REGISTRATION RIGHTS AGREEMENT
Dated February 4, 2002
among
PETROBRAS INTERNATIONAL FINANCE COMPANY
as Issuer,
PETROLEO BRASILEIRO S.A.--PETROBRAS
as Standby Purchaser,
and
UBS WARBURG LLC,
MORGAN STANLEY & CO. INCORPORATED
BANCO BILBAO VIZCAYA ARGENTARIA S.A.
as Initial Purchasers
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of
February 4, 2002, among PETROBRAS INTERNATIONAL FINANCE COMPANY, a Cayman
Islands company ("PIFCo"), PETROLEO BRASILEIRO S.A. - PETROBRAS, a sociedade de
economia mista ("Petrobras" and collectively with PIFCo being the "Companies")
organized and existing under the laws of the Federative Republic of Brazil
("Brazil") and UBS Warburg LLC, Morgan Stanley & Co. Incorporated and Banco
Bilbao Vizcaya Argentaria S.A. as initial purchasers (the "Initial Purchasers")
of U.S.$400,000,000 of PIFCo's 9 1/8% Senior Notes due 2007 (the "Initial
Notes"). Terms not otherwise defined herein are used as defined in the Indenture
(as defined below).
WITNESSETH
WHEREAS, PIFCo is today entering into an Indenture dated as of
February 4, 2002 with The Bank of New York, as Trustee (the "Indenture"),
pursuant to which it is today issuing U.S.$400,000,000 aggregate principal
amount of its Notes;
WHEREAS, Petrobras, as parent of PIFCo, is willing to provide
assurances to the Holders of the Notes that, in the event PIFCo fails to make
payments on the Notes as required under the Indenture, Petrobras will purchase
the Holders' rights to such payments at a purchase price equal to the amount of
such unpaid payments;
WHEREAS, to give effect to Petrobras' commitment with respect to the
Notes, it is today entering into the Standby Purchase Agreement dated as of
February 4, 2002 (the "Standby Purchase Agreement");
WHEREAS, in order to provide additional liquidity to the Holders,
PIFCo and Petrobras are willing to enter into this Registration Rights Agreement
providing for the registration of the Notes under the Securities Act of 1933, as
amended;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions.
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As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"Closing Date" shall mean the Closing Date as defined in the Purchase
------------
Agreement.
"Companies" shall have the meaning set forth in the preamble and shall
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also include their successors and assigns.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
------------
amended from time to time.
"Exchange Notes" shall mean securities issued by PIFCo, which are
--------------
unconditionally subject to an effective guarantee on a senior unsecured
basis by the Standby Purchaser under the Standby Purchase Agreement,
containing terms identical in all material respects to the Notes (except
that the Exchange Notes will not bear legends restricting their transfer)
and to be offered to Holders of Notes in exchange for Notes pursuant to the
Exchange Offer.
"Exchange Offer" shall mean the exchange offer by the Companies of
--------------
Exchange Notes for Registrable Securities pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the
---------------------------
Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
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registration statement on Form F-1, F-2, F-3 or F-4, as applicable, and all
amendments and supplements to such registration statement, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Holder" shall mean each person or entity that holds the Notes of the
------
Registrable Securities, and each of their successors, assigns and direct
and indirect transferees who become registered owners of Registrable
Securities under the Indenture; provided that, for purposes of Sections 4
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and 5 of this Agreement, the term "Holder" shall include Participating
Broker-Dealers (as defined in Section 4(a)).
"Indenture" shall mean the Indenture relating to the Notes dated the
---------
Closing Date, between PIFCo and The Bank of New York, as Trustee, as the
same may be amended from time to time in accordance with the terms thereof.
"Initial Purchasers" shall have the meaning set forth in the preamble.
------------------
"Majority Holders" shall mean the Holders of a majority of the
----------------
aggregate principal amount of outstanding Registrable Securities; provided
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that, whenever the consent or approval of Holders of a specified percentage
of Registrable Securities is required hereunder, Registrable Securities
held by the Companies or any of their affiliates (as such term is defined
in Rule 405 under the Securities Act) (other than the Initial Purchasers or
subsequent Holders of Registrable Securities if such subsequent Holders are
deemed to be such affiliates solely by reason of their holding of such
Registrable Securities) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage or
amount.
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"Person" shall mean an individual, partnership, limited liability
------
company, corporation, trust or unincorporated organization, or a government
or agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in a Registration
----------
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement and by all other
amendments and supplements to such prospectus, and in each case including
all material incorporated by reference therein.
