UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of December 2003
Petrobras International Finance Company - PIFCo
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(Translation of Registrant's Name Into English)
Cayman Islands
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(Jurisdiction of incorporation or organization)
Anderson Square Building, P.O. Box 714
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George Town, Grand Cayman
Cayman Islands, B.W.I.
(Address of principal executive offices)
(Indicate by check mark whether the registrant files or will file
annual reports under cover of Form 20-F or Form 40-F.)
Form 20-F x Form 40-F
--- ---
(Indicate by check mark whether the registrant by furnishing the
information contained in this form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)
Yes No x
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(If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-_____.)
STANDBY PURCHASE AGREEMENT
Dated as of December 10, 2003
Between
PETROLEO BRASILEIRO S.A.--PETROBRAS,
as Standby Purchaser,
and
JPMORGAN CHASE BANK, as
Trustee for the Noteholders
Referred to Herein
Table of Contents
Page
SECTION 1. Definitions......................................................2
SECTION 2. Partial Purchase Obligation.....................................11
SECTION 3. Total Purchase Obligation.......................................12
SECTION 4. Obligations Absolute............................................13
SECTION 5. Independent Obligation..........................................15
SECTION 6. Waivers and Acknowledgments.....................................15
SECTION 7. Claims Against the Issuer.......................................16
SECTION 8. Payments Free and Clear of Taxes, Etc...........................16
SECTION 9. Representations and Warranties..................................18
SECTION 10. Covenants.......................................................29
SECTION 11. Amendments, Etc.................................................35
SECTION 12. Notices, Etc....................................................35
SECTION 13. No Waiver; Remedies.............................................35
SECTION 14. Indemnification.................................................35
SECTION 15. Subordination...................................................36
SECTION 16. Continuing Agreement; Assignment of Rights Under the
Indenture and the Notes.........................................37
SECTION 17. Currency Rate Indemnity.........................................37
SECTION 18. Governing Law; Jurisdiction; Waiver of Immunity, Etc............38
SECTION 19. Execution in Counterparts.......................................39
SECTION 20. Pledge of Interests.............................................39
SECTION 21. Entire Agreement................................................40
STANDBY PURCHASE AGREEMENT
STANDBY PURCHASE AGREEMENT (this "Agreement"), dated as of December
10, 2003, between PETROLEO BRASILEIRO S.A.--PETROBRAS (the "Standby Purchaser"),
a sociedade do economia mista organized and existing under the laws of the
Federative Republic of Brazil ("Brazil"), and JPMORGAN CHASE BANK, as trustee
for the holders of the Notes (as defined below) issued pursuant to the Indenture
(as defined below) (the "Trustee").
WITNESSETH:
WHEREAS, Petrobras International Finance Company, a Cayman Islands
limited company and a wholly-owned Subsidiary of the Standby Purchaser (the
"Issuer"), has entered into an Indenture dated as of July 19, 2002 (the
"Original Indenture") with the Trustee, as supplemented by the Third
Supplemental Indenture among the Issuer, the Standby Purchaser and the Trustee
dated as of December 10, 2003 (the "Third Supplemental Indenture"). The Original
Indenture, as supplemented by the Third Supplemental Indenture, and as amended
or supplemented from time to time with respect to the Notes, is hereinafter
referred to as the "Indenture."
WHEREAS, the Issuer has duly authorized the issuance of its notes in
such principal amount or amounts as may from time to time be authorized in
accordance with the Indenture and is, on the date hereof, issuing
U.S.$750,000,000 of its 8.375% Global Notes due 2018 under the Indenture (the
"Notes");
WHEREAS, the Standby Purchaser is willing to enter into this Agreement
in order to provide the holders of the Notes (the "Noteholders") with assurances
that, if the Issuer shall fail to make all required payments of principal,
interest or other amounts due in respect of the Notes and the Indenture, the
Standby Purchaser will be obligated, without any action on the part of the
Noteholders, to immediately purchase the rights of the Noteholders to receive
such amounts in consideration of the payment by the Standby Purchaser of an
amount of funds equal to the amounts then owed by the Issuer under the Indenture
and the Notes, subject to the provisions hereof;
WHEREAS, the Standby Purchaser agrees that it will derive substantial
direct and indirect benefits from the issuance of the Notes by the Issuer;
WHEREAS, although the following shall not in any way be a condition to
the obligations of the Standby Purchaser hereunder, the Standby Purchaser
intends (but is not obligated hereunder) to enter into and maintain at all times
during the term of this Agreement arrangements for the import of oil and
petroleum products with the Issuer under which payments for such products are
expected to be (i) in an aggregate amount at least equal to the total amount
owed by the Issuer under the Indenture and the Notes (including any accrued and
unpaid interest and any other amounts required to be paid thereunder), (ii) made
through the Brazilian commercial rate exchange market regulated by Banco Central
do Brasil and (iii) applied to off-set (or be used to otherwise liquidate) any
amounts required to be paid by the Standby Purchaser under this Agreement in
respect of any obligation owed by the Issuer under the Indenture and the Notes;
WHEREAS, it is a condition precedent to the issuance of the Notes that
the Standby Purchaser shall have executed this Agreement.
NOW, THEREFORE, the Standby Purchaser and the Trustee hereby agree as
follows:
SECTION 1. Definitions. (a) As used herein the following capitalized
terms shall have the following meanings:
"Affiliate," with respect to any Person, means any other Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person; it being understood that for purposes of this definition, the
term "control" (including the terms "controlling," "controlled by" and "under
common control with") of a Person shall mean the possession, direct or indirect,
of the power to vote 25% or more of the equity or similar voting interests of
such Person or 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.
"Agreement" has the meaning set forth in the preamble to this
Agreement.
"Authorized Representative" of the Standby Purchaser or any other
Person means the person or persons authorized to act on behalf of such entity by
its chief executive officer, president, chief operating officer, chief financial
officer or any vice president or its Board of Directors or any other governing
body of such entity.
"Bankruptcy Law" has the meaning specified in Section 15(a).
"Base Prospectus" has the meaning set forth in the definition of
Registration Statement herein.
"Board of Directors", when used with respect to a corporation, means
either the board of directors of such corporation or any committee of that board
duly authorized to act for it, and when used with respect to a limited liability
company, partnership or other entity other than a corporation, any Person or
body authorized by the organizational documents or by the voting equity owners
of such entity to act for them.
"Brazil" has the meaning set forth in the preamble to this Agreement.
"Business Day" means any day except a Saturday, a Sunday or a legal
holiday or a day on which banking institutions (including, without limitation,
the members of the Federal Reserve System) are authorized or required by law,
regulation or executive order to close in The City of New York, the Cayman
Islands or Brazil.
"Closing Date" means December 10, 2003.
"Companies" means the Issuer and the Standby Purchaser.
"Default" has the meaning set forth in the Indenture.
"Default Rate" has the meaning specified in the Indenture.
"Denomination Currency" has the meaning specified in Section 17(b).
"Environmental Laws" means all applicable federal, state and local
statutes, rules, regulations, ordinances, orders, decrees and common law,
including any of the foregoing in any foreign jurisdiction, relating in any
manner to contamination, pollution or protection of human health or the
environment.
"Event of Default" has the meaning specified in the Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Final Offering Document" has the meaning specified in Section 9(d).
"Final Prospectus Supplement" has the meaning specified in Section
9(d).
"Governmental Authority" shall mean any regulatory, administrative or
other legal body, any court, tribunal or authority or any public legal entity or
public agency of the Cayman Islands, Brazil, the United States of America or any
other jurisdictions whether created by federal, provincial or local government,
or any other legal entity now existing or hereafter created, or now or hereafter
controlled, directly or indirectly, by any public legal entity or public agency
of any of the foregoing.
"Guarantee" means an obligation of a person to pay the Indebtedness of
another Person including without limitation:
(i) an obligation to pay or purchase such Indebtedness;
(ii) an obligation to lend money or to purchase or subscribe for
shares or other securities or to purchase assets or services in order to
provide funds for the payment of such Indebtedness;
(iii) an indemnity against the consequences of a default in the
payment of such Indebtedness; or
(iv) any other agreement to be responsible for such Indebtedness.
"Indebtedness" means any obligation (whether present or future, actual
or contingent and including, without limitation, any Guarantee) for the payment
or repayment of money which has been borrowed or raised (including money raised
by acceptances and all leases which, under generally accepted accounting
principles in the country of incorporation of the relevant obligor, would
constitute a capital lease obligation).
"Indemnified Party" has the meaning specified in Section 14.
"Indemnified Taxes" means any and all present or future taxes, levies,
imposts, deductions, charges or withholdings of any nature imposed by Brazil,
the Cayman Islands, Luxembourg or any other jurisdiction in which the Issuer
appoints a paying agent under the Indenture or any political subdivision of such
jurisdictions.
"Indenture" has the meaning specified in the preamble to this
Agreement.
"Issuer" has the meaning set forth in the preamble to this Agreement.
"Judgment Currency" has the meaning specified in Section 17(b).
"Law" means any constitutional provision, law, statute, rule,
regulation, ordinance, treaty, order, decree, judgment, decision, certificate,
holding, injunction, enforceable at law or in equity, along with the
interpretation and administration thereof by any Governmental Authority charged
with the interpretation or administration thereof.
"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 Adverse Effect" means a material adverse effect on (a) the
business, operations, assets, property, condition (financial or otherwise) or
results of operation of the Standby Purchaser together with its consolidated
Subsidiaries taken as a whole, (b) the validity or enforceability of this
Agreement or any other Transaction Document or (c) the ability of the Standby
Purchaser to perform its obligations under this Agreement or any other
Transaction Document, or (d) the material rights or benefits available to the
Noteholders or the Trustee, as representative of the Noteholders under the
Indenture, this Agreement or any of the other Transaction Documents.
"Material Subsidiary" means, as to any Person, any Subsidiary of such
Person which, on any given date of determination, accounts for more than 7.5% of
Petrobras' total consolidated assets, as such total assets are set forth on the
most recent consolidated financial statements of Petrobras prepared in
accordance with U.S. GAAP (or if Petrobras does not prepare financial statements
in U.S. GAAP, consolidated financial statements prepared in accordance with
Brazilian generally accepted accounting principles).
"Noteholders" has the meaning specified in the preamble of this
Agreement.
"Notes" has the meaning specified in the preamble of this Agreement.
"Offering Documents" has the meaning specified in Section 9(a).
"Officer's Certificate" means a certificate of an Authorized
Representative of the Standby Purchaser containing, in respect of each
certificate furnished with respect to a particular condition, covenant or
provision of this Agreement:
(i) a statement that an Authorized Representative of the Standby
Purchaser has read such covenant, condition or provision;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such individual, such
examination or investigation has been made as is necessary to enable such
individual to express an informed opinion as to whether or not such
covenant, condition or provision has been complied with; and (iv) a
statement as to whether, in the opinion of each such individual, such
condition, covenant or provision has been complied with.
"Opinion of Counsel" means a written opinion of counsel from any
Person either expressly referred to herein or otherwise reasonably satisfactory
to the Trustee which may include, without limitation, counsel for the Standby
Purchaser, whether or not such counsel is an employee of the Standby Purchaser,
which opinion contains:
(i) a statement that each individual signing such opinion has read
such covenant, condition or provision;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
opinion are based;
(iii) a statement that, in the opinion of each such individual, such
examination or investigation has been made as is necessary to enable such
individual to express an informed opinion as to whether or not such
covenant, condition or provision has been complied with; and
(iv) a statement as to whether, in the opinion of each such
individual, such condition, covenant or provision has been complied with.
"Original Indenture" has the meaning set forth in the preamble to this
Agreement.
"Other Taxes" means any present or future stamp, documentary, excise,
property or similar taxes, charges or levies imposed by Brazil, the Cayman
Islands, Luxembourg or any other jurisdiction in which the Issuer appoints a
paying agent under the Indenture or any political subdivision of such
jurisdictions that arise from any payment made hereunder, under the Notes or
under the Transaction Documents or from the execution, delivery or registration
of, performance under, or otherwise with respect to, this Agreement or any of
the other Transaction Documents.
"Partial Non-Payment Amount" has the meaning specified in Section
2(a).
"Partial Non-Payment Amount With Interest" has the meaning specified
in Section 2(a).
"Partial Non-Payment Due Date" has the meaning specified in Section
2(a).
"Partial Non-Payment Overdue Interest" has the meaning specified in
Section 2(a).
"Partial Non-Payment Notice" has the meaning specified in Section
2(a).
"Payment Account" has the meaning set forth in the Indenture.
"Payment Date" has the meaning set forth in the Indenture.
