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PURCHASE AGREEMENT
Among
PETROBRAS INTERNATIONAL FINANCE COMPANY,
PETROLEO BRASILEIRO S.A. --PETROBRAS
and
UBS WARBURG LLC
MORGAN STANLEY & CO. INCORPORATED
as Representatives on behalf of itself
and the other Initial Purchasers specified herein
Relating to
PIFCo's
U.S.$400,000,000]
9 1/8% Senior Notes Due 2007
January 29, 2002
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TABLE OF CONTENTS
Page
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SECTION 1. Representations and Warranties................................... 2
SECTION 2. Purchase and Sale................................................ 12
SECTION 3. Delivery and Payment............................................. 12
SECTION 4. Offering by Initial Purchasers................................... 13
SECTION 5. Covenants........................................................ 13
SECTION 6. Conditions to the Obligations of the Initial Purchasers.......... 17
SECTION 7. Reimbursement of Expenses........................................ 22
SECTION 8. Indemnification and Contribution................................. 22
SECTION 9. Termination...................................................... 25
SECTION 10. Representations and Indemnities to Survive...................... 25
SECTION 11. Notices......................................................... 25
SECTION 12. Successors...................................................... 25
SECTION 13. Jurisdiction.................................................... 26
SECTION 14. Governing Law................................................... 26
SECTION 15. Currency........................................................ 26
SECTION 16. Waiver of Immunity.............................................. 26
SECTION 17. Counterparts.................................................... 27
SECTION 18. Entire Agreement................................................ 27
SECTION 19. Headings........................................................ 27
SCHEDULE I List of Initial Purchasers
EXHIBIT A Selling Restrictions
PETROBRAS INTERNATIONAL FINANCE COMPANY -- PIFCo
U.S.$400,000,000
9 1/8% Senior Notes Due 2007
Purchase Agreement
------------------
January 29, 2002
UBS WARBURG LLC, as Representative
677 Washington Boulevard
Stamford, Connecticut 06901
MORGAN STANLEY & CO. INCORPORATED, as Representative
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
Petrobras International Finance Company, a company organized under the
laws of the Cayman Islands ("PIFCo") and a wholly-owned subsidiary of Petroleo
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Brasileiro S.A. - Petrobras, a sociedade de economia mista ("Petrobras" and,
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collectively with PIFCo, the Companies") organized and existing under the laws
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of the Federative Republic of Brazil ("Brazil"), proposes to issue and sell to
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UBS Warburg LLC and Morgan Stanley & Co. Incorporated (the "Representatives")
---------------
and the other initial purchasers set forth on Schedule I hereto (collectively,
the "Initial Purchasers") U.S.$400,000,000 principal amount of its 9 1/8% Senior
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Notes Due 2007 (the "Notes"). The Notes are to be issued under an Indenture (the
-----
"Indenture") to be dated the Closing Date (as defined herein) between PIFCo and
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The Bank of Trustee"). All of PIFCo's obligations under the Notes
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will have thebenefit of certain credit support provided by (i) Petrobras, in the
form of a Standby Purchase Agreement (the "Standby Purchase Agreement") to be
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dated the Closing Date between it and the Trustee, pursuant to which Petrobras
will agree,subject to certain conditions, to purchase from the holders of the
Notes their rights to receive payments from PIFCo in respect of principal,
interest and other amounts due on or with respect to the Notes if not paid by
PIFCo within specified time periods; (ii) the irrevocable standby letter of
credit to be issued on the Closing Date by Banco Bilbao Vizcaya Argentaria S.A.,
acting through its New York branch (the "Letter of Credit Bank"), and any
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replacement thereof (the "Letter of Credit") for the benefit of the Trustee; and
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reserve account (the "Reserve Account") to be established on the Closing Date by
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(iii) a PIFCo with the Trustee pursuant to the Indenture and amounts deposited
therein from time to time pursuant to the Indenture. Terms not otherwise defined
herein are used as defined in the Indenture.
The Initial Purchasers and their direct and indirect transferees of
the Notes will also be entitled to the benefit of a Registration Rights
Agreement (the "Registration Rights
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Agreement") to be entered into among PIFCo, Petrobras and the Representatives,
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on behalf of the Initial Purchasers, pursuant to which PIFCo and Petrobras will
agree, among other things, to file a registration statement with the Securities
and Exchange Commission (the "Commission") registering securities (the "Exchange
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Notes") under the United States Securities Act of 1933, as amended (the
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"Securities Act"), with identical terms as the Notes (except that the Exchange
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Notes will not contain provisions requiring PIFCo to register the Exchange Notes
or provisions regarding restrictions on transfer) and to consummate an exchange
offer exchanging the Notes for the Exchange Notes, in each case subject to the
terms and conditions therein specified.
The Notes will be offered and sold by PIFCo to the Initial Purchasers
without registration under the Securities Act, in reliance upon exemptions from
the registration requirements of the Securities Act. PIFCo understands that the
Initial Purchasers propose to make an offering of the Notes, as soon as the
Representatives deem advisable after this Purchase Agreement has been executed
and delivered, to persons in the United States whom the Initial Purchasers
reasonably believe to be qualified institutional buyers ("QIBs") as defined in
----
Rule 144A under the Securities Act, as such rule may be amended from time to
time ("Rule 144A"), in transactions meeting the requirements of Rule 144A, and
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to non-U.S. persons in transactions meeting the requirements of Regulation S
under the Securities Act, as such regulation may be amended from time to time
("Regulation S").
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In connection with the offer and sale of the Notes, the Companies have
prepared a preliminary offering memorandum, dated January 17, 2002, including
any and all exhibits thereto (the "Preliminary Memorandum"), and a final
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offering memorandum dated the date hereof, including any and all exhibits
thereto (the "Final Memorandum" and, together with the Preliminary Memorandum,
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the "Offering Memoranda"). Each of the Preliminary Memorandum and the Final
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Memorandum sets forth certain information concerning the Companies and the
Notes. The Companies hereby confirm that they have authorized the use of the
Preliminary Memorandum and the Final Memorandum, and any amendment or supplement
thereto, in connection with the offer and sale of the Notes by the Initial
Purchasers. Unless stated to the contrary, all references to the Final
Memorandum are to the Final Memorandum at the date hereof and are not meant to
include any amendment or supplement, subsequent thereto.
SECTION 1. Representations and Warranties. Each of the Companies
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jointly and severally represents and warrants to the Initial Purchasers as set
forth below:
(a) On the date hereof, the Final Memorandum 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 Companies do 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 Companies by the Representatives, on behalf of
the Initial Purchasers, or by the Letter of Credit Bank, specifically for
inclusion therein.
(b) Subject to compliance by the Initial Purchasers with the
representations and warranties set forth in Section 4 hereof, the offer,
issuance and sale of the Notes to
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the Initial Purchasers 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 United States Trust Indenture Act of
1939, as amended (the "TIA"). Neither of the Companies, nor any of their
---
"Affiliates" (as defined in Rule 501(b) of the Regulation D under the
Securities Act ("Regulation D")), nor any person acting on their behalf
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(other than the Initial Purchasers as to which the Companies make no
representation or warranty) has, directly or indirectly, made offers or
sales of any security, or solicited offers to buy any security, under
circumstances that would require the registration of the Notes under the
Securities Act.
(c) Neither of the Companies, nor any of their Affiliates, nor any
person acting on their behalf (other than the Initial Purchasers as to
which the Companies make 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
Notes in the United States.
(d) The 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 Section 4 hereof, the offering of the 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 Companies and any of their
Affiliates set forth in the Offering Memoranda complies with the applicable
requirements of Rule 144A and Regulation S.