"Purchase Agreement" shall mean the Purchase Agreement dated as of
------------------
January 29, 2002 among the Companies and the Initial Purchasers relating to
the purchase of the Notes by the Initial Purchasers.
"Registrable Securities" shall mean the Notes and the agreements in
----------------------
respect of the obligations of Petrobras under the Standby Purchase
Agreement (and the Standby Purchase Agreement itself to the extent
necessary or appropriate); provided, however, that the Notes and the
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agreements in respect of obligations of Petrobras under the Standby
Purchase Agreement (and the Standby Purchase Agreement itself to the extent
necessary or appropriate) shall cease to be Registrable Securities (i) when
a Registration Statement with respect to such Notes and the agreements in
respect of obligations of Petrobras under the Standby Purchase Agreement
(and the Standby Purchase Agreement itself to the extent necessary or
appropriate) shall have been declared effective under the Securities Act
and such Notes and the agreements in respect of obligations of Petrobras
under the Standby Purchase Agreement (and the Standby Purchase Agreement
itself to the extent necessary or appropriate) shall have been disposed of
pursuant to such Registration Statement, (ii) when such Notes and the
agreements in respect of obligations of Petrobras under the Standby
Purchase Agreement (and the Standby Purchase Agreement itself to the extent
necessary or appropriate) have been sold to the public pursuant to Rule
144(k) (or any similar provision then in force, but not Rule 144A) under
the Securities Act or (iii) when the Notes and the agreements in respect of
obligations of Petrobras under the Standby Purchase Agreement (and the
Standby Purchase Agreement itself to the extent necessary or appropriate)
shall have ceased to be outstanding; provided further, that the securities
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with respect to which PIFCo and Petrobras have caused to be filed and
declared effective an Exchange Offer Registration Statement and have
commenced an Exchange Offer, in each case pursuant to and in accordance
with Section 2(a) hereof, and which have not been tendered by the last
Exchange Date (as defined in Section 2(a)(ii) hereof) by the Holder thereof
shall be deemed not to be Registrable Securities.
"Registration Expenses" shall mean any and all expenses incident to
---------------------
performance of or compliance by PIFCo and Petrobras with this Agreement,
including without limitation: (i) all SEC, stock exchange or National
Association of Securities Dealers, Inc. registration and filing fees, (ii)
all fees and expenses incurred in connection with compliance with state
securities or blue sky laws (including reasonable fees and disbursements of
counsel for any underwriters or Holders in connection with blue sky
qualification of any of the Exchange Notes or Registrable Securities),
(iii) all expenses of
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any Persons in preparing or assisting in preparing, word processing,
printing and distributing any Registration Statement, any Prospectus, any
amendments or supplements thereto, any underwriting agreements, securities
sales agreements and other documents relating to the performance of and
compliance with this Agreement, (iv) all rating agency fees, (v) all fees
and disbursements relating to the qualification of the Indenture under
applicable securities laws, (vi) the fees and disbursements of the Trustee
and its counsel, (vii) the fees and disbursements of counsel for PIFCo and
Petrobras and (viii) the fees and disbursements of the independent public
accountants of PIFCo and Petrobras, including the expenses of any special
audits or "cold comfort" letters required by or incident to such
performance and compliance, but excluding fees and expenses of counsel to
the underwriters (other than reasonable fees and expenses set forth in
clause (ii) above) or the Holders and underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition
of Registrable Securities by a Holder.
"Registration Statement" shall mean any registration statement of
----------------------
PIFCo and Petrobras that covers any of the Exchange Notes or Registrable
Securities pursuant to the provisions of this Agreement and all amendments
and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"SEC" shall mean the United States Securities and Exchange Commission.
---
"Securities Act" shall mean the Securities Act of 1933, as amended
--------------
from time to time.
"Trustee" shall mean the trustee with respect to the Notes under the
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Indenture.
SECTION 2. Registration Under the Securities Act.
-------------------------------------
(a) To the extent not prohibited by any applicable law or applicable
interpretation of the staff of the SEC (the "Staff"), PIFCo and Petrobras shall
use their best efforts to cause to be filed an Exchange Offer Registration
Statement covering the offer by PIFCo and Petrobras to the Holders to exchange
all of the Registrable Securities for Exchange Notes and to have such
Registration Statement remain effective until the closing of the Exchange Offer.