"Permitted Lien" means a:
(i) Lien granted in respect of Indebtedness owed to the Brazilian
government, Banco Nacional de Desenvolvimento Economico e Social or any
official government agency or department of Brazil or of any state or
region thereof;
(ii) Lien arising by operation of law, such as merchants', maritime or
other similar Liens arising in the Standby Purchaser's ordinary course of
business or that of any Subsidiary or Lien 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;
(iii) Lien arising from the Standby Purchaser's obligations under
performance bonds or surety bonds and appeal bonds or similar obligations
incurred in the ordinary course of business and consistent with the Standby
Purchaser's past practice;
(iv) Lien arising in the ordinary course of business in connection
with Indebtedness maturing not more than one year after the date on which
such Indebtedness was originally incurred and which is related to the
financing of export, import or other trade transactions;
(v) Lien granted upon or with respect to any assets hereafter acquired
by the Standby Purchaser or any Subsidiary to secure the acquisition costs
of such assets or to secure Indebtedness incurred solely for the purpose of
financing the acquisition of such assets, including any Lien existing at
the time of the acquisition of such assets as long as the maximum amount so
secured shall not exceed the aggregate acquisition costs of all such assets
or the aggregate Indebtedness incurred solely for the acquisition of such
assets;
(vi) Lien granted in connection with the Indebtedness of a
Wholly-Owned Subsidiary owing to the Standby Purchaser or another
Wholly-Owned Subsidiary;
(vii) Lien existing on any asset or on any stock of any Subsidiary
prior to the acquisition thereof by the Standby Purchaser or any Subsidiary
as long as such Lien is not created in anticipation of such acquisition;
(viii) Lien over any Qualifying Asset relating to a project financed
by, and securing Indebtedness incurred in connection with, the Project
Financing of such project by the Standby Purchaser, any of the Standby
Purchaser's Subsidiaries or any consortium or other venture in which the
Standby Purchaser or any Subsidiary has any ownership or other similar
interest;
(ix) Lien existing as of the date of the Indenture;
(x) Lien resulting from the Transaction Documents;
(xi) Lien incurred in connection with the issuance of debt or similar
securities of a type comparable to those already issued by the Issuer, on
amounts of cash or cash equivalents on deposit in any reserve or similar
account to pay interest on such securities for a period of up to 24 months
as required by any Rating Agency as a condition to such Rating Agency
rating such securities investment grade or as is otherwise consistent with
market conditions at such time, as such conditions are satisfactorily
demonstrated to the Trustee;
(xii) Lien granted or incurred to secure any extension, renewal,
refinancing, refunding or exchange (or successive extensions, renewals,
refinancings, refundings or exchanges), in whole or in part, of or for any
Indebtedness secured by a Lien referred to in paragraphs (i) through (xi)
above (but not paragraph (iv)), provided that such Lien does not extend to
any other property, the principal amount of the Indebtedness secured by
such Lien is not increased, and in the case of paragraphs (i), (ii), (iii)
and (vi), the obligees meet the requirements of such paragraphs and in the
case of paragraph (viii), the Indebtedness is incurred in connection with a
Project Financing by the Standby Purchaser, any of the Standby Purchaser's
Subsidiaries or any consortium or other venture in which the Standby
Purchaser or any Subsidiary have any ownership or other similar interests;
and
(xiii) Lien in respect of Indebtedness the principal amount of which
in the aggregate, together with all Liens not otherwise qualifying as the
Standby Purchaser's Permitted Liens pursuant to clauses (i) through (xii)
of this definition, does not exceed 7.5% of the Standby Purchaser's
consolidated total assets (as determined in accordance with U.S. GAAP) at
any date as at which the Standby Purchaser's balance sheet is prepared and
published in accordance with applicable Law.
"Person" means any individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Post Petition Interest" has the meaning specified in Section 15(b).
"Preliminary Offering Document" has the meaning specified in Section
9(c).
"Preliminary Prospectus Supplement" has the meaning specified in
Section 9(c).
"Process Agent" has the meaning specified in Section 18(c).
"Project Financing" of any project means the incurrence of
Indebtedness relating to the exploration, development, expansion, renovation,
upgrade or other modification or construction of such project pursuant to which
the providers of such Indebtedness or any trustee or other intermediary on their
behalf or beneficiaries designated by any such provider, trustee or other
intermediary are granted security over one or more Qualifying Assets relating to
such project for repayment of principal, premium and interest or any other
amount in respect of such Indebtedness.
"Purchase Obligations" has the meaning specified in Section 4.
"Qualifying Asset" in relation to any Project Financing means:
(i) any concession, authorization or other legal right granted by any
Governmental Authority to the Standby Purchaser or any of the Standby
Purchaser's Subsidiaries, or any consortium or other venture in which the
Standby Purchaser or any Subsidiary has any ownership or other similar
interest;
(ii) any drilling or other rig, any drilling or production platform,
pipeline, marine vessel, vehicle or other equipment or any refinery, oil or
gas field, processing plant, real property (whether leased or owned), right
of way or plant or other fixtures or equipment;
(iii) any revenues or claims which arise from the operation, failure
to meet specifications, failure to complete, exploitation, sale, loss or
damage to, such concession, authorization or other legal right or such
drilling or other rig, drilling or production platform, pipeline, marine
vessel, vehicle or other equipment or refinery, oil or gas field,
processing plant, real property, right of way, plant or other fixtures or
equipment or any contract or agreement relating to any of the foregoing or
the Project Financing of any of the foregoing (including insurance
policies, credit support arrangements and other similar contracts) or any
rights under any performance bond, letter of credit or similar instrument
issued in connection therewith;
(iv) any oil, gas, petrochemical or other hydrocarbon-based products
produced or processed by such project, including any receivables or
contract rights arising therefrom or relating thereto and any such product
(and such receivables or contract rights) produced or processed by other
projects, fields or assets to which the lenders providing the Project
Financing required, as a condition therefor, recourse as security in
addition to that produced or processed by such project; and
(v) shares or other ownership interest in, and any subordinated debt
rights owing to the Standby Purchaser by, a special purpose company formed
solely for the development of a project, and whose principal assets and
business are constituted by such project and whose liabilities solely
relate to such project.
"Rating Agency" means a Nationally Recognized Statistical Rating
Organization as designated by the SEC Division of Market Regulation.
"Registration Statement" means the registration statement on Form F-3
under the Securities Act, initially dated July 5, 2002 and as amended on July
19, 2002 and further amended on August 14, 2002, filed with the SEC (File No.
333-92044) covering the registration of the Notes under the Securities Act and
including the related base prospectus in the form dated August 14, 2002 (the
"Base Prospectus") at the time such registration statement was declared
effective by the SEC, as amended to the date hereof (including any
post-effective amendment that includes a prospectus or prospectus supplement),
together with any documents incorporated by reference therein.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the United States Securities Act of 1933, as
amended.
"Standby Purchaser" has the meaning specified in the preamble of this
Agreement.
"Stated Maturity" has the meaning specified in the Indenture.
"Subordinated Obligations" has the meaning specified in Section 15.
"Subsidiary" means, as to any Person, a corporation, company,
partnership or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the Board of Directors (or similar governing body) of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Standby Purchaser.
"Successor Company" has the meaning specified in Section 10(m)(i).
"Taxing Jurisdiction" has the meaning specified in Section 8(c).
"Termination Date" has the meaning specified in Section 7.
"Third Supplemental Indenture" has the meaning set forth in the
preamble to this Agreement.
"TIA" means the United States Trust Indenture Act of 1939, as amended.
"Total Non-Payment Notice" shall have the meaning specified in Section
3(a).
"Total Non-Payment Amount" shall have the meaning specified in Section
3(a).
"Total Non-Payment Amount With Interest" has the meaning specified in
Section 3(a).
"Total Non-Payment Due Date" shall have the meaning specified in
Section 3(a).
"Total Non-Payment Overdue Interest" has the meaning specified in
Section 3(a).
"Transaction Documents" means, collectively, the Indenture, the Notes
and this Agreement.
"Trustee" has the meaning specified in the preamble of this Agreement.
"Underwriters" means Credit Suisse First Boston LLC and Lehman
Brothers Inc., acting as such under the Underwriting Agreement.
"Underwriting Agreement" has the meaning specified in Section 9(a).
"United States" or "U.S." means the United States of America.
"U.S. GAAP" means generally accepted accounting principles in effect
in the United States of America applied on a basis consistent with the
principles, methods, procedures and practices set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
approved by a significant segment of the accounting profession.
"Wholly-Owned Subsidiary" 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 the terms thereof ordinary voting power (not dependent
on the happening of a contingency) to elect the Board of Directors (or
equivalent controlling governing body) of such person is at the time owned or
controlled directly or indirectly by such corporate entity, by one or more
wholly-owned Subsidiaries of such corporate entity or by such corporate entity
and one or more wholly-owned Subsidiaries thereof.
(b) Construction. For all purposes of this Agreement (and for all
purposes of any other Transaction Document or any other instrument or agreement
that incorporates provisions of this Agreement by reference), except as
otherwise expressly provided or unless the context otherwise requires:
(i) the terms defined in this Section have the meanings assigned to
them in this Section, and include the plural as well as the singular;
(ii) except as otherwise expressly provided herein, (A) all accounting
terms used herein shall be interpreted, (B) all financial statements and
all certificates and reports as to financial matters required to be
delivered to the Trustee hereunder shall be prepared and (C) all
calculations made for the purposes of determining compliance with this
Agreement shall (except as otherwise expressly provided herein) be made in
accordance with, or by application of, U.S. GAAP;
(iii) all references in this Agreement (including the Appendices and
Schedules hereto) to designated "Articles", "Sections" and other
subdivisions are to the designated Articles, Sections and other
subdivisions of this Agreement;
(iv) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(v) unless the context clearly indicates otherwise, pronouns having a
masculine or feminine gender shall be deemed to include the other;
(vi) unless otherwise expressly specified, any agreement, contract or
document defined or referred to herein shall mean such agreement, contract
or document as in effect as of the date hereof, as the same may thereafter
be amended, supplemented or otherwise modified from time to time in
accordance with the terms of this Agreement and the other Transaction
Documents and shall include any agreement, contract, instrument or document
in substitution or replacement of any of the foregoing entered into in
accordance with the terms of this Agreement and the other Transaction
Documents;
(vii) any reference to any Person shall include its permitted
successors and assigns in accordance with the terms of this Agreement and
the other Transaction Documents including, in the case of any Governmental
Authority, any Person succeeding to its functions and capacities; and
(viii) unless the context clearly requires otherwise, references to
"Law" or to any particular Law shall include Laws or such particular Law as
in effect at each, every and any of the times in question, including any
amendments, replacements, supplements, extensions, modifications,
consolidations, restatements, revisions or reenactments thereto or thereof,
and whether or not in effect at the date of this Agreement.
SECTION 2. Partial Purchase Obligation. (a) In the event that, prior
to the Stated Maturity of the principal of the Notes, the Issuer shall fail to
make any payment on the Notes in respect of interest, principal or other amounts
as contemplated in the Indenture and/or the Notes (including, without
limitation, any Additional Amounts) on the date any such payment is due under
the terms of the Notes and the Indenture (other than in the case of an
acceleration thereof in accordance with the Indenture) (such date, the "Partial
Non-Payment Due Date"), then in such event (i) the Standby Purchaser shall be
obligated to pay immediately to the Trustee, for the benefit of the Noteholders
under the Indenture, the amount that the Issuer was required to pay but failed
to pay on such date under the terms of the Indenture and the Notes (the "Partial
Non-Payment Amount") and (ii) the Trustee shall provide notice to the Standby
Purchaser of the failure of the Issuer to make such payment; provided, however,
that the failure to provide such notice shall not in any way excuse the Standby
Purchaser from its obligations hereunder. The notice contemplated herein shall
be provided in writing in substantially the form of Exhibit A hereto (the
"Partial Non-Payment Notice") and shall be sent by the Trustee to the Standby
Purchaser at the address specified for the Standby Purchaser in Section 12
hereof no later than 5:00 p.m. (New York time) on the Partial Non-Payment Due
Date. The Partial Non-Payment Notice shall (i) confirm the Partial Non-Payment
Amount and the fact that such amount was not paid on the Partial Non-Payment Due
Date and (ii) remind the Standby Purchaser that it is obligated to pay the
Partial Non-Payment Amount immediately. To the extent that the Standby Purchaser
fails to pay the Partial Non-Payment Amount immediately pursuant to this Section
2(a) (whether or not it has received the Partial Non-Payment Notice), the
Standby Purchaser shall be obligated hereunder to pay, in addition to the
Partial Non-Payment Amount, interest on such amount at the Default Rate from the
Partial Non-Payment Due Date to and including the actual date of payment by the
Standby Purchaser (the "Partial Non-Payment Overdue Interest" and, together with
the Partial Non-Payment Amount, the "Partial Non-Payment Amount With Interest"),
which date of payment shall be a Business Day.
(b) Payment of the Partial Non-Payment Amount With Interest shall be
in consideration of the purchase by the Standby Purchaser of the rights of the
Noteholders to receive such amount from the Issuer. The Noteholders shall have
no right to retain such rights, and, following the purchase and sale provided
for in this Section 2, the Notes shall remain outstanding with all amounts due
in respect thereof adjusted to reflect the purchase, sale and payment provided
for herein. Upon any such payment, the Standby Purchaser shall be subrogated to
the Noteholders to the extent of any payment under this Section 2.
(c) The obligation of the Standby Purchaser to pay the Partial
Non-Payment Amount With Interest shall be absolute and unconditional upon
failure of the Issuer to make, prior to the Stated Maturity of the principal on
the Notes, any payment on the Notes in respect of interest, principal or other
amounts as contemplated in the Indenture and/or the Notes (including, without
limitation, any Additional Amounts) on the date any such payment is due. All
amounts payable by the Standby Purchaser hereunder in respect of any Partial
Non-Payment Amount With Interest shall be payable in U.S. dollars and in
immediately available funds to the Trustee at the account specified in Section
12 below, or to such other account as may be specified by the Trustee in the
applicable Partial Non-Payment Notice. The Standby Purchaser shall not be
relieved of its obligations hereunder unless and until the Trustee shall have
indefeasibly received all amounts required to be paid by it hereunder (and any
related Event of Default under the Indenture has been cured), including payment
of the Partial Non-Payment Overdue Interest as provided for herein.
(d) All payments actually received by the Trustee pursuant to this
Section 2 after 1:00 p.m. (New York time) on any Business Day will be deemed,
for purposes of this Agreement, to have been received by the Trustee on the next
succeeding Business Day.
SECTION 3. Total Purchase Obligation. (a) In the event that, at the
Stated Maturity of the principal on the Notes (or earlier upon any acceleration
thereof in accordance with the terms of the Indenture), the Issuer shall fail to
make any payment in respect of principal, interest or other amounts due under
the Indenture and the Notes on the date any such payment is so due (such date,
the "Total Non-Payment Due Date") then in such event, (i) the Standby Purchaser
shall be obligated to pay immediately to the Trustee, for the benefit of the
Noteholders under the Indenture, the amount that the Issuer was required to pay
but failed to pay on such date under the terms of the Notes and the Indenture
(the "Total Non-Payment Amount") and (ii) the Trustee shall provide notice to
the Standby Purchaser of the failure of the Issuer to make such payment,
provided, however, that the failure to provide such notice shall not in any way
excuse the Standby Purchaser from its obligations hereunder. The notice
contemplated herein shall be provided in writing in substantially the form of
Exhibit B hereto (the "Total Non-Payment Notice") sent to the Standby Purchaser
at the address specified for the Standby Purchaser in Section 12 hereof no later
than 5:00 p.m. (New York time) on the Total Non-Payment Due Date. The Total
Non-Payment Notice shall (i) confirm the amount of the Total Non-Payment Amount
and the fact that such amount was not paid on the Total Non-Payment Due Date and
(ii) remind the Standby Purchaser that it is obligated to pay the Total
Non-Payment Amount immediately. To the extent that the Standby Purchaser fails
to pay the Total Non-Payment Amount immediately when required pursuant to this
Section 3(a) (whether or not it has received the Total Non-Payment Notice), the
Standby Purchaser shall be obligated hereunder to pay, in addition to the
amounts specified above, interest on such amount at the Default Rate from the
Total Non-Payment Due Date to and including the actual date of payment by the
Standby Purchaser (the "Total Non-Payment Overdue Interest" and, together with
the Total Non-Payment Amount, the "Total Non-Payment Amount With Interest"),
which date of payment shall be a Business Day. Notwithstanding anything to the
contrary herein, the failure by the Trustee to deliver a Total Non-Payment
Notice as provided herein shall not release the Standby Purchaser of its
obligations to pay the Total Non-Payment Amount With Interest in the manner set
forth in this Section 3(a).
