DESCRIPTION OF THE SECURITIES
Description of the Ordinary Shares evidenced by American
Depository Shares
JPMorgan Chase Bank, N.A., as depositary
or the Depositary will issue the ADSs. Each ADS will represent an ownership interest in 20 shares which will be deposited with
the custodian, as agent of the Depositary, under the deposit agreement among ourselves, the Depositary and yourself as an ADR holder.
In the future, each ADS will also represent any securities, cash or other property deposited with the Depositary but which they
have not distributed directly to you. Unless specifically requested by persons depositing shares, all ADSs will be issued on the
books of our Depositary in book-entry form and periodic statements will be mailed to you which reflect your ownership interest
in such ADSs. In our description, references to ADRs shall include the statements you will receive which reflects your ownership
of ADSs.
The Depositary’s office is located
at 4 New York Plaza, New York, NY 10004.
You may hold ADSs either directly or indirectly
through your broker or other financial institution. If you hold ADSs directly, by having an ADS registered in your name on the
books of the Depositary, you are an ADR holder. This description assumes you hold your ADSs directly. If you hold the ADSs through
your broker or financial institution nominee, you must rely on the procedures of such broker or financial institution to assert
the rights of an ADR holder described in this section. You should consult with your broker or financial institution to find out
what those procedures are.
As an ADR holder, we will not treat you
as a shareholder of ours and you will not have any shareholder rights. Colombian law governs shareholder rights. Because the Depositary
or its nominee will be the shareholder of record for the shares represented by all outstanding ADSs, shareholder rights rest with
such record holder. Your rights are those of an ADR holder. Such rights derive from the terms of the deposit agreement to be entered
into among us, the Depositary and all registered holders from time to time of ADSs issued under the deposit agreement. The obligations
of the Depositary and its agents are also set out in the deposit agreement. Because the Depositary or its nominee will actually
be the registered owner of the shares, you must rely on it to exercise the rights of a shareholder on your behalf. The deposit
agreement and the ADSs are governed by New York law.
The following is a summary of the material
terms of the deposit agreement. Because it is a summary, it does not contain all the information that may be important to you.
For more complete information, you should read the entire deposit agreement and the form of ADR which contains the terms of your
ADSs. You can read a copy of the deposit agreement which is filed as an exhibit to the registration statement of which this prospectus
forms a part. See “Where You Can Find More Information” for information on how to obtain a copy.
Share Dividends and Other Distributions
How will I receive dividends and other
distributions on the shares underlying my ADSs?
We may make various types of distributions
with respect to our securities. The Depositary has agreed to pay to you the cash dividends or other distributions it or the custodian
receives on shares or other deposited securities, after converting any cash received into U.S. dollars and, in all cases, making
any necessary deductions provided for in the deposit agreement. You will receive these distributions in proportion to the number
of underlying securities that your ADSs represent.
Except as stated below, to the extent the
Depositary is legally permitted, it will deliver such distributions to ADR holders in proportion to their interests in the following
manner:
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Cash
. Subject to and any restrictions imposed by the laws of Colombia, regulations or applicable permits issued by any
governmental body, the Depositary will distribute any U.S. dollars available to it resulting from a cash dividend or other cash
distribution or the net proceeds of sales of any other distribution or portion thereof (to the extent applicable), on an averaged
or other practicable basis, subject to (i) appropriate adjustments for taxes withheld, (ii) such distribution being impermissible
or impracticable with respect to certain registered ADR holders, and (iii) deduction of the Depositary’s expenses in (1)
converting any foreign currency to U.S. dollars to the extent that it determines that such conversion may be made on a reasonable
basis, (2) transferring foreign currency or U.S. dollars to the United States by such means as the Depositary may determine to
the extent that it determines that such transfer may be made on a reasonable basis, (3) obtaining any approval or license of any
governmental authority required for such conversion or transfer, which is obtainable at a reasonable cost and within a reasonable
time and (4) making any sale by public or private means in any commercially reasonable manner.
If exchange rates fluctuate during
a time when the Depositary cannot convert a foreign currency, you may lose some or all of the value of the distribution.
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Shares
. In the case of a distribution in shares, the Depositary will issue additional ADRs to evidence the number of
ADSs representing such shares. Only whole ADSs will be issued. Any shares which would result in fractional ADSs will be sold and
the net proceeds will be distributed in the same manner as cash to the ADR holders entitled thereto.
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Rights to receive additional shares
. In the case of a distribution of rights to subscribe for additional shares or other
rights, if we provide satisfactory evidence that the Depositary may lawfully distribute such rights, the Depositary will distribute
warrants or other instruments representing such rights. However, if we do not furnish such evidence, the Depositary may:
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sell such rights if practicable and distribute the net proceeds as cash; or
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if it is not practicable to sell such rights, do nothing and allow such rights to lapse, in which case ADR holders will receive
nothing.
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We have no obligation to file a registration
statement under the Securities Act in order to make any rights available to ADR holders.
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Other Distributions
. In the case of a distribution of securities or property other than those described above, the Depositary
may either (i) distribute such securities or property in any manner it deems equitable and practicable or (ii) to the extent the
Depositary deems distribution of such securities or property not to be equitable and practicable, sell such securities or property
and distribute any net proceeds in the same way it distributes cash.
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If the Depositary determines that any distribution
described above is not practicable with respect to any specific ADR holder, the Depositary may choose any practicable method of
distribution for such ADR holder, including the distribution of foreign currency, securities or property, or it may retain such
items, without paying interest on or investing them, on behalf of the ADR holder as deposited securities, in which case the ADSs
will also represent the retained items.
Any U.S. dollar will be distributed by checks
drawn on a bank in the United States for whole dollars and cents. Fractional cents will be withheld without liability and dealt
with by the Depositary in accordance with its then current practices.
The Depositary is not responsible if it
decides that it is unlawful or impractical to make a distribution available to any ADR holders.
There can be no assurance that the Depositary
will be able to convert any currency at a specified exchange rate or sell any property, rights, shares or other securities at a
specified price, nor that any of such transactions can be completed within a specified time period.
Deposit, Withdrawal and Cancellation
How does the Depositary issue ADSs?
The Depositary will issue ADSs if you or
your broker deposits shares or evidence of rights to receive shares with the custodian and pay the fees and expenses owing to the
Depositary in connection with such issuance.
Shares deposited with the custodian must
be accompanied by certain delivery documentation, including instruments showing that such shares have been properly transferred
or endorsed to the person on whose behalf the deposit is being made.
The custodian will hold all deposited shares
for the account of the Depositary. ADR holders thus have no direct ownership interest in the shares and only have such rights as
are contained in the deposit agreement. The custodian will also hold any additional securities, property and cash received on or
in substitution for the deposited shares. The deposited shares and any such additional items are referred to as “deposited
securities.”
Upon each deposit of shares, receipt of
related delivery documentation and compliance with the other provisions of the deposit agreement, including the payment of the
fees and charges of the Depositary and any taxes or other fees or charges owing, the Depositary will issue an ADR or ADRs in the
name or upon the order of the person entitled thereto evidencing the number of ADSs to which such person is entitled. All of the
ADSs issued will, unless specifically requested to the contrary, be part of the Depositary’s direct registration system,
and a registered holder will receive periodic statements from the Depositary which will show the number of ADSs registered in such
holder’s name. An ADR holder can request that the ADSs not be held through the Depositary’s direct registration system
and that a certificated ADR be issued.
How do ADR holders cancel an ADS and
obtain deposited securities?
When you turn in your ADSs at the Depositary’s
office, or when you provide proper instructions and documentation in the case of direct registration ADSs, the Depositary will,
upon payment of certain applicable fees, charges and taxes, deliver the underlying shares at the custodian’s office or effect
delivery by such other means as the Depositary deems practicable, including transfer to an account of an accredited financial institution
on your behalf. At your risk, expense and request, the Depositary may deliver deposited securities at such other place as you may
request.
The Depositary may only restrict the withdrawal
of deposited securities in connection with:
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temporary delays caused by closing our transfer books or those of the Depositary or the deposit of shares in connection with
voting at a shareholders’ meeting, or the payment of dividends;
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the payment of fees, taxes and similar charges; or
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compliance with any U.S. or foreign laws or governmental regulations relating to the ADRs or to the withdrawal of deposited
securities.
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This right of withdrawal may not be limited
by any other provision of the deposit agreement.
Notwithstanding anything to the contrary
in the deposit agreement, holders of ADSs who are non-residents of Colombia, who withdraw deposited securities to or for their
own account or the account of a non-resident third party whether or not with the purpose of selling or causing to be sold such
deposited securities in Colombia simultaneously with such withdrawal, will be subject to applicable Colombian rules and regulations,
including without limitation Colombia’s International Investment Statute as well as any taxes applicable thereby, as in effect
from time to time.
Neither we nor the Depositary or the custodian
shall have any liability or responsibility whatsoever under the deposit agreement or otherwise for any action or failure to act
by any Holder relating to its obligations under Colombian tax law or Colombian Foreign Investment Law or any other Colombian law
or regulation relating to foreign investment in Colombia in respect of a withdrawal or sale of deposited securities, including,
without limitation, any failure by any holder to comply with a requirement to register such investment prior to such withdrawal,
or any failure by any holder to report foreign exchange transactions to the Colombian Central Bank, as the case may be.
Record Dates
The Depositary may fix record dates for
the determination of the ADR holders who will be entitled (or obligated, as the case may be):
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to receive any distribution on or in respect of shares;
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to give instructions for the exercise of voting rights at a meeting of holders of shares;
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for the determination of the registered holders who shall be responsible for the fee assessed by the Depositary for administration
of the ADR program and for any expenses as provided for in the ADR; or
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to receive any notice or to act in respect of other matters.
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All the above are subject to the provisions
of the deposit agreement.
Voting Rights
How do I vote?
If you are an ADR holder and the Depositary
asks you to provide it with voting instructions, you may instruct the Depositary how to exercise the voting rights for the shares
which underlie your ADSs. After receiving voting materials from us, the Depositary will notify the ADR holders of any shareholders’
meeting or solicitation of consents or proxies. This notice will state such information as is contained in the voting materials
and describe how you may instruct the Depositary to exercise the voting rights for the shares which underlie your ADSs and will
include instructions for giving a discretionary proxy to a person designated by us. For instructions to be valid, the Depositary
must receive them in the manner and on or before the date specified. The Depositary will try, as far as is practical, subject to
the provisions of and governing the underlying shares or other deposited securities, to vote or to have its agents vote the shares
or other deposited securities as you instruct. The Depositary will only vote or attempt to vote as you instruct. The Depositary
will not itself exercise any voting discretion. Furthermore, neither the Depositary nor its agents are responsible for any failure
to carry out any voting instructions, for the manner in which any vote is cast or for the effect of any vote.
There is no guarantee that you will receive
voting materials in time to instruct the Depositary to vote and it is possible that you, or persons who hold their ADSs through
brokers, dealers or other third parties, will not have the opportunity to exercise a right to vote. The holders will be solely
responsible for any exercise of the voting rights of the deposited shares represented by the deposited securities by the ADSs,
if such vote is made pursuant to the procedure described in the deposit agreement.
Reports and Other Communications
Will I be able to view our reports?
The Depositary will make available for inspection
by ADR holders any written communications from us which are both received by the custodian or its nominee as a holder of deposited
securities and made generally available to the holders of deposited securities. We will furnish these communications in English
when so required by any rules or regulations of the SEC.