PIFCo and Petrobras shall commence the Exchange Offer promptly after the
Exchange Offer Registration Statement has been declared effective by the SEC and
use their best efforts to have the Exchange Offer consummated not later than 60
days after such effective date. PIFCo and Petrobras shall commence the Exchange
Offer by mailing the related exchange offer Prospectus and accompanying
documents to each Holder stating, in addition to such other disclosures as are
required by applicable law:
(i) that the Exchange Offer is being made pursuant to this Agreement
and that all Registrable Securities validly tendered will be accepted for
exchange;
(ii) the dates of acceptance for exchange (which shall be a period of
at least 20 business days from the date such notice is mailed) (the
"Exchange Dates");
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(iii) that any Registrable Security not tendered will remain
outstanding and continue to accrue interest, but will not retain any rights
under this Agreement;
(iv) that Holders electing to have a Registrable Security exchanged
pursuant to the Exchange Offer will be required to surrender such
Registrable Security, together with the enclosed letters of transmittal, to
the institutions and at the addresses (located in the Borough of Manhattan,
the City of New York) specified in the notice prior to the close of
business (New York time) on the last Exchange Date; and
(v) that Holders will be entitled to withdraw their election, not
later than the close of business (New York time) on the last Exchange Date,
by sending to the institutions and at the addresses (located in the Borough
of Manhattan, the City of New York) specified in the notice a telegram,
telex, facsimile transmission or letter setting forth the name of such
Holder, the principal amount of Registrable Securities delivered for
exchange and a statement that such Holder is withdrawing his election to
have such Notes exchanged.
(b) As soon as practicable after the last Exchange Date, PIFCo and
Petrobras shall:
(i) accept for exchange Registrable Securities or portions thereof
tendered and not validly withdrawn pursuant to the Exchange Offer; and
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Securities or portions thereof so accepted for
exchange by PIFCo and Petrobras and issue, and cause the Trustee to
promptly authenticate and mail to each Holder, an Exchange Security equal
in principal amount to the principal amount of the Registrable Securities
surrendered by such Holder.
(c) PIFCo and Petrobras shall use their best efforts to complete the
Exchange Offer as provided above and shall comply with the applicable
requirements of the Securities Act, the Exchange Act and other applicable laws
and regulations in connection with the Exchange Offer. The Exchange Offer shall
not be subject to any conditions, other than that the Exchange Offer does not
violate applicable law or any applicable interpretation of the Staff of the SEC.
PIFCo and Petrobras shall inform the Initial Purchasers of the names and
addresses of the Holders to whom the Exchange Offer is made, and the Initial
Purchasers shall have the right, subject to applicable law, to contact such
Holders and otherwise facilitate the tender of Registrable Securities in the
Exchange Offer.
(d) In the event that PIFCo and Petrobras determine that the Exchange
Offer Registration provided for in Section 2(a) above is not available or may
not be consummated as soon as practicable after the last Exchange Date because
it would violate applicable law or the applicable interpretations of the Staff,
or the Exchange Offer is not for any reason consummated by the date that is six
months after the Closing Date, then PIFCo and Petrobras may file any
Registration Statement with the SEC that would result in the Holders of the
Notes being able to resell their Notes in such a manner that they cease to be
Registerable Securities, and upon
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effectiveness of any such Registration Statement, PIFCo and Petrobras shall be
deemed to have satisfied their obligations hereunder.
(e) PIFCo and Petrobras shall pay all Registration Expenses in
connection with the registration pursuant to Section 2(a).
(f) An Exchange Offer Registration Statement pursuant to Section 2(a)
hereof will not be deemed to have become effective unless it has been declared
effective by the SEC. As provided for in the Indenture, in the event the
Exchange Offer is not consummated or the Registration Statement referred to in
Section 2(d) above has not been declared effective on or prior to the date that
is twelve (12) months after the Closing Date, the annual interest rate on the
Notes will be increased by 0.5% per annum until the Exchange Offer is
consummated or the Exchange Offer Registration Statement is declared effective
by the SEC, whereupon the interest rate will decrease permanently to the
original interest rate on the Notes.
SECTION 3. Registration Procedures.
