STANDBY PURCHASE AGREEMENT

 

Exhibit 2.39

STANDBY PURCHASE AGREEMENT

 

Dated as of September 15, 2004

 

Between

 

PETRÓLEO BRASILEIRO S.A.—PETROBRAS,

 

as Standby Purchaser,

 

and

 

JPMORGAN CHASE BANK, as

 

Trustee for the Noteholders

 

Referred to Herein

 

Table of Contents

 

Execution Copy

 

STANDBY PURCHASE AGREEMENT

 

STANDBY PURCHASE AGREEMENT (this “ Agreement ”), dated as of September 15, 2004, between PETRÓLEO BRASILEIRO S.A. - PETROBRAS (the “ Standby Purchaser ”), a sociedade do economia mista organized and existing under the laws of the Federative Republic of Brazil (“ Brazil ”), and JPMORGAN CHASE BANK, as trustee for the holders of the Notes (as defined below) issued pursuant to the Indenture (as defined below) (the “ Trustee ”).

 

WITNESSETH:

 

WHEREAS, Petrobras International Finance Company, a Cayman Islands limited company and a wholly-owned Subsidiary of the Standby Purchaser (the “ Issuer ”), has entered into an Indenture dated as of July 19, 2002 (the “ Original Indenture ”) with the Trustee, as supplemented by the Fourth Supplemental Indenture among the Issuer, the Standby Purchaser and the Trustee dated as of September 15, 2004 (the “ Fourth Supplemental Indenture ”). The Original Indenture, as supplemented by the Fourth Supplemental Indenture, and as amended or supplemented from time to time with respect to the Notes, is hereinafter referred to as the “ Indenture .”

 

WHEREAS, the Issuer has duly authorized the issuance of its notes in such principal amount or amounts as may from time to time be authorized in accordance with the Indenture and is, on the date hereof, issuing U.S.$600,000,000 of its 7.75% Global Notes due 2014 under the Indenture (the “ Notes ”);

 

WHEREAS, the Standby Purchaser is willing to enter into this Agreement in order to provide the holders of the Notes (the “ Noteholders ”) with assurances that, if the Issuer shall fail to make all required payments of principal, interest or other amounts due in respect of the Notes and the Indenture, the Standby Purchaser will be obligated, without any action on the part of the Noteholders, to immediately purchase the rights of the Noteholders to receive such amounts in consideration of the payment by the Standby Purchaser of an amount of funds equal to the amounts then owed by the Issuer under the Indenture and the Notes, subject to the provisions hereof;

 

WHEREAS, the Standby Purchaser agrees that it will derive substantial direct and indirect benefits from the issuance of the Notes by the Issuer;

 

WHEREAS, although the following shall not in any way be a condition to the obligations of the Standby Purchaser hereunder, the Standby Purchaser intends (but is not obligated hereunder) to enter into and maintain at all times during the term of this Agreement arrangements for the import of oil and petroleum products with the Issuer under which payments for such products are expected to be (i) in an aggregate amount at least equal to the total amount owed by the Issuer under the Indenture and the Notes (including any accrued and unpaid interest and any other amounts required to be paid thereunder), (ii) made through the Brazilian

 

Standby Purchase Agreement

commercial rate exchange market regulated by Banco Central do Brasil and (iii) applied to off-set (or be used to otherwise liquidate) any amounts required to be paid by the Standby Purchaser under this Agreement in respect of any obligation owed by the Issuer under the Indenture and the Notes;

 

WHEREAS, it is a condition precedent to the issuance of the Notes that the Standby Purchaser shall have executed this Agreement.

 

NOW, THEREFORE, the Standby Purchaser and the Trustee hereby agree as follows:

 

SECTION 1. Definitions .

 

(a) As used herein the following capitalized terms shall have the following meanings:

 

“ Affiliate ,” with respect to any Person, means any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person; it being understood that for purposes of this definition, the term “ control ” (including the terms “ controlling ,” “ controlled by ” and “ under common control with ”) of a Person shall mean the possession, direct or indirect, of the power to vote 25% or more of the equity or similar voting interests of such Person or to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

 

“ Agreement ” has the meaning set forth in the preamble to this Agreement.