(b) Payment of the Total Non-Payment Amount With Interest by the
Standby Purchaser shall be in consideration of the purchase by the Standby
Purchaser of the rights of the Noteholders to receive such amount from the
Issuer. The Noteholders shall have no right to retain such rights, and,
following the purchase and sale provided for in this Section 3, the Standby
Purchaser shall be subrogated to the Noteholders to the extent of any payment
under this Section 3.
(c) The obligation of the Standby Purchaser to pay the Total
Non-Payment Amount With Interest shall be absolute and unconditional upon
failure of the Issuer to make, at the Stated Maturity of the principal of the
Notes (or earlier upon any acceleration thereof in accordance with the terms of
the Indenture), any payment in respect of principal, interest or other amounts
due under the Indenture and the Notes on the date any such payment is due. All
amounts payable by the Standby Purchaser hereunder in respect of any Total
Non-Payment Amount With Interest shall be payable in U.S. dollars and in
immediately available funds to the Trustee at the account specified in Section
12 below, or to such other account as may be specified by the Trustee in the
applicable Total Non-Payment Notice. The Standby Purchaser shall not be relieved
of its obligations hereunder unless and until the Trustee shall have received
all amounts required to be paid by it hereunder (and any related Event of
Default under the Indenture has been cured), including payment of the Total
Non-Payment Overdue Interest.
(d) All payments actually received by the Trustee pursuant to this
Section 3 after 1:00 p.m. (New York time) on any Business Day will be deemed,
for purposes of this Agreement, to have been received by the Trustee on the next
succeeding Business Day.
SECTION 4. Obligations Absolute. The Standby Purchaser's obligation to
pay one or more Partial Non-Payment Amounts With Interest or the Total
Non-Payment Amount With Interest (collectively, the "Purchase Obligations") are
absolute and unconditional regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of any Noteholder under its Notes or the Indenture. The Purchase
Obligations and the other obligations of the Standby Purchaser under or in
respect of this Agreement are independent of any obligations of the Issuer, the
Issuer's Subsidiaries or the Standby Purchaser's Subsidiaries under or in
respect of the Indenture and the Notes or any other document or agreement, and a
separate action or actions may be brought and prosecuted against the Standby
Purchaser to enforce this Agreement, irrespective of whether any action is
brought against the Issuer or whether the Issuer is joined in any such action or
actions. The liability of the Standby Purchaser under this Agreement shall be
irrevocable, absolute and unconditional irrespective of, and the Standby
Purchaser hereby irrevocably waives any defenses it may now have or hereafter
acquire in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any of the Transaction
Documents;
(b) any provision of applicable Law or regulation purporting to
prohibit the payment by the Standby Purchaser of any amount payable by it
under this Agreement;
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Purchase Obligations or any other
obligations of any other person or entity under or in respect of the
Transaction Documents, or any other amendment or waiver of or any consent
to departure from any Transaction Document, including, without limitation,
any increase in the obligations of the Issuer under the Indenture and the
Notes as a result of further issuances, any rescheduling of the Issuer's
obligations under the Notes or the Indenture or otherwise;
(d) any taking, release or amendment or waiver of, or consent to
departure from, any other guaranty or agreement similar in function to this
Agreement, for all or any of the obligations of the Issuer under the
Indenture or the Notes;
(e) any manner of sale or other disposition of any assets of any
Noteholder;
(f) any change, restructuring or termination of the corporate
structure or existence of the Issuer or the Standby Purchaser or any
Subsidiary thereof or any change in the name, purposes, business, capital
stock (including ownership thereof) or constitutive documents of the Issuer
or the Standby Purchaser;
(g) any failure of the Trustee to disclose to the Standby Purchaser
any information relating to the business, condition (financial or
otherwise), operations, performance, properties or prospects of the Issuer
or any of its Subsidiaries (the Standby Purchaser hereby waiving any duty
on the part of the Trustee or any Noteholders to disclose such
information);
(h) the failure of any other person or entity to execute or deliver
any other Guarantee or agreement or the release or reduction of liability
of any other guarantor or surety with respect to the Indenture;
(i) any other circumstance (including, without limitation, any statute
of limitations) or any existence of or reliance on any representation by
the Trustee or any Noteholder that might otherwise constitute a defense
available to, or a discharge of, the Issuer or the Standby Purchaser or any
other party; or
(j) any claim of set-off or other right which the Standby Purchaser
may have at any time against the Issuer or the Trustee, whether in
connection with this transaction or with any unrelated transaction.
This Agreement shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Purchase Obligations is
rescinded or must otherwise be returned by any Noteholder or any other person or
entity upon the insolvency, bankruptcy or reorganization of the Issuer or the
Standby Purchaser or otherwise, all as though such payment had not been made.
SECTION 5. Independent Obligation. The obligations of the Standby
Purchaser hereunder are independent of the Issuer's obligations under the Notes
and the Indenture. The Trustee, on behalf of the Noteholders, may neglect or
forbear to enforce payment under the Indenture and the Notes, without in any way
affecting or impairing the liability of the Standby Purchaser hereunder. The
Trustee shall not be obligated to exhaust recourse or remedies against the
Issuer to recover payments required to be made under the Indenture nor take any
other action against the Issuer or, under any agreement, purchase any security
which the Trustee may hold before being entitled to payment from the Standby
Purchaser of all amounts contemplated in Sections 2 and 3 hereof owed hereunder
or proceed against or have resort to any balance of any deposit account or
credit on the books of the Trustee in favor of the Issuer or in favor of the
Standby Purchaser. Without limiting the generality of the foregoing, the Trustee
shall have the right to bring a suit directly against the Standby Purchaser,
either prior or subsequent to or concurrently with any lawsuit against, or
without bringing suit against, the Issuer.
SECTION 6. Waivers and Acknowledgments. (a) The Standby Purchaser
hereby unconditionally and irrevocably waives promptness, diligence, notice of
acceptance, presentment, demand for performance, notice of nonperformance,
default, acceleration, protest or dishonor and any other notice with respect to
any of the Purchase Obligations and this Agreement and any requirement that the
Trustee, on behalf of the Noteholders, protect, secure, perfect or insure any
Lien or any property subject thereto or exhaust any right or take any action
against the Issuer or any other Person.
(b) The Standby Purchaser hereby unconditionally and irrevocably
waives any right to revoke this Agreement and acknowledges that this Agreement
is continuing in nature and applies to its Purchase Obligations, whether the
same are existing now or in the future.
(c) The Standby Purchaser hereby unconditionally and irrevocably
waives (i) any defense arising by reason of any claim or defense based upon an
election of remedies by any Noteholder or the Trustee on behalf of the
Noteholders that in any manner impairs, reduces, releases or otherwise adversely
affects the subrogation, reimbursement, exoneration, contribution or
indemnification rights of the Standby Purchaser or other rights of the Standby
Purchaser to proceed against the Issuer or any other person or entity and (ii)
any defense based on any right of set-off or counterclaim against or in respect
of the Purchase Obligations of the Standby Purchaser hereunder.
(d) The Standby Purchaser hereby unconditionally and irrevocably
waives any duty on the part of the Trustee or any Noteholder to disclose to the
Standby Purchaser any matter, fact or thing relating to the business, condition
(financial or otherwise), operations, performance, properties or prospects of
the Issuer now or hereafter known by the Trustee or any Noteholder, as
applicable.
(e) The Standby Purchaser acknowledges that it will receive
substantial direct and indirect benefits from the financing arrangements
contemplated by the Transaction Documents and that the waivers set forth in this
Section 6 are knowingly made in contemplation of such benefits.
SECTION 7. Claims Against the Issuer. The Standby Purchaser hereby
unconditionally and irrevocably agrees not to exercise any rights that it may
now have or hereafter acquire against the Issuer or any other guarantor that
arise from the existence, payment, performance or enforcement of the Standby
Purchaser's Purchase Obligations under or in respect of this Agreement or any
other Transaction Document, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any
right to enforce any rights to payments in respect of the Partial Non-Payment
Amount With Interest and/or the Total Non-Payment Amount With Interest purchased
by the Standby Purchaser from the Noteholders as provided hereunder, or to
participate in any claim or remedy of the Trustee, on behalf of the Noteholders,
against the Issuer or any other person, whether or not such claim, remedy or
right arises in equity or under contract, statute or common law, including,
without limitation, the right to take or receive from the Issuer or any other
person, directly or indirectly, in cash or other property or by set-off or in
any other manner, payment or security on account of such claim, remedy or right,
unless and until all of the Purchase Obligations and all other amounts payable
under this Agreement shall have been paid in full in cash. If any amount shall
be paid to the Standby Purchaser in violation of the immediately preceding
sentence at any time prior to the later of (a) the payment in full in cash of
the Purchase Obligations and all other amounts payable under this Agreement and
(b) the date on which all of the obligations of the Issuer under the Indenture
and the Notes have been discharged in full (the later of such dates being the
"Termination Date"), such amount shall be received and held by the Trustee in
trust for the benefit of the Noteholders, shall be segregated from other
property and funds of the Standby Purchaser and shall forthwith be paid or
delivered to the Trustee in the same form as so received (with any necessary
endorsement or assignment) to be credited and applied to the Purchase
Obligations and all other amounts payable under this Agreement, whether matured
or unmatured, in accordance with the terms of the Indenture. If (i) the Standby
Purchaser shall make payment to any Noteholder or the Trustee, on behalf of the
Noteholders, of all or any part of the Purchase Obligations, (ii) all of the
Purchase Obligations and all other amounts payable under this Agreement shall
have been paid in full in cash and (iii) the Termination Date shall have
occurred, then the Trustee, on behalf of the Noteholders, will, at the Standby
Purchaser's request and expense, execute and deliver to the Standby Purchaser
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to the Standby Purchaser of an
interest in the Purchase Obligations resulting from such payment made by the
Standby Purchaser pursuant to this Agreement.
SECTION 8. Payments Free and Clear of Taxes, Etc. (a) Any and all
payments by or on account of any obligation of the Standby Purchaser hereunder
or under any other Transaction Document shall be made free and clear of and
without deduction for any Indemnified Taxes; provided that if the Standby
Purchaser shall be required to deduct any Indemnified Taxes from such payments,
then (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional amounts
payable under this Section), the Trustee, on behalf of the Noteholders, receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Standby Purchaser shall make such deductions and (iii) the
Standby Purchaser shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable Law.
(b) Payment of Other Taxes by the Standby Purchaser. In addition, the
Standby Purchaser shall pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable Law.
(c) Notwithstanding anything to the contrary in Section 8(a) of this
Agreement, the Standby Purchaser will not be obligated to pay any Indemnified
Taxes imposed with respect to the Notes due to (i) the Noteholder or the Trustee
having a connection with the jurisdiction imposing the Indemnified Taxes
(hereinafter, the "Taxing Jurisdiction") other than from merely holding the
Notes or receiving principal or interest payments on the Notes (such as
citizenship, nationality, residence, domicile, or existence of a business, a
permanent establishment, a dependent agent, a place of business or a place of
management present or deemed present within the Taxing Jurisdiction), (ii) any
tax imposed on, or measured by, net income, (iii) the Noteholder or the Trustee
failing to comply with any certification, identification or other reporting
requirements concerning its nationality, residence, identity or connection with
the Taxing Jurisdiction, if (x) such compliance is required by applicable Law,
regulation, administrative practice or treaty as a precondition to exemption
from all or a part of the Indemnified Taxes, (y) the Noteholder or the Trustee
is able to comply with such requirements without undue hardship and (z) at least
30 calendar days prior to the first Payment Date with respect to which such
requirements under the applicable Law, regulation, administrative practice or
treaty shall apply, the Standby Purchaser has notified all the Noteholders or
the Trustee that they will be required to comply with such requirements, (iv)
the Noteholder or the Trustee failing to present (where presentation is
required) its Note within 30 calendar days after the Standby Purchaser has made
available to the Noteholder or the Trustee a payment under this Agreement;
provided that the Standby Purchaser will pay Indemnified Taxes which a
Noteholder or the Trustee would have been entitled to under such Note had it
been presented on any day (including the last day) within such 30 day period,
(v) any estate, inheritance, gift, value added, use or sales taxes or any
similar taxes, assessments or other governmental charges, (vi) such Indemnified
Taxes being imposed on a payment on the Notes to an individual and are required
to be made pursuant to European Union council Directive 2003/48/EC implementing
the conclusions of the Economic and Financial Council of Ministers of the member
states of the European Union (ECONFIN) Council meeting of November 26-27, 2000
on the taxation of savings income or any law implementing or complying with, or
introduced in order to conform to, any such Directive, (vii) such Note being
presented for payment by or on behalf of a Noteholder or Trustee who would have
been able to avoid such withholding or deduction by requesting that a payment on
the Notes be made by, or presenting the relevant Notes for payment to another
paying agent located in a member state of the European Union, or (viii) the
payment of any obligation of the Standby Purchaser to a Noteholder or Trustee
who would have been able to cause the avoidance of the Indemnified Taxes by
taking reasonable measures available to such Noteholder or the Trustee.
