Exhibit 10.5
EXECUTION VERSION
COLLECTION ACCOUNT PLEDGE AGREEMENT
     THIS AGREEMENT, dated as of February 22, 2007 (as amended, supplemented,
amended and restated or otherwise modified from time to time, this “Agreement”),
is made by GRAN TIERRA ENERGY COLOMBIA, LTD. (formerly ARGOSY ENERGY
INTERNATIONAL), a limited partnership organized under the laws of the State of
Utah (Registered No. 2110646-0180) and having its principal office at 300, 611
10th Avenue SW, Calgary, Alberta, Canada T2R OB2 (the “Pledgor”), in favor of
STANDARD BANK PLC, in its capacity as administrative agent under the Credit
Agreement (as hereinafter defined) acting for and on behalf of the Secured
Parties (in such capacity, the “Pledgee”).
W I T N E S S E T H:
     WHEREAS, pursuant to that certain credit agreement, dated as of
February 22, 2007 (the “Credit Agreement”), among the Pledgor, certain of its
affiliates, the banks from time to time party thereto (the “Banks”) and the
Pledgee, the Pledgee and the Banks have entered into financing arrangements
pursuant to which the Banks may make loans and provide other financial
accommodations to the Borrower;
     WHEREAS, in order to induce the Banks to make loans and provide other
financial accommodations pursuant to the Credit Agreement, and to induce the
Designated Hedge Counterparty to enter into the Designated Hedging Agreement and
for other good and valuable consideration (the sufficiency of which the Pledgor
hereby acknowledges), the Pledgor has agreed to secure the prompt payment in
full when due of the Obligations by executing and delivering to the Pledgee this
Agreement;
     NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Pledgor hereby agrees as follows:
     1. DEFINITIONS; RULES OF INTERPRETATION
          (a) Definition of Terms Used Herein. Capitalized terms used but not
defined herein shall have the meanings assigned to them in the Credit Agreement.
In addition:
         (i) “Account Collateral” means the Pledgor’s right, title and interest,
whether now existing or hereafter acquired or arising, in, to and under, the
Collection Account (including any successor accounts to any such accounts) and
all amounts, investments and any other property (including, but not limited to,
checks and other instruments) at any time deposited in or credited to any such
account and all security entitlements with respect thereto.
         (ii) “Collateral” has the meaning set forth in Section 2(a) hereto.
         (iii) “Collection Account” shall mean account number 103353265 in the
name of the Pledgor, maintained with JPMorgan Chase Bank, N.A. in New York, New
York, and each other deposit account that may be maintained by the Pledgor from
time to time in substitution thereof with the Pledgee’s prior written consent.

 

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         (iv) “Deposit Account Control Agreement” means a Deposit Account
Control Agreement, in substantially the form set forth on Exhibit A attached
hereto, by and among the Pledgor, the Pledgee and a depositary institution.
         (v) “Obligations” means the principal of and interest on the Loans made
by the Banks to, and the Notes held by each Bank from, and Reimbursement
Obligations in respect of Letters of Credit issued for the account of, and the
Designated Hedging Obligations of, the Borrower and all other amounts from time
to time owing to the Secured Parties by the Borrower under the Credit Agreement,
under the Notes, under each Designated Hedging Agreement and by any other
Obligor under any of the other Loan Documents to which such Obligor is a party,
in each case strictly in accordance with the terms hereof and thereof.
         (vi) “UCC” means the Uniform Commercial Code as from time to time in
effect in the State of New York.
     2. GRANT OF SECURITY INTEREST
     As collateral security for the prompt performance, observance and
indefeasible payment in full of all of the Obligations, the Pledgor hereby
assigns and pledges to the Pledgee, and grants to the Pledgee for itself and the
benefit of the Secured Parties, a security interest in and Lien upon the
following (collectively, the “Collateral”):
          (a) the Collection Account;
          (b) the Account Collateral;
          (c) all proceeds of and to any of the property of the Pledgor
described above, including, without limitation, all causes of action, claims and
warranties now or hereafter held by the Pledgor in respect of any of the items
listed above; and
          (d) the Pledgor’s books and records with respect to any of the
foregoing.
     3. OBLIGATIONS SECURED
     The Lien and other interests granted to the Pledgee for itself and the
benefit of the Secured Parties, pursuant to this Agreement shall secure the
prompt performance and payment in full of any and all of the Obligations.
     4. REPRESENTATIONS, WARRANTIES AND COVENANTS
     The Pledgor hereby represents, warrants and covenants with and to the
Pledgee and the Secured Parties the following as of the date hereof (all of such
representations, warranties and covenants being continuing so long as any of the
Obligations are outstanding):