-----------------------
(a) In connection with the obligations of PIFCo and Petrobras with
respect to the Registration Statements pursuant to Section 2(a) and Section 2(d)
hereof, PIFCo and Petrobras shall as expeditiously as possible:
(i) prepare and file with the SEC a Registration Statement on the
appropriate form under the Securities Act, which form (x) shall be selected
by PIFCo and Petrobras and (y) shall comply as to form in all material
respects with the requirements of the applicable form and include all
financial statements required by the SEC to be filed therewith, and use
their best efforts to cause such Registration Statement to become effective
and remain effective in accordance with Section 2 hereof;
(ii) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement effective for the applicable period and cause each
Prospectus to be supplemented by any required prospectus supplement and, as
so supplemented, to be filed pursuant to Rule 424 under the Securities Act;
to keep each Prospectus current during the period described under Section
4(3) and Rule 174 under the Securities Act that is applicable to
transactions by brokers or dealers with respect to the Registrable
Securities or Exchange Notes;
(iii) to the extent necessary or applicable, use their best efforts to
register or qualify the Registrable Securities under all applicable state
securities or "blue sky" laws of such jurisdictions as any Holder of
Registrable Securities covered by a Registration Statement shall reasonably
request in writing by the time the applicable Registration Statement is
declared effective by the SEC, to cooperate with such Holders in connection
with any filings required to be made with the National Association of
Securities Dealers, Inc. and do any and all other acts and things which may
be reasonably necessary or advisable to enable such Holder to consummate
the disposition in each such jurisdiction of such Registrable Securities
owned by such Holder; provided, however, that neither PIFCo nor Petrobras
shall be required to (A) qualify as a foreign corporation or as a
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dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(a)(iii), (B) file any general
consent to service of process or (C) subject itself to taxation in any such
jurisdiction if it is not so subject;
(iv) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the
earliest possible moment;
(v) a reasonable time prior to the filing of any Registration
Statement, any Prospectus, any amendment to a Registration Statement or
amendment or supplement to a Prospectus or any document which is to be
incorporated by reference into a Registration Statement or a Prospectus
after the initial filing of a Registration Statement, provide copies of
such document to the Initial Purchasers and their counsel and make such of
the representatives of PIFCo and Petrobras as shall be reasonably requested
by the Initial Purchasers or their counsel available for discussion of such
document, and shall not at any time file or make any amendment to the
Registration Statement, any Prospectus or any amendment of or supplement to
a Registration Statement or a Prospectus or any document which is to be
incorporated by reference into a Registration Statement or a Prospectus, of
which the Initial Purchasers and its counsel shall not have previously been
advised and furnished a copy or to which the Initial Purchasers or their
counsel shall reasonably object;
(vi) obtain a CUSIP number for all Exchange Notes or Registrable
Securities, as the case may be, not later than the effective date of a
Registration Statement;
(vii) use their best efforts to cause the Indenture to be qualified
under the Trust Indenture Act of 1939, as amended (the "TIA"), in
connection with the registration of the Exchange Notes or Registrable
Securities, as the case may be, cooperate with the Trustee and the Holders
to effect such changes to the Indenture as may be required for the
Indenture to be so qualified in accordance with the terms of the TIA and
execute, and use their best efforts to cause the Trustee to execute, all
documents as may be required to effect such changes and all other forms and
documents required to be filed with the SEC to enable the Indenture to be
so qualified in a timely manner; and
(viii) use their best efforts to cause the Exchange Notes to continue
to be rated by one nationally recognized statistical rating organization
(as such term is defined in Rule 436(g)(2) under the Securities Act), if
the Registrable Securities have been rated.
SECTION 4. Participation of Broker-Dealers in Exchange Offer.
-------------------------------------------------
(a) The parties hereto acknowledge that the Staff has taken the
position that any broker-dealer that receives Exchange Notes for its own account
in the Exchange Offer in exchange for Notes that were acquired by such
broker-dealer as a result of market-making or other trading activities (a
"Participating Broker-Dealer"), may be deemed to be an "underwriter" within the
---------------------------
meaning of the Securities Act and must deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such
Exchange Notes. PIFCo and Petrobras understand that it is the Staff's position
that if the Prospectus contained in the Exchange Offer Registration Statement
includes a plan of distribution containing a statement to
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the above effect and the means by which Participating Broker-Dealers may resell
the Exchange Notes, without naming the Participating Broker-Dealers or
specifying the amount of Exchange Notes owned by them, such Prospectus may be
delivered by Participating Broker-Dealers to satisfy their prospectus delivery
obligation under the Securities Act in connection with resales of Exchange Notes
for their own accounts, so long as the Prospectus otherwise meets the
requirements of the Securities Act.
