STANDBY PURCHASE AGREEMENT
Dated as of February 4, 2002
Between
PETROLEO BRASILEIRO S.A.--PETROBRAS,
as Standby Purchaser,
and
THE BANK OF NEW YORK, 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......................................................................14
SECTION 5. Independent Obligation....................................................................16
SECTION 6. Waivers and Acknowledgments...............................................................16
SECTION 7. Claims Against the Issuer.................................................................17
SECTION 8. Payments Free and Clear of Taxes, Etc.....................................................17
SECTION 9. Representations and Warranties............................................................19
SECTION 10. Covenants................................................................................29
SECTION 11. Amendments, etc..........................................................................35
SECTION 12. Notices, Etc.............................................................................36
SECTION 13. No Waiver; Remedies......................................................................36
SECTION 14. Indemnification..........................................................................36
SECTION 15. Subordination............................................................................37
SECTION 16. Continuing Agreement; Assignment of Rights Under the Indenture and the Notes.............38
SECTION 17. Currency Rate Indemnity..................................................................38
SECTION 18. Governing Law; Jurisdiction; Waiver of Immunity, Etc.....................................39
SECTION 19. Execution in Counterparts................................................................40
SECTION 20. Pledge of Interest in Accounts...........................................................41
SECTION 21. Entire Agreement.........................................................................41
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EXECUTION COPY
STANDBY PURCHASE AGREEMENT
STANDBY PURCHASE AGREEMENT (this "Agreement"), dated as of February 4,
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2002, between PETROLEO BRASILEIRO S.A.--PETROBRAS (the "Standby Purchaser"), a
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sociedade do economia mista organized and existing under the laws of the
Federative Republic of Brazil ("Brazil"), and THE BANK OF NEW YORK, as trustee
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for the holders of the Notes issued pursuant to the Indenture (as defined below)
(the "Trustee").
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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 February 4, 2002 (the
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"Indenture") with the Trustee;
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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.$400,000,000 of its 9 1/8% Senior Notes due 2007 under the Indenture (the
"Initial Notes");
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WHEREAS, pursuant to the Registration Rights Agreement (the
"Registration Rights Agreement"), dated February 4, 2002 among the Issuer, the
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Standby Purchaser and the Initial Purchasers, the Issuer and the Standby
Purchaser have agreed to register the Initial Notes under the Securities Act and
to effect an exchange offer pursuant to which the Issuer will issue securities
registered with the SEC under the Securities Act, with identical terms as the
Initial Notes (except restrictions on transfer) (the "Exchange Notes") in
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exchange for the Initial Notes;
WHEREAS, the Standby Purchaser is willing to enter into this Agreement
in order to provide the holders of the Initial Notes and the Exchange Notes
(together, the "Notes" and the holders thereof being "Noteholders") with
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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, upon notice from the Trustee and without
any action on the part of the Noteholders, 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 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 product 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 offset (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
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terms shall have the following meanings:
"Account Control Agreement" means the account control agreement dated
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as of February 4, 2002 between the Standby Purchaser and The Bank of New York.
"Affiliate" with respect to any Person, means any other Person that,
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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 10% 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 such interests, by contract or
otherwise.
"Agreement" has the meaning set forth in the preamble to this
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Agreement.
"Authorized Representative" of the Standby Purchaser or any other
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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).
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"Board of Directors", when used with respect to a corporation, means
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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.
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"Business Day" means any day except a Saturday, a Sunday or a legal
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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 February [_], 2002.
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"Companies" means the Issuer and the Standby Purchaser.
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"Default" has the meaning set forth in the Indenture.
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"Default Rate" has the meaning specified in the Indenture.
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"Denomination Currency" has the meaning specified in Section 17(b).
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"Environmental Laws" means all applicable federal, state and local
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statutes, rules, regulations, ordinances, orders, decrees and common law,
including any of the forgoing 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.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Exchange Notes" has the meaning set forth in the preamble to this
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Agreement.
"Expected Maturity Date" has the meaning specified in the Indenture.
----------------------
"Expropriation Event" has the meaning specified in the Indenture.
-------------------
"Final Memorandum" has the meaning specified in Section 9(a).
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"Governmental Authority" shall mean any regulatory, administrative or
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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
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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.
"Inconvertibility Event" has the meaning set forth in the Indenture.
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"Indebtedness" means any obligation (whether present or future, actual
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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 acceptable 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.
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"Indemnified Taxes" means any and all present or future taxes, levies,
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imposts, deductions, charges or withholdings, and all liabilities with respect
to any and all payments by or on account of any obligation of the Standby
Purchaser hereunder or under any other agreement, excluding taxes that are
imposed on the overall net income of the Trustee and each of the Noteholders
(and franchise taxes imposed in lieu thereof) by the state or jurisdiction under
the laws of which the Trustee or such Noteholder, as the case may be, is
organized or has its principal place of business or any political subdivision
thereof.
"Indenture" has the meaning specified in the preamble to this
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Agreement.
"Initial Notes" has the meaning specified in the preamble to this
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Agreement.
"Initial Purchasers" means UBS Warburg LLC, Morgan Stanley & Co., Inc
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and Banco Bilbao Vizcaya Argentaria S.A. acting as such under the Purchase
Agreement.
"Interest Payment Date" has the meaning set forth in the Indenture.
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"Issuer" has the meaning set forth in the preamble to this Agreement.
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"Judgment Currency" has the meaning specified in Section 17(b).
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"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.
"Letter of Credit" has the meaning specified in the Indenture.
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"Letter of Credit Bank" means a bank issuing a Letter of Credit
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pursuant to the Indenture and, on the Closing Date, Banco Bilbao Vizcaya
Argentaria S.A., acting through its New York branch.
"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.