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          (a) The Pledgor is the record and beneficial owner of, and has good
title to, the Account Collateral pledged by it hereunder, free of any and all
Liens or options in favor of, or claims of, any other Person, except for
Permitted Liens and Liens in favor of the depositary institution permitted by
the Deposit Account Control Agreement.
          (b) The Collateral is directly, legally and beneficially owned by the
Pledgor free and clear of all claims and Liens of any kind, nature or
description, except for Permitted Liens and Liens in favor of the depositary
institution permitted by the Deposit Account Control Agreement.
          (c) The Collateral is duly and validly pledged to the Pledgee, no
consent or approval of any governmental or regulatory authority or of any
securities exchange or the like, nor any consent or approval of any other third
party (other than the depositary institution party to the Deposit Account
Control Agreement), was or is necessary to the validity and enforceability of
this Agreement, except as expressly set forth herein.
          (d) The Pledgor shall not, without the prior consent of the Pledgee,
directly or indirectly, sell, assign, transfer, or otherwise dispose of, the
Collateral, nor create, incur or permit any further Lien with respect to the
Collateral other than as permitted in the Credit Agreement.
          (e) The Collection Account is subject to a Deposit Account Control
Agreement.
          (f) The Pledgor shall keep full and accurate books and records
relating to the Collateral pledged by it hereunder and stamp or otherwise mark
such books and records in such manner as the Pledgee may in good faith require
in order to reflect the security interests granted by this Agreement.
          (g) The Pledgor shall furnish, or cause to be furnished, to the
Pledgee such information concerning the Collateral as the Pledgee may from time
to time reasonably request.
          (h) The Pledgor shall not change its name or its jurisdiction of
organization from that existing as of the date of this Agreement, except upon 15
Business Days’ prior written notice to the Pledgee and delivery to the Pledgee
of copies of all filed additional financing statements, and other documents (in
each case, properly executed) reasonably requested by the Pledgee to maintain
the validity, perfection and priority of the security interests provided for
herein.
          (i) The Pledgor waives to the extent permissible under applicable law,
its rights under Section 9-207 of the UCC and agrees that the Collateral, other
collateral, or any other guarantor or endorser may be released, substituted or
added with respect to the Obligations, in whole or in part, without releasing or
otherwise affecting the liability of the Pledgor, the pledge and security
interests granted hereunder, or this Agreement. The Pledgee, for and on behalf
of itself and the Secured Parties, is entitled to all of the benefits of a
secured party set forth in Section 9-207 of the UCC.

