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EXHIBIT 4(C)
COLLATERAL PLEDGE AND SECURITY AGREEMENT
COLLATERAL PLEDGE AND SECURITY AGREEMENT, dated as of May 7, 1998,
among SEVEN SEAS PETROLEUM INC., a corporation organized under the laws of the
Yukon Territory, Canada ("Seven Seas" or the "Pledgor"), and THE BANK OF NOVA
SCOTIA TRUST COMPANY OF NEW YORK, as trustee (the "Trustee"), for the Holders
of the Notes (as defined herein) (this "Pledge Agreement" or this "Agreement").
Capitalized terms used but not otherwise defined herein shall have the meanings
given to such terms in the Indenture (as defined herein).
W I T N E S S E T H :
WHEREAS the Pledgor and the Trustee have entered into that certain
Indenture dated as of May 7, 1998 (as amended, restated, supplemented or
otherwise modified from time to time, the "Indenture"), pursuant to which the
Pledgor is issuing $110,000,000 in aggregate principal amount of its 12 1/2%
Senior Notes due 2005 (the "Notes");
WHEREAS the Pledgor has agreed, pursuant to the Indenture, to purchase
a portfolio of U.S. Government Securities initially consisting of those
securities listed in Exhibit A hereto (together with any replacement or
substitute securities, the "Pledged Securities") with scheduled principal and
interest payments on such Pledged Securities that, based upon the certificate
furnished to the Trustee of an internationally recognized firm of independent
certified public accountants selected by the Pledgor, will result in the
receipt of scheduled interest and principal payments in respect of the Pledged
Securities, in amounts sufficient and at the times necessary to provide for
payment in full of the four regularly scheduled interest payments due on the
Notes from November 15, 1999 through May 15, 2001 (the "Four Payments"); and
WHEREAS, to secure the payment and performance by the Pledgor of its
obligations under the Indenture and the Notes, including without limitation all
principal of, interest on, and any premium, Additional Amounts and Liquidated
Damages on, the Notes and all obligations of the Pledgor to the Trustee under
the Indenture and hereunder, including without limitation, pursuant to Section
11 and Section 13 hereof (all such obligations to the Holders and the Trustee,
collectively, the "Obligations"), the Pledgor has agreed (i) to place the
Pledged Securities in the Pledge Account (as defined herein) held by the
Trustee for the ratable benefit of the Holders of the Notes; and (ii) to grant
to the Trustee for itself and for the ratable benefit of the Holders of the
Notes a security interest in the Pledged Securities and the Pledge Account and
execute and deliver this Pledge Agreement.
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NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Pledge and Grant of Security Interest. The Pledgor hereby
pledges to the Trustee for itself and for the ratable benefit of the Holders of
the Notes, and grants to the Trustee for itself and for the ratable benefit of
the Holders of the Notes, a continuing first priority security interest in and
to (i) all of the Pledgor's right, title and interest in Securities Account No.
▇▇▇▇▇ maintained at The Bank of Nova Scotia, New York Agency (the "Securities
Account") and the "SEVEN SEAS PLEDGE ACCOUNT," Account No. 190575, maintained
with the Trustee (the "Pledge Account,") all Pledged Securities now or
hereafter existing, and any and all security entitlements (as defined in 8-102
of the Uniform Commercial Code of the State of New York (the "UCC")), (ii) all
certificates or other evidence of ownership representing the Pledged
Securities, the Pledge Account and any and all security entitlements (as
defined in 8-102 of the UCC) related thereto or the Securities Account and
(iii) all products and proceeds of any of the Pledged Securities and the Pledge
Account, including, without limitation, all dividends, interest, principal
payments, cash, options, warrants, rights, instruments, subscriptions and other
property or proceeds from time to time received, receivable or otherwise
distributed or distributable in respect of or in exchange for any or all of the
Pledged Securities (items (i), (ii) and (iii), collectively, the "Collateral").
The parties acknowledge that the Securities Account constitutes a securities
account and that all Collateral held in, carried in or credited to the
Securities Account shall constitute financial assets under the UCC.
2. Security for Obligations. This Pledge Agreement and the
Collateral secure the prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of all of the
Obligations.