 

“ Authorized Representative ” of the Standby Purchaser or any other Person means the person or persons authorized to act on behalf of such entity by its chief executive officer, president, chief operating officer, chief financial officer or any vice president or its Board of Directors or any other governing body of such entity.

 

“ Bankruptcy Law ” has the meaning specified in Section 15(a).

 

“ Base Prospectus ” has the meaning set forth in the definition of Registration Statement herein.

 

“ Board of Directors ”, when used with respect to a corporation, means either the board of directors of such corporation or any committee of that board duly authorized to act for it, and when used with respect to a limited liability company, partnership or other entity other than a corporation, any Person or body authorized by the organizational documents or by the voting equity owners of such entity to act for them.

 

“ Brazil ” has the meaning set forth in the preamble to this Agreement.

 

“ Business Day ” means any day except a Saturday, a Sunday or a legal holiday or a day on which banking institutions (including, without limitation,

 

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the members of the Federal Reserve System) are authorized or required by law, regulation or executive order to close in The City of New York, the Cayman Islands or Brazil.

 

“ Closing Date ” means September 15, 2004.

 

“ Companies ” means the Issuer and the Standby Purchaser.

 

“ Default ” has the meaning set forth in the Indenture.

 

“ Default Rate ” has the meaning specified in the Indenture.

 

“ Denomination Currency ” has the meaning specified in Section 17(b).

 

“ Environmental Laws ” means all applicable federal, state and local statutes, rules, regulations, ordinances, orders, decrees and common law, including any of the foregoing in any foreign jurisdiction, relating in any manner to contamination, pollution or protection of human health or the environment.

 

“ Event of Default ” has the meaning specified in the Indenture.

 

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

 

“ Final Offering Document ” has the meaning specified in Section 9(c).

 

“ Final Prospectus Supplement ” has the meaning specified in Section 9(c).

 

“ Fourth Supplemental Indenture ” has the meaning set forth in the preamble to this Agreement.

 

“ Governmental Authority ” shall mean any regulatory, administrative or other legal body, any court, tribunal or authority or any public legal entity or public agency of the Cayman Islands, Brazil, the United States of America or any other jurisdictions whether created by federal, provincial or local government, or any other legal entity now existing or hereafter created, or now or hereafter controlled, directly or indirectly, by any public legal entity or public agency of any of the foregoing.

 

“ Guarantee ” means an obligation of a person to pay the Indebtedness of another Person including without limitation:

 

(i) an obligation to pay or purchase such Indebtedness;

 

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(ii) an obligation to lend money or to purchase or subscribe for shares or other securities or to purchase assets or services in order to provide funds for the payment of such Indebtedness;

 

(iii) an indemnity against the consequences of a default in the payment of such Indebtedness; or

 

(iv) any other agreement to be responsible for such Indebtedness.

 

“ Indebtedness ” means any obligation (whether present or future, actual or contingent and including, without limitation, any Guarantee) for the payment or repayment of money which has been borrowed or raised (including money raised by acceptances and all leases which, under generally accepted accounting principles in the country of incorporation of the relevant obligor, would constitute a capital lease obligation).

 

“ Indemnified Party ” has the meaning specified in Section 14.

 

“ Indemnified Taxes ” means any and all present or future taxes, levies, imposts, deductions, charges or withholdings of any nature imposed by Brazil, the Cayman Islands, Luxembourg or any other jurisdiction in which the Issuer appoints a paying agent under the Indenture or any political subdivision of such jurisdictions.

 

“ Indenture ” has the meaning specified in the preamble to this Agreement.

 

“ Issuer ” has the meaning set forth in the preamble to this Agreement.

 

“ Judgment Currency ” has the meaning specified in Section 17(b).

 

“ Law ” means any constitutional provision, law, statute, rule, regulation, ordinance, treaty, order, decree, judgment, decision, certificate, holding, injunction, enforceable at law or in equity, along with the interpretation and administration thereof by any Governmental Authority charged with the interpretation or administration thereof.