(b) In light of the above, notwithstanding the other provisions of
this Agreement, PIFCo and Petrobras agree to take all actions necessary to
ensure the effectiveness of the Registration Statements referred to in Section 2
as may be reasonably requested by the Initial Purchasers or by one or more
Participating Broker-Dealers, in each case as provided in clause (ii) below, in
order to expedite or facilitate the disposition of any Exchange Notes by
Participating Broker-Dealers consistent with the positions of the Staff recited
in Section 4(a) above provided that:
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(i) neither PIFCo nor Petrobras shall be required to amend or
supplement the Prospectus contained in the Exchange Offer Registration
Statement for a period exceeding 180 days after the last Exchange Date (as
such period may be extended pursuant to the penultimate paragraph of
Section 3 of this Agreement) and Participating Broker-Dealers shall not be
authorized by PIFCo or Petrobras to deliver and shall not deliver such
Prospectus after such period in connection with the resales contemplated by
this Section 4; and
(ii) any application of the procedures to an Exchange Offer
Registration, to the extent not required by the positions of the Staff or
the Securities Act and the rules and regulations thereunder, will be in
conformity with the reasonable request to PIFCo and Petrobras by the
Initial Purchasers or with the reasonable request in writing to PIFCo and
Petrobras by one or more broker-dealers who certify to the Initial
Purchasers and PIFCo and Petrobras in writing that they anticipate that
they will be Participating Broker-Dealers; and provided further that, in
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connection with such application of any procedures to an Exchange Offer
Registration, PIFCo and Petrobras shall be obligated (x) to deal only with
one entity representing the Participating Broker-Dealers, which shall be
UBS Warburg LLC unless it elects not to act as such representative, (y) to
pay the reasonable fees and expenses of only one counsel representing the
Participating Broker-Dealers, which shall be counsel to the Initial
Purchasers unless such counsel elects not to so act and (z) to cause to be
delivered only one, if any, "cold comfort" letter with respect to the
Prospectus in the form existing on the last Exchange Date and with respect
to each subsequent amendment or supplement, if any, effected in connection
therewith.
(c) The Initial Purchasers shall have no liability to the Companies or
any Holder with respect to any request that they may make pursuant to Section
4(b) above.
SECTION 5. Indemnification and Contribution.
--------------------------------
(a) Each of PIFCo and Petrobras, jointly and severally agrees to
indemnify and hold harmless the Initial Purchasers, each Holder and each Person,
if any, who controls the Initial Purchasers or any Holder within the meaning of
either Section 15 of the Securities Act or Section
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20 of the Exchange Act, or is under common control with, or is controlled by,
the Initial Purchasers or any Holder, from and against all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred by the Initial Purchasers, any Holder or any such
controlling or affiliated Person in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement (or any
amendment thereto) pursuant to which Exchange Notes or Registrable Securities
were registered under the Securities Act, including all documents incorporated
therein by reference, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, or caused by any untrue statement or alleged
untrue statement of a material fact contained in any Prospectus (as amended or
supplemented if PIFCo or Petrobras shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state
therein a material fact necessary to make the statements therein in light of the
circumstances under which they were made not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to the Initial Purchasers or any Holder furnished to the Companies in
writing through UBS Warburg LLC or any selling Holder expressly for use therein;
provided that the foregoing indemnity agreement shall not inure to the benefit
of any Holder or any person controlling such Holder with respect to any sale or
disposition of Registrable Securities by such Holder in violation of Section 3
above; provided further that the foregoing indemnity agreement shall not inure
to the benefit of any Holder from whom the person asserting any such losses,
claims, damages or liabilities purchased Notes, or any person controlling such
Holder, if a copy of the final Prospectus (as then amended or supplemented if
PIFCo and Petrobras shall have furnished any amendments or supplements thereto)
was not sent or given by or on behalf of such Holder to such person, if required
by law so to have been delivered, at or prior to the written confirmation of the
sale of the Notes to such person, and if the final Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage or liability.
(b) To the extent relevant with respect to a Registration Statement
pursuant to Section 2(d), each Holder agrees, severally and not jointly, to
indemnify and hold harmless the Companies, the Initial Purchasers and the other
selling Holders, and each of their respective directors, officers who sign the
Registration Statement and each Person, if any, who controls PIFCo or Petrobras,
the Initial Purchasers and any other selling Holder within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from PIFCo and Petrobras to the Initial
Purchasers and the Holders, but only with reference to information relating to
such Holder furnished to the Companies, PIFCo or Petrobras in writing by or on
behalf of such Holder expressly for use in any Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto).