The Standby Purchaser shall, if European Council Directive 2003/48/EC
or any other Directive implementing the conclusions of ECOFIN council meeting of
November 26-27, 2000 is brought into force, ensure that it maintains a paying
agent hereunder in a member state of the European Union that will not be obliged
to withhold or deduct tax pursuant to such Directive.
(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Standby Purchaser to a Governmental
Authority, the Standby Purchaser shall deliver to the Trustee the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Trustee.
SECTION 9. Representations and Warranties. The Standby Purchaser makes
the following representations and warranties to the Trustee, on behalf of the
Noteholders, all of which shall survive the execution and delivery of this
Agreement:
(a) The Companies and the transactions contemplated in the
Underwriting Agreement dated as of December 3, 2003 among the Standby Purchaser,
the Issuer and the Underwriters (the "Underwriting Agreement") in connection
with the offer and sale of the Notes meet the requirements set forth in Form F-3
under the Securities Act for use of the Registration Statement in connection
with the offering of the Notes that are the subject of this Agreement.
(b) The Standby Purchaser and the Issuer have filed the Registration
Statement with the SEC, the Registration Statement has been declared effective
under the Securities Act, no stop order suspending the effectiveness of the
Registration Statement (including the Base Prospectus) is in effect and no
proceedings for such purposes are pending or, to the best of the Companies'
knowledge, threatened by the SEC.
(c) The Standby Purchaser and the Issuer have filed with the SEC
pursuant to Rule 424(b) under the Securities Act a proposed form of supplement
to the Base Prospectus (the "Preliminary Prospectus Supplement") within the time
frame required thereunder. The Base Prospectus as supplemented by the
Preliminary Prospectus Supplement, together with any documents incorporated by
reference therein, is herein referred to as the "Preliminary Offering Document".
(d) The Standby Purchaser and the Issuer confirm their intention to
file with the SEC pursuant to Rule 424(b) under the Securities Act a final form
of supplement to the Base Prospectus (the "Final Prospectus Supplement") dated
December 3, 2003 relating to the Notes and the distribution thereof. The Base
Prospectus as supplemented by the Final Prospectus Supplement in the form in
which it shall be filed with the SEC pursuant to Rule 424(b), together with any
documents incorporated by reference therein, is herein referred to as the "Final
Offering Document".
(e) Each of the Companies has filed all the documents required to be
filed by it with the SEC pursuant to the Exchange Act, including but not limited
to the annual reports on Form 20-F for the year ended December 31, 2002 and
Forms 6-K in connection with their respective financial statements for the three
months ended March 31, 2003, the six months ended June 30, 2003 and the nine
months ended September 30, 2003. Each document filed or to be filed by the
Companies under the Exchange Act complied and will comply when so filed in all
material respects with the requirements of the Exchange Act and the applicable
rules and regulations of the SEC and the documents incorporated or deemed to be
incorporated by reference in the Registration Statement, the Preliminary
Offering Document and the Final Offering Document, at the time they were or
hereafter are filed with the SEC, complied and will comply in all material
respects with the requirements of the Securities Act, the Exchange Act and the
rules and regulations thereunder.
(f) The Original Indenture, Third Supplemental Indenture and the
Standby Purchase Agreement have been qualified under the TIA, and all filings
and other actions required under the TIA to permit the use of the Indenture, the
issuance of the Notes thereunder and the execution by the Standby Purchaser and
the Trustee of the Standby Purchase Agreement have been made and taken prior to
the date hereof.
(g) Prior to the termination of the offering of the Notes, neither the
Standby Purchaser nor the Issuer has filed any amendment to the Registration
Statement or supplement to the Final Offering Document which shall not have
previously been furnished to the Underwriters or of which the Underwriters shall
not previously have been advised or to which the Underwriters shall have
reasonably objected in writing.
(h) Each of the Registration Statement, as amended, as of the time it
became effective under the Securities Act, and the Final Offering Document as
amended or supplemented as of the date hereof, contained and contains all
disclosures required under applicable laws, including the Securities Act and the
rules and regulations thereunder. Neither (i) the Registration Statement, as
amended, as of the time it became effective under the Securities Act nor (ii)
the Final Offering Document as amended or supplemented as of the date hereof
contains or will contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading. Notwithstanding
the foregoing, the Standby Purchaser does not make any representation or
warranty as to the information contained in or omitted from the Registration
Statement or the Final Offering Document in reliance upon and in conformity with
information furnished in writing to the Standby Purchaser and the Issuer by the
Underwriters, specifically for inclusion therein, which shall consist solely of
the first and sixth paragraphs under the captions "Plan of Distribution" in the
Final Prospectus Supplement.
(i) Neither the Issuer nor the Standby Purchaser is an "investment
company" or a company "controlled by" an "investment company" as such terms are
defined in the United States Investment Company Act of 1940, as amended, and the
rules and regulations of the SEC promulgated thereunder. After giving effect to
the offering and sale of the Notes and the application of the proceeds thereof
as described in the Registration Statement and the Final Offering Document
neither the Issuer nor the Standby Purchaser will be an "investment company" or
a company "controlled by" an "investment company" as such terms are defined in
the United States Investment Company Act of 1940, as amended, and the rules and
regulations of the SEC promulgated thereunder.
(j) Neither the Standby Purchaser, nor any of its Affiliates, nor any
person acting on their behalf (other than the Underwriters as to which the
Standby Purchaser makes no representation or warranty), has paid or agreed to
pay to any person any compensation for soliciting another to purchase (i) the
Notes or (ii) any other securities of the Standby Purchaser or the Issuer within
the last 90 days, except in the case of either (i) or (ii) as contemplated by
the Underwriting Agreement and the Underwriting Agreement, dated as of September
11, 2003 between the Companies and Bear Stearns & Co. Inc..
(k) Neither the Standby Purchaser, nor any of its Affiliates, nor any
person acting on their behalf (other than the Underwriters as to which the
Standby Purchaser makes no representation or warranty), has, directly or
indirectly, taken any action designed to cause or which has constituted or which
might reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Standby Purchaser or the Issuer
to facilitate the initial sale or resale of the Notes under the Exchange Act, or
otherwise.
(l) The Standby Purchaser has been duly organized and is validly
existing as a sociedade de economia mista (mixed-capital company) in good
standing (to the extent that good standing is applicable under applicable Law)
under the Laws of Brazil. Each of the Standby Purchaser's Significant
Subsidiaries (as defined in Rule 12b-2 under the Exchange Act) has been duly
incorporated and is validly existing as a corporation in good standing (to the
extent relevant) under the Laws of the jurisdiction in which it is chartered or
organized. Each of the Standby Purchaser and its Significant Subsidiaries is
licensed (if and to the extent necessary) and has the full corporate power and
authority to own or lease, as the case may be, and to operate its properties and
to conduct its business as described in the Registration Statement and the Final
Offering Document and to enter into and perform its obligations under this
Agreement and the other Transaction Documents to which it is a party, and is
duly qualified or licensed as a foreign corporation in good standing in each
jurisdiction which requires such qualification, except, in the case of its
Significant Subsidiaries other than the Issuer, where the failure to be so
qualified will not have a Material Adverse Effect. The Standby Purchaser owns,
directly or indirectly, all of the outstanding equity interests of the Issuer
and its other Significant Subsidiaries.
(m) All the outstanding shares of capital stock, if any, of each
Subsidiary of the Standby Purchaser have been duly and validly authorized and
issued and are fully paid and non-assessable except, in the case of the
Subsidiaries (other than the Issuer), as would not have a Material Adverse
Effect, and all outstanding shares of capital stock of the Subsidiaries are
owned by the Companies, as the case may be, either directly or through wholly
owned Subsidiaries free and clear of any perfected security interest or any
other security interests, claims, liens or encumbrances.
(n) The Standby Purchaser's capitalization is as set forth in the
Final Offering Document.
(o) There have been no material changes with respect to the matters
disclosed in "Item 11. Qualitative and Quantitative Disclosure About Market
Risk" in the Form 20-F of the Standby Purchaser for the year ended December 31,
2002, except as otherwise specified in the Final Offering Document.
(p) This Agreement has been duly authorized, executed and delivered by
the Standby Purchaser; each of this Agreement, the Third Supplemental Indenture
and each other document executed and delivered in connection therewith to which
the Standby Purchaser is party has been duly authorized and, assuming due
authorization, execution and delivery thereof by each other party to those
Transaction Documents (other than the Standby Purchaser), when executed and
delivered by the Standby Purchaser, will constitute a legal, valid and binding
agreement of the Standby Purchaser, enforceable against the Standby Purchaser in
accordance with its terms (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other similar
laws affecting creditors' rights generally from time to time in effect and to
general principles of equity); and the descriptions of the Transaction Documents
in the Final Offering Document fairly summarize the rights and obligations of
the parties thereto.
(q) The Notes have been duly authorized, and, when issued under the
Indenture, authenticated by the Trustee and delivered to and paid for by the
Underwriters pursuant to the Underwriting Agreement, will have been duly
executed, issued and delivered and will constitute legal, valid and binding
obligations of the Issuer, enforceable in accordance with their terms, subject,
as to the enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium, or other similar laws affecting creditors' rights
generally from time to time in effect and to general principles of equity and
will be entitled to the benefits provided by the Indenture as described in the
Registration Statement and the Final Offering Document.
(r) The Notes will constitute the general unsecured and unsubordinated
obligations of the Issuer and will rank pari passu in priority of payment and in
right of seniority with all other unsecured and unsubordinated obligations of
the Issuer that are not, by their terms, expressly subordinated in right of
payment to the Notes, except for statutory liens and preferences. The
obligations of the Standby Purchaser under this Agreement will constitute the
general unsecured and unsubordinated obligations of the Standby Purchaser and
will rank pari passu in priority of payment and in right of seniority with all
other unsecured and unsubordinated obligations of the Standby Purchaser that are
not, by their terms, expressly subordinated in right of payment to the rights of
the Trustee, except for statutory liens and preferences.
(s) No consent, approval, authorization, filing with or order of any
Governmental Authority is required for (i) the valid authorization, issuance,
sale and delivery of the Notes or (ii) the execution, delivery or performance by
the Issuer and the Standby Purchaser of any of their respective obligations
under any of the Transaction Documents in the manner contemplated in the
Registration Statement and the Final Offering Document, including, without
limitation, making any of the applicable payments required to be made after the
date hereof under or in respect of any of the Transaction Documents, except for
(i) the filing of the Final Prospectus Supplement pursuant to Rule 424(b) under
the Securities Act, which has been effected prior to the date hereof, (ii) such
consents as may be required under state or foreign securities or blue sky laws
and (iii) such filings or consents as may be required by the by-laws and rules
of the National Association of Securities Dealers, Inc. or NASD Regulation, Inc.
in connection with the use of the Base Prospectus for issuances of securities by
the Standby Purchaser and the Issuer and the purchase and distribution of the
Notes by the Underwriters and the confirmation by the National Association of
Securities Dealers, Inc. that it has no objection with respect to the fairness
and reasonableness of the underwriting terms and arrangements, each of which
has, to the best of the Companies' knowledge been obtained and is in full force
and effect.
(t) Neither of the Issuer or the Standby Purchaser is currently in
violation of its charter, by-laws or comparable organizational documents;
neither the issuance and sale of the Notes, the execution and delivery of any of
the Transaction Documents or the consummation of any of the transactions
described or contemplated therein, or the fulfillment of the terms thereof will
conflict with, or give rise to any right to accelerate the maturity or require
the prepayment, repurchase or redemption of any indebtedness under, or result in
a breach or violation or imposition of any lien, charge or encumbrance upon any
property or assets of the Companies or any of their Material Subsidiaries
pursuant to, (i) the charter, by-laws or comparable organizational documents of
either of the Issuer or the Standby Purchaser or any of their Subsidiaries, (ii)
the terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition, covenant or
instrument to which the Issuer or the Standby Purchaser or any of their
Subsidiaries is a party or is bound or to which any of their property or assets
is subject or (iii) any statute, law, rule, regulation, judgment, order or
decree applicable to the Issuer or the Standby Purchaser or any of their
Subsidiaries, except in the case of clauses (ii) or (iii) such as could not
reasonably be expected to have a Material Adverse Effect.
(u) The consolidated historical financial statements of the Issuer and
the Standby Purchaser and their consolidated Subsidiaries included in the
Preliminary Offering Document and the Final Offering Document, together with the
related notes, have been prepared in accordance with U.S. GAAP applied on a
consistent basis throughout the periods involved (except as otherwise noted
therein) and present fairly in all material respects the financial condition,
results of operations and cash flows of the Issuer and the Standby Purchaser as
of the dates and for the periods indicated; the summary financial information
set forth under the captions "Summary Financial Information for PIFCo," and
"Summary Financial Information for Petrobras" in the Preliminary Offering
Document and the Final Offering Document fairly present, on the basis stated in
the Preliminary Offering Document and the Final Offering Document, the
information included therein. The financial information relating to Petrobras
Energia Participaciones S.A.-PEPSA (formerly known as Perez Companc S.A.) and
its consolidated Subsidiaries set forth in the Preliminary Offering Document and
the Final Offering Document fairly present, on the basis stated in the
Preliminary Offering Document and the Final Offering Document, the information
included therein. Except as disclosed in the Preliminary Offering Document and
the Final Offering Document, there has been no material adverse change in the
operations, business, property or assets of or in the financial condition of
either of the Issuer or the Standby Purchaser and their consolidated
Subsidiaries, taken as a whole, since December 31, 2002. The segment data and
other financial and statistical information incorporated by reference in the
Registration Statement and the Final Offering Document present fairly the
information included therein and have been prepared on a basis consistent with
that of the financial statements that are incorporated by reference in the
Registration Statement and the Final Offering Document and the books and records
of the respective entities presented therein.
(v) There are no pro forma or consolidated financial statements or
other financial statements or data which are required to be included or
incorporated by reference in the Registration Statement and the Final Offering
Document in accordance with Regulation S-X under the Securities Act which have
not been included as so required.
(w) The statistical, industry-related and market-related data included
in the Preliminary Offering Document and the Final Offering Document are based
on or derived from sources which the Standby Purchaser and the Issuer reasonably
and in good faith believe are reliable and accurate, and such data agree with
the sources from which they are derived.