3. Delivery/Control of Collateral; Pledge Account; Interest. (a)
All certificates or instruments, if any, representing or evidencing the Pledged
Securities shall be delivered to and held by or on behalf of the Trustee
pursuant hereto or shall be delivered to the Trustee through the book-entry
facilities of the applicable depositary and shall be registered in the name of
the Trustee, as Trustee, or its nominee, in each case, for its benefit and for
the ratable benefit of the holders of the Notes such that the Trustee is the
"entitlement holder" (as defined in 8-102 of the UCC) therefore and has
"control" (as defined in 8-106 of the UCC) thereof.
(b) Concurrently with the execution and delivery of this Pledge
Agreement, the Trustee shall establish the "SEVEN SEAS PLEDGE ACCOUNT,"
referred to in Section 1 above, for the deposit of the Pledged Securities (the
"Pledge Account") at its offices at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
Subject to the other terms and conditions of this Pledge Agreement, all funds
or other property accepted by the Trustee pursuant to this Pledge Agreement
shall be held in the Pledge Account for its benefit and the ratable benefit of
the Holders of the Notes. The Pledged Securities, and the proceeds of any such
Pledged Securities, shall remain on deposit in the Pledge Account until
withdrawn in accordance with this Agreement. If and to the extent the Pledged
Securities comprise certificated securities (as defined in Section 8-102 of the
UCC), such Pledged Securities shall be registered in the name of the Trustee,
as Trustee, or its nominee, in each case for its benefit and for
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the ratable benefit of the Holders of the Notes, and possession thereof shall
be maintained within the State of New York.
(c) All interest earned on or other distributions or amounts paid
with respect to any Collateral shall be retained in the Pledge Account and may
be reinvested by the Trustee, at the direction (and for the account, benefit
and risk) of the Pledgor, in other U.S. Government Securities; provided that
the Pledgor may only direct the Trustee so to reinvest such interest,
distributions or amounts if, based on the report of an internationally
recognized firm of independent public accountants selected by the Pledgor and
addressed to the Trustee, scheduled principal and interest payments on the
Pledged Securities retained in the Pledge Account will result in receipt of
United States dollars in an amount and at a time sufficient to provide for
payment in full when due of each of the Four Payments (or, in the event any of
the Four Payments shall have been made (from Pledgor Funds, as defined below),
the remaining unpaid Four Payments.
4. Disbursement. (a) Prior to the date of any of the Four
Payments, the Pledgor may direct the Trustee in writing to liquidate, if
necessary, Pledged Securities and to transfer from the Pledge Account to the
Trustee on the payment date in its capacity as Paying Agent (or, if applicable,
any successor Paying Agent), United States dollars in immediately available
funds necessary to provide for payment in full of all or any portion of the
next regularly scheduled interest payment on the Notes. Upon receipt of such
written request, the Trustee shall follow such instructions (including, without
limitation, disposition of Pledged Securities) and transfer such amount of
United States dollars in immediately available funds directly to the Trustee as
Paying Agent (or, if applicable, any successor Paying Agent) from proceeds of
the Pledged Securities held in the Pledge Account.
(b) If the Pledgor elects to pay any of the Four Payments from a
source of funds other than the Pledge Account (the "Pledgor's Funds"), then the
Pledgor shall, at least three Business Days' prior to the payment date for such
payment notify Trustee of such election. Provided that no Default or Event of
Default exists under the Indenture, after payment of such regularly scheduled
interest payment, Pledgor may direct the Trustee in writing to release to the
Pledgor, or as it may direct, an amount of funds or Pledged Securities from the
Pledge Account less than or equal to the amount of such payment. If the
Trustee is not the Paying Agent, such direction shall include an Officers'
Certificate delivered to the Trustee stating that such regularly scheduled
interest payment constituting one of such Four Payments, has been made in
accordance with the terms of the Indenture. Upon receipt of such written
direction from the Pledgor the Trustee shall take such action as is necessary
to provide for the prompt payment to the Pledgor of the amount of funds or
Pledged Securities requested from the Pledge Account.
(c) If at any time (a) the scheduled payments of principal of and
interest on the Pledged Securities exceeds 100% of the amount in cash required,
based on the report of an internationally recognized firm of independent
certified public accountants selected by the Pledgor and addressed to the
Trustee, to provide for timely payment in full of the Four Payments (or, in the
event any of the regularly scheduled interest payments due on or prior to
November 15, 2000 have been made, an
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amount in cash sufficient to provide for timely payment in full of the
remaining unpaid regularly scheduled interest payment or payments due through
May 15, 2001) and no Default or Event of Default exists, the Pledgor may direct
the Trustee in writing to release to the Pledgor or as it directs an amount of
funds or Pledged Securities, at the Pledgor's sole option, less than or equal
to such excess. Upon receipt of such written direction from the Pledgor,
together with such report of such internationally recognized firm of
independent certified public accountants, the Trustee shall take such action as
is necessary to provide for the prompt payment to the Pledgor of the amount of
funds or Pledged Securities requested from the Pledge Account.