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any Person in respect of which indemnity may be
sought pursuant to either paragraph (a) or paragraph (b) above, such Person (the
"indemnified party") shall promptly notify the Person against whom such
indemnity may be sought (the "indemnifying party") in writing (but the failure
to so notify an indemnifying party shall not relieve it from any liability which
it may have under this Section 5, except to the extent that such indemnifying
party has
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been prejudiced in any material respect by such failure, or from any liability
it may otherwise have) and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for (A) the reasonable fees and expenses of more than
one separate firm (in addition to any local counsel) for the Initial Purchasers
and all Persons, if any, who control any Initial Purchasers within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act,
(B) the reasonable fees and expenses of more than one separate firm (in addition
to any local counsel) for PIFCo, Petrobras, their respective directors and
officers who sign the Registration Statement and each Person, if any, who
controls PIFCo and Petrobras within the meaning of either such Section and (C)
the reasonable fees and expenses of more than one separate firm (in addition to
any local counsel) for all Holders and all Persons, if any, who control any
Holders within the meaning of either such Section, and that all such fees and
expenses shall be reimbursed as they are incurred. In such case involving the
Initial Purchasers and any Person who controls any of the Initial Purchasers,
such firm shall be designated in writing by UBS Warburg LLC and Morgan Stanley &
Co. Incorporated. In such case involving the Holders and such Persons who
control any Holders, such firm shall be designated in writing by the Majority
Holders. In all other cases, such firm shall be designated by the Companies. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but, if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (x) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (y)
such indemnifying party shall not have reimbursed the indemnified party for such
fees and expenses of counsel in accordance with such request prior to the date
of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party (which consent shall not be unreasonably
withheld), effect any settlement of any pending or threatened proceeding in
respect of which such indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in paragraph (a) or
paragraph (b) of this Section 5 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such
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paragraph, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect the relative fault of the indemnifying party or parties
on the one hand and of the indemnified party or parties on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of PIFCo, Petrobras and the Holders shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by PIFCo or Petrobras or by the
Holders and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Holders'
respective obligations to contribute pursuant to this Section 5(d) are several
in proportion to the respective principal amount of Registrable Securities of
such Holder that were registered pursuant to a Registration Statement.
(e) PIFCo, Petrobras and each Holder agree that it would not be just
or equitable if contribution pursuant to this Section 5 were determined by pro
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rata allocation or by any other method of allocation that does not take account
- ----
of the equitable considerations referred to in paragraph (d) above. The amount
paid or payable by an indemnifying party as a result of the losses, claims,
damages and liabilities referred to in paragraph (d) above shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 5, no Holder shall be required to indemnify or contribute any amount in
excess of the amount by which the total price at which Registrable Securities
were sold by such Holder exceeds the amount of any damages that such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 5 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 5 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of the Initial Purchasers, any Holder or any Person controlling any Initial
Purchasers or any Holder, or by or on behalf of PIFCo or Petrobras, their
respective officers or directors, or any Person controlling PIFCo or Petrobras,
(iii) acceptance of any of the Exchange Notes and (iv) any sale of Registrable
Securities pursuant to any shelf or other Registration Statement.
SECTION 6. Miscellaneous.
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(a) No Inconsistent Agreements. Neither PIFCo nor Petrobras has
--------------------------
entered into, and on or after the date of this Agreement will not enter into,
any agreement which is inconsistent with the rights granted to the Holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
PIFCo's or any of Petrobras' other issued and outstanding securities under any
such agreements.
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(b) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless PIFCo and Petrobras have obtained the written consent of
Holders of at least a majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, modification, supplement,
waiver or consent; provided, however, that no amendment, modification,
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supplement, waiver or consent to any departure from the provisions of Section 5
hereof shall be effective as against any Holder of Registrable Securities unless
consented to in writing by such Holder.