 

“ Lien ” means any mortgage, pledge, lien, hypothecation, security interest or other charge or encumbrance on any property or asset, including, without limitation, any equivalent created or arising under applicable Law.

 

“ Material Adverse Effect ” means a material adverse effect on (a) the business, operations, assets, property, condition (financial or otherwise) or results of operation of the Standby Purchaser together with its consolidated Subsidiaries taken as a whole, (b) the validity or enforceability of this Agreement or any other Transaction Document or (c) the ability of the Standby Purchaser to perform its obligations under this Agreement or any other Transaction Document, or (d) the material rights or benefits available to

 

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the Noteholders or the Trustee, as representative of the Noteholders under the Indenture, this Agreement or any of the other Transaction Documents.

 

“ Material Subsidiary ” means, as to any Person, any Subsidiary of such Person which, on any given date of determination, accounts for more than 7.5% of Petrobras’ total consolidated assets, as such total assets are set forth on the most recent consolidated financial statements of Petrobras prepared in accordance with U.S. GAAP (or if Petrobras does not prepare financial statements in U.S. GAAP, consolidated financial statements prepared in accordance with Brazilian generally accepted accounting principles). A

 

“ Noteholders ” has the meaning specified in the preamble of this Agreement.

 

“ Notes ” has the meaning specified in the preamble of this Agreement.

 

“ Offering Documents ” has the meaning specified in Section 9(a).

 

“ Officer’s Certificate ” means a certificate of an Authorized Representative of the Standby Purchaser containing, in respect of each certificate furnished with respect to a particular condition, covenant or provision of this Agreement:

 

(i) a statement that an Authorized Representative of the Standby Purchaser has read such covenant, condition or provision;

 

(ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

 

(iii) a statement that, in the opinion of each such individual, such examination or investigation has been made as is necessary to enable such individual to express an informed opinion as to whether or not such covenant, condition or provision has been complied with; and

 

(iv) a statement as to whether, in the opinion of each such individual, such condition, covenant or provision has been complied with.

 

“ Opinion of Counsel ” means a written opinion of counsel from any Person either expressly referred to herein or otherwise reasonably satisfactory to the Trustee which may include, without limitation, counsel for the Standby Purchaser, whether or not such counsel is an employee of the Standby Purchaser, which opinion contains:

 

(i) a statement that each individual signing such opinion has read such covenant, condition or provision;

 

(ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such opinion are based;

 

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(iii) a statement that, in the opinion of each such individual, such examination or investigation has been made as is necessary to enable such individual to express an informed opinion as to whether or not such covenant, condition or provision has been complied with; and

 

(iv) a statement as to whether, in the opinion of each such individual, such condition, covenant or provision has been complied with.

 

“ Original Indenture ” has the meaning set forth in the preamble to this Agreement.

 

“ Other Taxes ” means any present or future stamp, documentary, excise, property or similar taxes, charges or levies imposed by Brazil, the Cayman Islands, Luxembourg or any other jurisdiction in which the Issuer appoints a paying agent under the Indenture or any political subdivision of such jurisdictions that arise from any payment made hereunder, under the Notes or under the Transaction Documents or from the execution, delivery or registration of, performance under, or otherwise with respect to, this Agreement or any of the other Transaction Documents.

 

“ Partial Non-Payment Amount ” has the meaning specified in Section 2(a).

 

“ Partial Non-Payment Amount With Interest ” has the meaning specified in Section 2(a).

 

“ Partial Non-Payment Due Date ” has the meaning specified in Section 2(a).

 

“ Partial Non-Payment Overdue Interest ” has the meaning specified in Section 2(a).

 

“ Partial Non-Payment Notice ” has the meaning specified in Section 2(a).

 

“ Payment Account ” has the meaning set forth in the Indenture.

 

“ Payment Date ” has the meaning set forth in the Indenture.