(d) Upon payment in full of the Four Payments, if no Default or
Event of Default exists, the security interest in the Collateral evidenced by
this Pledge Agreement shall terminate and be of no further force or effect.
Furthermore, upon release of any Collateral from the Pledge Account in
accordance with the terms of this Pledge Agreement, the security interest
created by this Pledge Agreement in the Collateral so released shall terminate
and be of no further force or effect.
5. Representations and Warranties. The Pledgor hereby represents
and warrants that:
(a) the execution, delivery and performance by the
Pledgor of this Pledge Agreement have been duly authorized by the
Pledgor and do not contravene or constitute a default under any
provision of applicable law, regulation, the certificate of
incorporation or the bylaws, as the case may be, of the Pledgor, or of
any judgment, injunction, order, decree or any material agreement or
instrument binding upon the Pledgor, and do not result in the creation
or imposition of any Lien on any asset of the Pledgor, except for the
security interests granted under this Pledge Agreement and the
Indenture;
(b) no financing statement covering any of the Collateral
is on file in any public office, other than financing statements filed
pursuant to this Pledge Agreement, if any;
(c) (i) if the securities are uncertificated, upon
recordation of the Pledged Securities in an account, under Trustee's
name, at the "Securities Intermediary," as defined in the UCC, or,
(ii) if the Pledged Securities are certificated, upon the delivery to
the Trustee of the certificates, representing the Pledged Securities
and notation on the records of the Trustee that it holds the Pledged
Securities as pledgee, the pledge of the Collateral pursuant to this
Pledge Agreement will constitute a valid and perfected first priority
security interest in and to the Collateral, securing the payment and
performance of the Obligations for the benefit of its Trustees and the
ratable benefit of the Holders of the Notes, enforceable as such
against all creditors of the Pledgor and any Persons purporting to
purchase any of the Collateral from the Pledgor;
(d) no consent of any other Person and no consent,
authorization, approval, or other action by, and no notice to or
filing with, any governmental authority or regulatory body in the
United States, Canada or otherwise, including, without limitation, any
taxing authority, is required to be obtained or made by the Pledgor as
of the date hereof either (i) for
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the pledge by the Pledgor of the Collateral pursuant to this Pledge
Agreement or for the execution, delivery or performance of this Pledge
Agreement by the Pledgor (except for any filings and notations
necessary to perfect the security interest created hereby in the
Collateral) or (ii) for the exercise by the Trustee of the rights
provided for in this Pledge Agreement or the remedies in respect of
the Collateral pursuant to this Pledge Agreement; and
(e) the pledge of the Collateral pursuant to this Pledge
Agreement is not prohibited by any applicable law or government
regulation, release, interpretation or opinion of the Board of
Governors of the Federal Reserve System or other regulatory agency in
the United States, Canada or otherwise (including, without limitation,
any taxing authority or Regulations T, U and X of the Board of
Governors of the Federal Reserve System).
6. Further Assurances. The Pledgor agrees promptly to take such
actions and to execute and deliver or cause to be executed and delivered, any
instruments to the Trustee and take any other actions that are necessary or, in
the opinion of the Trustee, desirable, to perfect, continue the perfection of,
confirm and assure the first priority of the Trustee's security interest in the
Collateral, to protect the Collateral against the rights, claims or interests
of third persons, or to otherwise effect the purposes of this Pledge Agreement.
Notwithstanding the foregoing, the Trustee shall have no duty or obligation to
ensure the maintenance or perfection of any security interest hereunder.
7. Covenants. The Pledgor covenants and agrees with the Trustee
and the Holders of the Notes from and after the date of this Pledge Agreement
until the payment in full of cash of (i) each of the Four Payments under the
terms of the Indenture and (ii) all Obligations due and owing under the
Indenture and the Notes prior to the payment of the Four Payments as follows:
(a) The Pledgor agrees that it (i) will not sell or
otherwise dispose of, or grant any option or other interest with
respect to, any of the Collateral, (ii) will not create or permit to
exist any Lien upon or with respect to any of the Collateral, except
for the Liens created pursuant to this Pledge Agreement or the
Indenture and (iii) will at all times be the sole beneficial owner of
the Collateral.