(f) PIFCo is a "foreign private issuer" (as defined in Regulation S),
and neither of the Companies, nor any of their Affiliates, nor any person
acting on their behalf (other than the Initial Purchasers as to which the
Companies make no representation or warranty) has engaged in any directed
selling efforts (as defined in Rule 902 of Regulation S) with respect to
the Notes, or otherwise taken any action that is not consistent with any of
the offering restrictions of Rule 144A or Regulation S, as the case may be,
with respect to the Notes.
(g) Each of the Companies reasonably believes that there is no
substantial U.S. market interest (as defined in Regulation S) in the Notes.
(h) Neither of the Companies 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
(the "Investment Company Act"), and the rules and regulations of the
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Commission promulgated thereunder.
(i) No person has the right to require that the Companies register any
securities (other than the Notes or the Exchange Notes, if any) for
offering and sale under
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the Securities Act by reason of the filing of the registration statement
contemplated by the Registration Rights Agreement.
(j) Neither of the Companies, nor any of their Affiliates, nor any
person acting on their behalf (other than the Initial Purchasers, as to
which the Companies make 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 PIFCo within the last 90
days, except in the case of either (i) or (ii) as contemplated by this
Purchase Agreement.
(k) Neither of the Companies, nor any of their Affiliates, nor any
person acting on their behalf (other than the Initial Purchasers, as to
which the Companies make 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 either of the Companies to
facilitate the initial sale or resale of the Notes under the United States
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
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otherwise.
(l) Petrobras is in compliance with all of its periodic reporting and
other requirements under the Exchange Act; all reports heretofore filed by
Petrobras 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 either of the Companies
pursuant to Rule 144A(d)(4) as contemplated in Section 5(h) will comply
with the requirements under the Securities Act, including Rule 144A,
applicable thereto.
(m) PIFCo has been duly incorporated and is validly existing as a
limited company in good standing under the laws of the Cayman Islands. Each
of PIFCo's subsidiaries has been duly incorporated and is validly existing
as a corporation in good standing (if applicable) under the laws of the
jurisdiction in which it was chartered or organized. Each of PIFCo and and
its subsidiaries has the full corporate power and authority to own or
lease, as the case may be, and to operate its properties and conduct its
business as described in the Final Memorandum. PIFCo has the full corporate
power and authority to enter into and perform its obligations under this
Purchase Agreement, the Indenture, the Notes, the Exchange Notes, the
Registration Rights Agreement, the Standby Purchase Agreement, the Letter
of Credit, the Application and Agreement for the Letter of Credit
(containing the Companies' reimbursement obligations with respect to the
Letter of Credit) and any reimbursement agreement to be entered into by the
Companies and any of their Affiliates in connection with the Letter of
Credit (in which event all representations and warranties with respect
thereto shall be deemed to apply to such reimbursement agreement to the
same extent, when ultimately executed, as if it were in fact executed on
the date hereof) (collectively, the "Transaction Documents"), to which it
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is a party, and is duly qualified to do business as a foreign corporation
under the laws of each jurisdiction which requires such qualification
except where the failure to be so qualified will not have a Material
Adverse Effect. For the purposes of this Purchase Agreement, the term
"Material Adverse Effect" shall mean (i) any material adverse effect
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on the condition (financial or otherwise), results of operation, or
prospects of either of the Companies, together with their respective
consolidated subsidiaries, (ii) any material adverse effect on the ability
of PIFCo, Petrobras or any other person to perform their respective
obligations under any of the Transaction Documents or (iii) any material
adverse effect on the rights of the Trustee, acting on behalf of the
holders of the Notes, or such holders, under any of the Transaction
Documents.
(n) Petrobras has been duly organized and is validly existing as a
sociedade de economia mista in good standing (to the extent relevant) under
the laws of Brazil. Each of Petrobras' Significant Subsidiaries (as defined
in Rule 12b-2 under the Exchange Act) has been duly incorporated and is
validly existing as a corporation in good standing (to the extent relevant)
under the laws of the jurisdiction in which it is chartered or organized.
Each of Petrobras 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 Purchase 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 PIFCo, where the failure to be so qualified will
not have a Material Adverse Effect. Petrobras owns, directly or indirectly,
all of the outstanding equity interests of PIFCo and its Significant
Subsidiaries.
(o) All the outstanding shares of capital stock, if any, of each
subsidiary of the Companies have been duly and validly authorized and
issued and are fully paid and nonassessable except, in the case of the
subsidiaries (other than PIFCo), 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.
(p) The Companies' respective capitalizations are as set forth in the
Final Memorandum.
(q) This Purchase Agreement has been duly authorized, executed and
delivered by each of the Companies; each of the Indenture, the Standby
Purchase Agreement and the Registration Rights Agreement and each other
document executed and delivered in connection therewith to which either of
the Companies 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 Companies), when executed and
delivered by the Companies, will constitute a legal, valid and binding
agreement of the Companies, as the case may be, enforceable against each of
the Companies 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.
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(r) 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 this Purchase Agreement, will have been
duly executed, issued and delivered and will constitute legal, valid and
binding obligations of PIFCo, 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
PIFCo, enforceable in accordance with their terms, subject, as to
enforcement of remedies, as provided above.
(s) Each of the Notes and the Exchange Notes, if any, will constitute
the general, direct and unconditional obligations of PIFCo and will rank
pari passu in priority of payment and in right of seniority with all other
unsecured obligations of PIFCo that are not, by their terms, expressly
subordinated in right of payment to the Notes or the Exchange Notes, if
any, except for statutory liens and preferences. The obligations of
Petrobras under the Standby Purchase Agreement will constitute the general,
direct and unconditional obligations of Petrobras and will rank pari passu
in priority of payment and in right of seniority with all other unsecured
obligations of Petrobras that are not, by their terms, expressly
subordinated in right of payment to the rights of the Trustee under the
Standby Purchase Agreement, except for statutory liens and preferences.
(t) No consent, approval, authorization, filing with or order of any
court or governmental agency or other regulatory authority or body having
jurisdiction over either of the Companies or any of their respective
properties or assets in Brazil, the Cayman Islands or elsewhere
("Government Authorities") is required for (i) the valid authorization,
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issuance, sale and delivery of the Notes, (ii) the execution, delivery or
performance by the Companies 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.
(u) Neither of the Companies 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 Companies or any of their
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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 Companies or any
of their subsidiaries is a party or is bound or to which any of their
property or assets is subject or (iii) any statute, law, rule, regulation,
judgment, order or decree applicable to the Companies 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.
(v) The consolidated historical financial statements of the Companies
and their consolidated subsidiaries included in the Offering Memoranda,
together with the related notes, have been prepared in accordance with
accounting principles generally accepted in the United States 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 Companies 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 Financial Data for
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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 Companies and their consolidated subsidiaries, taken as a
whole, since September 30, 2001.
(w) Except as set forth or contemplated in the Offering Memoranda,
neither of the Companies has entered into any transaction or agreement
(whether or not in the ordinary course of business) material to either of
the Companies individually or the Companies taken as a whole with their
consolidated subsidiaries.
(x) No action, suit or proceeding by or before any Government
Authority involving the Companies or any of their subsidiaries or their
property or assets is pending or, to the best knowledge of the Companies,
threatened, involving or in any way relating to (i) this Purchase
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 Companies 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.
(y) Each of the Companies 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
Companies holds properties, as described in the
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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 possession of the leased or subleased premises under any
such lease or sublease, except as would not result in a Material Adverse
Effect.