 

“ Permitted Lien ” means a:

 

(i) Lien granted in respect of Indebtedness owed to the Brazilian government, Banco Nacional de Desenvolvimento Econômico e Social or any official government agency or department of Brazil or of any state or region thereof;

 

(ii) Lien arising by operation of law, such as merchants’, maritime or other similar Liens arising in the Standby Purchaser’s ordinary course of business or that of any Subsidiary or Lien in respect of taxes, assessments or other governmental charges that are not yet delinquent or that are being contested in good faith by appropriate proceedings;

 

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(iii) Lien arising from the Standby Purchaser’s obligations under performance bonds or surety bonds and appeal bonds or similar obligations incurred in the ordinary course of business and consistent with the Standby Purchaser’s past practice;

 

(iv) Lien arising in the ordinary course of business in connection with Indebtedness maturing not more than one year after the date on which such Indebtedness was originally incurred and which is related to the financing of export, import or other trade transactions;

 

(v) Lien granted upon or with respect to any assets hereafter acquired by the Standby Purchaser or any Subsidiary to secure the acquisition costs of such assets or to secure Indebtedness incurred solely for the purpose of financing the acquisition of such assets, including any Lien existing at the time of the acquisition of such assets as long as the maximum amount so secured shall not exceed the aggregate acquisition costs of all such assets or the aggregate Indebtedness incurred solely for the acquisition of such assets;

 

(vi) Lien granted in connection with the Indebtedness of a Wholly-Owned Subsidiary owing to the Standby Purchaser or another Wholly-Owned Subsidiary;

 

(vii) Lien existing on any asset or on any stock of any Subsidiary prior to the acquisition thereof by the Standby Purchaser or any Subsidiary as long as such Lien is not created in anticipation of such acquisition;

 

(viii) Lien over any Qualifying Asset relating to a project financed by, and securing Indebtedness incurred in connection with, the Project Financing of such project by the Standby Purchaser, any of the Standby Purchaser’s Subsidiaries or any consortium or other venture in which the Standby Purchaser or any Subsidiary has any ownership or other similar interest;

 

(ix) Lien existing as of the date of the Indenture;

 

(x) Lien resulting from the Transaction Documents;

 

(xi) Lien incurred in connection with the issuance of debt or similar securities of a type comparable to those already issued by the Issuer, on amounts of cash or cash equivalents on deposit in any reserve or similar account to pay interest on such securities for a period of up to 24 months as required by any Rating Agency as a condition to such Rating Agency rating such securities investment grade or as is otherwise consistent with market conditions at such time, as such conditions are satisfactorily demonstrated to the Trustee;

 

(xii) Lien granted or incurred to secure any extension, renewal, refinancing, refunding or exchange (or successive extensions, renewals, refinancings, refundings or exchanges), in whole or in part, of or for any Indebtedness secured by a Lien referred to in paragraphs (i) through (xi) above (but not paragraph (iv)), provided that such Lien does not extend to any other property, the principal amount of the Indebtedness secured by such Lien is not increased, and in the case of paragraphs (i), (ii), (iii) and (vi), the

 

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obligees meet the requirements of such paragraphs and in the case of paragraph (viii), the Indebtedness is incurred in connection with a Project Financing by the Standby Purchaser, any of the Standby Purchaser’s Subsidiaries or any consortium or other venture in which the Standby Purchaser or any Subsidiary have any ownership or other similar interests; and

 

(xiii) Lien in respect of Indebtedness the principal amount of which in the aggregate, together with all Liens not otherwise qualifying as the Standby Purchaser’s Permitted Liens pursuant to clauses (i) through (xii) of this definition, does not exceed 7.5% of the Standby Purchaser’s consolidated total assets (as determined in accordance with U.S. GAAP) at any date as at which the Standby Purchaser’s balance sheet is prepared and published in accordance with applicable Law.

 

“ Person ” means any individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

 

“ Post Petition Interest ” has the meaning specified in Section 15(b).

 

“ Preliminary Prospectus Supplement ” has the meaning specified in Section 9(c).

 

“ Process Agent ” has the meaning specified in Section 18(c).

 

“ Project Financing ” of any project means the incurrence of Indebtedness relating to the exploration, development, expansion, renovation, upgrade or other modification or construction of such project pursuant to which the providers of such Indebtedness or any trustee or other intermediary on their behalf or beneficiaries designated by any such provider, trustee or other intermediary are granted security over one or more Qualifying Assets relating to such project for repayment of principal, premium and interest or any other amount in respect of such Indebtedness.