(b) The Pledgor agrees that it will not (i) enter into
any agreement or understanding that purports to or may restrict or
inhibit the Trustee's rights or remedies hereunder, including, without
limitation, the Trustee's right to sell or otherwise dispose of the
Collateral, or (ii) with regard to the Collateral, fail to pay or
discharge when the same is due any tax, assessment or levy of any
nature with respect thereto.
8. Power of Attorney. (a) The Pledgor hereby appoints and
constitutes the Trustee as the Pledgor's attorney-in-fact to exercise to the
fullest extent permitted by law all of the following powers upon and at any
time after the occurrence and during the continuance of an Event of Default:
(1) collection of proceeds of any Collateral;
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(2) conveyance of any item of Collateral to any purchaser
thereof as specified herein;
(3) giving of any notices or recording of any Liens
pursuant to Section 6 hereof;
(4) making any payments or taking any acts pursuant to
Section 9 hereof; and
(5) paying or discharging taxes or Liens levied or placed
upon the Collateral, the legality or validity thereof
and the amounts necessary to discharge the same to be
determined by the Trustee in its sole and reasonable
discretion, and any such payments made by the Trustee
shall become Obligations of the Pledgor to the
Trustee, due and payable immediately upon demand.
(b) The Trustee's authority under this Section 8 shall include,
without limitation, the authority to endorse and negotiate any checks or
instruments representing proceeds of Collateral in the name of the Pledgor,
execute and give receipt for any certificate of ownership or any document
constituting Collateral, transfer title to any item of Collateral, to the
extent permitted by applicable law, sign the Pledgor's name on all financing
statements or any other documents deemed necessary or appropriate by the
Trustee to preserve, process or perfect the security interest in the
Collateral, and to file the same, and to prepare, sign the Pledgor's name and
file any notice of Lien, and to take any other actions arising from or incident
to the powers granted to the Trustee in this Pledge Agreement. This power of
attorney is coupled with an interest and shall be irrevocable by the Pledgor.
9. Trustee May Perform. If the Pledgor fails to perform any
agreement contained herein, the Trustee may, but shall not be obligated to,
itself perform or cause performance of such agreement, and the reasonable
expenses incurred by or on behalf of the Trustee in connection therewith shall
be payable by the Pledgor under Section 13 hereof.
10. No Imposition of Duties. The rights and powers granted to the
Trustee hereunder are being granted in order to preserve and protect the
security interest of the Holders of Notes in and to the Collateral granted
hereby and shall not be interpreted to, and shall not, impose any duties on the
Trustee in connection therewith other than those imposed hereunder or under
applicable law.
11. Indemnity. The Pledgor shall indemnify, defend and hold
harmless the Trustee and its directors, officers, agents and employees from and
against all claims, actions, obligations, losses, liabilities and expenses,
including costs, fees and disbursements of counsel, the costs of
investigations, and claims for damages, arising from the Trustee's performance
under this Pledge Agreement, except insofar as the same may have been caused by
such indemnified person's own negligent action, its own negligent failure to
act or its own willful misconduct or unlawful act. The obligations of the
Pledgor under this Section 11 shall survive the resignation or removal of the
Trustee and the termination of this Agreement.