(c) Notices. All notices and other communications provided for or
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permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Companies by means of a notice given in accordance with the provisions of
this Section 6(c), which address initially is, with respect to the Initial
Purchasers, the address set forth in the Purchase Agreement; (ii) if to PIFCo,
initially at PIFCo's address set forth in the Purchase Agreement and thereafter
at such other address, notice of which is given in accordance with the
provisions of this Section 6(c); and (iii) if to Petrobras, initially at the
Petrobras' address set forth in the Purchase Agreement and thereafter at such
other address, notice of which is given in accordance with the provisions of
this Section 6(c). All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next business day if timely delivered to an air courier guaranteeing
overnight delivery. Copies of all such notices, demands, or other communications
shall be concurrently delivered by the Person giving the same to the Trustee, at
the address specified in the Indenture.
(d) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided that nothing herein shall be deemed to
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permit any assignment, transfer or other disposition of Registrable Securities
in violation of the terms of the Purchase Agreement. If any transferee of any
Holder shall acquire Registrable Securities, in any manner, whether by operation
of law or otherwise, such Registrable Securities shall be held subject to all of
the terms of this Agreement, and by taking and holding such Registrable
Securities such Person shall be conclusively deemed to have agreed to be bound
by and to perform all of the terms and provisions of this Agreement and such
Person shall be entitled to receive the benefits hereof. The Initial Purchasers
(in their capacity as Initial Purchasers) shall have no liability or obligation
to PIFCo or Petrobras with respect to any failure by a Holder to comply with, or
any breach by any Holder of, any of the obligations of such Holder under this
Agreement.
(e) Purchases and Sales of Securities. PIFCo and Petrobras shall have
---------------------------------
the right to purchase Registrable Securities as contemplated in the Indenture;
provided, however that, notwithstanding the forgoing, neither PIFCo nor
Petrobras shall, and each of PIFCo and Petrobras shall use their best efforts to
cause their respective affiliates (as defined in Rule 405 under the Securities
Act) not to, purchase and then resell or otherwise transfer any Registrable
Securities, if doing so would adversely affect the rights of the Holders
hereunder.
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(f) Third Party Beneficiary. The Holders shall be third party
-----------------------
beneficiaries to the agreements made hereunder between PIFCo and Petrobras, on
the one hand, and the Initial Purchasers, on the other hand, and shall have the
right to enforce such agreements directly to the extent they deem such
enforcement necessary or advisable to protect their rights hereunder.
(g) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
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reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. This Agreement shall be governed by the laws of the
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State of New York.
(j) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Jurisdiction.
------------
(a) Each of PIFCo and Petrobras agrees that any legal suit, action or
proceeding arising out of or relating to this Agreement or the transactions
contemplated herein may be instituted in any U.S. federal or New York State
court in the Borough of Manhattan in the City of New York (each a "New York
court") and each of PIFCo and Petrobras hereby waives any objection which it may
now or hereafter have to the laying of venue of any such proceeding, and
irrevocably submits to the jurisdiction of such courts, with respect to actions
brought against it as defendant, in any suit, action or proceeding.
(b) Each of PIFCo and Petrobras (A) irrevocably appoints the office of
Petrobras in New York located at 570 Lexington Avenue, New York, New York
10022-6837 (together with any successor, the "Process Agent"), as its authorized
agent in the Borough of Manhattan in the City of New York upon which process may
be served in any such suit, action or proceeding, acknowledges that the Process
Agent has accepted such designation and agrees that service of process upon the
Process Agent, and written notice of such service to the Companies, by the
person serving the same to the address set forth in the Purchase Agreement,
shall be deemed in every respect effective service of process upon the Companies
in any such suit, action or proceeding and (B) agrees to take any and all
action, including the execution and filing of any and all such documents and
instruments as may be necessary to continue such designation and appointment of
the Process Agent in full force and effect so long as any of the Notes shall be
outstanding.
(l) Waiver of Immunity. To the extent that either of the Companies has
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or hereafter may acquire 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) with respect to itself
or its property, it hereby irrevocably waives such
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immunity in respect of its obligations under this Agreement to the fullest
extent permitted by law.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
PETROBRAS INTERNATIONAL FINANCE
COMPANY
By:
--------------------------------
Name:
Title:
PETROLEO BRASILEIRO S.A. --PETROBRAS
By:
--------------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
UBS WARBURG LLC, as Representative on behalf of the Initial Purchasers
By:
------------------------
Name:
Title:
By:
------------------------
Name:
Title:
MORGAN STANLEY & CO. INCORPORATED, as Representative on behalf of the Initial
Purchasers
By:
------------------------
Name:
Title:
WITNESSES:
1.
------------------------
Name:
2.
------------------------
Name:
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