 

“ Purchase Obligations ” has the meaning specified in Section 4.

 

“ Qualifying Asset ” in relation to any Project Financing means:

 

(i) any concession, authorization or other legal right granted by any Governmental Authority to the Standby Purchaser or any of the Standby Purchaser’s Subsidiaries, or any consortium or other venture in which the Standby Purchaser or any Subsidiary has any ownership or other similar interest;

 

(ii) any drilling or other rig, any drilling or production platform, pipeline, marine vessel, vehicle or other equipment or any refinery, oil or gas field, processing

 

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plant, real property (whether leased or owned), right of way or plant or other fixtures or equipment;

 

(iii) any revenues or claims which arise from the operation, failure to meet specifications, failure to complete, exploitation, sale, loss or damage to, such concession, authorization or other legal right or such drilling or other rig, drilling or production platform, pipeline, marine vessel, vehicle or other equipment or refinery, oil or gas field, processing plant, real property, right of way, plant or other fixtures or equipment or any contract or agreement relating to any of the foregoing or the Project Financing of any of the foregoing (including insurance policies, credit support arrangements and other similar contracts) or any rights under any performance bond, letter of credit or similar instrument issued in connection therewith;

 

(iv) any oil, gas, petrochemical or other hydrocarbon-based products produced or processed by such project, including any receivables or contract rights arising therefrom or relating thereto and any such product (and such receivables or contract rights) produced or processed by other projects, fields or assets to which the lenders providing the Project Financing required, as a condition therefor, recourse as security in addition to that produced or processed by such project; and

 

(v) shares or other ownership interest in, and any subordinated debt rights owing to the Standby Purchaser by, a special purpose company formed solely for the development of a project, and whose principal assets and business are constituted by such project and whose liabilities solely relate to such project.

 

“ Rating Agency ” means a Nationally Recognized Statistical Rating Organization as designated by the SEC Division of Market Regulation.

 

“ Registration Statement ” means the registration statement on Form F-3 under the Securities Act, initially dated July 5, 2002 and as amended on July 19, 2002 and further amended on August 14, 2002, filed with the SEC (File No. 333-92044) covering the registration of the Notes under the Securities Act and including the related base prospectus in the form dated August 14, 2002 (the “ Base Prospectus ”) at the time such registration statement was declared effective by the SEC, as amended to the date hereof (including any post-effective amendment that includes a prospectus or prospectus supplement), together with any documents incorporated by reference therein.

 

“ SEC ” means the United States Securities and Exchange Commission.

 

“ Securities Act ” means the United States Securities Act of 1933, as amended.

 

“ Standby Purchaser ” has the meaning specified in the preamble of this Agreement.

 

“ Stated Maturity ” has the meaning specified in the Indenture.

 

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“ Subordinated Obligations ” has the meaning specified in Section 15.

 

“ Subsidiary ” means, as to any Person, a corporation, company, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the Board of Directors (or similar governing body) of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a “ Subsidiary ” or to “ Subsidiaries ” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Standby Purchaser.

 

“ Successor Company ” has the meaning specified in Section 10(m)(i).

 

“ Taxing Jurisdiction ” has the meaning specified in Section 8(c).

 

“ Termination Date ” has the meaning specified in Section 7.

 

“ TIA ” means the United States Trust Indenture Act of 1939, as amended.

 

“ Total Non-Payment Notice ” shall have the meaning specified in Section 3(a).

 

“ Total Non-Payment Amount ” shall have the meaning specified in Section 3(a).

 

“ Total Non-Payment Amount With Interest ” has the meaning specified in Section 3(a).

 

“ Total Non-Payment Due Date ” shall have the meaning specified in Section 3(a).

 

“ Total Non-Payment Overdue Interest ” has the meaning specified in Section 3(a).

 

“ Transaction Documents ” means, collectively, the Indenture, the Notes and this Agreement.

 

“ Trustee ” has the meaning specified in the preamble of this Agreement.