(z) PricewaterhouseCoopers Auditores Independentes, who have certified
the financial statements of the Companies 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.
(aa) Except as described in the Offering Memoranda, no labor problem
or dispute with the employees of the Companies or any of their subsidiaries
exists or, to the Companies' knowledge, is threatened or imminent, and the
Companies 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.
(bb) Each of the Companies and their respective subsidiaries has filed
or caused to be filed all tax returns which to the knowledge of the
Companies are required to be filed, and has paid all taxes shown to be due
and payable on said returns or on any assessments made against such person
or any of its respective properties and all other taxes, assessments, fees
or other charges imposed on such person or any of its respective properties
by, any Governmental Authority (other than those the amount or validity of
which is currently being contested in good faith by appropriate proceedings
and with respect to which reserves in conformity with generally accepted
accounting principles have been provided on the books of such person); and
no material tax liens or material liens with respect to any assessments,
fees or other charges have been filed and, to the knowledge of such person,
no material claims are being asserted with respect to any such taxes,
assessments, fees or other charges.
(cc) The Companies and each of their respective subsidiaries are
insured by insurers that the Companies reasonably believe to be financially
sound against such losses and risks and in such amounts as are prudent and
customary in the businesses and in the geographical regions in which they
are engaged, except when the failure to do so would not have a Material
Adverse Effect; and neither of the Companies 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.
8
(dd) No subsidiary of the Companies is currently prohibited, directly
or indirectly, from paying any dividends to either of the Companies, from
making any other distribution on such subsidiary's capital stock, from
repaying to the Companies any loans or advances to such subsidiary from the
Companies or from transferring any of such subsidiary's property or assets
to the Companies or any other subsidiary of the Companies.
(ee) The Companies 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 Companies nor any
of their subsidiaries has received any notice of proceedings relating to
the revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, could have a Material Adverse Effect.
(ff) To ensure the legality, validity, enforceability or admissibility
into evidence of any of the Transaction Documents, it is not necessary that
any such other document be filed or recorded with any court or other
authority in Brazil or the Cayman Islands (other than such authorizations
or filings that have already been obtained or made, as applicable), or that
any stamp or similar tax be paid in either Brazil or the Cayman Islands on
or in respect of any such document, except as provided in the 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.
(gg) The Companies 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 accounting principles generally accepted in the United
States and to maintain asset accountability, (iii) access to assets is
permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(hh) The Companies and their respective subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("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
9
or in the aggregate, have a Material Adverse Effect. Except as set forth in
the Final Memorandum, neither of the Companies 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 Company or any such
subsidiary been identified as the party responsible or potentially
responsible for any breach or violation of any other similar Environmental
Law.
(ii) In the ordinary course of its business, the Companies
periodically review the effect of Environmental Laws on the business,
operations and properties of the Companies 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 Companies have reasonably
concluded that such associated costs and liabilities could not, singly or
in the aggregate, have a Material Adverse Effect.
(jj) The Companies 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 Companies' businesses as now conducted or as described
in the Final Memorandum to be conducted by them and neither the Companies
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.
(kk) 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 Companies 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.
(ll) The indemnification and contribution provisions set forth in
Section 8 hereof do not contravene Brazilian or Cayman Islands law or
public policy.
(mm) The Companies are subject to civil and commercial law in respect
of their obligations hereunder and the Companies 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 U.S. 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
10
obligations, liabilities or any other matter under or arising out of or in
connection herewith; and, to the extent that the Companies 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.
(nn) The submission of the Companies 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 13 hereof and under each of the
--------------
Transaction Documents, as applicable, is legal, valid and binding under the
laws of Brazil and the Cayman Islands; the appointment of Petrobras' 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 13 below
and under each of the other Transaction Documents, as applicable, is legal,
valid and binding under the laws of Brazil and the Cayman Islands; and the
choice of law provision set forth in Section 14 below and in each
Transaction Document, as applicable, is legal, valid and binding under the
laws of Brazil and the Cayman Islands.
(oo) Any final judgment for any amount payable by the Companies
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 Companies
based upon any Transaction Document would be declared enforceable against
the Companies 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.
(pp) 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.
(qq) Both presently and immediately after giving effect to the
transactions contemplated hereunder, each of the Companies (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.
(rr) 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
11
resident of Brazil or the Cayman Islands or has a permanent establishment
or a fixed base in Brazil or the Cayman Islands.
(ss) There are no Brazilian or Cayman Islands taxes on or by virtue of
the execution or delivery of this Purchase Agreement, the Indenture, the
Notes, the Exchange Notes or any of the other Transaction Documents or any
other document to be furnished hereunder or thereunder. Payments to be made
by the Companies or any other party to any of the Transaction Documents
pursuant to the Transaction Documents will not be subject to Brazilian or
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 PIFCo of the Notes.
(tt) Application has been made to list the Notes on the Luxembourg
Stock Exchange and neither of the Companies has any reason to believe such
listing will not be approved by the issuance of the Notes as contemplated
hereunder.
SECTION 2. Purchase and Sale. Subject to the terms and conditions and
------------------
in reliance upon the representations and warranties herein set forth, PIFCo
agrees to sell the Notes with an aggregate principal amount of U.S.$400,000,000
to the Initial Purchasers, and the Initial Purchasers agree to purchase the
Notes from PIFCo, at a purchase price of 99.84% of the aggregate principal
amount of the Notes (the "Purchase Price").
--------------
SECTION 3. Delivery and Payment. (a) Delivery of and payment for the
---------------------
Notes shall be made at the offices of Shearman & Sterling in New York or such
other place as shall be agreed upon by the parties hereto at 10:00 A.M., New
York City time, on February 4, 2002, or at such time on such later date as the
Representatives shall designate, which date and time may be postponed by
agreement between the Representatives and PIFCo (such date and time of delivery
and payment for the Notes being herein called the "Closing Date"). Delivery of
------------
the Notes shall be made to the Representatives against (i) payment by the
Initial Purchasers of U.S.$399,360,000 as the Purchase Price to or upon the
order of PIFCo by wire transfer payable in immediately available funds to the
account specified in writing by PIFCo not less than three Business Days prior to
the Closing Date and (ii) payment to the Representatives, on behalf of the
Initial Purchasers of an amount equal to 0.45% of the U.S.$400,000,000 aggregate
principal amount of the Notes to be issued on the Closing Date or U.S.$1,800,000
(the "Selling Commission"). Delivery of the Notes shall be made through the
------------------
facilities of The Depository Trust Company unless the Representatives shall
otherwise instruct.
(b) PIFCo agrees to arrange to have the Notes available for
inspecting, checking and packaging by the Representatives on behalf of the
Initial Purchasers in New York, New York not later than 1:00 p.m. on the
Business Day prior to the Closing Date.
(c) For the purposes of this Purchase Agreement, the term "Business
--------
Day" means each Monday, Tuesday, Wednesday, Thursday and Friday that is not
---
a day on which banking institutions in the City of New York are authorized
or obligated by law, executive order or regulation to close.
12
SECTION 4. Offering by Initial Purchasers. The Representatives, on
------------------------------
behalf of the Initial Purchasers, represent and warrant to and agree with the
Companies that:
(a) No Initial Purchaser has offered or sold, nor will any of the
Initial Purchasers offer or sell, any Notes except (i) inside the United
States or to U.S. Persons: to only those U.S. Persons that such Initial
Purchaser reasonably believes to be QIBs and that, in connection with each
such sale, each Initial Purchaser has taken or will take reasonable steps
to ensure that the purchaser of such Notes is aware that such sale is being
made in reliance on Rule 144A, or (ii) outside the United States: in
accordance with the restrictions set forth in Regulation S, as described in
Exhibit A hereto.