(x) Except as set forth or contemplated in the Preliminary Offering
Document and the Final Offering Document, neither of the Issuer or the Standby
Purchaser has entered into any transaction or agreement (whether or not in the
ordinary course of business) material to either of the Issuer or the Standby
Purchaser individually or the Issuer and the Standby Purchaser taken as a whole
with their consolidated Subsidiaries.
(y) No action, suit or proceeding by or before any Governmental
Authority involving the Issuer or the Standby Purchaser or any of their
Subsidiaries or their property or assets is pending or, to the best knowledge of
the Standby Purchaser, threatened, involving or in any way relating to (i) this
Agreement, any of the other Transaction Documents or the transactions
contemplated herein or therein or (ii) any other matter that individually or in
the aggregate could reasonably be expected to have a Material Adverse Effect,
except as set forth in or contemplated in the Preliminary Offering Document and
the Final Offering Document. Neither the Issuer, the Standby Purchaser or any of
their Subsidiaries is in violation of or in default with respect to any
applicable statute (including, without limitation, any applicable provision of
the Sarbanes-Oxley Act, including any rules and regulations thereunder or
related thereto), rule, writ, injunction, decree, order or regulation of any
Governmental Authority having jurisdiction over such Person which is reasonably
likely to have a Material Adverse Effect.
(z) Each of the Issuer and the Standby Purchaser and each of their
respective Subsidiaries has good and marketable title to all of their properties
and assets and owns or leases all such properties and assets as are both
described in the Preliminary Offering Document and the Final Offering Document
and necessary to the conduct of its operations as presently conducted free and
clear of any liens, charges, security interests or other encumbrances except
such as (i) do not materially interfere with the intended use thereof and (ii)
could not reasonably be expected to have a Material Adverse Effect. All leases
and subleases material to the business of each of the Companies under which
either of the Issuer and the Standby Purchaser holds properties, as described in
the Preliminary Offering Document and the Final Offering Document, are in full
force and effect; and neither the Standby Purchaser nor the Issuer has had any
notice that any material claim of any sort has been asserted by anyone adverse
to the Standby Purchaser's or the Issuer's rights under any leases or subleases
mentioned above, or affecting or questioning the rights thereof to the continued
possession of the leased or subleased premises under any such lease or sublease,
except as would not result in a Material Adverse Effect.
(aa) Each of PricewaterhouseCoopers Auditores Independentes and Ernst
& Young Auditores Independentes (who have certified the financial statements of
the Issuer and the Standby Purchaser and supporting schedules and information of
Standby Purchaser and the Issuer and their consolidated Subsidiaries and
delivered their report with respect to the audited and unaudited consolidated
financial statements and other financial information included in the Preliminary
Offering Document and the Final Offering Document relating to the Issuer and the
Standby Purchaser and their consolidated Subsidiaries) and Pistrelli, Henry
Martin y Associados S.R.L., a member firm of Ernst & Young (who have delivered
their report with respect to financial information included in the Preliminary
Offering Document and the Final Offering Document relating to Petrobras Energia
Participaciones S.A.-PEPSA and its consolidated Subsidiaries) are independent
public accountants within the meaning of the Code of Professional Conduct of the
American Institute of Certified Public Accountants and the applicable
requirements of the Regulation S-X under the Securities Act and the Exchange Act
and, in the case of PricewaterhouseCoopers Auditores Independentes, and Ernst &
Young Auditores Independentes are certified public accountants with respect to
the Standby Purchaser and the Issuer under the standards established by the
local authorities in the Cayman Islands and Brazil, and, in the case of
Pistrelli, Henry Martin y Associados S.R.I., are certified public accountants
with respect to Petrobras Energia Participaciones S.A.-PEPSA under the standards
established by the local authorities in the Republic of Argentina.
(bb) Each of the Issuer and the Standby Purchaser and their respective
Subsidiaries has filed or caused to be filed all tax returns which to the
knowledge of the Issuer and the Standby Purchaser are required to be filed, and
has paid all taxes shown to be due and payable on said returns or on any
assessments made against such person or any of its respective properties and all
other taxes, assessments, fees or other charges imposed on such person or any of
its respective properties by, any Governmental Authority (other than those the
amount or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
generally accepted accounting principles have been provided on the books of such
person); and no material tax liens or material liens with respect to any
assessments, fees or other charges have been filed and, to the knowledge of such
person, no material claims are being asserted with respect to any such taxes,
assessments, fees or other charges.
(cc) The Issuer and the Standby Purchaser and each of their respective
Subsidiaries are insured by insurers that the Issuer and the Standby Purchaser
reasonably believe to be financially sound against such losses and risks and in
such amounts as are prudent and customary in the businesses and in the
geographical regions in which they are engaged except when the failure to do so
would not have a Material Adverse Effect; and neither of the Issuer or the
Standby Purchaser nor any Subsidiary thereof has any reason to believe that it
will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a Material
Adverse Effect.
(dd) No Subsidiary of the Issuer or the Standby Purchaser is currently
prohibited, directly or indirectly, from paying any dividends to either of the
Issuer or the Standby Purchaser, from making any other distribution on such
Subsidiary's capital stock, from repaying to the Issuer or the Standby Purchaser
any loans or advances to such Subsidiary from the Issuer or the Standby
Purchaser or from transferring any of such Subsidiary's property or assets to
the Issuer or the Standby Purchaser or any other Subsidiary of the Issuer or the
Standby Purchaser.
(ee) The Issuer and the Standby Purchaser and their Subsidiaries
possess all material licenses, certificates, permits and other authorizations
issued by the appropriate federal, state or foreign regulatory authorities
necessary to conduct their respective businesses, and neither of the Issuer and
the Standby Purchaser nor any of their Subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could have a Material Adverse Effect.
(ff) To ensure the legality, validity, enforceability or admissibility
into evidence of any of the Transaction Documents, it is not necessary that any
such other document be filed or recorded with any court or other authority in
Brazil or the Cayman Islands (other than such authorizations or filings that
have already been obtained or made, as applicable), or that any stamp or similar
tax be paid in either Brazil or the Cayman Islands on or in respect of any such
document, except as provided in the Preliminary Offering Document and the Final
Offering Document. It is not necessary under the laws of Brazil or the Cayman
Islands that any of the holders of the Notes, be licensed, qualified or entitled
to carry on business in either Brazil or the Cayman Islands by reason of the
execution, delivery, performance or enforcement of any of the Transaction
Documents.
(gg) The Issuer and the Standby Purchaser and each of their respective
Subsidiaries each maintain a system of internal accounting controls sufficient
to provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
accordance with U.S. GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(hh) The Issuer and the Standby Purchaser and their respective
Subsidiaries (i) are in compliance with any and all applicable Environmental
Laws, (ii) have received and are in compliance with all permits, licenses or
other approvals required of them under the applicable Environmental Laws to
conduct their respective businesses and (iii) except as described in the
Preliminary Offering Document and the Final Offering Document, have not received
notice of any actual or potential liability for the investigation or remediation
of any disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except in the case of clauses (i), (ii) and (iii)
above where such non-compliance with Environmental Laws, failure to receive
required permits, licenses or other approvals, or liability would not,
individually or in the aggregate, have a Material Adverse Effect. Except as set
forth in the Preliminary Offering Document and the Final Offering Document,
neither of the Issuer and the Standby Purchaser nor any of their Subsidiaries
has been named as a "potentially responsible party" under the United States
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, nor has the Issuer or any such Subsidiary been identified as the
party responsible or potentially responsible for any breach or violation of any
other similar Environmental Law.
(ii) In the ordinary course of its business, the Issuer and the
Standby Purchaser periodically review the effect of Environmental Laws on the
business, operations and properties of the Issuer and the Standby Purchaser and
their Subsidiaries, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws, or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to
third parties). On the basis of such review, the Issuer and the Standby
Purchaser have reasonably concluded that such associated costs and liabilities
would not, singly or in the aggregate, have a Material Adverse Effect.
(jj) The information set forth in the Preliminary Offering Document
and the Final Offering Document relating to oil and gas reserves, oil and gas
wells and any other oil and gas related information required to be disclosed in
such Preliminary Offering Document and the Final Offering Document has been
prepared by the Issuer and the Standby Purchaser in all material respects on the
basis disclosed in the Preliminary Offering Document and the Final Offering
Document and conforms in all material respects to the requirements of the
Securities Act and the Exchange Act, as the case may be.
(kk) The indemnification and contribution provisions set forth in
Section 14 hereof do not contravene Brazilian or Cayman Islands law or public
policy.
(ll) The Issuer and the Standby Purchaser are subject to civil and
commercial law in respect of their obligations hereunder and the Issuer and the
Standby Purchaser are not, nor are any of their properties, assets or revenues
subject to any right of immunity under Cayman Islands, Brazilian or New York
law, from any legal action, suit or proceeding, from the giving of any relief in
any such legal action, suit or proceeding, from set-off or counterclaim, from
the jurisdiction of any Cayman Islands, Brazilian, New York or United States
federal court, from service of process, attachment upon or prior to judgment, or
attachment in aid of execution of judgment, or from execution of a judgment, or
other legal process or proceeding for the giving of any relief or for the
enforcement of a judgment, in any such court with respect to its obligations,
liabilities or any other matter under or arising out of or in connection
herewith; and, to the extent that the Issuer and the Standby Purchaser or any of
their properties, assets or revenues may have or may hereafter become entitled
to any such right of immunity in any such court in which proceedings arising out
of, or relating to the transactions contemplated hereby, may at any time be
commenced, the Companies have waived or will waive such right to the extent
permitted by law and have consented to such relief and enforcement as provided
herein.
(mm) The submission of the Issuer and the Standby Purchaser to the
non-exclusive jurisdiction of the courts of the Supreme Court of the State of
New York, County of New York, and the United States District Court for the
Southern District of New York (each, a "New York court") in Section 18 hereof,
in the case of the Standby Purchaser, and, as applicable, under each of the
Transaction Documents is legal, valid and binding under the laws of Brazil and
the Cayman Islands; the appointment of the Standby Purchaser's New York Branch
located at 570 Lexington Avenue, 43rd Floor, New York, New York 10022 as its
authorized agent for the purpose described in Section 18 below and under each of
the other Transaction Documents is legal, valid and binding under the laws of
Brazil and the Cayman Islands; and the choice of law provision set forth in
Section 18 below and in each Transaction Document is legal, valid and binding
under the laws of Brazil and the Cayman Islands. Any final judgment of a New
York court in respect of any amount payable by the Issuer and the Standby
Purchaser under any Transaction Document and which conforms with Brazilian or
Cayman Island, as applicable, law, rule, regulation or public policy and with
the provisions for enforcement of foreign judgments set forth in the Final
Memorandum be enforceable in the courts of Brazil and the Cayman Islands without
reexamination of the merits.
(nn) Any final judgment for a fixed or readily calculable sum of money
rendered by any court of the State of New York or of the United States located
in the State of New York having jurisdiction under its own domestic laws in
respect of any suit, action or proceeding against the Issuer and the Standby
Purchaser based upon this Agreement would be declared enforceable against the
Issuer and the Standby Purchaser by the courts of the Cayman Islands or Brazil,
as applicable, without re-examination, review of the merits of the cause of
action in respect of which the original judgment was given or relitigation of
the matters adjudicated upon or payment of any stamp, registration or similar
tax or duty, as provided in the provisions for enforcement of foreign judgments
set forth in the Final Offering Document.
(oo) No part of the proceeds of the sale of the Notes will be used for
any purpose that violates the provisions of any of Regulation T, U or X of the
Board of Governors of the Federal Reserve System or any other regulation of such
Board of Governors.
(pp) Both presently and immediately after giving effect to the
transactions contemplated hereunder and in the Final Offering Document, each of
the Issuer and the Standby Purchaser (i) is and will be able to pay its debts as
they become due and (ii) is not insolvent as defined under applicable Brazilian
bankruptcy, insolvency or similar law or Cayman Islands bankruptcy, insolvency
or similar law.
(qq) None of the Noteholders, the Underwriters or the Trustee will be
deemed resident, domiciled, carrying on business or subject to taxation in
Brazil or the Cayman Islands solely by the execution, delivery, performance or
enforcement of any of the Transaction Documents or by virtue of the ownership or
transfer of a Note or Exchange Note or the receipt of payment thereon assuming
that none of such persons is a resident of Brazil or the Cayman Islands or has a
permanent establishment or a fixed base in Brazil or the Cayman Islands.
(rr) No Default or Event of Default (as defined in the Indenture) has
occurred and is continuing.
(ss) There are no Cayman Island taxes on or by virtue of the execution
or delivery of this Agreement, the Indenture, the Notes or any of the other
Transaction Documents or any other document to be furnished hereunder or
thereunder. Payments to be made by the Issuer and the Standby Purchaser or any
other party to any of the Transaction Documents pursuant to the Transaction
Documents will not be subject to Cayman Islands taxes. There are no stamp or
other issuance or transfer taxes or duties or other similar fees or charges
required to be paid in connection with the execution and delivery of any of the
Transaction Documents or the consummation of any of the other transactions
described therein or the issuance and sale by the Issuer of the Notes.