Additionally, if we make any written communications
generally available to holders of our shares, including the Depositary or the custodian, and we request the Depositary to provide
them to ADR holders, the Depositary will mail copies of them, or, at its option, English translations or summaries of them to ADR
holders.
Fees and Expenses
What fees and expenses will I be responsible
for paying?
The Depositary may charge each person to
whom ADSs are issued, including, without limitation, issuances against deposits of shares, issuances in respect of share distributions,
rights and other distributions, issuances pursuant to a stock dividend or stock split declared by us or issuances pursuant to a
merger, exchange of securities or any other transaction or event affecting the ADSs or deposited securities, and each person surrendering
ADSs for withdrawal of deposited securities in any manner permitted by the deposit agreement or whose ADRs are cancelled or reduced
for any other reason, US$5.00 for each 100 ADSs (or any portion thereof) issued, delivered, reduced, cancelled or surrendered,
the case may be. The Depositary may sell (by public or private sale) sufficient securities and property received in respect of
a share distribution, rights and/or other distribution prior to such deposit to pay such charge.
The following additional charges shall be
incurred by the ADR holders, by any party depositing or withdrawing shares or by any party surrendering ADSs or to whom ADSs are
issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchange
of stock regarding the ADRs or the deposited securities or a distribution of ADSs), whichever is applicable:
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a fee of US$1.50 per ADR or ADRs for transfers of certificated or direct registration ADRs;
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a fee of up to US$0.02 per ADS for any cash distribution made pursuant to the deposit agreement;
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a fee of US$0.05 per ADS per calendar year (or portion thereof) for services performed by the Depositary in administering our
ADR program (which fee may be charged on a periodic basis during each calendar year and shall be assessed against holders of ADRs
as of the record date or record dates set by the Depositary during each calendar year and shall be payable in the manner described
in the next succeeding provision);
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any other charge payable by any of the Depositary, any of the Depositary’s agents, including, without limitation, the
custodian, or the agents of the Depositary’s agents in connection with the servicing of our shares or other deposited securities
(which charge shall be assessed against registered holders of our ADRs as of the record date or dates set by the Depositary and
shall be payable at the sole discretion of the Depositary by billing such registered holders or by deducting such charge from one
or more cash dividends or other cash distributions);
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a fee for the distribution of securities (or the sale of securities in connection with a distribution), such fee being in an
amount equal to the fee for the execution and delivery of ADSs which would have been charged as a result of the deposit of such
securities (treating all such securities as if they were shares) but which securities or the net cash proceeds from the sale thereof
are instead distributed by the Depositary to those holders entitled thereto;
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stock transfer or other taxes and other governmental charges;
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cable, telex and facsimile transmission and delivery charges incurred at your request;
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transfer or registration fees for the registration of transfer of deposited securities on any applicable register in connection
with the deposit or withdrawal of deposited securities;
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expenses of the Depositary in connection with the conversion of foreign currency into U.S. dollars; and
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such fees and expenses as are incurred by the Depositary (including, without limitation, expenses incurred in connection with
compliance with foreign exchange control regulations or any law or regulation relating to foreign investment) in delivery of deposited
securities or otherwise in connection with the Depositary’s or its custodian’s compliance with applicable laws, rules
or regulations.
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We will pay all other charges and expenses
of the Depositary and any agent of the Depositary (except the custodian) pursuant to agreements from time to time between us and
the Depositary. The fees described above may be amended from time to time.
Our Depositary has agreed to reimburse us
for certain expenses we incur that are related to establishment and maintenance of the ADR program, including investor relations
expenses and exchange application and listing fees. Neither the Depositary nor we can determine the exact amount to be made available
to us because (i) the number of ADSs that will be issued and outstanding, (ii) the level of fees to be charged to holders of ADSs
and (iii) our reimbursable expenses related to the ADR program are not known at this time. The Depositary collects its fees for
issuance and cancellation of ADSs directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal
or from intermediaries acting for them. The Depositary collects fees for making distributions to investors by deducting those fees
from the amounts distributed or by selling a portion of distributable property to pay the fees. The Depositary may collect its
annual fee for Depositary services by deduction from cash distributions, or by directly billing investors, or by charging the book-entry
system accounts of participants acting for them. The Depositary may generally refuse to provide services to any holder until the
fees and expenses owing by such holder for those services or otherwise are paid.
Payment of Taxes
ADR holders must pay any tax or other governmental
charge payable by the custodian or the Depositary on any ADS or ADR, deposited security or distribution. If an ADR holder owes
any tax or other governmental charge, the Depositary may (i) deduct the amount thereof from any cash distributions, or (ii) sell
deposited securities and deduct the amount owing from the net proceeds of such sale. In either case, the ADR holder remains liable
for any shortfall. Additionally, if any tax or governmental charge is unpaid, the Depositary may also refuse to effect any registration,
registration of transfer, split-up or combination of deposited securities or withdrawal of deposited securities (except under limited
circumstances mandated by securities regulations). If any tax or governmental charge is required to be withheld on any non-cash
distribution, the Depositary may sell the distributed property or securities to pay such taxes and distribute any remaining net
proceeds to the ADR holders entitled thereto.
By holding an ADR or an interest therein,
you will be agreeing to indemnify us, the Depositary, its custodian and any of our or their respective Directors, employees, agents
and affiliates against, and hold each of them harmless from, any claims by any governmental authority with respect to taxes, additions
to tax, penalties or interest arising out of any refund of taxes, reduced rate of withholding at source or other tax benefit obtained
in respect of, or arising out of, your ADSs.
Reclassifications, Recapitalizations
and Mergers
If we take certain actions that affect the
deposited securities, including (i) any change in par value, split-up, consolidation, cancellation or other reclassification of
deposited securities or (ii) any recapitalization, reorganization, merger, consolidation, liquidation, receivership, bankruptcy
or sale of all or substantially all of our assets, then the Depositary may choose to:
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distribute additional or amended ADRs;
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distribute cash, securities or other property it has received in connection with such actions;
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sell any securities or property received and distribute the proceeds as cash; or
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not perform any of the above.
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If the Depositary does not choose any of
the above options, any of the cash, securities or other property it receives will constitute part of the deposited securities and
each ADS will then represent a proportionate interest in such property.
Amendment and Termination
How may the deposit agreement be amended?
We may agree with the Depositary to amend
the deposit agreement and the ADSs without your consent for any reason. ADR holders must be given at least 30 days notice of any
amendment that imposes or increases any fees or charges (other than stock transfer or other taxes and other governmental charges,
transfer or registration fees, cable, telex or facsimile transmission costs, delivery costs or other such expenses), or otherwise
prejudices any substantial existing right of ADR holders. If an ADR holder continues to hold an ADR or ADRs after being so notified,
such ADR holder is deemed to agree to such amendment. Notwithstanding the foregoing, if any governmental body or regulatory body
should adopt new laws, rules or regulations which would require amendment or supplement of the deposit agreement or the form of
ADR to ensure compliance therewith, we and the Depositary may amend or supplement the deposit agreement and the ADR at any time
in accordance with such changed laws, rules or regulations, which amendment or supplement may take effect before a notice is given
or you otherwise receive notice. No amendment, however, will impair your right to surrender your ADSs and receive the underlying
securities, except in order to comply with mandatory provisions of applicable law.
How may the deposit agreement be terminated?
The Depositary may, and shall at our written
direction, terminate the deposit agreement and the ADR by mailing notice of such termination to the registered holders of ADRs
at least 30 days prior to the date fixed in such notice for such termination; provided, however, if the Depositary shall have (i)
resigned as Depositary under the deposit agreement, notice of such termination by the Depositary shall not be provided to registered
holders unless a successor Depositary shall not be operating under the deposit agreement within 45 days of the date of such resignation,
and (ii) been removed as Depositary under the deposit agreement, notice of such termination by the Depositary shall not be provided
to registered holders of ADRs unless a successor Depositary shall not be operating under the deposit agreement on the 90th day
after our notice of removal was first provided to the Depositary. After termination, the Depositary’s only responsibility
will be (i) to deliver deposited securities to ADR holders who surrender their ADRs, and (ii) to hold or sell distributions received
on deposited securities. As soon as practicable after the expiration of six months from the termination date, the Depositary will
sell the deposited securities which remain and hold the net proceeds of such sales, without liability for interest, in trust for
the ADR holders who have not yet surrendered their ADRs. After making such sale, the Depositary shall have no obligations except
to account for such proceeds and other cash. The Depositary will not be required to invest such proceeds or pay interest on them.
Limitations on Obligations and Liability
to ADR Holders
Limits on our obligations and the obligations
of the Depositary; limits on liability to ADR holders and holders of ADSs
Prior to the issue, registration, registration
of transfer, split-up, combination, or cancellation of any ADRs, or the delivery of any distribution in respect thereof, the Depositary
and its custodian may require you to pay, provide or deliver:
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payment with respect thereto of (i) any stock transfer or other tax or other governmental charge, (ii) any stock transfer or
registration fees in effect for the registration of transfers of shares or other deposited securities upon any applicable register
and (iii) any applicable fees and expenses described in the deposit agreement;
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the production of proof satisfactory to the Depositary and/or its custodian of (i) the identity of any signatory and genuineness
of any signature and (ii) such other information, including, without limitation, information as to citizenship, residence, exchange
control approval, beneficial ownership of any securities, compliance with applicable law, regulations, provisions of or governing
shares and terms of the deposit agreement and the ADRs, as it may deem necessary or proper;
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compliance with such regulations as the Depositary may establish consistent with the deposit agreement or any Colombian law
or regulation relating to Colombian taxes, foreign investment in Colombia and laws, rules and regulations relating to the regulation
of foreign exchange in Colombia.
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The issuance of ADRs, the acceptance of
deposits of shares, the registration, registration of transfer, split-up or combination of ADRs or the withdrawal of shares, generally
or in particular instances, when the ADR register or any register for shares is closed or when any such action is deemed advisable
by the Depositary; provided that the ability to withdraw shares may only be limited under the following circumstances: (i) temporary
delays caused by closing transfer books of the Depositary or our transfer books or the deposit of shares in connection with voting
at a shareholders’ meeting, or the payment of dividends, (ii) the payment of fees, taxes, and similar charges, and (iii)
compliance with any laws or governmental regulations relating to ADRs or to the withdrawal of shares.
The deposit agreement expressly limits the
obligations and liability of the Depositary, ourselves and our respective agents. Neither we nor the Depositary nor any such agent
will be liable if:
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present or future law, rule or regulation of the United States, Colombia or any other country, or of any governmental or regulatory
authority or securities exchange or market or automated quotation system, the provisions of or governing any deposited securities,
any present or future provision of our charter, any act of God, war, terrorism or other circumstance beyond our, the Depositary’s
or our respective agents’ control shall prevent, delay or subject to any civil or criminal penalty any act which the deposit
agreement or the ADRs provide shall be done or performed by us, the Depositary or our respective agents (including, without limitation,
voting);
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it exercises or fails to exercise discretion under the deposit agreement or the ADR;
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it performs its obligations without gross negligence or bad faith;
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it takes any action or refrains from taking any action in reliance upon the advice of or information from legal counsel, accountants,
any person presenting shares for deposit, any registered holder of ADRs, or any other person believed by it to be competent to
give such advice or information; or
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it relies upon any written notice, request, direction or other document believed by it to be genuine and to have been signed
or presented by the proper party or parties.