(b) No Initial Purchaser nor any person acting on its behalf has made
or will make offers or sales of the Notes in the United States by means of
any form of general solicitation or general advertising (within the meaning
of Rule 502(c) of Regulation D) in the United States. With respect to the
Notes sold in reliance on Regulation S, no Initial Purchaser has engaged
nor will any such Initial Purchaser engage in any directed selling efforts
in the United States (within the meaning of Regulation S).
(c) Except as set forth in the Final Memorandum, the Initial
Purchasers will not engage in any activity that reasonably can be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of PIFCo or Petrobras to
facilitate the sale or resale of the Notes.
(d) Prior to the Closing Date, the Initial Purchasers will not issue
any press release or other communication directly or indirectly or hold any
press conference relating to the Notes without Petrobras' prior written
consent (which shall not be unreasonably withheld), unless in the judgment
of any of the Initial Purchasers and their counsel, and after notification
to Petrobras, such press release or communication is required by law, or
except as issued in accordance with the applicable regulations promulgated
under the Securities Act or the Exchange Act.
SECTION 5. Covenants. The Companies agree with each of the Initial
---------
Purchasers that:
(a) The Companies will furnish to the Representatives and to counsel
for the Initial Purchasers, without charge, during the period referred to
in paragraph (c) below, as many copies of the Final Memorandum and any
amendments and supplements thereto as they may reasonably request,
including the delivery of 3,000 copies of the Final Memorandum to the
Representatives, one of which shall be signed by a duly authorized officer
of the Companies.
(b) The Companies will not amend or supplement the Final Memorandum
without the prior written consent of the Representatives, which consent
will not be unreasonably withheld.
(c) If at any time prior to the completion of the sale of the Notes by
the Initial Purchasers (as determined by the Representatives), any event
occurs as a result of which the Final Memorandum, as then amended or
supplemented, would include any untrue
13
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, or if it should be necessary to amend
or supplement the Final Memorandum to comply with applicable law, the
Companies promptly (i) will notify the Representatives of any such event,
(ii) subject to the requirements of paragraph (b) of this Section 5, will
prepare an amendment or supplement that will correct such statement or
omission or effect such compliance and (iii) will supply any supplemented
or amended Final Memorandum to the Representatives and counsel for the
Representatives, without charge, in such quantities as the Representatives
may reasonably request.
(d) PIFCo will arrange, if necessary, for the qualification of the
Notes for sale by the Initial Purchasers under the laws of such
jurisdictions as the Representatives may designate and will maintain such
qualifications in effect so long as required for the completion of the
distribution of the Notes; provided, however, that in no event shall the
-------- -------
Companies be obligated to qualify to do business in any jurisdiction where
it is not now so qualified or to take any action that would subject it to
service of process in suits, other than those arising out of the offering
or sale of the Notes, in any jurisdiction where it is not now so subject.
The Companies will promptly inform the Representatives, and shall confirm
such information in writing, of the receipt by the either of the Companies
of any notification with respect to the suspension of the qualification of
the Notes for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. The Companies will file such statements
and reports as may be required by the laws of each jurisdiction in which
the Notes have been qualified or registered as provided above.
(e) Prior to the completion of the distribution of the Notes by the
Initial Purchasers (as determined by the Representatives), the Companies
will not, and will not permit any of their Affiliates to, acquire any
Notes.
(f) Neither of the Companies, nor any of their Affiliates, nor any
person acting on their behalf (other than the Initial Purchasers as to
which this covenant shall not apply) will, directly or indirectly, make
offers or sales of any security, or solicit offers to buy any security,
under circumstances that would require the registration of the Notes under
the Securities Act.
(g) Neither of the Companies, nor any of their Affiliates, nor any
person acting on its or their behalf (other than the Initial Purchasers, as
to which this covenant shall not apply) will engage in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Notes in the United States.
(h) So long as any of the Notes are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act, Petrobras will, unless
PIFCo becomes subject to and complies with Section 13 or 15(d) of the 1934
Act, or becomes exempt from such reporting requirements pursuant to, and
complies with, Rule 12g3-2(b) under the 1934 Act, furnish the Trustee and
any Noteholder or prospective purchaser designated by such Noteholder with
the information required to be provided by Rule 144A(d)(4) under the
Securities Act. This covenant is intended to be for the benefit of the
holders, and the
14
prospective purchasers designated by such holders, from time to time of
such restricted securities.
(i) The Companies will cooperate with the Representatives and will
take all such action as is necessary to permit the Notes to be eligible for
clearance and settlement through DTC.
(j) Neither of the Companies will, for so long as the Notes are
outstanding, be or become, or be or become owned by, an open-end investment
company, unit investment trust or face-amount certificate company that is
or is required to be registered under Section 8 of the Investment Company
Act, and will not be or become, or be or become owned by a closed-end
investment company required to be registered but not registered thereunder.
(k) The Companies will not for a period of 90 days following the date
hereof, without the prior written consent of the Representatives, offer,
sell or contract to sell, or otherwise dispose of or enter into any
transaction which is designed to, or could reasonably be expected to,
result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by the Companies
or any of their Affiliates or any person in privity with the Companies or
any of their Affiliates, directly or indirectly, or announce the offering
of, or file a registration statement for, any debt securities substantially
similar to the Notes issued or guaranteed by the Companies (other than the
Notes, any export credit agency loans and trade-related facilities).
(l) The Companies will not take, directly or indirectly, any action
designed to or which has constituted or which could reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of PIFCo or Petrobras to
facilitate the sale or resale of the Notes.
(m) The Companies will not and will request their Affiliates not to
offer, sell or solicit offers to buy or otherwise negotiate in respect of
any security (as defined in the Securities Act) the offering of which
security could be integrated with the sale of the Notes in a manner that
would require the registration of any of the Notes under the Securities
Act.
(n) Neither of the Companies nor any of their Affiliates, nor any
person acting on their behalf (other than the Initial Purchasers, as to
which this covenant shall not apply), will engage in any directed selling
efforts in the United States with respect to the Notes, and each of the
Companies will ensure that it and its Affiliates (and any other person
acting on behalf thereof, other than the Initial Purchasers, as to which
this covenant shall not apply) will comply with any applicable offering
restrictions of Regulation S.
(o) PIFCo will use the net proceeds received by it from the sale of
the Notes in the manner specified in the Final Memorandum under the caption
"Use of Proceeds".
15
(p) Prior to the Closing Date, neither of the Companies nor their
Affiliates will issue any press release or other communications directly or
indirectly or hold any press conference relating to the Notes, without the
Representatives' prior written consent (which shall not be unreasonably
withheld), unless in the judgment of either of the Companies and its
counsel, and after notification to the Representatives, such press release
or communication is required by law or except as issued in accordance with
the applicable regulations promulgated under the Securities Act.
(q) The Companies will pay any stamp, issue, registration, transaction
or similar documentary taxes and duties, including interest and penalties,
payable on or in connection with the creation, issue and offering of the
Notes, or the execution or delivery of the Transaction Documents or the
enforcement by the Initial Purchasers of this Purchase Agreement against
the Companies or any transaction carried out pursuant to this Purchase
Agreement; and, in addition to any amount payable by it under this Purchase
Agreement, any value-added, turnover or similar tax payable in respect of
that amount (and references in this Purchase Agreement to such amount shall
be deemed to include any such taxes so payable in addition to it and
express mention of such payment of any taxes (if applicable) in any
provisions hereof shall not be construed as excluding such payment of any
taxes in those provisions hereof where such express mention is not made).