(tt) There is no tax, levy, impost, deduction, charge or withholding
imposed, levied or made by or in Brazil or any political subdivision or taxing
authority thereof or therein either (i) on or by virtue of the execution or
delivery of this Agreement or any of the other Transaction Documents or (ii) on
any payment to be made by the Standby Purchaser to the Trustee (to the extent
that such payments are for the benefit of non-residents of Brazil) or the
holders (that are non-residents of Brazil) of the Notes pursuant to this
Agreement, except with respect to any payment of interest, fees or other income
made to a party hereto or thereto outside of Brazil from funds of the Standby
Purchaser in Brazil each of which currently would be subject to a withholding
tax which, as of the date hereof, is levied at the rate of 15%, 25% if the
beneficiary is domiciled in a tax haven jurisdiction or such other lower rate,
as it may be contemplated in a bilateral treaty aimed at avoiding double
taxation between Brazil and such other country where the recipient of the
payment has its domicile. The Standby Purchaser is permitted to make all
payments pursuant to this Agreement free and clear of all taxes, levies,
imposts, deductions, charges or withholdings imposed, levied or made by or in
Brazil or any political subdivision or taxing authority thereof or therein, and
no such payment in the hands of the Trustee (to the extent that such payments
are for the benefit of non-residents of Brazil) or the Holders (that are
non-residents of Brazil) of the Notes will be subject to any tax, levy, impost,
deduction, charge or withholding imposed, levied or made by or in Brazil or any
political subdivision or taxing authority therein or thereof, in each case
except as provided in the immediately preceding sentence. The Standby Purchaser
intends to make all payments pursuant to this Agreement from funds offshore
Brazil. The Standby Purchaser does not believe or reasonably expect that any
interest paid or purchases of Purchase Obligations made by the Standby Purchaser
pursuant to the terms hereof will constitute interest paid by a trade or
business in the United States within the meaning of Section 884 (f) (1) (A) of
the Internal Revenue Code of 1986, as amended. To ensure the legality, validity,
enforceability or admissibility in evidence of this Agreement in Brazil, it is
not necessary that this Agreement or any other document be filed or recorded
with any court or other authority in Brazil, other than the notarization of the
signatures of the parties signing outside Brazil, the subsequent consularization
(authentication) of the signature of such a notary by a Brazilian consulate
official and the subsequent translation of this Agreement into Portuguese by a
sworn translator, or that any stamp or similar tax be paid on or in respect of
this Agreement or any of the other Transaction Documents.
(uu) After being notarized, consularized and translated into
Portuguese by a sworn translator, this Agreement will be in proper legal form
under the laws of Brazil for the enforcement thereof in Brazil.
(vv) To the extent the Standby Purchaser or its respective property
has or may in the future have any right of immunity, on the grounds of
sovereignty or otherwise, from any legal action, suit or proceeding, set-off or
counterclaim, the jurisdiction of any competent court, service of process,
attachment or execution, in any jurisdiction, with respect to its obligations,
liabilities, or any other matter under or arising out of or in connection with
this Agreement and any other Transaction Documents, the Standby Purchaser has
effectively waived such rights as provided in Section 18 hereof; provided that
no assets of the Standby Purchaser which are specifically used in the
furtherance of the activities listed in Article 177 of the Brazilian
Constitution, in respect of which the Brazilian government has a monopoly, could
be used by any person in Brazil acquiring such assets as a result of the
execution thereof in violation of the provisions contained in such Article 177
of the Brazilian Constitution. The execution and delivery of this Agreement by
the Standby Purchaser and the performance of its obligations hereunder by the
Standby Purchaser constitute private and commercial acts rather than
governmental or public acts.
(ww) Except as described in the Final Offering Document and except as
to matters, individually or in the aggregate, which could not reasonably be
expected to have a Material Adverse Effect:
(i) The Standby Purchaser and its Material Subsidiaries have obtained
all environmental permits with respect to the business in which they are
engaged and with respect to the facilities and properties owned, leased or
operated by the Standby Purchaser or any of its Material Subsidiaries, and
the business and all operations at the properties of the Standby Purchaser
are in compliance with all environmental permits and are otherwise in
compliance with all environmental laws;
(ii) No officer of the Standby Purchaser or of any of its Material
Subsidiaries has received any notice of any claim with respect to any of
the properties, the business or otherwise, nor does the Standby Purchaser
have knowledge or reason to believe that any such claim will be received or
is threatened; and
(iii) There are no past or present actions, activities, events,
conditions or circumstances, including the release, threatened, release,
emission, discharge, generation, treatment, storage or disposal of any
hazardous materials at any locations, that would reasonably be expected to
give rise to liability of the Standby Purchaser or any of its Material
Subsidiaries under any law or any contract or agreement.
(xx) The Standby Purchaser has, independently and without reliance
upon any Noteholder and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement and each other Transaction Document to which it is or is to be a
party, and the Standby Purchaser has established adequate means of obtaining
from the Issuer on a continuing basis information pertaining to, and is now and
on a continuing basis will be completely familiar with, the business, condition
(financial or otherwise), operations, performance, properties and prospects of
the Issuer.
SECTION 10. Covenants
For so long as the Notes remain outstanding or any amount remains
unpaid on the Notes and the Indenture, the Standby Purchaser will, and will
cause each of its Subsidiaries to, comply with the terms and covenants set forth
below (except as otherwise provided in a duly authorized amendment to this
Agreement as provided herein):
(a) Performance of Obligations. The Standby Purchaser shall pay all
amounts owed by it and comply with all its other obligations under the terms of
this Agreement and the Indenture in accordance with the terms thereof.
(b) Maintenance of Corporate Existence. The Standby Purchaser will,
and will cause each of its Subsidiaries to, (i) maintain in effect its corporate
existence and all registrations necessary therefor except as otherwise permitted
by Section 10(m) and (ii) take all actions to maintain all rights, privileges,
titles to property, franchises, concessions and the like necessary or desirable
in the normal conduct of its business, activities or operations; provided,
however, that this Section 10(b) shall not require the Standby Purchaser to
maintain or cause any Subsidiary thereof to maintain any such right, privilege,
title to property or franchise or require the Standby Purchaser to preserve the
corporate existence of any Subsidiary, if, in each case, the failure to do so
does not, and will not, have a Material Adverse Effect.
(c) Maintenance of Properties. The Standby Purchaser will, and will
cause each of its Subsidiaries to, maintain and keep in good condition, repair
and working order (normal wear and tear excepted) all properties used or useful
in the conduct of its or its Subsidiaries businesses, and will, and will cause
each of its Subsidiaries to, make all necessary repairs, renewals, replacements
and improvements thereof, all as in the judgment of the Standby Purchaser shall
be necessary properly to conduct at all times the business carried on in
connection therewith; provided, that this Section 10(c) shall not require the
Standby Purchaser to maintain or cause any Subsidiary thereof to maintain any of
such properties if the failure to maintain such properties does not, and will
not, have a Material Adverse Effect.
(d) Compliance with Laws and Agreements. The Standby Purchaser will
comply, and will cause its Subsidiaries to comply, at all times in all material
respects with all applicable Laws (including, without limitation, Environmental
Laws), rules, regulations, orders and directives of any Governmental Authority
having jurisdiction over the Standby Purchaser and each Subsidiary thereof or
their businesses or any of the transactions contemplated herein. The Standby
Purchaser will also comply, and will cause its Subsidiaries to comply, with all
covenants and other obligations contained in any agreements to which they are a
party, except where the failure so to comply would not have a Material Adverse
Effect.
(e) Maintenance of Governmental Approvals. The Standby Purchaser will,
and will cause its Subsidiaries to, duly obtain and maintain in full force and
effect all approvals of Governmental Authorities and third parties, consents or
licenses which are necessary under the laws of Brazil, the Cayman Islands or any
other jurisdiction having jurisdiction over the Standby Purchaser and each
Subsidiary thereof in connection with the execution, delivery and performance of
this Agreement and each other Transaction Document by the Standby Purchaser or
the validity or enforceability of any thereof.
(f) Payments of Taxes and Other Claims. The Standby Purchaser will,
and will cause each of its Subsidiaries to, pay or discharge or cause to be paid
or discharged, before the same shall become delinquent, (i) all taxes,
assessments and governmental charges levied or imposed upon the Standby
Purchaser or such Subsidiary, as the case may be, and (ii) all lawful claims for
labor, materials and supplies which, if unpaid, might by law become a lien upon
the property of the Standby Purchaser or such Subsidiary, as the case may be;
provided, however, that this Section 10(f) shall not require the Standby
Purchaser to, or to cause any Subsidiary thereof to, pay or discharge or cause
to be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith and, if appropriate,
by appropriate legal proceedings or where the failure to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim would
not have a Material Adverse Effect.
(g) Maintenance of Ownership of the Issuer. For so long as any Notes
are outstanding, the Standby Purchaser will retain no less than 51% direct or
indirect ownership of the outstanding voting and economic interests (equity or
otherwise) of and in the Issuer.
(h) Maintenance of Insurance. The Standby Purchaser will, and will
cause each of its Subsidiaries to, maintain insurance with insurance companies
that the Standby Purchaser reasonably believes to be financially sound in such
amounts and covering such risks as are usually carried by companies engaged in
similar businesses and owning or operating properties or facilities similar to
those owned and operated by the Standby Purchaser or its Subsidiaries, as the
case may be, in the same general areas in which the Standby Purchaser and its
Subsidiaries own or operate their properties or facilities, except where the
failure to do so would not have a Material Adverse Effect.
(i) Maintenance of Books and Records. The Standby Purchaser shall, and
shall cause each of its Material Subsidiaries to, maintain books, accounts and
records in accordance with U.S. GAAP, in the case of the Standby Purchaser and
the Issuer, and, in the case of each other Subsidiary of the Standby Purchaser,
generally accepted accounting principles in the jurisdiction where each such
Subsidiary is organized.
(j) Maintenance of Office or Agency. So long as any of the Notes are
outstanding, the Standby Purchaser will maintain in the Borough of Manhattan,
The City of New York, an office or agency where notices to and demands upon the
Standby Purchaser in respect of this Agreement may be served, and the Standby
Purchaser will not change the designation of such office without prior notice to
the Trustee and designation of a replacement office in the same general
location.
(k) Ranking. The Standby Purchaser will ensure at all times that its
obligations under this Agreement will constitute the general senior unsecured
and unsubordinated obligations of the Standby Purchaser and will rank pari
passu, without any preferences among themselves, with all other present and
future senior unsecured and unsubordinated obligations of the Standby Purchaser
(other than obligations preferred by statute or by operation of law) that are
not, by their terms, expressly subordinated in right of payment to the
obligations of the Standby Purchaser under this Agreement.
(l) Notice of Defaults. The Standby Purchaser will give written notice
to the Trustee, as soon as is practicable and in any event within ten calendar
days after the Standby Purchaser becomes aware, or should reasonably become
aware, of the occurrence of any Default or any Event of Default, accompanied by
a certificate of an officer of the Standby Purchaser setting forth the details
thereof and stating what action the Standby Purchaser proposes to take with
respect thereto.
(m) Limitation on Consolidation, Merger, Sale or Conveyance. (i) The
Standby Purchaser will not, in one or a series of transactions, consolidate or
amalgamate with or merge into any corporation or convey, lease or transfer
substantially all of its properties, assets or revenues to any person or entity
(other than a direct or indirect Subsidiary of the Standby Purchaser) or permit
any person or entity (other than a direct or indirect Subsidiary of the Standby
Purchaser) to merge with or into it, unless:
(A) either the Standby Purchaser is the continuing entity or the
person (the "Successor Company") formed by such consolidation or into which
the Standby Purchaser is merged or that acquired or leased such property or
assets of the Standby Purchaser will be a corporation organized and validly
existing under the laws of Brazil and shall assume (jointly and severally
with the Standby Purchaser unless the Standby Purchaser shall have ceased
to exist as a result of such merger, consolidation or amalgamation), by an
amendment to this Agreement (the form and substance of which shall be
previously approved by the Trustee), all of the Standby Purchaser's
obligations under this Agreement;
(B) the Successor Company (jointly and severally with the Standby
Purchaser unless the Standby Purchaser shall have ceased to exist as part
of such merger, consolidation or amalgamation) agrees to indemnify each
Noteholder against any tax, assessment or governmental charge thereafter
imposed on such Noteholder solely as a consequence of such consolidation,
merger, conveyance, transfer or lease with respect to the payment of
principal of, or interest on, the Notes;
(C) immediately after giving effect to such transaction, no Event of
Default and no Default has occurred and is continuing;
(D) the Standby Purchaser has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such merger
consolidation, sale, transfer or other conveyance or disposition and the
amendment to this Agreement comply with the terms of this Agreement and
that all conditions precedent provided for herein and relating to such
transaction have been complied with; and
(E) the Standby Purchaser has delivered notice of any such transaction
to Moody's (which notice shall contain a description of such merger,
consolidation or conveyance).
(ii) Notwithstanding anything to the contrary in the foregoing, so
long as no Default or Event of Default shall have occurred and be continuing at
the time of such proposed transaction or would result therefrom and the Standby
Purchaser has delivered notice of any such transaction to Moody's and the
Trustee (which notice shall contain a description of such merger, consolidation
or conveyance):
(A) the Standby Purchaser may merge, amalgamate or consolidate with or
into, or convey, transfer, lease or otherwise dispose of all or
substantially all of its properties, assets or revenues to a direct or
indirect Subsidiary of the Standby Purchaser in cases when the Standby
Purchaser is the surviving entity in such transaction and such transaction
would not have a material adverse effect on the Standby Purchaser and its
Subsidiaries taken as a whole, it being understood that if the Standby
Purchaser is not the surviving entity, the Standby Purchaser shall be
required to comply with the requirements set forth in the previous
paragraph; or
(B) any direct or indirect Subsidiary of the Standby Purchaser may
merge or consolidate with or into, or convey, transfer, lease or otherwise
dispose of assets to, any person (other than the Standby Purchaser or any
of its Subsidiaries or Affiliates) in cases when such transaction would not
have a material adverse effect on the Standby Purchaser and its
Subsidiaries taken as a whole; or
(C) any direct or indirect Subsidiary of the Standby Purchaser may
merge or consolidate with or into, or convey, transfer, lease or otherwise
dispose of assets to, any direct or indirect Subsidiary of the Standby
Purchaser; or
(D) any direct or indirect Subsidiary of the Standby Purchaser may
liquidate or dissolve if the Standby Purchaser determines in good faith
that such liquidation or dissolution is in the best interests of the
Standby Purchaser, and would not result in a material adverse effect on the
Standby Purchaser and its Subsidiaries taken as a whole and if such
liquidation or dissolution is part of a corporate reorganization of the
Standby Purchaser.