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Neither the Depositary nor its agents have
any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any deposited securities or
the ADRs. We and our agents shall only be obligated to appear in, prosecute or defend any action, suit or other proceeding in respect
of any deposited securities or the ADRs, which in our opinion may involve us in expense or liability, if indemnity satisfactory
to us against all expense (including fees and disbursements of counsel) and liability is furnished as often as may be required.
The Depositary and its agents may fully respond to any and all demands or requests for information maintained by or on its behalf
in connection with the deposit agreement, any registered holder or holders of ADRs, any ADSs or otherwise to the extent such information
is requested or required by or pursuant to any lawful authority, including without limitation laws, rules, regulations, administrative
or judicial process, banking, securities or other regulators.
Additionally, none of us, the Depositary
or the custodian shall be liable for the failure by any registered holder of ADRs or beneficial owner therein to obtain the benefits
of credits on the basis of non-U.S. tax paid against such holder’s or beneficial owner’s income tax liability. Neither
we nor the Depositary shall incur any liability for any tax consequences that may be incurred by holders or beneficial owners on
account of their ownership of ADRs or ADSs.
The Depositary will not be responsible for
failing to carry out instructions to vote the deposited securities or for the manner in which the deposited securities are voted
or the effect of the vote. In no event shall we, the Depositary or any of our respective agents be liable to holders of ADSs or
interests therein for any indirect, special, punitive or consequential damages.
The Depositary may own and deal in deposited
securities and in ADSs.
Disclosure of Interest in ADSs
To the extent that the provisions of or
governing any deposited securities may require disclosure of or impose limits on beneficial or other ownership of deposited securities,
other shares and other securities and may provide for blocking transfer, voting or other rights to enforce such disclosure or limits,
you agree to comply with all such disclosure requirements and ownership limitations and to comply with any reasonable instructions
we may provide in respect thereof. We reserve the right to request you to deliver your ADSs for cancellation and withdrawal of
the deposited securities so as to permit us to deal with you directly as a holder of deposited securities and, by holding an ADS
or an interest therein, you will be agreeing to comply with such instructions.
Books of Depositary
The Depositary or its agent will maintain
a register for the registration, registration of transfer, combination and split-up of ADRs, which register shall include the Depositary’s
direct registration system. You may inspect such records at such office during regular business hours, but solely for the purpose
of communicating with other holders in the interest of business matters relating to the deposit agreement. Such register may be
closed from time to time, when deemed expedient by the Depositary or when requested by us.
The Depositary will maintain facilities
to record and process the issuance, cancellation, combination, split-up and transfer of ADRs. These facilities may be closed from
time to time, to the extent not prohibited by law.
Pre-release of ADSs
The Depositary may issue ADSs prior to the
deposit with the custodian of shares (or rights to receive shares). This is called a pre-release of the ADS. A pre-release is closed
out as soon as the underlying shares (or rights to receive shares from us or from any registrar, transfer agent or other entity
recording share ownership or transactions) are delivered to the Depositary. The Depositary may pre-release ADSs only if:
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the Depositary has received collateral for the full market value of the pre-released ADSs (marked to market daily); and
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each recipient of pre-released ADSs agrees in writing that he or she
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owns the underlying shares;
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assigns all rights in such shares to the Depositary;
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holds such shares for the account of the Depositary;
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will deliver such shares to the custodian as soon as practicable, and promptly if the Depositary so demands; and
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will not act inconsistently with treating the Depositary, acting in its capacity as such on behalf of holders, as the owner
of such Shares.
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In general, the number of pre-released ADSs
will not evidence more than 30% of all ADSs outstanding at any given time (excluding those evidenced by pre-released ADSs). However,
the Depositary may change or disregard such limit from time to time as it deems appropriate. The Depositary may retain for its
own account any earnings on collateral for pre-released ADSs and its charges for issuance thereof.
Appointment
In the deposit agreement, each holder and
each person holding an interest in ADSs, upon acceptance of any ADSs (or any interest therein) issued in accordance with the terms
and conditions of the deposit agreement will be deemed for all purposes to:
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be a party to and bound by the terms of the deposit agreement and the applicable ADR or ADRs, and
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appoint the Depositary its attorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions
contemplated in the deposit agreement and the applicable ADR or ADRs, to adopt any and all procedures necessary to comply with
applicable laws and to take such action as the Depositary in its sole discretion may deem necessary or appropriate to carry out
the purposes of the deposit agreement and the applicable ADR and ADRs, the taking of such actions to be the conclusive determinant
of the necessity and appropriateness thereof.
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Description of the Debt Securities
This is a summary of the material terms
of the debt securities which we may offer pursuant to this prospectus and the indenture dated July 23, 2009, as amended by Amendment
No. 1 to the indenture, dated as of June 26, 2015, (collectively the “indenture”), among Ecopetrol and The Bank of
New York Mellon, as trustee. Because this is a summary, it does not contain the complete terms of the debt securities and the indenture,
and may not contain all the information that you should consider before investing in the debt securities. A copy of the indenture
has been filed as an exhibit to our registration statement on Form F-4 filed with the SEC on August 31, 2009. A copy of the form
of Amendment No. 1 to the indenture has been filed as an exhibit to our current report on Form 6-K filed with the SEC on June 24,
2015. We urge you to closely examine and review the indenture itself. See “Where You Can Find More Information” for
information on how to obtain a copy. You may also inspect a copy of the indenture at the corporate trust office of the trustee,
which is currently located at 101 Barclay Street, 4 East, New York, New York 10286.
The applicable prospectus supplement or
other offering materials may also add, update or change the description of the debt securities contained in this prospectus. You
should carefully read this prospectus, any prospectus supplement or other offering materials before you invest in any of our securities,
including our debt securities.
General
The indenture does not limit the aggregate
principal amount of senior notes which may be issued under the indenture and provides that Ecopetrol may issue senior notes from
time to time in one or more series. The senior notes which Ecopetrol may issue under the indenture are collectively referred to
in this prospectus as the “debt securities”.
The debt securities will be unsecured senior
obligations of Ecopetrol. Ecopetrol may “reopen” the note series and issue additional notes of the same series.
The debt securities will bear interest at
the rate per annum set forth in the applicable prospectus supplement from the date of original issuance of such debt securities.
Interest payable will be paid on the dates set forth in the applicable prospectus supplement, each such date being an “interest
payment date”, to the persons in whose names the debt securities are registered at the close of business on the fifteenth
calendar day preceding the interest payment date. Interest payable at maturity will be payable to the person to whom principal
will be payable on that date. The maturity date for the debt securities will be set forth in the applicable prospectus supplement.
If any interest payment date or maturity date would be otherwise a day that is not a business day, the related payment of principal
and interest will be made on the next succeeding business day as if it were made on the date the payment was due, and no interest
will accrue on the amounts so payable for the period from and after the interest payment date or the maturity date, as the case
may be, to the next succeeding business day. A “business day” means a day other than a Saturday, Sunday or other day
on which banking institutions in New York, New York are authorized or obligated by law, regulation or executive order to close.
In the case of amounts not paid by Ecopetrol
under the debt securities, interest will continue to accrue on such amounts, to the extent permitted by applicable law, at a default
rate equal to 1.0% in excess of the interest rate on the debt securities, from and including the date when such amounts were due
and owing and through and including the date of payment of such amounts by Ecopetrol.
The indenture does not contain any provision
that would limit the ability of Ecopetrol and its Subsidiaries to incur indebtedness or to substantially reduce or eliminate Ecopetrol’s
assets or that would afford the holders of the debt securities protection in the event of a decline in Ecopetrol’s credit
quality or a takeover, recapitalization or highly leveraged or similar transaction involving Ecopetrol. In addition, subject to
the limitations set forth under “—Merger and Consolidation”, Ecopetrol may, in the future, enter into certain
transactions, including the sale of all or substantially all of its assets or the merger or consolidation of Ecopetrol, that would
increase the amount of Ecopetrol’s indebtedness or substantially reduce or eliminate Ecopetrol’s assets, which may
have an adverse effect on Ecopetrol’s ability to service its indebtedness, including the debt securities.
Except as otherwise set forth in the applicable
prospectus supplement, each book-entry note will be represented by one or more global notes in fully registered form, registered
in the name of The Depositary Trust Company, which is referred to in this prospectus as “DTC” or the “depositary”,
or its nominee. Beneficial interests in the global notes will be shown on, and transfers thereof will be effected only through,
records maintained by DTC and its participants. See “—Form, Denomination and Registration”. Except in the limited
circumstances described in this prospectus, book-entry notes will not be exchangeable for debt securities issued in fully registered
form (“certificated notes”).
Except as otherwise set forth in the applicable
prospectus supplement, in the event that, as a result of certain changes in law affecting Colombian withholding taxes, Ecopetrol
becomes obliged to pay Additional Amounts (as defined below), the debt securities will be redeemable, as a whole but not in part,
at Ecopetrol’s option at any time at 100% of their principal amount plus accrued and unpaid interest, if any. See “—
Withholding Tax Redemption”. In addition, we will have the right at our option to redeem any of the debt securities in whole
or in part at a redemption price set forth below.
Except as otherwise set forth in the applicable
prospectus supplement, we are required to make an offer to purchase all or any portion of outstanding debt securities held by holders
upon the occurrence of a Change of Control Repurchase Event (as defined below) at a purchase price in cash equal to 101% of the
principal amount of the debt securities so purchased, plus accrued and unpaid interest thereon and any Additional Amounts to but
excluding the date of such purchase.
Book-entry notes may be transferred or exchanged
only through the depositary. See “—Form, Denomination and Registration”. Registration of transfer or exchange
of certificated notes will be made at the office or agency maintained by Ecopetrol for this purpose in the Borough of Manhattan,
The City of New York, currently the office of the trustee at 101 Barclay Street, 4 East, New York, New York 10286. Neither Ecopetrol
nor the trustee will charge a service charge for any registration of transfer or exchange of debt securities, but Ecopetrol may
require payment of a sum sufficient to cover any tax or other governmental charge that may he imposed in connection with the transfer
or exchange (other than exchanges pursuant to the indenture not involving any transfer).
Despite the Republic of Colombia’s
ownership interest in Ecopetrol, the Nation is not responsible for Ecopetrol’s obligations under the senior debt securities
or the indenture.
Payments
Ecopetrol will make payments of principal,
and premium, if any, and interest on book-entry notes through the trustee to the depositary. See “—Form, Denomination
and Registration”. In the case of certificated notes (which will only be issued in the circumstances described below under
“Form, Denomination and Registration”), Ecopetrol will pay the principal and premium, if any, due on the maturity date
in immediately available funds upon presentation and surrender by the holder of the debt securities at the office or agency maintained
by Ecopetrol for this purpose in the Borough of Manhattan, The City of New York, currently the office of the trustee at 101 Barclay
Street, 4 East, New York, New York 10286. Ecopetrol will pay interest due on the maturity date of a certificated note to the person
to whom payment of the principal and premium, if any, will be made. Ecopetrol will pay interest due on a certificated note on any
interest payment date other than the maturity date by check mailed to the address of the holder entitled to the payment as the
address shall appear in the note register of Ecopetrol. Notwithstanding the foregoing, a holder of U.S.$10.0 million or more in
aggregate principal amount of certificated notes will be entitled to receive interest payments, if any, on any interest payment
date other than the maturity date by wire transfer of immediately available funds if appropriate wire transfer instructions have
been received in writing by the trustee not less than 15 calendar days prior to the interest payment date. Any wire transfer instructions
received by the trustee will remain in effect until revoked by the holder. Any interest not punctually paid or duly provided for
on a certificated note on any interest payment date other than the maturity date will cease to be payable to the holder of any
note as of the close of business on the related record date and may either be paid (1) to the person in whose name the certificated
note is registered at the close of business on a special record date for the payment of the defaulted interest that is fixed by
Ecopetrol, written notice of which will be given to the holders of the debt securities not less than 30 calendar days prior to
the special record date, or (2) at any time in any other lawful manner.