The Companies will indemnify the Initial Purchasers against any loss,
liability, cost, claim, action, demand or expense (including, but not
limited to, reasonable legal fees) which any of them may incur or which may
be made against any of them arising out of or in relation to or in
connection with any failure to pay or delay in paying any such taxes.
(r) Neither the sale of the Notes nor the use of the proceeds thereof
will violate any regulation of the United States Treasury Department
contained in 31 C.F.R., Chapter V Subpart B, as amended, or Executive
Orders 12722 and 12724 (55 Fed. Reg. 31803 and 55 Fed. Reg. 33089) Blocking
Iraqi Government Property and Prohibiting Transactions with Iraq or the
International Money Laundering Statement and Financial Anti-Terrorism Act
of 2001.
(s) The Companies will furnish a copy of each amendment of the
Transaction Documents to the Representatives at their respective addresses
set forth in Section 11 hereof.
(t) The Companies agree to pay the costs and expenses relating to the
following matters: (i) the fees of the Trustee, (ii) the preparation,
printing or reproduction of the Preliminary Memorandum and Final Memorandum
and all amendments or supplements to either of them, (iii) the costs of
delivery (including postage, air freight charges and charges for counting
and packaging) of such copies of the Preliminary Memorandum and Final
Memorandum, and all amendments or supplements to either of them, as may, in
each case, be reasonably requested for use in connection with the offering
and sale of the Notes, (iv) the preparation, printing, authentication,
issuance and delivery of certificates for the Notes, including any stamp,
transfer or other similar taxes in connection with the original issuance
and sale of the Notes, (v) the printing (or reproduction) and delivery of
this Purchase Agreement, any blue sky
16
memorandum and all other agreements or documents printed (or reproduced)
and delivered in connection with the offering of the Notes, (vi) any
registration or qualification of the Notes for offer and sale under the
securities or blue sky laws of the several states (including filing fees
but not including the fees and expenses of counsel for the Initial
Purchasers relating to such registration and qualification), (vii) the
transportation and other expenses incurred by or on behalf of Companies'
personnel in connection with presentations to prospective purchasers of the
Notes, (viii) the fees and expenses of the Companies' accountants and the
fees and expenses of counsel (including Brazilian, Cayman Islands and
United States counsel) for the Companies, (ix) the fees and reasonable
expenses of Moody's incurred in connection with the rating of the Notes and
Exchange Notes, if any, (x) the listing of the Notes and the Exchange Notes
on the Luxembourg Stock Exchange and (xi) all other costs and expenses
incident to the performance by PIFCo of its obligations hereunder.
SECTION 6. Conditions to the Obligations of the Initial Purchasers.
-------------------------------------------------------
The obligations of the Initial Purchasers to purchase the Notes shall be subject
to the following conditions:
(a) On or prior to the Closing Date, the following shall have been
executed and delivered to the Initial Purchasers, each dated the Closing
Date:
(i) the Indenture duly executed and delivered by PIFCo and the
Trustee in form and substance acceptable to the Representatives and
the instrument executed and delivered by Kredietbank S.A.
Luxembourgeoise pursuant to Section 8.11(e) of the Indenture;
(ii) a Restricted Global Note and a Regulation S Global Note in
the form attached to the Indenture, duly executed and delivered by
PIFCo and duly authenticated by the Trustee in accordance with the
Indenture, each in such principal amount as the Representatives shall
direct (it being understood that the aggregate principal amount of
such Notes shall equal U.S.$400,000,000), and otherwise in form and
substance acceptable to the Representatives;
(iii) the Standby Purchase Agreement duly executed and delivered
by Petrobras and the Trustee in form and substance acceptable to the
Representatives; and
(iv) the Registration Rights Agreement duly executed and
delivered by the Companies in form and substance acceptable to the
Representatives.
(b) On the Closing Date, the Trustee shall have received the Letter of
Credit in form and substance acceptable to the Representatives.
(c) On or prior to the Closing Date, the Letter of Credit Bank shall
have furnished to the Representatives a certificate of good standing
certified by the Secretary of State of the State of New York.
17
(d) The Reserve Account shall have been established as contemplated in
the Indenture and the Initial Purchasers and the Trustee shall be satisfied
that the Trustee has a first priority security interest in the Reserve
Account, all funds therein, all additions thereto and proceeds thereof
under United States, Cayman and Brazilian laws.
(e) All of the applicable taxes, fees and other charges due and owing
in connection with the execution and delivery of the Transaction Documents
shall have been paid.
(f) The Representatives shall have received from
Pricewaterhouse Coopers Auditores Independentes, independent public
accountants for the Companies (i) on the date hereof, a comfort letter
dated the date hereof addressed to the Initial Purchasers, in form and
substance satisfactory to the Representatives, concerning the financial
statements and certain information with respect to the Companies set forth
in the Final Memorandum and (ii) on the Closing Date, a "bring down"
comfort letter, dated the Closing Date, in form and substance satisfactory
to the Representatives.
(g) Moody's Investors Service ("Moody's") shall have delivered to
-------
PIFCo and the Initial Purchasers a final rating letter setting forth a
rating with respect to the Notes of at least "Baa1" and, subsequent to the
date thereof, Moody's shall not have announced in writing that it has under
surveillance or review, with possible negative implications, this rating of
the Notes.
(h) Application shall have been made to list the Notes on the
Luxembourg Stock Exchange.
(i) The Notes shall be eligible for clearance and settlement through
DTC.
(j) PIFCo shall have furnished to the Initial Purchasers a certificate
of PIFCo, signed by an authorized officer of PIFCo acceptable to the
Representatives, dated the Closing Date and in form and substance
satisfactory to the Representatives, to the effect that:
(i) the representations and warranties of PIFCo in this Purchase
Agreement and any of the other Transaction Documents to which it is a
party are true and correct in all material respects on and as of the
Closing Date with the same effect as if made on the Closing Date, and
PIFCo has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date;
(ii) since the date of the most recent financial statements
included in the Final Memorandum (exclusive of any amendment or
supplement thereto), there has been no material adverse change in the
condition (financial or otherwise), prospects, earnings, business or
properties of PIFCo and its subsidiaries, taken as a whole, whether or
not arising from transactions in the ordinary course of business,
except as set forth in or contemplated by the Final Memorandum
(exclusive of any amendment or supplement thereto);
18
(iii) no Default or Event of Default (or other event that with
the passage of time or notice, or both, will ripen into a Default or
an Event of Default) under the Notes or the Indenture has occurred and
is continuing as of the Closing Date;
(iv) the incumbency of the officers or representatives of PIFCo
signing the applicable Transaction Documents and the other documents
delivered hereunder and thereunder on behalf of PIFCo and containing
specimen signatures thereof; and
(v) the Memorandum and Articles of Association of PIFCo has not
been amended and is in full force and effect, copies of which shall be
attached to such certificate.
(k) Petrobras shall have furnished to the Initial Purchasers a
certificate, signed by an authorized officer of Petrobras acceptable to the
Representatives, dated the Closing Date and in form and substance
satisfactory to the Representatives, to the effect that:
(i) the representations and warranties of Petrobras in this
Purchase Agreement and any of the other Transaction Documents to which
it is a party are true and correct in all material respects on and as
of the Closing Date with the same effect as if made on the Closing
Date, and Petrobras has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date;
(ii) since the date of the most recent financial statements
included in the Final Memorandum (exclusive of any amendment or
supplement thereto), there has been no material adverse change in the
condition (financial or otherwise), prospects, earnings, business or
properties of Petrobras and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated by the Final
Memorandum (exclusive of any amendment or supplement thereto);
(iii) no Default or Event of Default (or other event that with
the passage of time or notice, or both, will ripen into a Default or
an Event of Default) has occurred and is continuing as of the Closing
Date;
(iv) the incumbency of the officers or representatives of
Petrobras signing the applicable Transaction Documents and the other
documents delivered hereunder and thereunder on behalf of Petrobras
and containing specimen signatures thereof; and
(v) the Estatuto Social of Petrobras has not been amended and are
in full force and effect, copies of which shall be attached to such
certificate.