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     5. RIGHTS AND REMEDIES
     At any time after an Event of Default exists or has occurred and is
continuing, in addition to all other rights and remedies of the Pledgee and the
Secured Parties, whether provided under this Agreement, the Credit Agreement
(including the Pledgee’s rights under Section 2.10(a) thereof), the other Loan
Documents, applicable law or otherwise, the Pledgee shall have the following
rights and remedies which may be exercised without notice to, or consent by, the
Pledgor except as such notice or consent is expressly provided for hereunder or
such notices which the Pledgor may not waive in accordance with applicable law:
          (a) The Pledgee may, in its good faith discretion sell, transfer,
assign, deliver or otherwise dispose of any and all Collateral on such terms as
the Pledgee may deem reasonable, for cash, upon credit or for future delivery,
all of the foregoing being free from any right or equity of redemption of the
Pledgor, which right or equity of redemption is hereby expressly waived and
released by the Pledgor (to the extent permitted by applicable law). If notice
of disposition of Collateral is required by law, ten (10) days prior notice by
the Pledgee to the Pledgor designating the time and place of any public sale or
the time after which any private sale or other intended disposition of
Collateral is to be made, shall be deemed to be reasonable notice thereof and
any other notice. The Pledgee shall apply the cash proceeds of Collateral
actually received by the Pledgee from any sale, foreclosure or other disposition
of the Collateral to payment of the Obligations then due, in whole or in part
and in accordance with the terms of Section 10 of the Credit Agreement, and
thereafter may hold such proceeds as cash collateral for the Obligations not
then due. The Pledgor shall remain liable to the Pledgee and the Secured Parties
for the payment of any deficiency with interest at the highest rate provided for
in the Credit Agreement and agrees to indemnify the Pledgee and the Secured
Parties from all costs and expenses of collection or enforcement incurred in
good faith by each of them or on their behalf, including reasonable attorneys’
fees and expenses, as provided in the Credit Agreement.
          (b) All of the rights and remedies of the Pledgee and the Secured
Parties, including, but not limited to, the foregoing and those otherwise
arising under this Agreement, the Credit Agreement and the other Loan Documents,
applicable law or otherwise, shall be cumulative and not exclusive and shall be
enforceable alternatively, successively or concurrently as the Pledgee may deem
expedient. No failure or delay on the part of the Pledgee or any Secured Party
in exercising any of its options, powers or rights or partial or single exercise
thereof, shall constitute a waiver of such option, power or right.
     6. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW
          (a) The validity, interpretation and enforcement of this Agreement and
any dispute arising out of the relationship between the Pledgor and the Pledgee
or any Secured Party, whether in contract, tort, equity or otherwise, shall be
governed by the laws of the State of New York, including, without limitation,
Section 5-1401 of the New York General Obligations Law.
          (b) The Pledgor hereby irrevocably consents and submits to the
non-exclusive jurisdiction of the Supreme Court of the State of New York,
sitting in the Borough of Manhattan, The

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City of New York and the United States District Court for the Southern District
of New York, whichever the Pledgee may elect, and waives any objection based on
venue or forum non conveniens with respect to any action instituted therein
arising under this Agreement or any of the other Loan Documents or in any way
connected with or related or incidental to the dealings of the Pledgor and the
Pledgee or any Secured Party in respect of this Agreement or any of the other
Loan Documents or the transactions related hereto or thereto, in each case
whether now existing or hereafter arising, and whether in contract, tort, equity
or otherwise, and agrees that any dispute with respect to any such matters shall
be heard only in the courts described above (except that the Pledgee and the
Secured Parties shall have the right to bring any action or proceeding against
the Pledgor or its property in the courts of any other jurisdiction that the
Pledgee deems necessary or appropriate in order to realize on any collateral at
any time granted by the Borrower or the Pledgor to the Pledgee or any Secured
Party or to otherwise enforce its rights against the Pledgor or its property).
          (c) The Pledgor hereby irrevocably designates, appoints and empowers
CT Corporation as its designee, appointee and agent to receive, accept and
acknowledge for and on its behalf, and in respect of its property, service of
any and all legal process which may be served in any action or proceeding. If
for any reason CT Corporation shall cease to be available to act as such, the
Pledgor agrees to designate a new designee, appointee and agent on the terms and
for the purposes of this provision satisfactory to the Pledgee. The Pledgor
hereby irrevocably consents to the service of process out of any of the courts
mentioned in Section 8(b) above in any such action or proceeding by the mailing
of copies thereof by registered or certified mail, postage prepaid to such
Pledgor at its respective address referred to in Section 12.02 of the Credit
Agreement.
          (d) THE PLEDGOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL
TO THE DEALINGS OF THE PARTIES HERETO OR THERETO IN RESPECT OF THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO IN
EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT,
TORT, EQUITY OR OTHERWISE. THE PLEDGOR HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY AND THAT THE PLEDGOR, ANY SECURED PARTY OR THE PLEDGEE MAY FILE AN
ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PLEDGOR TO THE WAIVER OF ITS RIGHT TO TRIAL BY
JURY.
          (e) Neither the Pledgee nor any Secured Party shall have any liability
to the Pledgor (whether in tort, contract, equity or otherwise) for losses
suffered by the Pledgor in connection with, arising out of, or in any way
related to the transactions or relationships contemplated by this Agreement, or
any act, omission or event occurring in connection herewith, unless with respect
to the Pledgee or any Secured Party, as applicable, it is determined by a final
and non-appealable judgment or court order binding on the Pledgee or such
Secured Party, as applicable, that the losses were the result of acts or