All monies paid by Ecopetrol to the trustee
or any paying agent for the payment of principal of, and premium and interest on, any note which remains unclaimed for two years
after the principal, premium or interest is due and payable may be repaid to Ecopetrol and, after that payment, the holder of any
note will look only to Ecopetrol for payment.
Form, Denomination and Registration
Except as otherwise set forth in the applicable
prospectus supplement, the debt securities will be issued in book-entry form in minimum denominations of U.S.$1,000 and integral
multiples of U.S.$1,000 in excess thereof.
So long as the depositary, which initially
will be DTC, or its nominee is the registered owner of a global note, the depositary or its nominee, as the case may be, will be
the sole holder of the debt securities represented by the global note for all purposes under the indenture. Except as otherwise
provided in this section, the beneficial owners of the global notes representing the debt securities will not be entitled to receive
physical delivery of certificated notes and will not be considered the holders of the debt securities for any purpose under the
indenture, and no global note representing the book-entry notes will be exchangeable or transferable. Accordingly, each beneficial
owner must rely on the procedures of the depositary and, if the beneficial owner is not a participant of the depositary, then the
beneficial owner must rely on the procedures of the participant through which the beneficial owner owns its interest in order to
exercise any rights of a holder under the global notes or the indenture. The laws of some jurisdictions may require that certain
purchasers of debt securities take physical delivery of the debt securities in certificated form. Such limits and laws may impair
the ability to transfer beneficial interests in a global note representing the debt securities.
The global notes representing the debt securities
will be exchangeable for certificated notes of like tenor and terms and of differing authorized denominations aggregating a like
principal amount, only if the depositary notifies us that it is unwilling or unable to continue as depositary for the global notes,
the depositary ceases to be a clearing agency registered under the Exchange Act, we in our sole discretion determine that the global
notes shall be exchangeable for certificated notes, or there shall have occurred and be continuing an event of default under the
indenture with respect to the debt securities.
Upon any exchange, the certificated notes
shall be registered in the names of the beneficial owners of the global notes representing the debt securities, which names shall
be provided by the depositary’s relevant participants (as identified by the depositary) to the trustee.
Because of time zone differences, the securities
account of a Euroclear or Clearstream Banking participant purchasing a beneficial interest in a global note from a depositary participant
will be credited during the securities settlement processing day, which must be a business day for Euroclear or Clearstream Banking,
as applicable, immediately following the depositary’s settlement date. Credit of a transfer of a beneficial interest in a
global note settled during that processing day will be reported to the applicable Euroclear or Clearstream Banking participant
on that day. Cash received in Euroclear or Clearstream Banking as a result of a transfer of a beneficial interest in a global note
by or through a Euroclear or Clearstream Banking participant to a depositary participant will be received with value on the depositary’s
settlement date but will be available in the applicable Euroclear or Clearstream Banking cash account only as of the business day
following settlement in the depositary.
Information Relating to the Depositary.
The following is based on information furnished by the depositary:
The depositary will act as the depositary
for the debt securities. The debt securities will be issued as fully registered senior debt securities registered in the name of
Cede & Co., which is the depositary’s partnership nominee. Fully registered global notes will be issued for the debt
securities, in the aggregate principal amount of the issue, and will be deposited with the depositary.
The depositary is a limited-purpose trust
company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial
Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. The depositary
holds securities that its participants deposit with the depositary. The depositary also facilitates the settlement among participants
of securities transactions, including transfers and pledges, in deposited securities through electronic computerized book-entry
changes to participants’ accounts, thereby eliminating the need for physical movement of senior debt securities certificates.
Direct participants of the depositary include securities brokers and dealers, including the initial purchasers of the debt securities,
banks, trust companies, clearing corporations and certain other organizations. The depositary is owned by a number of its direct
participants, including the initial purchasers of the debt securities and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the depositary’s system is also available
to indirect participants, which includes securities brokers and dealers, banks and trust companies that clear through or maintain
a custodial relationship with a direct participant, either directly or indirectly. The rules applicable to the depositary and its
participants are on file with the SEC.
Purchases of debt securities under the depositary’s
system must be made by or through direct participants, which will receive a credit for the debt securities on the depositary’s
record. The ownership interest of each beneficial owner, which is the actual purchaser of any note, represented by global notes,
is in turn to be recorded on the direct and indirect participants’ records. Beneficial owners will not receive written confirmation
from the depositary of their purchase, but beneficial owners are expected to receive written confirmations providing details of
the transaction, as well as periodic statements of their holdings, from the direct or indirect participants through which the beneficial
owner entered into the transaction. Transfers of ownership interests in the global notes representing the debt securities are to
be accomplished by entries made on the books of participants acting on behalf of beneficial owners. Beneficial owners of the global
notes representing the debt securities will not receive certificated notes representing their ownership interests therein, except
in the limited circumstances described above.
To facilitate subsequent transfers, all
global notes representing the debt securities which are deposited with, or on behalf of, the depositary are registered in the name
of the depositary’s nominee, Cede & Co. The deposit of global notes with, or on behalf of, the depositary and their registration
in the name of Cede & Co. effect no change in beneficial ownership. The depositary has no knowledge of the actual beneficial
owners of the global notes representing the debt securities; the depositary’s records reflect only the identity of the
direct participants to whose accounts the debt securities are credited, which may or may not be the beneficial owners. The participants
will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications
by the depositary to direct participants, by direct participants to indirect participants, and by direct and indirect participants
to beneficial owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be
in effect from time to time.
Neither the depositary nor Cede & Co.
will consent or vote with respect to the global notes representing the debt securities. Under its usual procedure, the depositary
mails an omnibus proxy to Ecopetrol as soon as possible after the applicable record date. The omnibus proxy assigns Cede &
Co.’s consenting or voting rights to those direct participants to whose accounts the debt securities are credited on the
applicable record date (identified in a listing attached to the omnibus proxy).
Principal, premium, if any, and/or interest
payments on the global notes representing the debt securities will be made to the depositary. The depositary’s practice is
to credit direct participants’ accounts on the applicable payment date in accordance with their respective holdings shown
on the depositary’s records unless the depositary has reason to believe that it will not receive payment on the date. Payments
by participants to beneficial owners will be governed by standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in “street name”, and will be the responsibility of
the participant and not of the depositary, the trustee or Ecopetrol, subject to any statutory or regulatory requirements as may
be in effect from time to time. Payment of principal, premium, if any, and/or interest to the depositary is the responsibility
of Ecopetrol or the trustee, disbursement of the payments to direct participants will be the responsibility of the depositary,
and disbursement of the payments to the beneficial owners will be the responsibility of direct and indirect participants.
The depositary may discontinue providing
its services as securities depositary with respect to the debt securities at any time by giving reasonable notice to Ecopetrol
or the trustee. Under such circumstances, in the event that a successor securities depositary is not obtained, certificated notes
are required to be printed and delivered.
Ecopetrol may decide to discontinue use
of the system of book-entry transfers through the depositary or a successor securities depositary. In that event, certificated
notes will be printed and delivered.
Although the depositary, Euroclear and Clearstream
Banking have agreed to the procedures described above in order to facilitate transfers of interests in the global notes among participants
of the depositary, Euroclear and Clearstream Banking, they are under no obligation to perform or continue to perform these procedures,
and these procedures may be discontinued at any time. Neither the trustee nor Ecopetrol will have any responsibility for the performance
by the depositary, Euroclear or Clearstream Banking or their respective participants or indirect participants of their respective
obligations under the rules and procedures governing their operations.
Trading
. Transfers between participants
in the depositary will be effected in the ordinary way in accordance with the depositary’s rules and operating procedures,
while transfers between participants in Euroclear and Clearstream Banking will be effected in the ordinary way in accordance with
their respective rules and operating procedures.
The information in this subsection “—Form,
Denomination and Registration” concerning the depositary, Euroclear and Clearstream Banking and their respective book-entry
systems has been obtained from the depository, Euroclear and Clearstream Banking but Ecopetrol takes responsibility solely for
the accuracy of its extraction of this information.
Certain Covenants
The indenture provides that the covenants
set forth below are applicable to Ecopetrol.
Payment of Principal and Interest
.
Ecopetrol will duly and punctually pay the principal of and any premium and interest and other amounts (including any Additional
Amounts in the event withholding and other taxes are imposed in Colombia) on the debt securities in accordance with the debt securities
and the indenture.
Maintenance of Corporate Existence
.
Ecopetrol will maintain its corporate existence and take all reasonable actions to maintain all rights, privileges and the like
necessary or desirable in the normal conduct of business, activities or operations, unless the Board of Directors determines (based
on appropriate shareholder authorization, if necessary) that preserving Ecopetrol’s corporate existence is no longer desirable
in the conduct of Ecopetrol’s business and is not disadvantageous in any material respect to holders.
Ranking
. Ecopetrol will ensure
that the debt securities will at all times constitute its general senior, unsecured and unsubordinated obligations and will rank
pari passu
, without any preferences among themselves, with all of its other present and future unsecured and unsubordinated
obligations of Ecopetrol that constitute External Indebtedness (other than obligations preferred by statute or by operation of
law).
Statement by Officers as to Default
and Notices of Events of Default
. Within 10 days (or promptly with respect to certain events of default relating to Ecopetrol’s
insolvency and in any event no later than 10 days) after Ecopetrol becomes aware or should reasonably become aware of the occurrence
of any default or event of default under the indenture or the debt securities, it will notify the trustee in writing of the occurrence
of such default or event of default.
Provision of Financial Statements
and Reports
. In the event that Ecopetrol files any financial statements or reports with the SEC or publishes or otherwise
makes such statements or reports publicly available in Colombia, the United States or elsewhere, Ecopetrol will furnish a copy
of the statements or reports to the trustee within 15 days of the date of filing or the date the information is published or otherwise
made publicly available.
Ecopetrol will provide, together with each
of the financial statements delivered as described in the preceding paragraph, an officer’s certificate stating (i) that
a review of Ecopetrol’s activities has been made during the period covered by such financial statements with a view to determining
whether Ecopetrol has kept, observed, performed and fulfilled its covenants and agreements under the indenture; and (ii) that no
event of default, or event which with the giving of notice or passage of time or both would become an event of default, has occurred
during that period or, if one or more have actually occurred, specifying all those events and what actions have been taken and
will be taken with respect to that event of default or other event.
Delivery of these reports, information and
documents to the trustee is for informational purposes only and the trustee’s receipt of any of those will not constitute
constructive notice of any information contained therein or determinable from information contained therein, including Ecopetrol’s
compliance with any of its covenants under the indenture (as to which the trustee is entitled to rely exclusively on officer’s
certificates).
Money for Securities Payments to Be
Held in Trust
.