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12. Remedies upon Event of Default. If an Event of Default shall
have occurred and be continuing:
(a) The Trustee shall have and may exercise with
reference to the Collateral any or all of the rights and remedies of a
secured party under the UCC, and as otherwise granted herein or under
any other applicable law or under any other agreement now or hereafter
in effect executed by the Pledgor, including, without limitation, the
right and power to sell, at public or private sale or sales, or
otherwise dispose of, or otherwise utilize the Collateral and any part
or parts thereof, in any manner authorized or permitted under the UCC
after default by a debtor, and to apply the proceeds thereof toward
payment of any costs and expenses and attorneys' fees and expenses
thereby incurred by the Trustee and toward payment of the Obligations
as provided in paragraph 12(c) below. Specifically, and without
limiting the foregoing, the Trustee shall have the right to take
possession of all or any part of the Collateral or any security
therefor and of all books, records, papers and documents of the
Pledgor or in the Pledgor's possession or control relating to the
Collateral that are not already in the Trustee's possession, and for
such purposes may enter upon any premises upon which any of the
Collateral or any security therefor or any of said books, records,
papers and documents are situated and remove the same therefrom
without any liability for trespass or damages thereby occasioned. To
the extent permitted by law, the Pledgor expressly waives any notice
of sale or other disposition of the Collateral and all other rights or
remedies of the Pledgor or formalities prescribed by law relative to
sale or disposition of the Collateral or exercise of any other right
or remedy of the Trustee existing after an Event of Default. To the
extent any such notice is required and cannot be waived, the Pledgor
agrees that if such notice is given in the manner provided in Section
17 hereof at least ten days before the time of the sale or
disposition, such notice shall be deemed reasonable and shall fully
satisfy any requirement for giving of said notice. The Trustee shall
not be obligated to make any sale of Collateral regardless of notice
of sale having been given. The Trustee may adjourn any public or
private sale. The Pledgor further agrees to use its best efforts to
do or cause to be done all such other acts as may be necessary to
effect the intention of this Section 12.
(b) All rights to marshaling of assets of the Pledgor,
including any such right with respect to the Collateral, are hereby
waived by the Pledgor. The Pledgor shall not contest or support any
other Person in contesting the validity or priority of the security
interests created under this Pledge Agreement.
(c) Any money collected by the Trustee pursuant to this
Section 12 shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium, if any) or interest, upon
presentation of the Notes and the notation thereon of the payment (if
only partially paid) and upon surrender thereof if fully paid):
(i) FIRST: to the payment of all amounts due the Trustee
under Sections 11 and 13 of this Pledge Agreement;
and
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(ii) SECOND: to the payment of the amounts then due and
unpaid for interest on the Notes, ratably, without
preference or priority of any kind, according to the
amounts due and payable on such Notes for interest;
and
(iii) THIRD: to the payment of the amounts then due and
unpaid for principal of (and premium, Additional
Amounts and Liquidated Damages, if any) on the Notes,
ratably without preference or priority of any kind,
according to the amounts due and payable on such
Notes for principal (and premium, if any); and
(iv) FOURTH: to the Pledgor.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 12 in accordance with the Indenture.
13. Fees and Expenses. The Pledgor shall, upon demand, pay to the
Trustee the amount of its fees (which shall be in an amount previously agreed
to by the Pledgor and the Trustee) and any and all reasonable expenses
(including, without limitation, the reasonable fees, expenses and disbursements
of counsel, experts and agents retained by the Trustee) that the Trustee may
incur in connection with (i) the administration of this Pledge Agreement, (ii)
the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Trustee and the holders of the Notes hereunder or (iv)
the failure by the Pledgor to perform or observe any of the provisions hereof.
The obligations of the Pledgor under this Section 13 shall survive the
resignation or removal of the Trustee and the termination of this Agreement.
14. Continuing Security Interest; Termination. This Pledge
Agreement shall terminate upon the payment in full of each of the Four Payments
to the Holders of the Notes provided no Default or Event of Default exists. If
a Default or Event of Default exists at such time, this Pledge Agreement shall
not terminate until such Default or Event of Default, and any subsequent
Default or Event of Default, is cured and waived. At such time, the Trustee
shall, at the written request of the Pledgor, reassign and redeliver to the
Pledgor all of the Collateral hereunder that has not been sold, disposed of,
retained or applied by the Trustee in accordance with the terms of this Pledge
Agreement and the Indenture. Such reassignment and redelivery shall be without
warranty (either express or implied) by or recourse to the Trustee, except as
to the absence of any prior assignments by the Trustee of its interest in the
Collateral, and shall be at the expense of the Pledgor. This Pledge Agreement
shall be binding upon the Pledgor, its successors and assigns, and shall inure,
together with the rights and remedies of the Trustee hereunder, to the benefit
of the Trustee and the Holders of the Notes and their respective successors,
transferees and assigns.