(n) Negative Pledge. So long as any Note remains outstanding, the
Standby Purchaser will not create or permit any Lien, other than a Permitted
Lien, on any of the Standby Purchaser's assets to secure (i) any of the Standby
Purchaser's Indebtedness or (ii) the Indebtedness of any other person, unless
the Standby Purchaser contemporaneously creates or permits such Lien to secure
equally and ratably the Standby Purchaser's obligations under this Agreement or
the Standby Purchaser provides such other security for the Notes as is duly
approved by the Trustee, at the direction of the Noteholders, in accordance with
the Indenture. In addition, the Standby Purchaser will not allow any of the
Standby Purchaser's Subsidiaries to create or permit any Lien, other than a
Permitted Lien, on any of the Standby Purchaser's assets to secure (i) any of
the Standby Purchaser's Indebtedness, (ii) any of the Indebtedness of the
Standby Purchaser's Subsidiaries or (iii) the Indebtedness of any other person,
unless it contemporaneously creates or permits the Lien to secure equally and
ratably the Standby Purchaser's obligations under this Agreement or the Standby
Purchaser or such Subsidiary provides such other security for the Notes as is
duly approved by the Trustee, at the direction of the Noteholders, in accordance
with the Indenture.
(o) Transactions with Affiliates. The Standby Purchaser shall not, and
shall not permit any of its Subsidiaries to, enter into or carry out (or agree
to enter into or carry out) any transaction or arrangement with any Affiliate,
except for any transaction or arrangement entered into or carried out on terms
no less favorable to the Standby Purchaser or such Subsidiary than those which
could have been obtained on an arm's-length basis with a person that is not an
Affiliate, provided, however, that the foregoing shall not apply to transactions
(i), between the Standby Purchaser and the Issuer or any Subsidiary of the
Issuer or (ii) except as otherwise permitted pursuant to clause (i), between or
among the Standby Purchaser, the Issuer and any of their respective Subsidiaries
not involving any other person so long as consummation of any such transaction
described in this clause (ii) will not have a Material Adverse Effect.
(p) Provision of Financial Statements and Reports. (i) The Standby
Purchaser will provide to the Trustee, in English or accompanied by a certified
English translation thereof, (A) within 90 calendar days after the end of each
fiscal quarter (other than the fourth quarter), its unaudited and consolidated
balance sheet and statement of income calculated in accordance with U.S. GAAP,
(B) within 120 calendar days after the end of each fiscal year, its audited and
consolidated balance sheet and statement of income calculated in accordance with
U.S. GAAP and (C) such other financial data as the trustee may reasonably
request.
(ii) The Standby Purchaser will provide, together with each of the
financial statements delivered pursuant to Sections 10(p)(i)(A) and (B), an
Officers' Certificate stating that a review of the activities of the
Standby Purchaser and the Issuer has been made during the period covered by
such financial statements with a view to determining whether the Standby
Purchaser and the Issuer have kept, observed, performed and fulfilled their
covenants and agreements under this Agreement and the Indenture, as
applicable, and that no Default or Event of Default has occurred during
such period or, if one or more have actually occurred, specifying all such
events and what actions have been taken and will be taken with respect to
such Default or Event of Default.
(iii) The Standby Purchaser shall, whether or not it is required to
file reports with the SEC, file with the SEC and deliver to the Trustee
(for redelivery to all Noteholders) all reports and other information as it
would be required to file with the SEC under the Exchange Act if it were
subject to those regulations; provided, however, that if the SEC does not
permit the filing described in the first sentence of this Section
10(q)(iii), the Standby Purchaser will provide annual and interim reports
and other information to the Trustee within the same time periods that
would be applicable if the Standby Purchaser were required and permitted to
file these reports with the SEC.
(q) Further Actions. The Standby Purchaser will, at its own cost and
expense, and will cause its Subsidiaries to, at their own cost and expense, take
any action, satisfy any condition or take any action (including the obtaining or
effecting of any necessary consent, approval, authorization, exemption, filing,
license, order, recording or registration) at any time required, in the
reasonable opinion of the Trustee, in accordance with applicable Laws (as
applicable) to be taken, fulfilled or done in order to (i) enable the Standby
Purchaser to lawfully enter into, exercise its rights and perform and comply
with its obligations under this Agreement and each of the other Transaction
Documents to which it is a party, as the case may be, (ii) ensure that the
Standby Purchaser's obligations under this Agreement and each of the other
Transaction Documents are legally binding and enforceable, (iii) make this
Agreement and each of the other Transaction Documents admissible in evidence in
the courts of the State of New York, Brazil or the Cayman Islands, (iv) enable
the Trustee to exercise and enforce its rights under and carry out the terms,
obligations, provisions and purposes of this Agreement and each of the other
Transaction Documents, (v) take any and all action necessary to preserve the
enforceability of, and maintain the Trustee's rights under this Standby Purchase
Agreement and the other Transaction Documents, including, without limitation,
refraining from taking any action that reasonably can be expected to have an
adverse effect on the enforceability of, or any of the Trustee's rights under,
this Agreement and the other Transaction Documents, and (vi) assist the Trustee
in the Trustee's performance of its obligations under this Agreement and the
other Transaction Documents; provided, however, that the Standby Purchaser shall
not be required to take any action contemplated herein if it promptly (and in no
event later than two Business Days after any such request) provides to the
Trustee a written opinion from counsel reasonably acceptable to the Trustee
specifying that the failure to take such action or satisfy such condition would
not have an adverse effect on the rights of the Noteholders.
(r) Importation of Oil and Oil Products. The Standby Purchaser shall,
in each calendar year, purchase from the Issuer not less than 80% (on a United
States dollar value) of the oil and oil product it imports.
SECTION 11. Amendments, Etc. No amendment or waiver of any provision
of this Agreement and no consent to any departure by the Standby Purchaser
therefrom shall in any event be effective unless the same shall be in writing
and signed by the Trustee and the Standby Purchaser, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
SECTION 12. Notices, Etc. (a) All notices and other communications
provided for hereunder shall be in writing (including telegraphic or telecopy)
and mailed, telecopied or delivered by hand, if to the Standby Purchaser,
addressed to it at Avenida Republica do Chile, 65, 20035-900 Rio de Janeiro -
RJ, Brazil, Telephone: (55-21) 534-4477, Telecopier: (55-21) 534-4278,
Attention: Wilson de Oliveira Senna, Financings, Leasing and Corporate Loans
Manager, if to the Trustee, at 4 New York Plaza, 15th floor, New York, New York
10004, Telephone: (212) 623-5162, Telecopier: (212) 623-6207, Attention:
Institutional Trust Services or, as to any party, at such other address as shall
be designated by such party in a written notice to each other party. All such
notices and other communications shall, when telecopied, be effective when
transmitted. Delivery by telecopier of an executed counterpart of a signature
page to any amendment or waiver of any provision of this Agreement shall be
effective as delivery of an original executed counterpart thereof.
(b) All payments made by the Standby Purchaser to the Trustee
hereunder shall be made to the Payment Account (as defined in the Indenture),
except to the extent otherwise specified in a Partial Non-Payment Notice or
Total Non-Payment Notice.
SECTION 13. No Waiver; Remedies. No failure on the part of the Trustee
to exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 14. Indemnification. (a) Without limitation on any other
obligations of the Standby Purchaser or remedies of the Trustee under this
Agreement, the Standby Purchaser shall, to the fullest extent permitted by law,
indemnify, defend and save and hold harmless the Trustee and its officers,
directors, employees, agents and advisors (each, an "Indemnified Party") from
and against, and shall pay on demand, any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party in connection with or as a result of any failure of any
Purchase Obligation to be the legal, valid and binding obligations of the
Standby Purchaser enforceable against it in accordance with their terms.
(b) The Standby Purchaser hereby also agrees that none of the
Indemnified Parties shall have any liability (whether direct or indirect, in
contract, tort or otherwise) to the Standby Purchaser or any of its Affiliates
or any of their respective officers, directors, employees, agents and advisors,
and the Standby Purchaser hereby agrees not to assert any claim against any
Indemnified Party on any theory of liability, for special, indirect,
consequential or punitive damages arising out of or otherwise relating to the
Transaction Documents or any of the transactions contemplated by the Transaction
Documents.
(c) Without prejudice to the survival of any of the other agreements
of the Standby Purchaser under this Agreement or any of the other Transaction
Documents, the agreements and obligations of the Standby Purchaser contained in
Sections 2 and 3 (with respect to the payment of all other amounts owed under
the Indenture), Section 9 and this Section 14 shall survive the payment in full
of the Purchase Obligations and all of the other amounts payable under this
agreement.
SECTION 15. Subordination. To the extent that the Standby Purchaser is
required to make any payment hereunder, the Standby Purchaser hereby
subordinates any and all debts, liabilities and other obligations owed by the
Issuer to the Standby Purchaser (the "Subordinated Obligations") to the Purchase
Obligations and agrees that it shall not require the Issuer to make any payments
in respect thereof to the extent and in the manner hereinafter set forth in this
Section 15:
(a) Prohibited Payments, Etc. Except during the continuance of a
Default or Event of Default (including the commencement and continuation of any
proceeding under any applicable bankruptcy, insolvency, receivership or similar
law now or hereafter in effect relating to the Issuer (each such law, a
"Bankruptcy Law")), the Standby Purchaser may receive any payments from the
Issuer on account of the Subordinated Obligations. After the occurrence and
during the continuance of any Default (including the commencement and
continuation of any proceeding under any Bankruptcy Law relating to the Issuer),
however, unless the Trustee otherwise agrees, the Standby Purchaser shall not
demand, accept or take any action to collect any payment on account of the
Subordinated Obligations.
(b) Prior Payment of Purchase Obligations. In any proceeding under any
Bankruptcy Law relating to the Issuer, the Standby Purchaser agrees that the
Trustee, on behalf of the Noteholders, shall be entitled to receive payment in
full in cash of all Purchase Obligations (including all interest and expenses
accruing after the commencement of a proceeding under any Bankruptcy Law,
whether or not constituting an allowed claim in such proceeding ("Post Petition
Interest")) before the Standby Purchaser receives payment of any Subordinated
Obligations.
(c) Turn-Over. After the occurrence and during the continuance of any
Default (including the commencement and continuation of any proceeding under any
Bankruptcy Law relating to the Issuer), the Standby Purchaser shall, if the
Trustee, on behalf of the Noteholders, so requests, collect, enforce and receive
payments on account of the Subordinated Obligations as trustee for the Trustee
and deliver such payments to the Trustee, on behalf of the Noteholders, on
account of the Purchase Obligations (including all Post Petition Interest),
together with any necessary endorsements or other instruments of transfer, but
without reducing or affecting in any manner the liability of the Standby
Purchaser under the other provisions of this Agreement.
(d) Trustee Authorization. After the occurrence and during the
continuance of any Default (including the commencement and continuation of any
proceeding under any Bankruptcy Law relating to any of the Issuer, any Material
Subsidiary thereof or any Material Subsidiary of the Standby Purchaser), the
Trustee, at the direction of the Noteholders or otherwise, is authorized and
empowered (but without any obligation to so do), in its discretion, (i) in the
name of the Standby Purchaser, to collect and enforce, and to submit claims in
respect of, Subordinated Obligations and to apply any amounts received thereon
to the Purchase Obligations (including any and all Post Petition Interest), and
(ii) to require the Standby Purchaser (A) to collect and enforce, and to submit
claims in respect of, Subordinated Obligations and (B) to pay any amounts
received on such obligations to the Trustee for application to the Purchase
Obligations (including any and all Post Petition Interest).
SECTION 16. Continuing Agreement; Assignment of Rights Under the
Indenture and the Notes. This Agreement is a continuing Purchase Obligation and
shall (a) remain in full force and effect until the later of (i) the repayment
in full by the Issuer of all amounts due and owing under the Indenture with
respect to the Notes and (ii) the repayment in full of all Purchase Obligations
and all other amounts payable under this Agreement, (b) be binding upon the
Standby Purchaser, its successors and assigns and (c) inure to the benefit of
and be enforceable by the Trustee, on behalf of Noteholders, and their
successors, transferees and assigns. Without limiting the generality of clause
(c) of the immediately preceding sentence, any Noteholder may assign or
otherwise transfer all or any portion of its rights and obligations under the
Indenture (including, without limitation, the Note or Notes held by it) to any
other person or entity (subject to the rights of the Standby Purchaser hereunder
in respect of any Partial Non-Payment Amount With Interest or Total Non-Payment
Amount With Interest as provided herein), and such other person or entity shall
thereupon become vested with all the benefits in respect thereof granted to such
Noteholder herein or otherwise, in each case as and to the extent provided in
the Indenture. The Standby Purchaser shall not have the right to assign its
rights hereunder or any interest herein without the prior written consent of all
of the Noteholders.
SECTION 17. Currency Rate Indemnity. (a) The Standby Purchaser shall
(to the extent lawful) indemnify the Trustee and the Noteholders and keep them
indemnified against:
(i) in the case of nonpayment by the Standby Purchaser of any amount
due to the Trustee, on behalf of the Noteholders, under this Agreement any
loss or damage incurred by any of them arising by reason of any variation
between the rates of exchange used for the purposes of calculating the
amount due under a judgment or order in respect thereof and those
prevailing at the date of actual payment by the Standby Purchaser; and
(ii) any deficiency arising or resulting from any variation in rates
of exchange between (a) the date as of which the local currency equivalent
of the amounts due or contingently due under this Agreement or in respect
of the Notes is calculated for the purposes of any bankruptcy, insolvency
or liquidation of the Standby Purchaser, and (b) the final date for
ascertaining the amount of claims in such bankruptcy, insolvency or
liquidation. The amount of such deficiency shall be deemed not to be
increased or reduced by any variation in rates of exchange occurring
between the said final date and the date of any bankruptcy, insolvency or
liquidation or any distribution of assets in connection therewith.
(b) The Standby Purchaser agrees that, if a judgment or order given or
made by any court for the payment of any amount in respect of its Purchase
Obligation hereunder is expressed in a currency (the "Judgment Currency") other
than U.S. dollars (the "Denomination Currency"), it will indemnify the relevant
holder against any deficiency arising or resulting from any variation in rates
of exchange between the date at which the amount in the Denomination Currency is
notionally converted into the amount in the Judgment Currency for the purposes
of such judgment or order and the date of actual payment thereof.
(c) The above indemnities shall constitute separate and independent
obligations of the Standby Purchaser from its obligations hereunder, will give
rise to separate and independent causes of action, will apply irrespective of
any indulgence granted from time to time and will continue in full force and
effect notwithstanding any judgment or the filing of any proof or proofs in any
bankruptcy, insolvency or liquidation of the Standby Purchaser for a liquidated
sum or sums in respect of amounts due under this Agreement, or under the
Indenture or the Notes or under any judgment or order.