 

“ Underwriters ” means Morgan Stanley & Co. Incorporated and Bear, Stearns & Co., Inc., acting as such under the Underwriting Agreement.

 

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“ Underwriting Agreement ” has the meaning specified in Section 9(a).

 

“ United States ” or “U.S.” means the United States of America.

 

“ U.S. GAAP ” means generally accepted accounting principles in effect in the United States of America applied on a basis consistent with the principles, methods, procedures and practices set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession.

 

“ Wholly-Owned Subsidiary ” means, with respect to any corporate entity, any person of which 100% of the outstanding capital stock (other than qualifying shares, if any) having by the terms thereof ordinary voting power (not dependent on the happening of a contingency) to elect the Board of Directors (or equivalent controlling governing body) of such person is at the time owned or controlled directly or indirectly by such corporate entity, by one or more wholly-owned Subsidiaries of such corporate entity or by such corporate entity and one or more wholly-owned Subsidiaries thereof.

 

(b) Construction . For all purposes of this Agreement (and for all purposes of any other Transaction Document or any other instrument or agreement that incorporates provisions of this Agreement by reference), except as otherwise expressly provided or unless the context otherwise requires:

 

(i) the terms defined in this Section have the meanings assigned to them in this Section, and include the plural as well as the singular;

 

(ii) except as otherwise expressly provided herein, (A) all accounting terms used herein shall be interpreted, (B) all financial statements and all certificates and reports as to financial matters required to be delivered to the Trustee hereunder shall be prepared and (C) all calculations made for the purposes of determining compliance with this Agreement shall (except as otherwise expressly provided herein) be made in accordance with, or by application of, U.S. GAAP;

 

(iii) all references in this Agreement (including the Appendices and Schedules hereto) to designated “Articles”, “Sections” and other subdivisions are to the designated Articles, Sections and other subdivisions of this Agreement;

 

(iv) the words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision;

 

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(v) unless the context clearly indicates otherwise, pronouns having a masculine or feminine gender shall be deemed to include the other;

 

(vi) unless otherwise expressly specified, any agreement, contract or document defined or referred to herein shall mean such agreement, contract or document as in effect as of the date hereof, as the same may thereafter be amended, supplemented or otherwise modified from time to time in accordance with the terms of this Agreement and the other Transaction Documents and shall include any agreement, contract, instrument or document in substitution or replacement of any of the foregoing entered into in accordance with the terms of this Agreement and the other Transaction Documents;

 

(vii) any reference to any Person shall include its permitted successors and assigns in accordance with the terms of this Agreement and the other Transaction Documents including, in the case of any Governmental Authority, any Person succeeding to its functions and capacities; and

 

(viii) unless the context clearly requires otherwise, references to “Law” or to any particular Law shall include Laws or such particular Law as in effect at each, every and any of the times in question, including any amendments, replacements, supplements, extensions, modifications, consolidations, restatements, revisions or reenactments thereto or thereof, and whether or not in effect at the date of this Agreement.

 

SECTION 2. Partial Purchase Obligation . (a) In the event that, prior to the Stated Maturity of the principal of the Notes, the Issuer shall fail to make any payment on the Notes in respect of interest, principal or other amounts as contemplated in the Indenture and/or the Notes (including, without limitation, any Additional Amounts) on the date any such payment is due under the terms of the Notes and the Indenture (other than in the case of an acceleration thereof in accordance with the Indenture) (such date, the “ Partial Non-Payment Due Date ”), then in such event (i) the Standby Purchaser shall be obligated to pay immediately to the Trustee, for the benefit of the Noteholders under the Indenture, the amount that the Issuer was required to pay but failed to pay on such date under the terms of the Indenture and the Notes (the “ Partial Non-Payment Amount ”) and (ii) the Trustee shall provide notice to the Standby Purchaser of the failure of the Issuer to make such payment; provided, however , that the failure to provide such notice shall not in any way excuse the Standby Purchaser from its obligations hereunder. The notice contemplated herein shall be provided in writing in substantially the form of Exhibit A hereto (the “ Partial Non-Payment Notice ”) and shall be sent by the Trustee to the Standby Purchaser at the address specified for the Standby Purchaser in Section 12 hereof no later than 5:00 p.m. (New York time) on the Partial Non-Payment Due Date. The Partial Non-Payment Notice shall (i) confirm the Partial Non-Payment Amount and the fact that such amount was not paid on the Partial Non-Payment Due Date and (ii) remind the Standby Purchaser that it is obligated to pay the Partial Non-Payment Amount immediately. To the extent that the Standby Purchaser fails to pay the Partial Non-Payment Amount immediately pursuant to this Section 2(a) (whether or not it has received the Partial Non-Payment Notice), the Standby Purchaser shall be obligated hereunder to pay, in addition to the Partial Non-Payment Amount, interest on