15. Authority of the Trustee. (a) The Trustee shall have and be
entitled to exercise all powers hereunder that are specifically granted to the
Trustee by the terms hereof, together with such powers as are reasonably
incident thereto. The Trustee may perform any of its duties hereunder or
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in connection with the Collateral by or through agents or employees and shall
be entitled to retain counsel and to act in reliance upon the advice of counsel
concerning all such matters. None of the Trustee or any director, officer,
employee, attorney or agent of the Trustee shall be liable to the Pledgor for
any action taken or omitted to be taken by it or them hereunder, except for its
or their own negligent action, negligent failure to act or willful misconduct;
provided that (i) each such person shall not be liable for any error of
judgment made in good faith by it unless it is proved that such person was
negligent in ascertaining the pertinent facts and (ii) the Trustee shall not be
liable with respect to any action it takes or omits to take in good faith in
accordance with a direction or request received by it pursuant to Section 6.5
of the Indenture or Section 16(d) hereof. The Trustee shall not be responsible
for the validity, effectiveness or sufficiency hereof or of any document or
security furnished pursuant hereto. The Trustee and its directors, officers,
employees, attorneys and agents shall be entitled to rely on any communication,
instrument or document believed by it or them to be genuine and correct and to
have been signed or sent by the proper Person(s).
(b) The Pledgor acknowledges that the rights and responsibilities
of the Trustee under this Pledge Agreement with respect to any action taken by
the Trustee or the exercise or non-exercise by the Trustee of any option,
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Pledge Agreement shall, as between the Trustee
and the holders of the Notes, be governed by the Indenture and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Trustee and the Pledgor, the Trustee shall be conclusively
presumed to be acting as agent for the holders of the Notes with full and valid
authority so to act or refrain from acting, and the Pledgor shall not be
obligated or entitled to make any inquiry respecting such authority.
(c) The Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Agreement and no implied covenants
or obligations shall be read in this Agreement against the Trustee. The
Trustee shall not be deemed to have knowledge of a Default or an Event of
Default under the Indenture unless informed in writing by the Pledgor or the
Holder of any Note or unless a Trust Officer shall have actual knowledge
thereof.
(d) The Trustee shall not be required to exercise any remedies
hereunder unless required by law or requested in writing to do so by the
Holders of not less than a majority in principal amount of the outstanding
Notes and only if furnished with indemnity satisfactory to the Trustee. The
Trustee may consult with counsel and shall not be liable for any action taken
in good faith in reliance upon advice of such counsel except for its bad faith,
its own negligent action, its own negligent failure to act or its own wilful
misconduct or unlawful act. The Trustee makes no representation or warranty
and shall have no responsibility concerning the value or validity of the
Collateral or the validity or perfection of the pledge thereof.
(e) Any resignation or removal of the Trustee under the Indenture
shall result in the simultaneous resignation or removal, as the case may be, of
the Trustee hereunder and any appointment of a successor Trustee under the
Indenture shall result in the simultaneous appointment of the same successor
Trustee hereunder.
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(f) The Trustee shall be deemed to have exercised reasonable care
in the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which the Trustee
accords its own property, it being understood that neither the Trustee nor the
Holders of the Notes shall have responsibility for (i) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Collateral, whether or not any such Person has or
is deemed to have knowledge of such matters, or (ii) taking any necessary steps
to preserve rights against any parties with respect to any Collateral.
(g) Notwithstanding anything herein to the contrary, the
exculpations, immunities and protections available to the Trustee under the
Indenture shall be available to the Trustee hereunder.
16. Notices. Any communication, notice or demand to be given
hereunder shall be in writing and delivered in person or mailed by first class
mail, postage prepaid, addressed to the Trustee and the Company at the
addresses specified in the Indenture. Notice may also be given in such other
form and manner or to such other address as shall be designated by any party
hereto to each other party hereto in a written notice delivered in accordance
with the terms of the Indenture.
17. No Waiver; Cumulative Rights. No failure on the part of the
Trustee to exercise, and no delay in exercising, any right, remedy or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise by the Trustee of any right, remedy or power hereunder preclude any
other or future exercise of any other right, remedy or power. Each and every
right, remedy and power hereby granted to the Trustee or allowed it by law or
other agreement shall be cumulative and not exclusive the one of any other, and
may be exercised by the Trustee from time to time.
18. Benefits of Pledge Agreement. Nothing in this Pledge
Agreement, whether express or implied, shall give to any Person other than the
parties hereto and their successors hereunder, and the Holders, any benefit or
any legal or equitable right, remedy or claim under this Pledge Agreement.