"Luxembourg Paying Agent" means Kredietbank S.A. Luxembourgeoise as
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the Luxembourg Paying Agent under the Indenture.
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"Material Adverse Effect" means a material adverse effect on (a) the
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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 any Subsidiary of the Standby Purchaser
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with total assets of more than U.S.$200,000,000 (or its equivalent in another
currency) as reflected on the most recent consolidated financial statements of
the Standby Purchaser.
"Moody's" means Moody's Investors Service, Inc.
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"Noteholders" has the meaning specified in the preamble of this
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Agreement.
"Note Rate" has the meaning set forth in the Indenture.
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"Notes" has the meaning specified in the preamble of this Agreement.
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"Offering Memoranda" has the meaning specified in Section 9(a).
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"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
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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:
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(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.
"Other Taxes" any present or future stamp, documentary, excise,
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property or similar taxes, charges or levies 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
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2(a).
"Partial Non-Payment Due Date" has the meaning specified in Section
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2(a).
"Partial Non-Payment Overdue Interest" has the meaning specified in
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Section 2(a).
"Partial Non-Payment Notice" has the meaning specified in Section
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2(a).
"Payment Account" has the meaning set forth in the Indenture.
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"Payment Date" has the meaning set forth in the Indenture.
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"Permitted Investments" has the meaning set forth in the Indenture.
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"Permitted Lien" means a:
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(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;
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(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; provided, however, that 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 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; provided, however, that 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 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 Lien referred to in paragraphs (i) through (ix)
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 paragraph 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
(xi) Lien in respect of Indebtedness the principal amount of which in
the aggregate, together with all Liens not otherwise qualifying as
Permitted Liens pursuant to clauses (i) through (x) of this definition,
does not exceed 5% of the Standby Purchaser's consolidated total assets (as
determined in accordance with U.S. GAAP) at any date on which the Standby
Purchaser's balance sheet is prepared and published in accordance with
applicable law.
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"Person" means any individual, partnership, corporation (including a
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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 Memorandum" has the meaning specified in Section 9(a).
----------------------
"Process Agent" has the meaning specified in Section 18(c).
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"Project Financing" of any project means the incurrence of
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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 Agreement" has the meaning specified in Section 9(d).
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"Purchase Obligations" has the meaning specified in Section 4.
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"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
8
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.
"Registration Rights Agreement" has the meaning set forth in the
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preamble to this Agreement.
"Regulation D" has the meaning specified in Section 9(b).
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"Regulation S" means Regulation S promulgated under the Securities
------------
Act, as amended and in effect from time to time
"Required Partial Payment Date" has the meaning specified in Section
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2(a).
"Reserve Account" has the meaning set forth in the Indenture.
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"Rule 144A" means Rule 144A promulgated under the Securities Act, as
---------
amended and in effect from time to time.
"SEC" means the United States Securities and Exchange Commission.
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"Securities Act" means the United States Securities Act of 1933, as
--------------
amended.
"Standby Purchaser" has the meaning specified in the preamble of this
-----------------
Agreement.
"Subordinated Obligations" has the meaning specified in Section 15.
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"Subsidiary" means, as to any Person, a corporation, company,
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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
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to a Subsidiary or Subsidiaries of the Standby Purchaser.
"Successor Company" has the meaning specified in Section 10(n)(i).
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"Taxing Jurisdiction" has the meaning specified in Section 8(d).
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"Termination Date" has the meaning specified in Section 7.
----------------
"TIA" means the United States Trust Indenture Act of 1939, as amended.
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9
"Total Non-Payment Notice" shall have the meaning specified in Section
------------------------
3(a).
"Total Payment Amount" shall have the meaning specified in Section
--------------------
3(a).
"Total Payment Due Date" shall have the meaning specified in Section
----------------------
3(a).
"Total Payment Amount Suspension" has the meaning specified in Section
-------------------------------
3(d).
"Total Payment Overdue Interest" has the meaning specified in Section
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3(a).
"Transaction Documents" means, collectively, this Indenture, the
---------------------
Notes, this Agreement, the Registration Rights Agreement, the Account Control
Agreement and each Letter of Credit.
"Trustee" has the meaning specified in the preamble of this Agreement.
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"United States" or "U.S." means the United States of America.
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"U.S. GAAP" means generally accepted accounting principles in effect
---------
in the United States applied on a basis consistent with the principles, methods,
procedures and practices employed in the preparation of the Issuer's audited
financial statements, including, without limitation, those 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,
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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
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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;
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(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 the Issuer
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shall fail to make any payment prior to the Expected Maturity Date (as the same
may be extended as permitted in the Indenture) for the Notes in respect of
interest, principal or other amounts as provided for in the Indenture and/or the
Notes on the date any such payment is due (other than in the case of an
acceleration thereof in accordance with the Indenture), the Trustee shall
provide notice thereof to the Standby Purchaser. Such notice shall be provided
in writing in substantially the form of Exhibit A hereto (the "Partial
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Non-Payment Notice") and shall be sent by the Trustee to the Standby Purchaser
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at the address specified for the Standby Purchaser in Section 12 hereof no later
than 5:00 p.m. (New York time) on the Business Day that the Issuer was obligated
under the terms of Section 2.15(a) of, or otherwise under, the Indenture to pay
such amounts to the Payment Account. The Partial Non-Payment Notice shall (i)
specify the amounts under the Notes and the Indenture that were not paid on the
date that such amounts were required to be paid under the terms of the Notes and
the Indenture (such date being, the "Partial Non-Payment Due Date"), (ii)
----------------------------
specify that the Standby Purchaser is obligated to pay the amounts specified in
the Partial Non-Payment Notice plus interest thereon at the Note Rate from the
Partial Non-Payment Due Date through and including the date of actual payment by
the Standby Purchaser (such interest amounts being "Partial Non-Payment Overdue
----------------------------
Interest" and together with the
- --------
11
applicable or unpaid amounts, the "Partial Non-Payment Amount"), which shall be
--------------------------
a date no later than the end of the applicable grace period therefor, if any, as
provided pursuant to Section 7.1(b) of the Indenture (the "Required Partial
----------------
Payment Date") and which date shall be a Business Day. To the extent that the
- ------------
Standby Purchaser fails to pay the Partial Non-Payment Amount on or prior to the
Required Partial Payment Date, the Standby Purchaser shall be obligated
hereunder to pay, in addition to the amounts specified above, interest on the
amount specified in the applicable Partial Non-Payment Notice at the Default
Rate from the Required Partial Payment Date to and including the actual date of
payment by the Standby Purchaser, which date of payment shall be a Business Day.