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omissions constituting gross negligence or willful misconduct or bad faith of
the Pledgee or the relevant Secured Party, as applicable. In any such
litigation, the Pledgee and the Secured Parties shall be entitled to the benefit
of the rebuttable presumption that they acted in good faith and with the
exercise of ordinary care in the performance by them of the terms of the Credit
Agreement and the other Loan Documents. The Pledgor: (i) certifies that neither
the Pledgee nor any Secured Party nor any representative, agent or attorney
acting for or on behalf of the Pledgee or any Secured Party has represented,
expressly or otherwise, that the Pledgee and the Secured Parties would not, in
the event of litigation, seek to enforce any of the waivers or other agreements
for their benefit provided for in this Agreement or any of the other Loan
Documents and (ii) acknowledges that in entering into this Agreement and the
other Loan Documents, the Pledgee and the Secured Parties are relying upon,
among other things, the waivers and certifications set forth in this Section
8(e) and elsewhere herein and therein.
     7. RELEASE OF COLLATERAL
          (a) Upon termination of the Commitments and payment and satisfaction
in full (in cash or other immediately available funds) of all Loans and all
other Obligations and, in respect of contingent Letter of Credit Liabilities,
after cash collateral has been deposited with respect thereto or after such
Letter of Credit Liabilities have been fully guaranteed by Export Development
Canada (EDC) on terms in form and substance acceptable to the Majority Banks in
accordance with the terms and conditions of the Credit Agreement, the Collateral
shall be released from the Lien created hereby and this Agreement and all
obligations of the Pledgee and the Pledgor hereunder shall terminate, all
without delivery of any instrument or performance of any act by any Person, and
all rights to the Collateral shall revert to the Pledgor. At the request of the
Pledgor following any such termination, the Pledgee shall deliver to the Pledgor
any Collateral held by the Pledgee hereunder and execute and deliver to the
Pledgor such documents as the Pledgor shall reasonably request to evidence such
termination.
          (b) If the Pledgee, pursuant to the terms of the Credit Agreement or
any other Loan Documents, shall release any Lien upon any Collateral, such
Collateral shall be released from the Lien created hereby to the extent provided
under, and subject to the terms and conditions set forth in the Credit Agreement
or such other Loan Document. In connection therewith, the Pledgee, at the
request and of the Pledgor, shall execute and deliver to the Pledgor all
releases or other documents, including, without limitation, UCC amendment or
termination statements, reasonably necessary or desirable for the release of the
Lien created hereby on such Collateral.
     8. MISCELLANEOUS
          (a) The Pledgor authorizes the Pledgee to file or record UCC financing
statements with respect to the Collateral with or without the signature of the
Pledgor, in such form and in such offices as the Pledgee reasonably determines
appropriate to perfect the security interests of the Pledgee under this
Agreement; provided that nothing herein shall relieve the Pledgor from its
obligation to file or record any UCC financing or continuation statement with
respect to the Collateral.