19. Applicable Law. THIS PLEDGE AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
20. Consent to Jurisdiction and Service. (a) The Pledgor
irrevocably submits to the jurisdiction of any United States federal or state
court located in the Borough of Manhattan in The City of New York, New York
over any suit, action or proceeding arising out of or relating to this
Collateral Pledge and Security Agreement. The Pledgor irrevocably waives, to
the fullest extent permitted by laws any objection which it may have to the
laying of the venue of any such suit, action or proceeding brought in such a
court and any claim that any suit, action or proceeding brought in such a court
has been brought in an inconvenient forum. The Pledgor agrees that final
judgment in any such suit, action or proceeding brought in such a court shall
be conclusive and binding upon the Pledgor and may be enforced in the courts of
Canada (or any other courts to the jurisdiction of which
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the Pledgor is subject) by a suit upon such judgment, provided that service of
process is effected upon the Pledgor in the manner specified in Section 21(b)
or as otherwise permitted by law.
(b) As long as this Collateral Pledge and Security Agreement
remains in effect, the Pledgor will at all times have an authorized agent in
the Borough of Manhattan, The City of New York, New York upon whom process may
be served in any legal action or proceeding arising out of or relating to this
Collateral Pledge and Security Agreement. Service of process upon such agent
shall be deemed in every respect effective service of process upon the Pledgor
in any such legal action or proceeding. The Pledgor hereby irrevocably
appoints CT Corporation system, whose address is, as of the date hereof, ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as its agent for such purpose and covenants
and agrees that service of process in any such legal action or proceeding may
be made upon it at the office of such agent at said address (or at such other
address in the Borough of Manhattan, The City of New York, New York as the
Pledgor may designate by written notice to the Trustee).
(c) The Pledgor hereby consents to process being served in any
suit, action or proceeding of the nature referred to in Section 21(a) and
Section 21(b) hereof by service upon such agent. The Pledgor irrevocably
waives, to the fullest extent permitted by law, all claim of error by reason of
any such service and agrees that such service (i) shall be deemed in every
respect effective service of process upon the Pledgor in any such suit, action
or proceeding and (ii) shall, to the fullest extent permitted by law, be taken
and held to be valid personal service.
(d) Nothing in this Section shall affect the right of the Trustee
or any Holder of Notes to serve process in any manner permitted by law or limit
the right of the Trustee to bring proceedings against the Pledgor in the courts
of any jurisdiction or jurisdictions.
21. Execution in Counterparts. This Pledge Agreement may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute one and the same instrument.
22. Trust Indenture Act. From and after qualification of the
Indenture under the Trust Indenture Act, the Pledgor shall provide the annual
opinion required by Section 314(b) of the Trust Indenture Act and shall comply
with Section 314(d) thereof, to the extent applicable, in connection with any
release or substitution of Collateral hereunder.
-11-
12
IN WITNESS WHEREOF, the undersigned have executed this Collateral
Pledge and Security Agreement effective as of the date first above written.
"Pledgor"
SEVEN SEAS PETROLEUM INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, III
------------------------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, III
Title: Executive Vice President
and Chief Financial Officer
"Trustee"
THE BANK OF NOVA SCOTIA TRUST
COMPANY OF NEW YORK, as Trustee
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Print Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Trust Officer
13
EXHIBIT A
------------------------------------------------------------------------------------------
VALUE AT
--------
ISSUE PRICE YIELD MATURITY
----- ----- ----- --------
------------------------------------------------------------------------------------------
United States
Treasury Strips (1) 11/15/99 92.10100 5.490 $6,875,000
------------------------------------------------------------------------------------------
United States
Treasury Strips (1) 05/15/00 89.58700 5.520 6,875,000
------------------------------------------------------------------------------------------
United States
Treasury Strips (1) 11/15/00 87.16000 5.530 6,875,000
------------------------------------------------------------------------------------------
United States
Treasury Strips (1) 05/15/01 84.76500 5.550 6,875,000
------------------------------------------------------------------------------------------
(1) Separately Traded Registered and Interest Principal Security
14
1999
(a)
------------
no bold after the box head, rm before the bd,x, outside
paren..................................................... tab
1999
(A)
------------
bold command right after the boxhead command, no roman
before the bd,x........................................... tab
1999
(A)
------------
roman, bd,x inside the paren, no other bold in the box
head...................................................... tab
1999
(a)
------------
roman, bd,x outside the paren, no previous bold in the box
head...................................................... tab
1999
(a)
------------
just bd,x outside the paren, no previous bold in the box
head...................................................... tab
2