SECTION 18. Governing Law; Jurisdiction; Waiver of Immunity, Etc. (a)
This Agreement shall be governed by, and construed in accordance with, the laws
of the State of New York.
(b) The Standby Purchaser hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any of the other
Transaction Documents to which it is or is to be a party, or for recognition or
enforcement of any judgment, and the Standby Purchaser hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State court or, to
the extent permitted by law, in such federal court. The Standby Purchaser agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement or any other Transaction
Document shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement or any other Transaction
Document in the courts of any jurisdiction.
(c) The Standby Purchaser hereby irrevocably appoints and empowers the
New York office of Petroleo Brasileiro S.A., located at 570 Lexington Avenue,
43rd Floor, New York, New York 10022 as its authorized agent (the "Process
Agent") to accept and acknowledge for and on its behalf and on behalf of its
property service of any and all legal process, summons, notices and documents
which may be served in any such suit, action or proceedings in any New York
State court or United States federal court sitting in the State of New York in
the Borough of Manhattan and any appellate court from any thereof, which service
may be made on such designee, appointee and agent in accordance with legal
procedures prescribed for such courts. The Standby Purchaser will take any and
all action necessary to continue such designation in full force and effect and
to advise the Trustee of any change of address of such Process Agent and should
such Process Agent become unavailable for this purpose for any reason, the
Standby Purchaser will promptly and irrevocably designate a new Process Agent
within New York, New York, which will agree to act as such, with the powers and
for the purposes specified in this subsection (c). The Standby Purchaser
irrevocably consents and agrees to the service of any and all legal process,
summons, notices and documents out of any of the aforesaid courts in any such
action, suit or proceeding by hand delivery, to it at its address set forth in
Section 12 or to any other address of which it shall have given notice pursuant
to Section 12 or to its Process Agent. Service upon the Standby Purchaser or the
Process Agent as provided for herein will, to the fullest extent permitted by
law, constitute valid and effective personal service upon it and the failure of
the Process Agent to give any notice of such service to the Standby Purchaser
shall not impair or affect in any way the validity of such service or any
judgment rendered in any action or proceeding based thereon.
(d) The Standby Purchaser irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other
Transaction Documents to which it is or is to be a party in any New York State
or federal court. The Standby Purchaser hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such suit, action or proceeding in any such court.
(e) THE STANDBY PURCHASER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE TRANSACTION
DOCUMENTS, THE ADVANCES OR THE ACTIONS OF ANY NOTEHOLDER IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
(f) This Agreement and any other documents delivered pursuant hereto,
and any actions taken hereunder, constitute commercial acts by the Standby
Purchaser. The Standby Purchaser irrevocably and unconditionally and to the
fullest extent permitted by law, waives, and agrees not to plead or claim, any
immunity from jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) for itself, the Issuer or any of their
property, assets or revenues wherever located with respect to its obligations,
liabilities or any other matter under or arising out of or in connection with
this Agreement or any document delivered pursuant hereto, in each case for the
benefit of each assigns, it being intended that the foregoing waiver and
agreement will be effective, irrevocable and not subject to withdrawal in any
and all jurisdictions, and, without limiting the generality of the foregoing,
agrees that the waivers set forth in this subsection (f) shall have the fullest
scope permitted under the United States Foreign Sovereign Immunities Act of 1976
and are intended to be irrevocable for the purposes of such act.
SECTION 19. Execution in Counterparts. This Agreement and each
amendment, waiver and consent with respect hereto may be executed in any number
of counterparts and by different parties thereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Agreement by telecopier shall
be effective as delivery of an original executed counterpart of this Agreement.
SECTION 20. Pledge of Interests. (a) The Standby Purchaser hereby
pledges to the Trustee (for the benefit of the Noteholders) and grants a
continuing security interest in, all of its interest (if any) in (a) the Payment
Account, (b) all funds from time to time on deposit in the Payment Account, (c)
all interest, dividends, distributions, cash, instruments and other property
from time to time received, receivable or on deposit in the Payment Account, and
(d) all proceeds of any of the foregoing (together, the "Collateral"). The
Standby Purchaser agrees to take all such action as is required by applicable
Law or as the Trustee may require, including delivering Opinions of Counsel in
form and substance acceptable to the Trustee, as to the grant and perfection of
the foregoing security interests.
(b) The security interest granted in the Collateral, shall secure the
payment of all obligations of the Standby Purchaser now or hereafter existing
under the Transaction Documents, whether direct or indirect, absolute or
contingent, and whether for principal, reimbursement obligations, interest,
fees, premiums, penalties, indemnifications, contract causes of action, costs,
expenses or otherwise. The Standby Purchaser represents and warrants that it has
not heretofore pledged, conveyed, granted a lien on, or security interest in, or
otherwise encumbered any of the Collateral in favor of any Person under U.S.,
Cayman, Brazilian or other Law.
SECTION 21. Entire Agreement. This Agreement, together with the
Indenture and the Notes, sets forth the entire agreement of the parties hereto
with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Standby Purchaser has caused this Agreement to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
PETROLEO BRASILEIRO S.A.--PETROBRAS
By: /s/ Joseph Vieira
-------------------------------
Name: Joseph Vieira
Title: Assistant Finance Manager of
Petrobras' New York Office
WITNESSES:
1. Gavin Lee Parrish
--------------------------------
Name: Gavin Lee Parrish
2. Raha Ramezani
--------------------------------
Name: Raha Ramezani
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On this 10th day of December, 2003, before me personally came Joseph
Vieira to me known, who, being by me duly sworn, did depose and say that he is
the Assistant Finance Manager of Petrobras' New York Office of Petroleo
Brasileiro S.A. - Petrobras, a corporation described in and which executed the
foregoing instrument and acknowledges said instrument to be the free act and
deed of said entity.
On this 10th day of December, 2003, before me personally came Gavin
Parrish and Raha Ramezani to me personally known, who being by me sworn, did
depose and say that they signed their names to the foregoing instrument as
witnesses.
[Notarial Seal]
/s/ Nick Ferrer
--------------------------
Nick Ferrer
Notary Public
COMMISSION EXPIRES October 14, 2007
ACKNOWLEDGED:
JPMORGAN CHASE BANK, as Trustee and not
in its individual capacity
By: /s/ Susy P. Pestana
-------------------
Name: Susy P. Pestana
Title: Assistant Vice President
WITNESSES:
1. /s/ Raha Ramezani
-------------------------
Name: Raha Ramezani
2. /s/ Michael Fruchter
-------------------------
Name: Michael Fruchter
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On this 10th day of December, 2003, before me personally came
Susy Pestana to me known, who, being by me duly sworn, did depose and say
that she is the Assistant Vice President of JPMorgan Chase Bank described in and
which executed the foregoing instrument and acknowledges said instrument to be
the free act and deed of said entity.
On this 10th day of December, 2003, before me personally came
Raha Ramezani and Michael Fruchter to me personally known, who being by me
sworn, did depose and say that they signed their names to the foregoing
instrument as witnesses.
[Notarial Seal]
/s/ Nick Ferrer
--------------------------
Nick Ferrer
Notary Public
COMMISSION EXPIRES October 14, 2007
EXHIBIT A
FORM OF PARTIAL NON-PAYMENT NOTICE
[Date]
VIA FACSIMILE
- -------------
Petroleo Brasileiro S.A. - Petrobras
Avenida Republica do Chile, 65
20035-900 Rio de Janeiro
Brazil
Attention : Servio Tulio Tinoco
Head of Trade Finance & Foreign Exchange
Petrobras International Finance Company
U.S.$750,000,000 8.375% Global Notes due 2018
---------------------------------------------
Dear Ladies and Gentlemen:
Reference is made to that certain indenture dated as of July 19, 2002
(the "Original Indenture") between Petrobras International Finance Company
("PIFCo") and JPMorgan Chase Bank (the "Trustee"), as supplemented by the third
supplemental indenture among the Issuer, Petroleo Brasileiro, S.A. - Petrobras
("Petrobras") and the Trustee dated as of December 10, 2003 (the "Third
Supplemental Indenture"). The Original Indenture, as supplemented by the Third
Supplemental Indenture, and as amended or supplemented from time to time, with
respect to the Notes is hereinafter referred to as the "Indenture." Reference is
also made to that certain Standby Purchase Agreement (as amended or supplemented
from time to time, the "Standby Purchase Agreement") dated as of December 10,
2003 between the Trustee and Petrobras pursuant to which Petrobras has
undertaken to purchase from the holders of PIFCo's 8.375% Global Notes due 2018
(the "Notes") such holders' right to receive unpaid amounts due and owing on
such Notes. Capitalized terms not defined herein shall have the meanings set
forth in the Standby Purchase Agreement.
By this notice, the undersigned, acting on behalf of the holders of
the Notes, hereby advises you as follows:
1. On [date], PIFCo was obligated to make a payment of [principal]
[interest] [Additional Amounts] [other amounts under the
Indenture] in an amount equal to U.S.$ ________ in respect of
[principal] [interest] [Additional Amounts] [other amounts due
under the Indenture] (the "Overdue Amount"). This notice
constitutes a Partial Non-Payment Notice as contemplated in the
Standby Purchase Agreement.
2. Pursuant to the Standby Purchase Agreement, you are obligated to
purchase from the holders of the Notes their right to receive the
Overdue Amount.
3. Pursuant to the Standby Purchase Agreement, you are hereby
directed to purchase the right of the holders of the Notes to
receive the Overdue Amount and to make a payment to the Trustee,
on behalf of the holders of the Notes, in partial satisfaction of
your obligation to purchase the right to Overdue Amount.
4. You are hereby directed to pay immediately the Overdue Amount to
the Payment Account referenced in the Standby Purchase Agreement
(Account No. _______) together with interest on such Overdue
Amount, at the rates specified in the Standby Purchase Agreement,
from the date PIFCo was itself obligated to pay the Overdue
Amount (the "Liability Date"), through and including the date
that payment by you is actually made.
5. Petrobras is requested to acknowledge receipt of this notice by
countersigning in the space provided below and returning a copy
of the same to the Issuer at the address provided in the Standby
Purchase Agreement with a copy by facsimile to the Trustee at
fax: (212) 623-6207 (Attention: Institutional Trust Services).
JPMORGAN CHASE BANK, as Trustee
By:
---------------------------
Name:
Title:
ACKNOWLEDGED & AGREED
- ---------------------
PETROLEO BRASILEIRO S.A.--PETROBRAS
By:
----------------------
Name:
Title:
Date:
EXHIBIT B
FORM OF TOTAL NON-PAYMENT NOTICE
[Date]
VIA FACSIMILE
- -------------
Petroleo Brasileiro S.A. - Petrobras
Avenida Republica do Chile, 65
20035-900 Rio de Janeiro
Brazil
Attention : Servio Tulio Tinoco
Head of Trade Finance & Foreign Exchange
Petrobras International Finance Company
U.S.$750,000,000 8.375% Global Notes due 2018
---------------------------------------------
Dear Sirs:
Reference is made to that certain indenture dated as of July 19, 2002
(the "Original Indenture") between Petrobras International Finance Company
("PIFCo") and JPMorgan Chase Bank (the "Trustee"), as supplemented by the third
supplemental indenture among the Issuer, Petroleo Brasileiro, S.A. - Petrobras
("Petrobras") and the Trustee dated as of December 10, 2003 (the "Third
Supplemental Indenture"). The Original Indenture, as supplemented by the Third
Supplemental Indenture, and as amended or supplemented from time to time with
respect to the Notes, is hereinafter referred to as the "Indenture." Reference
is also made to that certain Standby Purchase Agreement (as amended or
supplemented from time to time, the "Standby Purchase Agreement") dated as of
December 10, 2003 between the Trustee and Petroleo Brasileiro, S.A. - Petrobras
("Petrobras") pursuant to which Petrobras has undertaken to purchase from the
holders of PIFCo's 8.375% Global Notes due 2018 (the "Notes") such holders'
right to receive unpaid amounts due and owing on such Notes. Capitalized terms
not defined herein shall have the meanings set forth in the Standby Purchase
Agreement.
By this notice, the undersigned, acting on behalf of the holders of
the Notes, hereby advises you as follows:
1. On [date], PIFCo was obligated to make a payment of [principal]
[interest] [Additional Amounts] [other amounts under the
Indenture] in an amount equal to U.S.$__________in respect of
[principal] [interest] [Additional Amounts] [other amounts due
under the Indenture] (the "Overdue Amount"). This notice
constitutes a Total Non-Payment Notice as contemplated in the
Standby Purchase Agreement.
2. Pursuant to the Standby Purchase Agreement, you are obligated to
purchase from the holders of the Notes their right to receive the
Overdue Amount.
3. Pursuant to the Standby Purchase Agreement, you are hereby
directed to purchase the right of the holders of the Notes to
receive the Overdue Amount and to make a payment to the Trustee,
on behalf of the holders of the Notes, in partial satisfaction of
your obligation to purchase the right to Overdue Amount.
4. You are hereby directed to pay immediately the Overdue Amount to
the Payment Account referenced in the Standby Purchase Agreement
(Account No. ________) together with interest on such Overdue
Amount, at the rates specified in the Standby Purchase Agreement,
from the date PIFCo was itself obligated to pay the Overdue
Amount through and including the date that payment by you is
actually made.
5. Petrobras is requested to acknowledge receipt of this notice by
countersigning in the space provided below and returning a copy
of the same to the Issuer at the address provided in the Standby
Purchase Agreement with a copy by facsimile to the Trustee at
fax: (212) 623-6207 (Attention: Institutional Trust Services).
JPMORGAN CHASE BANK, as Trustee
By:
Name:
Title:
ACKNOWLEDGED & AGREED
PETROLEO BRASILEIRO S.A.--PETROBRAS
By:
------------------------
Name:
Title:
Date:
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PETROBRAS INTERNATIONAL FINANCE COMPANY - PIFCo
By: /s/ Daniel Lima de Oliveira
-------------------------------------------
Name: Daniel Lima de Oliveira
Title: Financial Manager
Date: December 11, 2003