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          (b) The Pledgor agrees that at any time and from time to time upon the
written request of the Pledgee, the Pledgor shall execute and deliver such
further documents, in form satisfactory to the Pledgee’s counsel, and will take
or cause to be taken such further acts as the Pledgee may request in order to
effect the purposes of this Agreement and perfect or continue the perfection of
the security interest in the Collateral granted to the Pledgee hereunder.
          (c) Beyond the exercise of reasonable care to assure the safe custody
of the Collateral (whether such custody is exercised by the Pledgee, or the
Pledgee’s nominee, agent or bailee) the Pledgee or the Pledgee’s nominee agent
or bailee shall have no duty or liability to protect or preserve any rights
pertaining thereto and shall be relieved of all responsibility for the
Collateral upon surrendering it to the Pledgor or foreclosure with respect
thereto.
          (d) All notices, requests and other communications provided for herein
(including, without limitation, any modifications of, or waivers or consents
under, this Agreement) shall be given or made by fax or other writing and faxed,
mailed or delivered to the intended recipient in accordance with Section 12.02
of the Credit Agreement.
          (e) All references to the plural herein shall also mean the singular
and to the singular shall also mean the plural. All references to the Pledgor,
the Pledgee, any Secured Party and the Issuer pursuant to the definitions set
forth in the recitals hereto, or to any other person herein, shall include their
respective successors and assigns. The words “hereof,” “herein,” “hereunder,”
“this Agreement” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not any particular provision of this
Agreement and as this Agreement now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.
          (f) This Agreement shall be binding upon the Pledgor and its
respective successors and assigns and shall inure to the benefit of and be
enforceable by the Pledgee and the Secured Parties and their respective
successors, endorsees, transferees and assigns, except that no Pledgor may
assign its rights under this Agreement without the prior written consent of the
Pledgee and the Secured Parties. Any such purported assignment without such
express prior written consent shall be void. The liquidation, dissolution or
termination of the Pledgor shall not terminate this Pledge. The terms and
provisions of this Agreement are for the purpose of defining the relative rights
and obligations of the Borrower, the Pledgor, the Pledgee and the Secured
Parties with respect to the transactions contemplated hereby and there shall be
no third party beneficiaries of any of the terms and provisions of this
Agreement.
          (g) If any provision of this Agreement is held to be invalid or
unenforceable, such invalidity or unenforceability shall not invalidate this
Agreement as a whole, but this Agreement shall be construed as though it did not
contain the particular provision held to be invalid or unenforceable and the
rights and obligations of the parties shall be construed and enforced only to
such extent as shall be permitted by applicable law.
          (h) This Agreement, any supplements hereto, and any instruments or
documents delivered or to be delivered in connection herewith, represents the
entire agreement and understanding of

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the parties hereto concerning the subject matter hereof, and supersedes all
other prior agreements, understandings, negotiations and discussions,
commitments, proposals, offers and contracts concerning the subject matter
hereof, whether oral or written. In the event of any inconsistency between the
terms of this Agreement and any exhibit hereto, the terms of this Agreement
shall govern.
          (i) Neither this Agreement nor any provision hereof shall be amended,
modified, waived or discharged orally or by course of conduct, but only by a
written agreement signed by an authorized officer of the Pledgee. The Pledgee
shall not by any act, delay, omission or otherwise be deemed to have expressly
or impliedly waived any of its rights, powers and/or remedies unless such waiver
shall be in writing and signed by an authorized officer of the Pledgee. Any such
waiver shall be enforceable only to the extent specifically set forth therein. A
waiver by the Pledgee of any right, power and/or remedy on any one occasion
shall not be construed as a bar to or waiver of any such right, power and/or
remedy that the Pledgee would otherwise have on any future occasion, whether
similar in kind or otherwise.
          (j) This Agreement may be executed in any number of counterparts, each
of which shall be an original, but all of which taken together shall constitute
one and the same agreement. Delivery of an executed counterpart of this
Agreement by telefacsimile or electronic delivery shall have the same force and
effect as the delivery of an original executed counterpart of this Agreement.
Any party delivering an executed counterpart of this Agreement by telefacsimile
or electronic transmission shall also deliver an original executed counterpart,
but the failure to do so shall not affect the validity, enforceability or
binding effect of this Agreement.
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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.

            PLEDGOR

GRAN TIERRA ENERGY COLOMBIA, LTD.
by Argosy Energy Corp., its General Partner
      By:   /s/ James Hart         Name:           Title:           PLEDGEE

STANDARD BANK PLC
for the benefit of the Secured Parties
      By:   /s/ SJ Branchflower         Name:   SJ Branchflower         Title:  
Senior Manager            By:   /s/ Manuel Gonzalez-Spahr         Name:        
  Title:        

 

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EXHIBIT A
TO
COLLECTION ACCOUNT PLEDGE AGREEMENT
DEPOSIT ACCOUNT CONTROL AGREEMENT
See Attached

A-1