If Ecopetrol will at any time act as its own paying agent with respect to any notes, it will,
on or before each due date of the principal of, any premium or interest on or Additional Amounts with respect to any of notes,
segregate and hold in trust for the benefit of the persons entitled thereto a sum in the currency or currencies, currency unit
or units or composite currency or currencies in which the notes are payable (except as otherwise specified pursuant to Section
301 of the indenture for the notes) sufficient to pay the principal or any premium, interest or Additional Amounts so becoming
due until such sums shall be paid to such persons or otherwise disposed of as herein provided, and shall promptly notify the trustee
of its action or failure so to act. Whenever Ecopetrol will have one or more paying agents for any notes, it will, on or prior
to each due date of the principal of, any premium or interest on or any Additional Amounts with respect to any notes, deposit with
any paying agent a sum (in the currency or currencies, currency unit or units or composite currency or currencies described in
the preceding paragraph) sufficient to pay the principal or any premium, interest or Additional Amounts so becoming due, such sum
to be held in trust for the benefit of the persons entitled thereto, and (unless such paying agent is the trustee) Ecopetrol will
promptly notify the trustee of its action or failure so to act.
Ecopetrol will cause each paying agent for
any notes (other than the trustee) to execute and deliver to the trustee an instrument in which such paying agent shall agree with
the trustee, subject to the provisions of Section 1003 of the indenture, that such paying agent shall:
(1) hold all sums held by it for the payment
of the principal of, any premium or interest on or any Additional Amounts with respect to notes in trust for the benefit of the
persons entitled thereto until such sums will be paid to such persons or otherwise disposed of as provided in or pursuant to the
indenture, and Ecopetrol will have no proprietary or other interest whatsoever in such amounts; and so long as the trustee or such
paying agent holds the funds so deposited and such funds are available to holders of the notes entitled thereto in accordance with
the terms of the notes and the indenture and holders of the notes are not prevented from claiming such funds in accordance with
the terms of the notes and the indenture, Ecopetrol will not be considered to have defaulted in its obligation to make payment
of such amounts on the date on which such amounts become due and payable;
(2) give the trustee notice of any default
by Ecopetrol (or any other obligor upon the notes) in the making of any payment of principal, any premium or interest on or any
Additional Amounts with respect to the notes; and
(3) at any time during the continuance of
any such default, upon the written request of the trustee, forthwith pay to the trustee all sums so held in trust by such paying
agent.
Ecopetrol may at any time, for the purpose
of obtaining the satisfaction and discharge of the indenture or for any other purpose, pay, or by company order direct any paying
agent to pay, to the trustee all sums held in trust by Ecopetrol or such paying agent, such sums to be held by the trustee upon
the same terms as those upon which such sums were held by Ecopetrol or such paying agent; and, upon such payment by any paying
agent to the trustee, such paying agent will be released from all further liability with respect to such sums.
Except as otherwise provided in the notes
or in the indenture, any money deposited with the trustee or any paying agent, or then held by Ecopetrol, in trust for the payment
of the principal of, any premium or interest on or any Additional Amounts with respect to any note and remaining unclaimed for
two years after such principal or any such premium or interest or any such Additional Amounts will have become due and payable
shall be paid to Ecopetrol on company request, or (if then held by Ecopetrol) will be discharged from such trust; and the holder
of such note shall thereafter, as an unsecured general creditor, look only to Ecopetrol for payment thereof, and all liability
of the trustee or such paying agent with respect to such trust money, and all liability of Ecopetrol as trustee thereof, will thereupon
cease; provided, however, that the trustee or such paying agent, before being required to make any such repayment, may at the expense
of Ecopetrol cause to be published once, in an authorized newspaper in each place of payment for such series or to be mailed to
holders of registered notes of such series, or both, notice that such money remains unclaimed and that, after a date specified
therein, which will not be less than 30 days from the date of such publication or mailing nor will it be later than two years after
such principal and any premium or interest or Additional Amounts will have become due and payable, any unclaimed balance of such
money then remaining will be repaid to Ecopetrol.
Waiver of Certain Covenants
.
Ecopetrol may omit in any particular instance to comply with any term, provision or condition set forth in Section 1002 of the
indenture, inclusive with respect to the notes if before the time for such compliance the holders of at least a majority in principal
amount of the outstanding notes, by act of such holders, either will waive such compliance in such instance or generally will have
waived compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or
condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of Ecopetrol
and the duties of the trustee in respect of any such term, provision or condition will remain in full force and effect.
Limitation on Liens
. Ecopetrol
will not, and will not permit any Material Subsidiary to, directly or indirectly, create, incur or assume any Lien, except for
Permitted Liens, to secure the payment of Indebtedness of Ecopetrol or any Material Subsidiary, unless effective provision is made
whereby the debt securities (together with, if Ecopetrol shall so determine, any other Indebtedness ranking equally with the debt
securities, whether then existing or thereafter created) are secured equally and ratably with (or prior to) such Indebtedness (but
only for so long as such Indebtedness is so secured).
The foregoing limitation on Liens shall
not apply to the creation, incurrence or assumption of the following Liens (“Permitted Liens”):
1. Liens arising by operation of law,
such as merchants’, maritime or other similar Liens arising in the ordinary course of business or Liens in respect of taxes,
assessments or other governmental charges that are not yet delinquent or that are being contested in good faith by appropriate
proceedings;
2. Liens arising in the ordinary course
of business in connection with Indebtedness maturing not more than one year after the date on which that Indebtedness was originally
incurred and which is related to the financing of export, import or other trade transactions;
3. Liens resulting from the deposit of
funds or evidences of Indebtedness in trust for the purpose of discharging or defeasing Indebtedness of Ecopetrol or any Material
Subsidiary;
4. Liens on any property or assets existing
at the time of acquisition thereof by Ecopetrol or any Material Subsidiary, including Liens on assets or property of a Person existing
at the time such Person is merged into, consolidated with or acquired by Ecopetrol or any Material Subsidiary or becomes a Material
Subsidiary; provided that any such Lien is not incurred in contemplation of such merger, consolidation or acquisition (unless such
Lien was created to secure or provide for the payment of any part of the purchase price of such property or assets) and does not
secure any property of Ecopetrol or any Material Subsidiary other than the property and assets subject to such Lien prior to such
merger, consolidation or acquisition;
5. Liens existing as of the date of original
issuance of the debt securities;
6. Liens securing Indebtedness (including
in the form of Capitalized Lease Obligations and purchase money Indebtedness) incurred for the purpose of financing the cost (including
without limitation the cost of design, development, site acquisition, construction, integration, manufacture or acquisition) of
real or personal property (tangible or intangible) which is incurred contemporaneously therewith or within 180 days thereafter;
provided (i) such Liens secure Indebtedness in an amount not in excess of the cost of such property (plus an amount equal to the
reasonable fees and expenses incurred in connection with the incurrence of such Indebtedness) and (ii) such Liens do not extend
to any property of Ecopetrol or any Material Subsidiary other than the property for which such Indebtedness was incurred;
7. Liens to secure the performance of
statutory and common law obligations, bids, trade contracts, judgments, surety or appeal bonds, performance bonds or other obligations
of a like nature incurred in the ordinary course of business
8. Liens arising out of judgments or
awards against Ecopetrol or a Material Subsidiary which have not resulted in an Event of Default;
9. Liens to secure the debt securities;
10. (i) Liens granted in favor of Ecopetrol
and/or any Wholly Owned Subsidiary to secure Indebtedness owing to Ecopetrol or such Wholly Owned Subsidiary, and (ii) Liens granted
by a Material Subsidiary in favor of another Material Subsidiary to secure Indebtedness owing to such other Material Subsidiary;
11. Legal or equitable encumbrances deemed
to exist by reason of the inclusion of customary negative pledge provisions in any financing document of Ecopetrol or any Subsidiary;
12. Liens securing Internal Indebtedness;
13. Any Lien in respect of Indebtedness
representing the extension, refinancing, renewal or replacement (or successive extensions, refinancings, renewals or replacements)
of Indebtedness secured by Liens referred to in clauses (2), (3), (4), (5), (6), (7), (8), (9), (10) and (11) above and (17) below;
provided that the principal of the Indebtedness secured thereby does not exceed the principal of the Indebtedness secured thereby
immediately prior to such extension, renewal or replacement, plus any accrued and unpaid interest or capitalized interest payable
thereon, reasonable fees and expenses incurred in connection therewith, and the amount of any prepayment premium necessary to accomplish
any refinancing; and provided, further, that such extension, renewal or replacement shall be limited to all or a part of the property
(or interest therein) subject to the Lien so extended, renewed or replaced (plus improvements and construction on such property);
14. Pledges and deposits made in the
ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws
or regulations;
15. Easements, zoning restrictions, rights-of-way
and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary
obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business
of Ecopetrol or any of its Subsidiaries;
16. Liens arising out of governmental
concessions or licenses held by Ecopetrol or any of its Subsidiaries;
17. Liens over construction or development
project assets (including shares or other equity interests of any Person formed to own, construct, or develop such assets) so long
as recourse is limited to recoveries (including any revenues) in respect of such construction or development of project assets;
18. Liens or deposits required by any
contract or statute or other regulatory requirements in order to permit Ecopetrol or any Subsidiary of Ecopetrol to perform any
contract or subcontract made by it with or at the request of a governmental entity or any department, agency or instrumentality
thereof, or to secure return of partial progress, advance or any other payments to Ecopetrol or any Subsidiary by a governmental
entity or any department, agency, or instrumentality thereof pursuant to the provisions of any contract or statute; and
19. Liens in respect of Indebtedness
the principal amount of which in the aggregate, together with all other Liens not otherwise qualifying as Permitted Liens pursuant
to another part of this definition of Permitted Liens, does not exceed 15% of Ecopetrol’s Consolidated Total Assets. For
purposes of this covenant, the value of any Lien securing Indebtedness will be computed on the basis of the lesser of (i) the outstanding
principal amount of such secured Indebtedness and (ii) the higher of (x) the book value or (y) the Fair Market Value of the property
securing such Indebtedness.
Repurchase of Debt securities upon
a Change of Control Repurchase Event
. Ecopetrol must commence, within 30 days of the occurrence of a Change of Control
Repurchase Event, and consummate an offer to purchase (“Offer to Purchase”) all debt securities then outstanding, at
a purchase price equal to 101% of the principal amount of the debt securities on the date of repurchase, plus accrued interest
(if any) to the date of purchase. Ecopetrol is not required to make an Offer to Purchase following a Change of Control Repurchase
Event if a third party makes an Offer to Purchase that would be in compliance with the provisions described in this covenant if
it were made by Ecopetrol and such third party purchases (for the consideration referred to in the immediately preceding sentence)
the debt securities validly tendered and not withdrawn. Prior to the mailing of the notice to holders commencing such Offer to
Purchase, but in any event within 30 days following any Change of Control Repurchase Event, Ecopetrol covenants to (i) repay in
full all indebtedness of Ecopetrol that would prohibit the repurchase of the debt securities pursuant to such Offer to Purchase
or (ii) obtain any requisite consents under instruments governing any such indebtedness of Ecopetrol to permit the repurchase of
the debt securities. Ecopetrol shall first comply with the covenant in the preceding sentence before it repurchases debt securities
upon a Change of Control Repurchase Event pursuant to this covenant.
We will comply, to the extent applicable,
with the requirements of Rule 14e-1 of the Exchange Act and other applicable securities laws or regulations in connection with
making an offer to purchase debt securities upon the occurrence of a Change of Control Repurchase Event. To the extent that the
provisions of any applicable securities laws or regulations conflict with provisions of this covenant, we will comply with the
applicable securities laws and regulations and will not be deemed to have breached our obligations under this covenant by virtue
of our compliance with such securities laws or regulations.