(b) The Standby Purchaser hereby agrees that, upon receipt of a
Partial Non-Payment Notice, it shall make a payment to the Trustee contemplated
by clause (a) of this Section 2 no later than 1:00 p.m. (New York time) on the
Required Partial Payment Date. Payment of the Partial Non-Payment Amount shall
be in consideration of the purchase by the Standby Purchaser of the rights of
the Noteholders to receive the Partial Non-Payment Amount. 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 and the Trustee's determination of the Partial Non-Payment
Amount shall be absolute and unconditional upon receipt by it of the Partial
Non-Payment Notice, absent manifest error. All amounts payable by the Standby
Purchaser hereunder in respect of any Partial Non-Payment Amount shall be
payable in U.S. dollars and in immediately available funds to the Trustee at the
account 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) Subject to clause (d) below,
-------------------------
in the event the Issuer shall fail to make any payment at the Expected Maturity
Date (as the same may be extended as permitted in the Indenture or earlier upon
any acceleration thereof in accordance with the terms of the Indenture), in
respect of principal, interest or other amounts as provided for in the Indenture
and the Notes on the date any such payment is due, the Trustee shall provide
notice thereof to the Standby Purchaser. Such notice 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
Business Day that the Issuer was obligated under the terms of Section 2.15(a)
of, or otherwise under, the Indenture to pay such amounts to the Payment Account
(such date, the "PIFCo Payment Due Date"). The Total Non-Payment Notice shall
----------------------
(i) specify the
12
amounts under the Notes and the Indenture that were not paid on the PIFCo
Payment Due Date and that such amounts are required to be paid to Noteholders
under the terms of the Notes and the Indenture either (as applicable) on the
PIFCo Payment Due Date or the Business Day immediately thereafter (such day
being the "Total Payment Due Date"), (ii) specify that the Standby Purchaser is
----------------------
obligated to pay the amounts specified in the Total Non-Payment Notice plus
interest at the applicable rate specified in the Indenture from the Total
Payment Due Date through and including the date of actual payment by the Standby
Purchaser (such interest amounts being "Total Payment Overdue Interest" and
------------------------------
together with the applicable or unpaid amounts, the "Total Payment Amount"),
--------------------
which date of payment shall be a Business Day.
(b) The Standby Purchaser hereby agrees that, upon receipt of a Total
Non-Payment Notice, it shall make a payment to the Trustee contemplated by
clause (a) of this Section 3 by 1:00 p.m. (New York time) on the Total Payment
Due Date. Payment of the Total Payment Amount by the Standby Purchaser shall be
in consideration of the purchase by the Standby Purchaser of the rights of the
Noteholders to receive the Total Payment Amount. 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 Payment
Amount and the Trustee's determination of the Total Payment Amount shall be
absolute and unconditional upon receipt by it of the Total Non-Payment Notice,
absent manifest error. All amounts payable by the Standby Purchaser hereunder in
respect of any Total Payment Amount shall be payable in U.S. dollars and in
immediately available funds to the Trustee at the account 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 Payment Overdue Interest.
(d) (i) Notwithstanding anything to the contrary in this Section 3,
if, at any time, the Standby Purchaser is obligated to pay the Total Payment
Amount and the Standby Purchaser does not have sufficient funds available to it
outside Brazil to satisfy its obligations hereunder to pay the Total Payment
Amount, the Standby Purchaser shall be permitted to suspend (such suspension a
"Total Payment Amount Suspension") paying the Total Payment Amount (other than
-------------------------------
accrued interest included thereon) if the obligation of the Standby Purchaser to
make such payment (A) arises as a result of a Default or Event of Default of the
type specified in Sections 7.1(g), (h), (i), (j), (k) or (l) of the Indenture in
respect of the Issuer, any Material Subsidiary thereof or any Material
Subsidiary of the Standby Purchaser and (B) arises during the occurrence and
continuation of an Inconvertibility Event or an Expropriation Event.
(ii) Each Total Payment Amount Suspension shall last from the
applicable Total Payment Due Date until the earliest to occur of (A) eighteen
calendar months from such Total Payment Due Date, (B) the latest date for which
funds are available under the Letter of Credit or in the Reserve Account to pay
interest on the Notes, and (C) the cessation of the Inconvertibility Event or
Expropriation Event that gave rise to such Total Payment Amount Suspension.
13
(iii) Upon the cessation of any Total Payment Amount Suspension, the
Standby Purchaser shall be obligated to pay that portion of the Total Payment
Amount representing outstanding principal and other amounts due on or with
respect to the Notes (other than accrued interest) at the end of such Total
Payment Amount Suspension.
(iv) The Standby Purchaser shall in addition to its obligation to pay
the Total Payment Amount upon the ending of any Total Payment Amount Suspension
be obligated to continue to pay interest on the outstanding but unpaid principal
amount of the Notes on each date that would (but for any Default or Event of
Default then continuing) otherwise be an Interest Payment Date during the entire
Total Payment Amount Suspension at a rate equal to the Note Rate; provided,
however, that interest shall accrue on the Notes at the Default Rate if the
Trustee shall not receive interest at the Note Rate from the Standby Purchaser,
from the Letter of Credit or from amounts on deposit in the Reserve Account as
set forth above from the date such amount was due until such amount shall be
paid in full.