(l) The Trustee shall have furnished to the Representatives a
certificate of the Trustee, signed by an authorized officer of the Trustee
acceptable to the Representatives, dated the Closing Date, (i) stating that
the Trustee is a banking corporation organized and validly existing under
the laws of the State of New York and that its principal office and
19
place of business is not located in the Cayman Islands or Brazil, (ii)
regarding the authority of the Trustee to enter into the Transaction
Documents to which it is a party and to execute all documents related
thereto and (iii) regarding the incumbency of its officers executing such
documents.
(m) Subsequent to the date hereof and on or prior to the Closing Date,
there shall not have been any decrease in the rating of any of the
Companies' debt securities by any "nationally recognized statistical rating
organization" (as defined for the purposes of Rule 436(g) under the
Securities Act) or any notice given of any intended or potential decrease
in any such rating or of a possible change in any such rating that does not
indicate the direction of such possible change, or any withdrawal of any
such rating.
(n) Subsequent to the date hereof and on or prior to the closing of
the issuance of the Notes, no legislation shall have been enacted by either
house of the United States or Brazilian congress or any national
legislative body in the Cayman Islands or by any state legislature, no
other action shall have been taken by any Governmental Authority, whether
by order, regulation, rule, ruling or otherwise, and no decision shall have
been rendered by any court of competent jurisdiction in the United States,
Brazil, the Cayman Islands or any other country, which would have a
Material Adverse Effect.
(o) On the Closing Date, none of the events listed below shall have
occurred and be continuing:
(i) a default in the performance or observance by the Companies
of any covenant or agreement made by it under this Purchase Agreement
or any other Transaction Document to which they are a party; or
(ii) proceedings shall have been commenced against either of the
Companies, the Letter of Credit Bank or the Trustee under any
Brazilian, United States, Cayman Islands or other bankruptcy act or
other foreign, federal or state law relating to bankruptcy or
insolvency or laws relating to the relief of debtors, readjustments of
indebtedness, reorganizations, arrangements, compositions or
extensions, or appointing a receiver or decreeing or ordering the
winding up or liquidation of the affairs of either Company, the Letter
of Credit Bank or the Trustee or similar proceedings for any relief
which includes or might result in, any material modification of the
obligations of either Company, the Letter of Credit Bank or the
Trustee hereunder or under the applicable Transaction Documents; or
(iii) either Company, the Letter of Credit Bank or the Trustee
shall have instituted proceedings to be adjudicated insolvent or a
bankrupt or shall have consented to the institution of bankruptcy or
insolvency proceedings against it or shall have filed a petition or
answer or consent seeking reorganization or relief under any
Brazilian, United States, Cayman Islands or other bankruptcy act or
any other federal or state law relating to bankruptcy or insolvency or
shall have consented to the appointment of a receiver or shall have
made an assignment for
20
the benefit of creditors or shall have admitted in writing its
inability to pay its debts.
(p) Subsequent to the date hereof and on or prior to the Closing Date
or, if earlier, the dates as of which information is given in the Final
Memorandum (exclusive of any amendment or supplement thereto), there shall
not have been (i) any material change or decrease in any of the financial
line items specified in the letter or letters referred to in paragraph (f)
of this Section 6 or (ii) any change, or any development involving a
prospective change, in or affecting the condition (financial or otherwise),
prospects, earnings, business or properties of the Companies and their
subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth or contemplated in the
Final Memorandum (exclusive of any amendment or supplement thereto) the
effect of which, in any case referred to in clause (i) or (ii) above, is,
in the judgment of the Representatives, so material and adverse as to make
it impractical or inadvisable to market the Notes as contemplated by the
Final Memorandum (exclusive of any amendment or supplement thereto).
(q) The Representatives shall have received from Clifford Chance
Rogers & Wells, special United States counsel to the Companies, an opinion,
dated the Closing Date and addressed to the Initial Purchasers, in form and
substance acceptable to the Representatives.
(r) The Representatives shall have received from Walkers, Cayman
Islands counsel to the Companies, an opinion, dated the Closing Date and
addressed to the Initial Purchasers, in form and substance acceptable to
the Representatives.
(s) The Representatives shall have received an opinion of internal
counsel to Petrobras, dated the Closing Date and addressed to the Initial
Purchasers, in form and substance acceptable to the Representatives.
(t) The Representative shall have received an opinion of internal
counsel to the Letter of Credit Bank, dated the Closing Date and addressed
to the Initial Purchasers, in form and substance acceptable to the
Representatives.
(u) The Representatives shall have received an opinion of Emmet,
Marvin & Martin, LLP, external New York counsel to the Trustee, dated the
Closing Date and addressed to the Initial Purchasers, in form and substance
acceptable to the Representatives.
(v) The Representatives shall have received an opinion of Machado,
Meyer, Sendacz e Opice, special Brazilian counsel for the Initial
Purchasers, in form and substance acceptable to the Representatives (it
being understood that the Companies shall have furnished to such counsel
such documents as they request for the purposes of enabling them to pass on
such matters).
(w) The Representatives shall have received an opinion from Shearman &
Sterling, special United States counsel to the Initial Purchasers, dated
the Closing Date and addressed to the Initial Purchasers, and the Companies
shall have furnished to such
21
counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
(x) Prior to the Closing Date, the Companies shall have furnished to
the Representatives such further information, certificates and documents as
the Representatives may reasonably request.
(y) The Representatives shall be satisfied that payments to be made to
it pursuant to Section 2 hereof will be made on the Closing Date.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Purchase
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Purchase Agreement shall not be in all material respects
reasonably satisfactory in form and substance to the Representatives and counsel
for the Representatives, this Purchase Agreement and all obligations of the
Initial Purchasers hereunder may be canceled at, or at any time prior to, the
Closing Date by the Representatives. Notice of such cancellation shall be given
to PIFCo in writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 will be
delivered at the office of counsel for the Initial Purchasers, at 599 Lexington
Avenue, New York, N.Y. 10022, on the Closing Date.
SECTION 7. Reimbursement of Expenses. If the sale of the Notes
-------------------------
provided for herein is not consummated because any condition to the obligations
of the Initial Purchasers set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 9 hereof or because of any
refusal, inability or failure on the part of either of the Companies to perform
any agreement herein or comply with any provision hereof other than by reason of
a default by the Initial Purchasers, the Companies will reimburse the Initial
Purchasers on demand for all properly documented out-of-pocket expenses
(including the fees and disbursements of counsel) that shall have been incurred
by them in connection with the proposed purchase and sale of the Notes;
provided, however that if the Representatives, on behalf of the Initial
Purchasers, resign without having good commercial reasons for resigning (having
regard to good international capital markets practice), then the Companies shall
be under no obligation to reimburse such expenses. The Companies' liability to
the Initial Purchasers under this Section 7 is joint and several.