There can be no assurance that Ecopetrol
will have sufficient funds available at the time of any Change of Control Repurchase Event to make the repurchases of debt securities
required by the foregoing covenant (as well as by any covenant contained in other securities of Ecopetrol which might be outstanding
at the time).
Additional Amounts
. Pursuant
to the indenture, all payments to be made in respect of the debt securities are to be made free and clear of, and without deduction
or withholding for or on account of, any taxes imposed or levied by or on behalf of Colombia or any political subdivision or authority
of or in such jurisdiction having the power to tax (“Taxes”, and such jurisdictions, “Taxing Jurisdiction”),
except to the extent such Taxes are imposed by applicable law. In the event that any Taxes are required by applicable law to be
deducted or withheld from any payment required to be made in respect of the debt securities or otherwise under the indenture,
then the amount of such payment shall be increased by an amount as may be necessary such that such payment is made, after withholding
or deduction for or on account of such Taxes, in an amount equal to the amount that would have been received by the applicable
recipient(s) in respect of such payment had no such Taxes (including any Taxes payable in respect of such Additional Amounts)
been required to be so deducted or withheld (any such amounts, “Additional Amounts”). Furthermore, the amount of any
Taxes required to be withheld or deducted from any payment made in respect of the debt securities or otherwise under the indenture
shall be withheld or deducted from such payment (as increased by any Additional Amounts) and paid to the Taxing Jurisdiction imposing
such Taxes in accordance with applicable law.
Notwithstanding the preceding sentences, no such Additional Amounts will be payable
in respect of:
(i). any Tax assessed or imposed
by any Taxing Jurisdiction to the extent that such Tax would not have been assessed or imposed but for the applicable recipient
or beneficial owner of such payment having a present or former connection with the Taxing Jurisdiction (including, without limitation,
such holder being or having been a citizen or resident thereof or having been engaged in a trade or business or present therein
or having, or having had, a permanent establishment therein), other than solely by reason of the applicable recipient’s participation
in the transactions effected by the indenture and the receipt of payments thereunder (including under the debt securities);
(ii). any estate, inheritance,
gift, personal property, sales, use, excise, transfer or other similar Tax imposed with respect to such payment;
(iii). any such Taxes that would
not have been imposed but for the failure of the applicable recipient or beneficial owner of such payment to comply with any certification,
identification, information, documentation or other reporting requirement to the extent (a) such compliance is required by applicable
law or an applicable treaty as a precondition to exemption from, or reduction in the rate of deduction or withholding of, such
Taxes and (b) at least 30 days before the first payment date with respect to which the obligor with respect to a payment shall
apply this clause (3), such obligor shall have notified such recipient in writing that such recipient will be required to comply
with such requirement;
(iv). any Tax imposed on a payment
on the debt securities required to be made pursuant to Council Directive 2003/48/EC of the Council of the European Union on the
taxation of savings income in the form of interest payments (or any European Union Directive otherwise implementing the conclusions
of the ECOFIN Council Meeting of 26 and 27 November 2000) or any law implementing or complying with, or introduced in order to
conform to, any such Directive;
(v). any tax imposed as a result
of any note being presented for payment (where presentation is required) more than 15 days after the relevant payment is first
made available for payment to the applicable recipient (except to the extent that such recipient would have been entitled to Additional
Amounts had any note been presented during such 15-day period);
(vi). any Tax payable other than
by withholding or deduction from payments of principal or of interest on any note; or
(vii). any Tax imposed on or
in respect of a payment to or on behalf of a holder or beneficial owner who would have been able to avoid such Tax in a commercially
reasonable manner by presenting the relevant note to any other paying agent;
(viii). any Tax imposed on or
in respect of any note pursuant to sections 1471 to 1474 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”),
any successor law or regulation implementing or complying with, or introduced in order to conform to, such sections or any intergovernmental
agreement or any agreement entered into pursuant to section 1471(b)(1) of the Code, or
(ix). any combination of the
circumstances described in clauses (i) through (viii);
nor will any Additional Amounts be paid with respect to any
payment to a recipient who is a fiduciary, partnership, limited liability company or any Person other than the sole beneficial
owner of such payment to the extent that a beneficiary or settlor with respect to such fiduciary or a member of such partnership,
limited liability company or a beneficial owner would not have been entitled to the Additional Amounts had such beneficiary, settlor,
member or beneficial owner been in the place of such recipient.
Ecopetrol will provide the trustee upon
its request with documentation reasonably satisfactory to it evidencing the payment of Taxes in respect of which Ecopetrol has
paid any Additional Amounts. Copies of such documentation will be made available to the applicable recipients upon written request
therefor to the trustee.
The obligation to pay Additional Amounts
will survive the repayment of the debt securities and the sale or transfer of the debt securities (or beneficial interests therein)
by any investor.
In addition, Ecopetrol shall pay any and
all other Taxes (“Other Taxes”) imposed by the relevant taxing authority imposing such Other Taxes in accordance with
applicable law, excluding any such Other Taxes imposed by any jurisdiction outside of Colombia. As used herein, Other Taxes shall
mean any and all stamp, documentary or similar taxes, or any other excise or similar levies that arise on account of any payment
to be made under any note or from the execution, delivery, registration, recording or enforcement of the debt securities and the
indenture (other than any Taxes paid in accordance with the first paragraph of “—Additional Amounts”).
Optional Redemption
Except as otherwise set forth below and
in the applicable prospectus supplement, we will not be permitted to redeem the debt securities before their stated maturity. The
debt securities will not be entitled to the benefit of any sinking fund-meaning that we will not deposit money on a regular basis
into any separate account to repay your debt securities. In addition, except as set forth above under “—Repurchase
of Debt securities upon a Change of Control Repurchase Event”, you will not be entitled to require us to repurchase your
debt securities from you before the stated maturity.
Withholding Tax Redemption
The debt securities may be redeemed at Ecopetrol’s
election, in whole but not in part on any date, by the giving of notice as provided herein under “—Notices”,
at a price equal to the outstanding principal amount thereof, together with any Additional Amounts and accrued and unpaid interest
to the redemption date, if, as a result of any change in, or amendment to, laws or treaties (or any regulation or rulings promulgated
thereunder) of Colombia or any political subdivision or taxing authority thereof or therein or any change in the official application,
administration or interpretation of such laws, treaties, regulations or rulings in such jurisdictions, Ecopetrol is or will become
obligated to pay any Additional Amounts on the debt securities, if such change or amendment is announced and becomes effective
on or after the issuance of the debt securities and such obligation cannot be avoided by taking commercially reasonable measures
available to Ecopetrol; provided, however, that no such notice of redemption shall be given earlier than 90 days prior to the earliest
date on which Ecopetrol would be obligated to pay such Additional Amounts.
Notice of any redemption will be mailed
at least 30 days but not more than 60 days before the redemption date to each holder of the debt securities to be redeemed. Prior
to the giving of notice of redemption of such debt securities pursuant to the indenture, Ecopetrol will deliver to the trustee
an officer’s certificate and a written opinion of recognized Colombian counsel independent of Ecopetrol and its Affiliates
to the effect that all governmental approvals necessary for it to effect such redemption have been or at the time of redemption
will be obtained and in full force and effect, and that Ecopetrol has or will become obligated to pay such Additional Amounts as
a result of such change, amendment, application, administration or interpretation. On the redemption date, interest will cease
to accrue on the debt securities that have been redeemed.
Open Market Purchases
Ecopetrol or any of its Subsidiaries may
at any time purchase any note in the open market or otherwise at any price.
Merger and Consolidation
Ecopetrol may not consolidate with or merge
into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its assets and the properties
and assets of its Subsidiaries (taken as a whole) as an entirety to, any entity or entities (including limited liability companies)
unless (1) the successor entity or entities, each of which shall be organized under the laws of Colombia or of the United States
or a State thereof, shall assume by supplemental indenture all the obligations of Ecopetrol under the debt securities and the indenture
(including the obligation to pay the Additional Amounts) and such successor entity or entities delivers certain certificates, opinions
of counsel and other documents to the trustee, (2) if the other entity is organized under the laws of a country other than the
United States, a state thereof or Colombia, Ecopetrol indemnifies holders against any tax, assessment or governmental charge or
other cost resulting from the transaction, (3) prior to and immediately after giving effect to the transaction or series of transactions,
no default or event of default shall have occurred and be continuing, (4) Ecopetrol delivers certain certificates, opinions of
its counsel and other documents to the trustee and (5) if, as a result of such transaction, properties or assets of Ecopetrol would
become subject to an encumbrance which would not be permitted by the terms of the debt securities, Ecopetrol or the successor entity
or entities shall take such steps as are necessary to secure such debt securities equally and ratably with all indebtedness secured
thereunder. Thereafter, all such obligations of Ecopetrol shall terminate. Notwithstanding the foregoing, nothing herein shall
prohibit Ecopetrol from selling, assigning, transferring, leasing, conveying or otherwise disposing of any of Ecopetrol’s
Subsidiaries at the date of the indenture or any interest therein or any assets thereof.
Events of Default
The term “event of default”
means any one of the following events with respect to the debt securities:
1. default in the payment of any interest
on any note, or any Additional Amounts payable with respect thereto, when the interest becomes or the Additional Amounts become
due and payable, and continuance of the default for a period of 30 days;
2. default in the payment of the principal
of or any premium on any note, or any Additional Amounts payable with respect thereto, when the principal or premium becomes or
the Additional Amounts become due and payable at their maturity, upon redemption or otherwise, and continuance of the default for
a period of 7 days;
3. default in the performance, or breach,
of any covenant or warranty of Ecopetrol in the indenture (other than a covenant or warranty a default in whose performance or
breach is elsewhere in Section 501 of the indenture specifically dealt with or which has expressly been included in the indenture
solely for the benefit of a series of Securities other than that series) or the debt securities and continuance of the default
or breach for a period of 60 days (inclusive of any cure period contained in any such covenant or other term for compliance thereunder)
after there has been given, by registered or certified mail, to Ecopetrol by the trustee or to Ecopetrol and the trustee by the
holders of at least 25% in principal amount of the outstanding senior debt securities of the series, a written notice specifying
the default or breach and requiring it to be remedied and stating that the notice is a “Notice of Default” under the
indenture;
4. any event of default as defined in
any mortgage, indenture or instrument under which there may be issued, or by which there may be secured or evidenced, any External
Indebtedness of Ecopetrol, other than the debt securities, or any Material Subsidiary of Ecopetrol, whether the External Indebtedness
now exists or shall hereafter be created, shall occur and shall result in such External Indebtedness in aggregate principal amount
(or, if applicable, with an issue price and accreted original issue discount) in excess of U.S.$100.0 million (or its equivalent
in another currency) becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;
5. the entry by a court having competent
jurisdiction of one or more final and non-appealable judgments or final decrees against Ecopetrol or a Material Subsidiary involving
in the aggregate a liability (not paid or fully covered by insurance) of 1% of Consolidated Net Tangible Assets (or its equivalent
in another currency) or more, and all such judgments or decrees have not been vacated, discharged or stayed within 180 days after
the date set for payment;
6. Ecopetrol admits that it is generally
unable to pay its debts as they become due or passes a resolution to dissolve;
7. the entry by a court having competent
jurisdiction of:
(a) a decree or order for relief
in respect of Ecopetrol in an involuntary proceeding under Bankruptcy Law, which decree or order shall remain unstayed and in effect
for a period of 180 consecutive days;
(b) a decree or order in an
involuntary proceeding under Bankruptcy Law adjudging Ecopetrol to be insolvent, or approving a petition seeking a similar relief
under Bankruptcy Law in respect of Ecopetrol, which decree or order shall remain unstayed and in effect for a period of 180 consecutive
days; or
(c) a final and non-appealable
order appointing a custodian, receiver, liquidator, assignee, trustee or other similar official of Ecopetrol or of any substantial
part of the property of Ecopetrol or ordering the winding up or liquidation of the affairs of Ecopetrol; and
8. the commencement by Ecopetrol of a
voluntary proceeding under any applicable bankruptcy, insolvency or other similar law or of a voluntary proceeding seeking to be
adjudicated insolvent or the consent by Ecopetrol to the entry of a decree or order for relief in an involuntary proceeding under
any applicable bankruptcy, insolvency or other similar law or to the commencement of any insolvency proceedings against it, or
the filing by Ecopetrol of a petition or answer or consent seeking relief under any applicable bankruptcy, insolvency or other
similar law, or the consent by Ecopetrol to the filing of the petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or similar official of Ecopetrol or any substantial part of the property of Ecopetrol or
the making by Ecopetrol of an assignment for the benefit of creditors, or the taking of corporate action by Ecopetrol in furtherance
of any such action.