(e) Notwithstanding the foregoing, if at any time a Default or Event
of Default of the type specified in Sections 7.1(g), (h), (i), (j), (k) or (l)
of the Indenture occurs in relation to the Standby Purchaser, all of the Standby
Purchaser's obligations hereunder, including the obligation to pay the Total
Payment Amount, shall be immediately due and payable without any notice to the
Standby Purchaser or the Issuer.
(f) 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 or the Total Payment Amount
(collectively, the "Purchase Obligations") are absolute and unconditional
--------------------
(except to the extent that the Trustee is required to deliver Partial
Non-Payment Notice or the Total Non-Payment Notice as specified in Sections 2
and 3 hereto) 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;
14
(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;
(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; or
(k) any Inconvertibility Event or Expropriation Event, whether or not
such event is know to the Standby Purchaser or the Trustee.
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.
15
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 (plus any
interest thereon at the Default Rate in accordance with Section 3(d)(iv) of this
Agreement) 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 is 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.
16
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 and/or the Total Payment Amount 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 or Other Taxes; provided that if the
Standby Purchaser shall be required to deduct any Indemnified Taxes or Other
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.
17
(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) Indemnification by the Standby Purchaser. The Standby Purchaser
----------------------------------------
shall indemnify the Trustee and the Noteholders within 10 days after written
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
(including taxes imposed or asserted on or attributable to amounts payable under
this Section) paid by the Trustee and the Noteholders and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to the Standby Purchaser by
the Trustee or the Noteholders, or on behalf of the Trustee or the Noteholders,
shall be conclusive absent manifest error.
(d) Notwithstanding anything to the contrary in Sections 8(a) and (c)
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
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 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 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 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 Trustee a payment under this Agreement; provided that the
Standby Purchaser will pay Indemnified Taxes which a Noteholder or 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 to
an individual and is required to be made pursuant to any European Union
Directive on the taxation of savings income relating to the proposal for a
Directive on the taxation of savings income published by the European Commission
on July 18, 2001 or otherwise implementing the conclusions of the Economic and
Financial Council of Ministers of the member states of the European Union
(ECONFIN) Council meeting of 26 and 27 November 2000 or any law implementing or
complying with, or introduced in order to conform to, any such Directive,
(vii)such Note being presented for payment by or on behalf of a Noteholder who
would have been able to avoid such withholding or deduction by presenting the
relevant Note to another paying agent in a member state of the European Union,
or (vii) the payment of any obligation of the Standby Purchaser to the
Noteholder or Trustee who would have been able to
18
cause the avoidance of the Indemnified Taxes by taking reasonable measures
available to the Noteholder or Trustee.
(e) 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.
(f) Foreign Law. If the Trustee or a Noteholder is entitled to an
-----------
exemption from or reduction of Indemnified Taxes, with respect to payments under
this Agreement, the Trustee or such Noteholder (as applicable) shall provide to
the Standby Purchaser, as reasonably requested by the Standby Purchaser (who
shall provide the Trustee or the Noteholder, as the case may be, the relevant
documentation, forms and instructions prescribed by applicable law), such
documentation as will permit payments under this Agreement to be made without
withholding or at a reduced rate; provided, however, if any documentation or
-------- -------
form referred to in this subsection (f) requires the disclosure of information
that the Trustee or the Noteholder, as the case may be, reasonably considers to
be confidential, the Trustee or such Noteholder shall give notice thereof to the
Standby Purchaser and shall not be obligated to include in such documentation or
form such confidential information.
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) On the date hereof, the offering memorandum dated January 29, 2002
prepared by the Issuer and the Standby Purchaser in connection with the issuance
and sale of the Notes (the "Final Memorandum", and together with the Preliminary
----------------
Offering Memorandum dated January 17, 2002 (the "Preliminary Memorandum")
----------------------
prepared by the Issuer and the Standby Purchaser in connection with the issuance
and sale of the Notes, the "Offering Memoranda") did not, and on the Closing
------------------
Date will not, 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 Preliminary Memorandum or
the Final Memorandum, or any amendment or supplement thereto, in reliance upon
and in conformity with information furnished in writing to the Standby Purchaser
and the Issuer by UBS Warburg, LLC and Morgan Stanley & Co. Incorporated, as the
representatives on behalf of the Initial Purchasers, or by the Letter of Credit
Bank, specifically for inclusion therein.
(b) The offer, issuance and sale of the Initial Notes in the manner
contemplated by the Final Memorandum will not require registration of the same
under the Securities Act or qualification of the Notes under the TIA. Neither of
the Standby Purchaser and the Issuer, nor any of their "Affiliates" (as defined
in Rule 501(b) of Regulation D under the Securities Act ("Regulation D")), nor
------------
any person acting on their behalf (other than the Initial Purchasers as to which
the Standby Purchaser makes no representation or warranty) has, directly or
indirectly,
19
made offers or sales of any security, or solicited offers to buy any security,
under circumstances that would require the registration of the Initial Notes
under the Securities Act.
(c) Neither of the Standby Purchaser, the Issuer, nor any of their
Affiliates, nor any person acting on their behalf (other than the Initial
Purchasers as to which the Standby Purchaser makes no representation or
warranty), has engaged in any form of general solicitation or general
advertising (within the meaning of Rule 502(c) of Regulation D) in connection
with any offer or sale of the Initial Notes in the United States.