SECTION 8. Indemnification and Contribution. (a) The Companies agree
--------------------------------
to indemnify and hold harmless the Initial Purchasers, the directors, officers,
employees and agents of the Initial Purchasers and each person who controls any
of the Initial Purchasers within the meaning of either the Securities Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Securities
Act, the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the Final
Memorandum, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state
22
therein a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any properly documented legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Companies will
-------- -------
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made in the Final Memorandum,
or in any amendment thereof or supplement thereto, in reliance upon and in
conformity with written information relating to the Initial Purchasers furnished
to the Companies by or on behalf of the Initial Purchasers specifically for
inclusion therein. This indemnity agreement will be in addition to any liability
which the Companies may otherwise have.
(b) The Initial Purchasers agree to indemnify and hold harmless the
Companies, each of their directors, officers, employees and agents, and each
person who controls the Companies within the meaning of either the Securities
Act or the Exchange Act, to the same extent (subject to the proviso set forth
below) as the foregoing indemnity from the Companies to the Initial Purchasers,
but only with reference to written information relating to the Initial
Purchasers furnished to the Companies by or on behalf of the Initial Purchasers
specifically for inclusion in the Preliminary Memorandum or the Final Memorandum
(or in any amendment or supplement thereto) provided that the Initial
Purchasers' aggregate liability to the parties set forth above shall in no event
exceed the amount of the Selling Commission. This indemnity agreement will be in
addition to any liability which the Initial Purchasers may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
-------- -------
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the
23
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Companies and the Initial Purchasers agree
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Companies
------
and the Initial Purchasers may be subject in such proportion as is appropriate
to reflect the relative benefits received by the Companies (on the one hand) and
by the Initial Purchasers (on the other) from the offering of the Notes. If the
allocation provided by the immediately preceding sentence is unavailable for any
reason, the Companies and the Initial Purchasers shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Companies (on the one hand) and of the Initial
Purchasers (on the other) in connection with the statements or omissions which
resulted in such Losses, as well as any other relevant equitable considerations.
Benefits received by the Companies shall be deemed to be equal to the total net
proceeds from the offering (before deducting expenses) received by PIFCo, and
benefits received by the Initial Purchasers shall be deemed to be equal to the
total amount of the Selling Commission. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Companies (on the one hand)
or the Initial Purchasers (on the other), the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. Each of the Companies and the Initial
Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 8 were determined by pro rata allocation (even if the
Initial Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to in subsection (c) above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who controls any
of the Initial Purchasers within the meaning of either the Securities Act or the
Exchange Act and each director, officer, employee and agent of any of the
Initial Purchasers shall have the same rights to contribution as the Initial
Purchasers, and each person who controls either of the Companies within the
meaning of either the Securities Act or the Exchange Act and each officer and
director of either of the Companies shall have the same rights to contribution
as the Companies, subject in each case to the applicable terms and conditions of
this paragraph (d). Notwithstanding the provisions of this Section 8, no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which its percentage of the total Selling Commission exceeds the amount of any
damage which such Initial Purchaser has
24
otherwise been required to pay by reason of such untrue statement or alleged
untrue statement or omission or alleged omission.
(e) The liability of each of the Companies under this Section 8 is
joint and several.
SECTION 9. Termination. This Purchase Agreement shall be subject to
-----------
termination in the absolute discretion of the Representatives, by notice given
to the Companies prior to delivery of and payment for the Notes, if at any time
prior to such time (i) trading in any of the Companies' securities shall have
been suspended by the Sao Paulo Stock Exchange or trading in securities
generally on the New York Stock Exchange or the Sao Paulo Stock Exchange shall
have been suspended or limited or minimum prices shall have been established on
either such exchanges, (ii) a banking moratorium shall have been declared either
by Federal or New York State authorities or by the relevant banking authorities
in Brazil or the Cayman Islands or (iii) there shall have occurred any outbreak
or escalation of hostilities, declaration by the United States of a national
emergency or war or other calamity (including any terrorist act) or crisis the
effect of which on financial markets is such as to make it, in the sole judgment
of the Representatives, impracticable or inadvisable to proceed with the
offering or delivery of the Notes as contemplated by the Final Memorandum
(exclusive of any amendment or supplement thereto).
SECTION 10. Representations and Indemnities to Survive. The respective
------------------------------------------
agreements, representations, warranties, indemnities and other statements of
each of the Companies or their officers and of the Initial Purchasers set forth
in or made pursuant to this Purchase Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of the Initial
Purchasers or the Companies or any of the officers, directors or controlling
persons referred to in Section 8 hereof, and will survive delivery of and
payment for the Notes. The provisions of Sections 7 and 8 hereof shall survive
the termination or cancellation of this Purchase Agreement.
SECTION 11. Notices. All communications hereunder will be in writing
-------
and effective only on receipt, and, if sent to the Initial Purchasers, will be
mailed, delivered or telefaxed to UBS Warburg, 677 Washington Boulevard,
Stamford, Connecticut 06901, Attention: Marcelo del Mar (with a copy, which
shall not constitute notice under this Purchase Agreement, the Legal and
Compliance Department of UBS Warburg at the same address) and to Morgan Stanley
& Co. Incorporated, 1585 Broadway, New York, New York 10036, Attention: Debt
Capital Market Syndicate Desk; if sent to PIFCo, will be mailed, delivered or
telefaxed to PIFCo, Avenida Republica do Chile 65, Rio de Janeiro, RJ 20035-900,
Brazil, 20035-901, Attention: Isabela Alvim, or, if sent to Petrobras, will be
mailed, delivered or telefaxed to Petrobras, Avenida Republica do Chile 65, Rio
de Janeiro, RJ 20035-900, Brazil, 20035-901, Attention: Isabela Alvim.
SECTION 12. Successors. This Purchase Agreement will inure to the
----------
benefit of and be binding upon the parties hereto and their respective
successors and the officers and directors and controlling persons referred to in
Section 8 hereof, and, except as expressly set forth in Section 5(h) hereof, no
other person will have any right or obligation hereunder.
25
SECTION 13. Jurisdiction. Each of PIFCo, Petrobras and the Initial
------------
Purchasers agree that any suit, action or proceeding against them, arising out
of or based upon this Purchase Agreement or the transactions contemplated
hereby, may be instituted in any State or federal court in the City of New York,
New York, or in the competent courts of their own corporate domiciles with
respect to actions brought against any of them as a defendant, and waive any
objection which they may now or hereafter have to the laying of venue of any
such proceeding and any right to which any of them may be entitled on account of
places of residence or domicile, and irrevocably submit to the jurisdiction of
such courts in any suit, action or proceeding. The Companies have appointed the
New York office of Petrobras, located at 570 Lexington Avenue, 43rd Floor, New
York, New York 10022 as its authorized agent (the "Authorized Agent") upon whom
----------------
process may be served in any suit, action or proceeding arising out of or based
upon this Purchase Agreement or the transactions contemplated herein which may
be instituted in any State or federal court in the City of New York, New York,
by the Initial Purchasers, the directors, officers, employees and agents of the
Initial Purchasers, or by any person who controls any of the Initial Purchasers,
and expressly accepts the jurisdiction of any such court in respect of any such
suit, action or proceeding. The Companies hereby represent and warrant that the
Authorized Agent has accepted such appointments and has agreed to act as said
agent for service of process, and the Companies agree to take any and all
action, including the filing of any and all documents that may be necessary to
continue such appointment in full force and effect as aforesaid. Subject to
applicable law, service of process upon the Authorized Agent shall be deemed, in
every respect, effective service of process upon each of the Companies.
SECTION 14. Governing Law. This Purchase Agreement will be governed by
-------------
and construed in accordance with the laws of the State of New York.