If an event of default with respect to the
debt securities at the time outstanding (other than an event of default specified in clause (7) or (8) above) occurs and is continuing,
then the trustee or the holders of not less than 25% in principal amount of the outstanding debt securities may declare the principal
of the debt securities, to be due and payable immediately, by a notice in writing to Ecopetrol (and to the trustee if given by
the holders), and upon any declaration the principal shall become immediately due and payable. If an event of default specified
in clause (7) or (8) above occurs, all unpaid principal of and accrued interest on the debt securities shall become and be immediately
due and payable without any declaration or other act on the part of the trustee or any holder of any note.
At any time after a declaration of acceleration
or automatic acceleration with respect to the debt securities has been made and before a judgment or decree for payment of the
money due has been obtained by the trustee, the holders of not less than a majority in principal amount of the outstanding debt
securities, by written notice to Ecopetrol and the trustee, may rescind and annul the declaration and its consequences if:
1. Ecopetrol has paid or deposited with
the trustee a sum of money sufficient to pay all overdue installments of any interest on and Additional Amounts with respect to
all the debt securities and the principal of and any premium on the debt securities which have become due otherwise than by the
declaration of acceleration and interest on the debt securities; and
2. all events of default with respect
to the debt securities, other than the nonpayment of the principal of, any premium and interest on, and any Additional Amounts
with respect to the debt securities which shall have become due solely by the acceleration, shall have been cured or waived.
No rescission shall affect any subsequent
default or impair any right consequent thereon.
Meetings of Noteholders
A meeting of noteholders may be called by
the trustee, Ecopetrol or the holders of at least 25% in aggregate principal amount of the outstanding debt securities at any time
and from time to time, to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other actions
provided by the indenture to be made, given or taken by holders of debt securities. The meeting shall be held at such time and
at such place in the Borough of Manhattan, The City of New York or in such other place as the trustee shall determine. Notice of
every meeting of noteholders, setting forth the time and the place of such meeting and in general terms the action proposed to
be taken at such meeting, shall be given not less than 21 nor more than 180 days prior to the date fixed for the meeting.
The persons entitled to vote a majority
in principal amount of the outstanding debt securities shall constitute a quorum for a meeting. Any resolution presented to a meeting
at which a quorum is present may be adopted only by the affirmative vote of the holders of a majority in principal amount of the
outstanding debt securities. Any resolution passed or decision taken at any meeting of holders of debt securities duly held in
accordance with the indenture shall be binding on all the holders of debt securities, whether or not such holders were present
or represented at the meeting.
Modification and Waiver
Modification and amendments of the indenture
may be made by Ecopetrol and the trustee with the consent of the holders of not less than a majority in aggregate principal amount
of the outstanding debt securities affected thereby; provided, however, that no modification or amendment may, without the consent
of the holder of each outstanding debt securities affected thereby:
1. change the stated maturity of the
principal of, or any premium or installment of interest on, or any Additional Amounts with respect to, any note;
2. reduce the principal amount of, or
the rate of interest on, or any Additional Amounts with respect to, or any premium payable upon the redemption of, any note;
3. shorten the period during which Ecopetrol
is not permitted to redeem any of the debt securities (except as permitted by the indenture), or permit Ecopetrol to redeem such
debt securities prior to their stated maturity if, prior to such action, Ecopetrol is not permitted to do so (except as permitted
by the indenture);
4. change any obligation to pay the
Additional Amounts described under “Certain Covenants — Additional Amounts”;
5. change the place of payment or the
coin or currency in which the principal of, any premium or interest on or any Additional Amounts with respect to any note is payable;
6. impair the right to institute suit
for the enforcement of any payment on or after the stated maturity of any note (or, in the case of redemption, on or after the
redemption date or, in the case of repayment at the option of any holder, on or after the date for repayment);
7. reduce the percentage in principal
amount of the outstanding debt securities, the consent of whose holders is required in order to take certain actions;
8. reduce the requirements for quorum
or voting by holders of debt securities as provided in the indenture; or
9. modify any of the provisions in the
indenture regarding the waiver of past defaults and the waiver of certain covenants by the holders of debt securities except to
increase any percentage vote required or to provide that certain other provisions of the indenture cannot be modified or waived
without the consent of the holder of each note affected thereby or modify any of the foregoing provisions.
The holders of not less than a majority
in aggregate principal amount of the debt securities may, on behalf of the holders of all debt securities, waive compliance by
Ecopetrol with certain restrictive provisions of the indenture. The holders of not less than a majority in aggregate principal
amount of the outstanding debt securities may, on behalf of the holders of all debt securities, waive any past default and its
consequences under the indenture with respect to the debt securities, except a default:
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in the payment of principal (or premium, if any), or any interest on or any Additional Amounts with respect to debt securities;
or
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in respect of a covenant or provision of the indenture that cannot be modified or amended without the consent of the holder
of each note.
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The indenture contains provisions permitting
Ecopetrol and the trustee, without the consent of any holders of the debt securities, to enter into a supplemental indenture, among
other things, for purposes of curing any ambiguity or correcting or supplementing any provisions contained in the indenture or
in any supplemental indenture, curing any provision in the indenture which may be inconsistent with the description of the indenture
or of the debt securities in any offering document, or making other provisions in regard to the matters or questions arising under
the indenture or any supplemental indenture as the Board of Directors of Ecopetrol deems necessary or desirable and which does
not adversely affect the interests of the holders of debt securities in any material respect. Ecopetrol and the trustee, without
the consent of any holders of the debt securities, may also enter into a supplemental indenture to establish the forms or terms
of any series of senior debt securities.
Notices
Except as otherwise expressly provided in
or pursuant to the indenture, where the indenture provides for notice to holders of notes of any event, such notice shall be sufficiently
given to holders of registered notes if in writing and mailed, first-class postage prepaid, to each holder of a registered note
affected by such event, at his address as it appears in the security register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice.
In any case where notice to holders of registered
notes is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular holder
of a registered note shall affect the sufficiency of such notice with respect to other holders of registered notes. Any notice
which is mailed in the manner herein provided shall be conclusively presumed to have been duly given or provided. In the case by
reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice
by mail, then such notification as shall be made with the approval of the trustee shall constitute a sufficient notification for
every purpose under the indenture.
Where the indenture provides for notice
in any manner, such notice may be waived in writing by the person entitled to receive such notice, either before or after the event,
and such waiver shall be the equivalent of such notice. Waivers of notice by holders of notes shall be filed with the trustee,
but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
The trustee may rely upon and comply with
instructions or directions sent via unsecured facsimile or email transmission and the trustee shall not be liable for any loss,
liability or expense of any kind incurred by Ecopetrol or the holders due to the trustee’s reliance upon and compliance with
instructions or directions given by unsecured facsimile or email transmission, provided, however, that such losses have not arisen
from the gross negligence or willful misconduct of the trustee, it being understood that the failure of the trustee to verify or
confirm that the person providing the instructions or directions, is in fact, an authorized person does not constitute gross negligence
or willful misconduct.
Unclaimed Amounts
Any money deposited with the trustee or
paying agent or held by Ecopetrol, in trust, for the payment of principal, premium, interest or any Additional Amounts, that remains
unclaimed for two years after such amount becomes due and payable shall be paid to Ecopetrol on its request or, if held by Ecopetrol,
shall be discharged from such trust. The holder of the debt securities will look only to Ecopetrol for payment thereof, and all
liability of the trustee, paying agent or of Ecopetrol, as trustee, shall thereupon cease.
Certain Definitions
The following are certain of the terms defined
in the indenture:
“
Affiliate
” means, as
applied to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control
with, such Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”,
“controlled by” and “under common control with”), as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
“
Bankruptcy Law
” means
(a) Colombian Law 550 of 1999 and Law 1116 of 2006, or the equivalent laws that may replace them in the future, and (b) any bankruptcy,
insolvency or debtor relief statute, law or decree of the United States of America or any other jurisdiction where Ecopetrol has
(i) assets that account for 10% or more of Consolidated Total Assets or (ii) as of the date of determination, operations that account
for 10% or more of Ecopetrol’s consolidated revenues based on its most recent consolidated balance sheet prepared in accordance
with IFRS.
“
Board of Directors
”
means the Board of Directors of Ecopetrol or any executive committee thereof, if duly authorized by the Board of Directors and
under Colombian law to act with respect to the indenture.
“
Capital Stock
” of any
Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests
in (however designated) equity of such Person, including any preferred stock, but excluding any debt securities convertible into
such equity.
“
Capitalized Lease Obligation
”
of any Person means any obligation of such Person to pay rent or other amounts under a lease with respect to any property (whether
real, personal or mixed) acquired or leased (other than leases for transponders) by such Person and used in its business that is
required to be accounted for as a liability on the balance sheet of such Person in accordance with IFRS and the amount of such
Capitalized Lease Obligation shall be the amount so required to be accounted for as a liability.
“
Change of Control
” means
an event or series of events that results in (i) the direct or indirect sale, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties
or assets of Ecopetrol and its Subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d)
of the Securities and Exchange Act of 1934, as amended), (ii) the adoption of a plan relating to the liquidation or dissolution
of Ecopetrol or (iii) the Republic of Colombia ceasing to be the beneficial owner, directly or indirectly, of a majority in the
aggregate of the total voting power of the Voting Stock of Ecopetrol.
“
Change of Control Repurchase Event
”
means the occurrence of both a Change of Control and a Rating Downgrade Event.
“
Consolidated Net Tangible Assets
”
means, at any date, the Consolidated Total Assets of the Company less goodwill and intangibles (other than intangibles arising
from, or relating to, intellectual property, licenses or permits (including, but not limited to, emissions rights) of the Company
on a consolidated basis), in each case calculated in accordance with IFRS, less current liabilities (other than current maturities
of long-term debt, in each case calculated in accordance with IFRS).
“
Consolidated Total Assets
”
means, at any date, the total amount of assets of Ecopetrol, as of the end of the last period preceding such date for which a balance
sheet is prepared and published in accordance with applicable law, on a consolidated basis as determined in accordance with IFRS.
“
External Indebtedness
”
means Indebtedness other than Internal Indebtedness.
“
Fair Market Value
” means,
with respect to any asset or property, the price which could be negotiated in an arm’s-length transaction, for cash, between
an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy. Fair Market
Value shall be determined by the Board of Directors of Ecopetrol, acting in good faith and evidenced by a resolution delivered
to the trustee.