(d) The Initial Notes satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act and, assuming the accuracy of the
representations and warranties of the Representatives on behalf of the Initial
Purchasers, set forth in the Purchase Agreement (the "Purchase Agreement") dated
------------------
as of January 29, 2002, among the Standby Purchaser, the Issuer and the Initial
Purchasers, the offering of the Initial Notes in the manner set forth in the
Final Memorandum has been made in compliance with the applicable requirements of
Rule 144A and Regulation S, as the case may be.
(e) The information provided by the Standby Purchaser and the Issuer
and any of their Affiliates set forth in the Offering Memoranda complies with
the applicable requirements of Rule 144A and Regulation S.
(f) The Standby Purchaser reasonably believes that there is no
substantial United States market interest (as defined in Regulation S) in the
Initial Notes.
(g) Neither the Issuer or the Standby Purchaser is, and after giving
effect to the offering and sale of the Notes and the application of the proceeds
thereof as described in the Final Memorandum will not 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.
(h) No person has the right to require that either the Issuer or the
Standby Purchaser register any securities (other than the Initial Notes or the
Exchange Notes, if any) for offering and sale under the Securities Act by reason
of the filing of the registration statement contemplated by the Registration
Rights Agreement.
(i) Neither the Standby Purchaser, nor any of its Affiliates, nor any
person acting on their behalf (other than the Initial Purchasers 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 Issuer within the last 90 days, except
in the case of either (i) or (ii) as contemplated by the Purchase Agreement.
(j) Neither the Standby Purchaser, nor any of its Affiliates, nor any
person acting on their behalf (other than the Initial Purchasers 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 to facilitate
the initial sale or resale of the Notes under the Exchange Act, or otherwise.
20
(k) The Standby Purchaser is in compliance with all of its periodic
reporting and other requirements under the Exchange Act; all reports heretofore
filed by the Standby Purchaser under the Exchange Act complied as to form with
the requirements applicable thereto and did not contain any material
misstatement or omit to state any material facts necessary to make the
statements contained therein not misleading; all information to be provided by
the Standby Purchaser pursuant to Rule 144A(d)(4) as contemplated in Section
5(h) of the Purchase Agreement will comply with the requirements under the
Securities Act, including Rule 144A, applicable thereto.
(l) The Standby Purchaser has been duly organized and is validly
existing as a mixed-capital company in good standing 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
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 Final Memorandum 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 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 Memorandum.
(o) This Agreement has been duly authorized, executed and delivered by
each of the Standby Purchaser; each of this Agreement, the Registration Rights
Agreement and each other document executed and delivered in connection therewith
to which either of 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 Memorandum fairly summarize the rights and
obligations of the parties thereto.
21
(p) The Notes have been duly authorized, and, when issued under the
Indenture, authenticated by the Trustee and delivered to and paid for by the
Initial Purchasers pursuant to the Purchase 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
Final Memorandum; the Exchange Notes have been duly authorized and, when issued,
authenticated by the Trustee and delivered in exchange for the Notes, 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 enforcement of remedies, as provided above.
(q) Each of the Initial Notes and the Exchange Notes, if any, will
constitute the general, direct and unconditional obligations of the Issuer and
will rank pari passu in priority of payment and in right of seniority with all
other unsecured obligations of the Issuer that are not, by their terms,
expressly subordinated in right of payment to the Initial Notes or the Exchange
Notes, if any, except for statutory liens and preferences. The obligations of
the Standby Purchaser under this Agreement will constitute the general, direct
and unconditional obligations of the Standby Purchaser and will rank pari passu
in priority of payment and in right of seniority with all other unsecured
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.
(r) 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, (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 Final
Memorandum, 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 or (iii) the issuance, exchange and delivery of the
Exchange Notes, except as has been obtained or completed or such as will be
obtained in accordance with the Registration Rights Agreement under the
Securities Act or the TIA.
(s) Neither of the Issuer nor 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 nor the consummation of any of the transactions
described or contemplated therein, nor 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 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 bound or to which any of their property or assets is subject or (iii)
any statute, law, rule, regulation, judgment, order or decree
22
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.
(t) The consolidated historical financial statements of the Issuer and
the Standby Purchaser and their consolidated Subsidiaries included in the
Offering Memoranda, 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 and selected financial data set forth under the captions "Selected
Financial Data for PIFCo", "Summary Financial Information for PIFCo", "Selected
Financial Data for Petrobras" and "Summary Financial Information for Petrobras"
in the Offering Memoranda fairly present, on the basis stated in the Offering
Memoranda, the information included therein. Except as disclosed in the Offering
Memoranda, 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 September 30, 2001.
(u) Except as set forth or contemplated in the Offering Memoranda,
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.
(v) No action, suit or proceeding by or before any Government
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 Final Memorandum. Neither the
Issuer, the Standby Purchaser nor any of their Subsidiaries is in default with
respect to any applicable statute, rule, writ, injunction, decree, order or
regulation of any Government Authority having jurisdiction over such Person
which is reasonably likely to have a Material Adverse Effect.
(w) 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 Offering Memoranda 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 Offering Memoranda, are in full force and
effect; and neither of the Companies has had any notice that any material claim
of any sort has been asserted by anyone adverse to the Companies rights under
any leases or subleases mentioned above, or affecting or questioning the rights
thereof to the continued
23
possession of the leased or subleased premises under any such lease or sublease,
except as would not result in a Material Adverse Effect.
(x) PricewaterhouseCoopers Auditores Independentes, who have certified
the financial statements of the Issuer and the Standby Purchaser and their
consolidated Subsidiaries and delivered their report with respect to the audited
consolidated financial statements included in the Final Memorandum, 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 of the Securities Act and the
Exchange Act and are certified public accountants with respect to the Companies
under the standards established by the local authorities in the Cayman Islands
and Brazil.