SECTION 15. Currency. Each reference in this Purchase Agreement to
--------
U.S. dollars is of the essence. To the fullest extent permitted by law, the
obligation of PIFCo in respect of any amount due under this Purchase Agreement
will, notwithstanding any payment in any other currency (whether pursuant to a
judgment or otherwise), be discharged only to the extent of the amount in U.S.
dollars that the party entitled to receive such payment may, in accordance with
its normal procedures, purchase with the sum paid in such other currency (after
any premium and costs of exchange) on the Business Day immediately following the
day on which such party receives such payment. If the amount in U.S. dollars
that may be so purchased for any reason falls short of the amount originally
due, the applicable Company will pay such additional amounts, in U.S. dollars,
as may be necessary to compensate for the shortfall. Any obligation of the
Companies not discharged by such payment will, to the fullest extent permitted
by applicable law, be due as a separate and independent obligation and, until
discharged as provided herein, will continue in full force and effect.
SECTION 16. Waiver of Immunity. This Purchase Agreement, the other
------------------
Transaction Documents and any other documents delivered pursuant hereto or
thereto, and any actions taken hereunder or thereunder, constitute commercial
acts by each of the Companies. Each of the Companies 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 or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) for itself of any of its
property, assets or
26
revenues wherever located with respect to its obligations, liabilities or any
other matter under or arising out of or in connection with this Purchase
Agreement, the other Transaction Documents, or any document delivered pursuant
hereto or thereunder, 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 jurisdiction, and, without limiting
the generality of the foregoing, agrees that the waivers set forth in this
Section 16 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 17. Counterparts. This Purchase Agreement may be executed in
------------
one or more counterparts (including via telecopier), each of which shall
constitute an original and all of which together shall constitute one and the
same instrument.
SECTION 18. Entire Agreement. This Purchase Agreement sets forth the
----------------
entire agreement of the parties hereto with respect to the subject matter
hereof.
SECTION 19. Headings. The section headings used herein are for
--------
convenience only and shall not affect the construction hereof.
27
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this Purchase Agreement and your acceptance shall represent a binding agreement
between PIFCo and the Representatives, on behalf of the Initial Purchasers.
Very truly yours,
PETROBRAS INTERNATIONAL FINANCE COMPANY
By:
-------------------------------------
Name: Servio Tulio da Rosa Tinoco
Title: Attorney-in-Fact
PETROLEO BRASILEIRO S.A. --PETROBRAS
By:
-------------------------------------
Name: Joao Pinheiro Nogueira Batista
Title: Attorney-in-Fact
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
UBS WARBURG LLC, as Representative on behalf of the Initial Purchasers
By:
---------------------------
Name:
Title:
By:
---------------------------
Name:
Title:
MORGAN STANLEY & CO., INC., as Representative on behalf of the Initial
Purchasers
By:
---------------------------
Name:
Title:
WITNESSES:
1. 2.
--------------------------- -------------------------
Name: Name:
28
SCHEDULE I
Initial Purchasers
Principal Amount of
Name Notes Commitment
- ---- -------------------
UBS Warburg LLC .......................................... U.S.$170,000,000
Morgan Stanley & Co. Incorporated......................... U.S.$170,000,000
Banco Bilbao Vizcaya Argentaria S.A. ..................... U.S.$ 60,000,000
----------------
Total .................................................... U.S.$400,000,000
EXHIBIT A
Selling Restrictions for Offers and Sales outside the United States
-------------------------------------------------------------------
(a) The Notes have not been and will not be registered under the
Securities Act and may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. persons except in accordance with Regulation
S under the Act or pursuant to an exemption from the registration requirements
of the Securities Act. The Initial Purchasers represent and agree that, except
as otherwise permitted by Section 4(a)(i) or (ii) of the Purchase Agreement to
which this is an exhibit, it has offered and sold the Notes, and will offer and
sell the Notes, (i) as part of their distribution at any time; and (ii)
otherwise until 40 days after the later of the commencement of the offering and
the Closing Date, only in accordance with Rule 903 of Regulation S under the
Securities Act. Accordingly, the Initial Purchasers represent and agree that
neither it, nor any of its Affiliates nor any person acting on its or their
behalf has engaged or will engage in any directed selling efforts with respect
to the Notes, and that it and they have complied and will comply with the
offering restrictions requirement of Regulation S. The Initial Purchasers agree
that, at or prior to the confirmation of a sale of Notes (other than a sale of
Notes pursuant to Section 4(a)(i) or (ii) of the Purchase Agreement to which
this is an exhibit), it shall have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases Notes
from it during the distribution compliance period a confirmation or notice to
substantially the following effect:
"The Notes covered hereby have not been registered under the U.S.
Securities Act Securities Act") and may not be offered or
---------------- --------------
sold within the United States or to, or for the account or benefit of, U.S.
persons (i) as part of their distribution at any time or (ii) otherwise
until 40 days after the later of the commencement of the offering and
February 4, 2002, except in either case in accordance with Regulation S or
Rule 144A under the Act. Terms used above have the meanings given to them
by Regulation S."
(b) Each Initial Purchaser also represents and agrees that it has not
entered and will not enter into any contractual arrangement with any distributor
with respect to the distribution of the Notes, except with its Affiliates or
with the prior written consent of the Companies.
(c) Terms used in this section have the meanings given to them by
Regulation S.
(d) Each of the Initial Purchasers represents and agrees that (a) it
(or any affiliate of it) has not offered or sold and, prior to the expiry of the
period of six months from the Closing Date, will not offer or sell any notes to
persons in the United Kingdom, except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995 or the Financial
Services and Markets Act 2000 (as amended) (the "FSMA"); (b) it has only
communicated or caused to be communicated and will only communicate or cause to
be communicated any invitation or inducement to engage in investment activity
(within the meaning of section 21 of the FSMA) received by it in connection with
the issue or sale of any notes in circumstances in which section 21(1) of the
FSMA does not apply to PIFCo or Petrobras; (c) it has complied and will comply
with all applicable provisions of the FSMA with respect to anything done by it
in relation to the notes in, from or otherwise involving the United Kingdom; and
(d) it has not offered or sold, and will not offer or sell, any Notes in Brazil,
except in compliance with applicable Brazilian laws or pursuant to an available
exemption therefrom.
STATE OF CONNECTICUT )
) ss:
COUNTY OF FAIRFIELD )
On this [_] th day of January, 2002 before me, a notary public within and
for said county, personally appeared Marcelo Delmar and Nadine Cavusoglu, to me
personally known who being duly sworn, did say that they are each a Managing
Director and a Director, respectively of UBS Warburg LLC, one of the persons
described in and which executed the foregoing instrument, and acknowledge said
instrument to be the free act and deed of said corporation.
On this 29th day of January, 2002, before me personally came
to me known, who, being by me duly sworn, did depose and say
- -----------------
that he is the of Petroleo Brasileiro S.A. - Petrobras and
--------------------
the of Petrobras International Finance Company - PIFCo, each a
------------
corporation described in and which executed the foregoing instrument and
acknowledges said instrument to be the free act and deed of said entities.
On this 29th day of January, 2002 before me, a notary public within and for
said county, personally appeared and , to me
-------------- ------------
personally known who being duly sworn, did say that they are each a
------------
and a , respectively of Morgan Stanley & Co. Incorporated, one of the
-----------
persons described in and which executed the foregoing instrument, and
acknowledge said instrument to be the free act and deed of said corporation.
On this 29th day of January, 2002, before me personally came
and to me personally known, who being by me
- ----------------- ----------------
sworn, did depose and say that they signed their names to the foregoing
instrument as witnesses.
[Notarial Seal]
--------------------------
Notary Public
COMMISSION EXPIRES