“
Fitch
” means Fitch Ratings
Ltd.
“
IFRS
” means International
Financial Reporting Standards, as adopted by the International Accounting Standards Board (“
IASB
”).
“
Indebtedness
” of any
Person means, without duplication:
(1) any indebtedness of such Person (i)
for borrowed money or (ii) evidenced by a note, debenture or similar instrument (including a purchase money obligation) given in
connection with the acquisition of any property or assets, including securities;
(2) any guarantee by such Person of any
indebtedness of others described in the preceding clause (1); and
(3) any amendment, renewal, extension
or refunding of any such indebtedness or guarantee.
“
Internal Indebtedness
”
means any Indebtedness payable to Colombian residents in Colombian pesos.
“
Lien
” means any mortgage,
pledge, lien, hypothecation, security interest or other charge or encumbrance on any property or asset including, without limitation,
any equivalent created or arising under applicable law.
“
Material Subsidiary
”
means a Subsidiary of Ecopetrol which on any given date of determination accounts for more than 10% of Ecopetrol’s Consolidated
Total Assets.
“
Moody’s
” means
Moody’s Investors Services Inc.
“
Person
” means an individual,
a corporation, a partnership, a limited liability company, an association, a trust or any other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
“
Rating Agency
” means
(1) each of Fitch, Moody’s and S&P; and (2) if any of Fitch, Moody’s or S&P ceases to rate the debt securities
or fails to make a rating of the debt securities publicly available for reasons outside of our control, a “nationally recognized
statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, selected by us as
a replacement agency for Fitch, Moody’s or S&P, as the case may be.
“
Rating Downgrade Event
”
means the rating on the debt securities is lowered from their rating then in effect by any of the Rating Agencies on any date from
the date of the public notice of an arrangement that could result in a Change of Control until the end of the 60-day period following
public notice of the occurrence of a Change of Control (which period shall be extended so long as the rating of the debt securities
is under publicly announced consideration for possible downgrade by any of the Rating Agencies).
“
S&P
” means Standard
& Poor’s Ratings Services, a division of McGraw-Hill, Inc.
“
Subsidiary
” means any
corporation, association, limited liability company, partnership or other business entity of which a majority of the total voting
power of the Capital Stock or other interests (including partnership interests) entitled (without regard to the incurrence of a
contingency) to vote in the election of directors, managers, or trustees thereof is at the time owned or controlled, directly or
indirectly, by (i) Ecopetrol, (ii) Ecopetrol and one or more of its Subsidiaries or (iii) one or more Subsidiaries of Ecopetrol.
“
Voting Stock
” means,
with respect to any Person, Capital Stock of any class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
“
Wholly Owned
” means,
with respect to any corporate entity, any Person of which 100% of the outstanding Capital Stock (other than qualifying shares,
if any) having by its terms ordinary voting power (not dependent on the happening of a contingency) to elect the board of directors
(or equivalent controlling governing body) of that Person, is at the time owned or controlled directly or indirectly by that corporate
entity, by one or more wholly-owned Subsidiaries of that corporate entity or by that corporate entity and one or more wholly-owned
Subsidiaries.
Discharge, Defeasance and Covenant Defeasance
Ecopetrol may discharge certain obligations
to holders of any series of senior debt securities that have not already been delivered to the trustee for cancellation and that
either have become due and payable or will become due and payable within one year (or scheduled for redemption within one year)
by irrevocably depositing or causing to be deposited with the trustee, in trust, funds specifically pledged as security for, and
dedicated solely to, the benefit of the holders in U.S. Dollars or Government Obligations, which is defined below, in an amount
sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification
thereof delivered to the trustee, to pay and discharge the entire indebtedness on the senior debt securities with respect to principal
(and premium, if any) and interest to the date of the deposit (if the senior debt securities have become due and payable) or to
the maturity thereof, as the case may be.
The indenture provides that, unless the
provisions of the “Defeasance and Covenant Defeasance” section thereof are made inapplicable in respect of any series
of senior debt securities of or within any series pursuant to the “Amount Unlimited; Issuable in Series” section
thereof, Ecopetrol may elect, at any time, either:
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to defease and be discharged from any and all obligations with respect to the senior debt securities (except for, among other
things, the obligation to pay Additional Amounts, if any, upon the occurrence of certain events of taxation, assessment or governmental
charge with respect to payments on the senior debt securities and other obligations to register the transfer or exchange of the
senior debt securities, to replace temporary or mutilated, destroyed, lost or stolen senior debt securities, to maintain an office
or agency with respect to the senior debt securities and to hold moneys for payment in trust) (“defeasance”);
or
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to be released from its obligations with respect to the senior debt securities under the covenants described under “—Certain
Covenants” and “—Merger and Consolidation” above or, if provided pursuant to the “Amount Unlimited;
Issuable in Series” section of the indenture, its obligations with respect to any other covenant, and any omission to comply
with the obligations shall not constitute a default or an event of default with respect to the senior debt securities (“covenant
defeasance”).
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Defeasance or covenant defeasance, as the
case may be, shall be conditioned upon the irrevocable deposit by Ecopetrol with the trustee, as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the holders of
the debt securities, of (i) an amount in Dollars, in which such senior debt securities, together with all interest appertaining
thereto, are then specified as payable at their stated maturity, or (ii) an amount of Government Obligations, which is defined
below, applicable to such senior debt securities and the interest appertaining thereto, which through the scheduled payment of
principal and interest in accordance with their terms will provide money, or a combination thereof in an amount, in any case, sufficient,
in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered
to the trustee, to pay and discharge the entire indebtedness on the senior debt securities with respect to principal (and premium,
if any) and interest to the date of the deposit (if the senior debt securities have become due and payable) or to the maturity
thereof, as the case may be.
Such a trust may only be established if,
among other things,
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the applicable defeasance or covenant defeasance does not result in a breach or violation of, or constitute a default under,
the indenture or any other material agreement or instrument to which Ecopetrol is a party or by which it is bound, and
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Ecopetrol has delivered to the trustee an opinion of counsel (as specified in the indenture) to the effect that the holders
of the senior debt securities will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the defeasance
or covenant defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if the defeasance or covenant defeasance had not occurred, and the opinion of counsel, in the case
of defeasance, must refer to and be based upon a letter ruling of the Internal Revenue Service received by Ecopetrol, a revenue
ruling published by the Internal Revenue Service or a change in applicable U.S. federal income tax law occurring after the date
of the indenture.
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“
Government Obligations
”
means securities which are:
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direct obligations of the United States of America or the government or the governments in the confederation which issued the
foreign currency in which the senior debt securities of a particular series are payable, for the payment of which the full faith
and credit of the United States or such other government or governments is pledged; or
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obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America
or such other government or governments, the timely payment of which is unconditionally guaranteed as a full faith and credit obligation
by the United States of America or such other government or governments;
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and which are not callable or redeemable
at the option of the issuer or issuers thereof, and shall also include a depositary receipt issued by a bank or trust company as
custodian with respect to any Government Obligation or a specific payment of interest on or principal of or any other amount with
respect to any Government Obligation held by the custodian for the account of the holder of the depositary receipt; provided that
(except as required by law) the custodian is not authorized to make any deduction from the amount payable to the holder of the
depositary receipt from any amount received by the custodian with respect to the Government Obligation or the specific payment
of interest on or principal of or any other amount with respect to the Government Obligation evidenced by the depositary receipt.
In the event Ecopetrol effects covenant
defeasance with respect to any senior debt securities and the senior debt securities are declared due and payable because of the
occurrence of any event of default other than an event of default with respect to the “Limitations on Liens” covenant
contained in the indenture (which sections would no longer be applicable to the senior debt securities after the covenant defeasance)
or with respect to any other covenant as to which there has been covenant defeasance, the amount in the foreign currency in which
the senior debt securities are payable, and Government Obligations on deposit with the trustee, will be sufficient to pay amounts
due on the senior debt securities at the time of the stated maturity but may not be sufficient to pay amounts due on the senior
debt securities at the time of the acceleration resulting from the event of default. However, Ecopetrol would remain liable to
make payment of the amounts due at the time of acceleration.
Currency Indemnity
Any amount received or recovered by a holder
of a debt security on or under the debt securities or the indenture (whether as a result of, or of the enforcement of, a judgment
or order of a court of any jurisdiction, in the winding-up or dissolution of us or otherwise) in a currency other than U.S. Dollars
will constitute a discharge of Ecopetrol’s obligation only to the extent of the U.S. Dollar amount which such holder is able
to purchase with the amount so received or recovered in that other currency on the date of that receipt or recovery (or, if it
is not practicable to make that purchase on that date, on the first date on which it is practicable to do so). If that U.S. Dollar
amount is less than the U.S. Dollar amount expressed to be due to such holder of a debt security, Ecopetrol will indemnify such
holder against any loss sustained by it as a result; if that U.S. Dollar amount so purchased exceeds the U.S. Dollar amount expressed
to be due to the holder of such debt security, such holder agrees to remit such excess to Ecopetrol. Notwithstanding the foregoing,
any payment required to be made by us under this indemnity will remain subject to the final judgment, order or decree entered by
the applicable court of jurisdiction with respect thereto.
For the purposes of the preceding paragraph,
it will be sufficient for the holder of a debt security to certify in a manner reasonably satisfactory to Ecopetrol (indicating
the sources of information used) that it would have suffered a loss had an actual purchase of U.S. Dollars been made with the amount
so received in that other currency on the date of receipt or recovery (or, if a purchase of U.S. Dollars on such date had not been
practicable, on the first date on which it would have been practicable, which date and the reason for such impracticability shall
be included in the certification by the holder of such debt security). These indemnities will constitute a separate and independent
obligation from the other obligations under the indenture and the debt securities, will give rise to a separate and independent
cause of action, will apply irrespective of any indulgence granted by any holder of a debt security and will continue in full force
and effect despite any other judgment or order, for a liquidated amount in respect of any sum due under any debt security.
Governing Law
The indenture and the debt securities will
be governed by, and construed in accordance with, the laws of the State of New York except that the laws of Colombia will govern
all matters relating to authorization and execution of the indenture and the debt securities.
Submission to Jurisdiction; Agent for
Service of Process
We will submit, to the fullest extent permitted
by applicable law, to the jurisdiction of any federal or state court in the City of New York, Borough of Manhattan for purposes
of all legal actions and proceedings instituted in connection with the debt securities or the indenture. We have appointed Corporation
Service Company (CSC), 1133 Avenue of the Americas, Suite 3100, New York, New York 10036 as our authorized agent upon which service
of process may be served in any such action relating to the debt securities or the indenture.
Regarding the Trustee
The trustee is permitted to engage in other
transactions with Ecopetrol and its subsidiaries from time to time; provided that if the trustee acquires any conflicting interest
it must eliminate the conflict upon the occurrence of an event of default, or else resign.
Ecopetrol may at any time remove the trustee
at its office or agency in the City of New York designated for the foregoing purposes and may from time to time rescind such designations.
No Personal Liability of Shareholders,
Officers, Directors, or Employees
The indenture provides that no recourse
for the payment of the principal of, premium, if any, or interest on any of the debt securities or for any claim based thereon
or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of Ecopetrol in such indenture,
or in any of the debt securities or because of the creation of any indebtedness represented thereby, shall be had against any shareholder,
officer, director, employee or controlling person of Ecopetrol or of any successor thereof.