(y) Except as otherwise described in the Offering memoranda, no labor
problem or dispute with the employees of the Issuer and the Standby Purchaser or
any of their Subsidiaries exists or, to the Issuer's and the Standby Purchaser's
knowledge, is threatened or imminent, and the Issuer and the Standby Purchaser
are not aware of any existing or imminent labor disturbance by the employees of
any of their or their Subsidiaries' principal suppliers, contractors or
customers, that could reasonably be expected to have a Material Adverse Effect.
(z) 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.
(aa) 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 where 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.
(bb) 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
24
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.
(cc) 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.
(dd) 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 Offering Memoranda. It is not necessary
under the laws of Brazil or the Cayman Islands that any of the holders of the
Notes or the Exchange Notes, if any, 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.
(ee) 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.
(ff) 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
Offering Memoranda, 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 Final Memorandum, 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.
25
(gg) 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
could not, singly or in the aggregate, have a Material Adverse Effect.
(hh) The Issuer and the Standby Purchaser and their Subsidiaries own,
possess, license or have other rights to use, on reasonable terms, all patents,
patent applications, trade and service marks, trade and service mark
registrations, trade names, copyrights, licenses, inventions, trade secrets,
technology, know-how and other intellectual property necessary for the conduct
of the Issuer's and the Standby Purchaser's businesses as now conducted or as
described in the Final Memorandum to be conducted by them and neither the
Issuer, the Standby Purchaser nor any of their Subsidiaries has received any
notice of infringement or of conflict with asserted rights of others with
respect to any of the foregoing which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or funding, could reasonably be
expected to result in any Material Adverse Effect.
(ii) The information set forth in the Final Memorandum relating to oil
and gas reserves, oil and gas wells and any other oil and gas related
information required to be disclosed in such Final Memorandum has been prepared
by the Issuer and the Standby Purchaser in all material respects on the basis
disclosed in the Final Memorandum and conforms in all material respects to the
requirements of the Securities Act and the Exchange Act, as the case may be.
(jj) The indemnification and contribution provisions set forth in
Section 14 hereof do not contravene Brazilian or Cayman Islands law or public
policy.
(kk) 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.
26
(ll) 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.
(mm) 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 Memorandum.
(nn) 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.
(oo) Both presently and immediately after giving effect to the
transactions contemplated hereunder and in the Final Memorandum, 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.
(pp) None of the Noteholders, the Initial Purchasers 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.
(qq) 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
27
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.
(rr) No Default or Event of Default (as defined in the Indenture) has
occurred and is continuing.
(ss) 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 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% or 25% if the beneficiary is
domiciled in a tax haven jurisdiction. 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 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 and the subsequent translation of this Agreement 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.
(tt) 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.
(uu) 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
28
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.
(vv) Except as described in the Offering Memoranda 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.
(ww) 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.
(xx) No Expropriation Event or Inconvertibility Event is in occurrence
on the date hereof.
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):
29
(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
the Agreement and each other Transaction Document entered into in connection
therewith to which it is a party 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(n) 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 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 Board of Directors of the
Standby Purchaser shall determine in good faith that (i) the maintenance or
preservation thereof is no longer necessary or desirable in the conduct of the
business of the Standby Purchaser and that (ii) 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 Board of Directors of the Standby Purchaser and each
affected Subsidiary thereof shall determine in good faith that (i) the
maintenance thereof is no longer necessary or desirable in the conduct of the
business of the Standby Purchaser and (ii) 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.
30
(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 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 of 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 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.
31
(l) Notice of Defaults. The Standby Purchaser will give 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 that the Standby Purchaser proposes to take with
respect thereto.
(m) Notice of Expropriation or Inconvertibility Events. The Standby
--------------------------------------------------
Purchaser will give notice to the Trustee, as soon as is practicable and in any
event within five Business Days after the Standby Purchaser becomes aware of any
action taken by the Brazilian government that could give rise to an
Expropriation Event or an Inconvertibility Event; provided that if the Standby
Purchaser is prevented, by an Expropriation Event or Inconvertibility Event,
from converting Brazilian reais to U.S. dollars or transferring U.S. dollars
outside of Brazil in satisfaction of its obligations hereunder, the Standby
Purchaser shall promptly (but in any event not later than 9:00 a.m. (New York
time) on the Business Day immediately succeeding the Standby Purchaser's
discovery thereof) notify the Trustee of such Expropriation Event or
Inconvertibility Event by delivering to the Trustee a certificate substantially
in the form of Exhibit C hereto stating that (i) an Expropriation Event or an
Inconvertibility Event has resulted in the Standby Purchaser inability to
satisfy its Purchase Obligations under this Agreement and (ii) no other funds
are otherwise available to make any payments due under the Notes or this
Agreement.
(n) 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;
32
(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;
(o) 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
33
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 its own Indebtedness 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.
(p) 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 (ii) 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 will
not have a Material Adverse Effect.
(q) 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(q)(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
34
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.
(r) 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 the 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
Purchases 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.
(s) Available Information. For so long as the Notes are "restricted
---------------------
securities" within the meaning of Rule 144(a)(3) under the Securities Act, the
Standby Purchaser will furnish to any Noteholder of a Note issued under Rule
144A, or to any prospective purchaser designated by such Noteholder, upon
request of such Noteholder, financial and other information described in
paragraph (d)(4) of Rule 144A with respect to the Standby Purchaser and the
Issuer to the extent required in order to permit such Noteholder to comply with
Rule 144A (as amended from time to time and including any successor provision)
with respect to any resale of such Note, unless, at the time of such request,
the Issuer is subject to the reporting requirements of Section 13 or Section
15(d) of the Exchange Act or is exempt from such requirements pursuant to Rule
12g3-2(b) under the Exchange Act (as amended from time to time and including any
successor provision) and no such information about the Issuer or the Standby
Purchaser is otherwise required pursuant to Rule 144A.
(t) 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
35
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. 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: Isabela Alvim, if to the Trustee, at 101 Barclay Street, 21W, New
York, New York 10286, Telephone: (212) 815-5381, Telecopier: (212) 815-3522,
Attention: Global Finance Unit or, as to any party, at such other address as
shall be designated by such party in a written notice to each other party. The
Trustee shall forward promptly copies of all notices and other communications
given or received hereunder or under any of the Transaction Documents to Moody's
at Moody's Investor Service, 99 Church Street, New York, New York, Attention:
Latin American ABS Monitoring. 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.
Copies of all written information provided by the Standby Purchaser
under the terms hereof, including without limitation all such written
information and financial statements provided to the Trustee under Section 10
hereof, shall be sent to the Luxembourg Paying Agent by first class mail at its
offices at 43, Boulevard Royal, L-2955 Luxembourg, or such other address as
shall be designated in writing by the Luxembourg Paying Agent to the Trustee and
the Standby Purchaser.
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
36
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.
37
(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 or Total Payment Amount 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.
38
(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; 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
39
subsection (c). The Standby Purchaser irrevocably consents and agrees to the
service and 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 of any of its 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.
40
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) the Reserve Account, (c) each Letter of Credit issued from time to
time as contemplated hereunder, (d) all funds from time to time on deposit in
the Payment Account and/or the Reserve Account, (e) all Permitted Investments
obtained with proceeds of the Reserve Account or the Payment Account, (f) all
interest, dividends, distributions, cash, instruments and other property from
time to time received, receivable or on deposit in the Reserve Account or the
Payment Account, and (g) all proceeds of any of the foregoing (together, the
"Collateral"). The Standby Purchaser agrees to take all such action as is
----------
necessary 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, except to the
extent that withdrawals from them Reserve Account are otherwise limited as set
forth in Section 5.3 of the Indenture, 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
heretofor 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, the Notes and the Letter of Credit, sets forth the entire agreement
of the parties hereto with respect to the subject matter hereof.
41
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:
---------------------------------
Name:
Title:
ACKNOWLEDGED:
THE BANK OF NEW YORK, as Trustee and not
in its individual capacity
By:
---------------------------------
Name:
Title:
WITNESSES:
1.
---------------------------------
Name:
2.
---------------------------------
Name:
42
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.$400,000,000 9 1/8% Senior Notes due 2007
---------------------------------------------
Dear Sirs:
Reference is made to that certain indenture (the "Indenture") dated
February 4, 2002 between Petrobras International Finance Company ("PIFCo") and
The Bank of New York, as trustee (the "Trustee"). Reference is also made to that
certain Standby Purchase Agreement (the "Standby Purchase Agreement") dated
February 4, 2002 between the Trustee and Petroleo Brasileiro, S.A. - Petrobras
("Petrobras") pursuant to which Petrobras has undertaken to purchase from the
holders of PIFCo's 9 1/8% Senior Notes due 2007 (the "Notes") such holders'
right to receive unpaid amounts due and owing on such Notes. Capitalized terms
not defined herein shall have the meanings set forth in the Standby Purchase
Agreement.
By this notice, the undersigned, acting on behalf of the holders of
the Notes, hereby advises you as follows:
1. On [date], PIFCo was obligated to make a payment of [principal]
[interest] [Additional Amounts] [other amounts under the
Indenture] in an amount equal to U.S.$ 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 Amounts.
4. You are hereby requested to pay the Overdue Amount to the Payment
Account established under the Indenture (Account No. ) by the
----
date that payment is due pursuant to Section 2 of the Standby
Purchase Agreement 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 of payment
by you is actually made (the "Payment Date"), of U.S.$ (the
------
"Interest Amount").
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) 815-3522 (Attention: Global Finance Unit).
THE BANK OF NEW YORK, 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.$400,000,000 9 1/8% Senior Notes due 2007
---------------------------------------------
Dear Sirs:
Reference is made to that certain indenture (the "Indenture") dated
February 4, 2002 between Petrobras International Finance Company ("PIFCo") and
The Bank of New York, as trustee (the "Trustee"). Reference is also made to that
certain standby purchase agreement (the "Standby Purchase Agreement") dated
February 4, 2002 between the Trustee and Petroleo Brasileiro, S.A. - Petrobras
("Petrobras") pursuant to which Petrobras has undertaken to purchase from the
holders of PIFCo's 9 1/8% Senior Notes due 2007 (the "Notes") such holders'
right to receive unpaid amounts due and owing on such Notes. Capitalized terms
not defined herein shall have the meanings set forth in the Standby Purchase
Agreement.
By this notice, the undersigned, acting on behalf of the holders of
the Notes, hereby advises you as follows:
1. On [date], PIFCo was obligated to make a payment of [principal]
[interest] [Additional Amounts] [other amounts under the
Indenture] in an amount equal to U.S.$ 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 Amounts.
4. You are hereby requested to pay the Overdue Amount to the Payment
Account established under the Indenture (Account No. ) by
-------
the date that payment is due pursuant to Section 3 of the Standby
Purchase Agreement 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 of payment
by you is actually made (the "Payment Date"), of U.S.$
---------
(the "Interest Amount").
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) 815-3522 (Attention: Global Finance Unit).
THE BANK OF NEW YORK, as
Trustee
By:
------------------------
Name:
Title:
ACKNOWLEDGED & AGREED
- ---------------------
PETROLEO BRASILEIRO S.A.--PETROBRAS
By:
--------------------
Name:
Title:
Date:
EXHIBIT C
FORM OF INCONVERTIBILITY CERTIFICATE
[DATE]
The Bank of New York
101 Barclay Street
21 W
New York, New York 10286
Attention: Corporate Trust Department
Dear Sirs,
Reference is made to that certain (i) Indenture (the "Indenture")
dated February 4, 2002 between Petrobras International Finance Company (the
"Issuer") and you, as trustee (the "Trustee") and (ii) Standby Purchase
Agreement (the "Standby Purchase Agreement") dated February 4, 2002 between you
and Petroleo Brasileiro S.A.--Petrobras, as the standby purchaser (the "Standby
Purchaser"). Capitalized terms not defined herein shall have the meanings set
forth in the Indenture.
Pursuant to Section 5.2 of the Indenture and Section 10(m) of the
Standby Purchase Agreement, the Issuer and the Standby Purchaser hereby certify
to you, the Trustee, acting on behalf of the holders of the Issuer's 9 1/8%
Senior Notes due 2007, as follows:
(i) [PLEASE DELETE ONE OF THE FOLLOWING AS APPROPRIATE]
(a) [The Issuer is unable to repay the principal amount of
the Notes and the Standby Purchaser does not have funds
available to satisfy its obligations under the Standby
Purchase Agreement to pay the Total Payment Amount;]
(b) [The Issuer is unable to pay interest on the Notes and
the Standby Purchaser does not have funds available to it to
satisfy its obligations under the Standby Purchase Agreement
to pay a Partial Non-Payment Amount;]
(ii) The Standby Purchaser has funds in Brazilian Reais but is unable
to convert such funds and transfer them outside of Brazil to the Trustee
for payment of amounts due under or in respect of the Notes due to the
occurrence and continuation of an Expropriation Event or Inconvertibility
Event which occurred on ; and
-----------------
(iii) The Issuer and the Standby Purchaser have used their best
efforts to either convert and transfer the funds referred to in clause
(iii) above; and
(iv) Neither the Issuer nor the Standby Purchaser has funds available
to it outside of Brazil to satisfy its obligations under the Indenture or
Standby Purchase Agreement, respectively.
PETROBRAS INTERNATIONAL FINANCE COMPANY
By:
-----------------------------------
Name:
Title:
PETROLEO BRASILEIRO S.A.---PETROBRAS
By:
-----------------------------------
Name:
Title:
INDEX OF DEFINED TERMS
Account Control Agreement.............................................................................2
Affiliate............................................................................................ 2
Agreement..........................................................................................1, 2
Authorized Representative.............................................................................2
Bankruptcy Law....................................................................................2, 37
Board of Directors....................................................................................2
Brazil................................................................................................1
Business Day..........................................................................................2
Closing Date..........................................................................................2
Collateral...........................................................................................41
- ----------
Companies.............................................................................................3
Default...............................................................................................3
Default Rate .........................................................................................3
Denomination Currency ............................................................................3, 39
Environmental Laws....................................................................................3
Event of Default .....................................................................................3
Exchange Act..........................................................................................3
Exchange Notes......................................................................................1,3
Expected Maturity Date................................................................................3
Expropriation Event...................................................................................3
Final Memorandum..................................................................................3, 19
Governmental Authority................................................................................3
Guarantee ............................................................................................3
Inconvertibility Event................................................................................3
Indebtedness.... .....................................................................................4
Indemnified Party.................................................................................4, 36
Indemnified Taxes.....................................................................................4
Indenture..........................................................................................1, 4
Initial Notes......................................................................................1, 4
Initial Purchasers....................................................................................4
Issuer.............................................................................................1, 4
Judgment Currency.................................................................................4, 39
Law...................................................................................................4
Letter of Credit......................................................................................4
Letter of Credit Bank.................................................................................4
Lien..................................................................................................4
Luxembourg Paying Agent...............................................................................4
Material Adverse Effect...............................................................................5
Material Subsidiary...................................................................................5
Moody's...............................................................................................5
New York court.......................................................................................27
Note Rate.............................................................................................5
Noteholders........................................................................................1, 5
Notes..............................................................................................1, 5
Offering Memoranda................................................................................5, 19
Officer's Certificate.................................................................................5
Opinion of Counsel....................................................................................5
Other Taxes...........................................................................................6
Partial Non-Payment Amount........................................................................6, 12
Partial Non-Payment Due Date......................................................................6, 11
Partial Non-Payment Notice........................................................................6, 11
Partial Non-Payment Overdue Interest..............................................................6, 11
Payment Account.......................................................................................6
Payment Date..........................................................................................6
Permitted Investments.................................................................................6
Permitted Lien........................................................................................6
Person................................................................................................8
PIFCo Payment Date...................................................................................12
Post Petition Interest............................................................................8, 37
Preliminary Memorandum............................................................................8, 19
Process Agent........................................................................................39
Project Financing.....................................................................................8
Purchase Agreement................................................................................8, 20
Purchase Obligations..............................................................................8, 14
Qualifying Asset......................................................................................8
Registration Rights Agreement......................................................................1, 9
Regulation D......................................................................................9, 19
Required Partial Payment Date.....................................................................9, 12
Reserve Account.......................................................................................9
Rule 144A.............................................................................................9
SEC.................. ................................................................................9
Securities Act........................................................................................9
Standby Purchaser..................................................................................1, 9
Subordinated Obligations..........................................................................9, 37
Subsidiary............................................................................................9
Successor Company................................................................................ 9, 32
Taxing Jurisdiction...............................................................................9, 18
Termination Date..................................................................................9, 17
TIA...................................................................................................9
Total Non-Payment Notice.........................................................................10, 12
Total Payment Amount.............................................................................10, 13
Total Payment Amount Suspension..................................................................10, 13
Total Payment Due Date...........................................................................10, 13
Total Payment Overdue Interest...................................................................10, 13
Transaction Documents................................................................................10
Trustee...........................................................................................1, 10
U.S. GAAP............................................................................................10
United States........................................................................................10
Wholly-Owned Subsidiary..............................................................................10