 

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such amount at the Default Rate from the Partial Non-Payment Due Date to and including the actual date of payment by the Standby Purchaser (the “ Partial Non-Payment Overdue Interest ” and, together with the Partial Non-Payment Amount, the “ Partial Non-Payment Amount With Interest ”), which date of payment shall be a Business Day.

 

(b) Payment of the Partial Non-Payment Amount With Interest shall be in consideration of the purchase by the Standby Purchaser of the rights of the Noteholders to receive such amount from the Issuer. The Noteholders shall have no right to retain such rights, and, following the purchase and sale provided for in this Section 2, the Notes shall remain outstanding with all amounts due in respect thereof adjusted to reflect the purchase, sale and payment provided for herein. Upon any such payment, the Standby Purchaser shall be subrogated to the Noteholders to the extent of any payment under this Section 2.

 

(c) The obligation of the Standby Purchaser to pay the Partial Non-Payment Amount With Interest shall be absolute and unconditional upon failure of the Issuer to make, prior to the Stated Maturity of the principal on the Notes, any payment on the Notes in respect of interest, principal or other amounts as contemplated in the Indenture and/or the Notes (including, without limitation, any Additional Amounts) on the date any such payment is due. All amounts payable by the Standby Purchaser hereunder in respect of any Partial Non-Payment Amount With Interest shall be payable in U.S. dollars and in immediately available funds to the Trustee at the account specified in Section 12 below, or to such other account as may be specified by the Trustee in the applicable Partial Non-Payment Notice. The Standby Purchaser shall not be relieved of its obligations hereunder unless and until the Trustee shall have indefeasibly received all amounts required to be paid by it hereunder (and any related Event of Default under the Indenture has been cured), including payment of the Partial Non-Payment Overdue Interest as provided for herein.

 

(d) All payments actually received by the Trustee pursuant to this Section 2 after 1:00 p.m. (New York time) on any Business Day will be deemed, for purposes of this Agreement, to have been received by the Trustee on the next succeeding Business Day.

 

SECTION 3. Total Purchase Obligation . (a) In the event that, at the Stated Maturity of the principal on the Notes (or earlier upon any acceleration thereof in accordance with the terms of the Indenture), the Issuer shall fail to make any payment in respect of principal, interest or other amounts due under the Indenture and the Notes on the date any such payment is so due (such date, the “ Total Non-Payment Due Date ”) then in such event, (i) the Standby Purchaser shall be obligated to pay immediately to the Trustee, for the benefit of the Noteholders under the Indenture, the amount that the Issuer was required to pay but failed to pay on such date under the terms of the Notes and the Indenture (the “ Total Non-Payment Amount ”) and (ii) the Trustee shall provide notice to the Standby Purchaser of the failure of the Issuer to make such payment, provided, however , that the failure to provide such notice shall not in any way excuse the Standby Purchaser from its obligations hereunder. The notice contemplated herein shall be provided in writing in substantially the form of Exhibit B hereto (the “ Total Non-Payment Notice ”) sent to the Standby Purchaser at the address specified for the Standby Purchaser in Section 12 hereof no later than 5:00 p.m. (New York time)

 

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on the Total Non-Payment Due Date. The Total Non-Payment Notice shall (i) confirm the amount of the Total Non-Payment Amount and the fact that such amount was not paid on the Total Non-Payment Due Date and (ii) remind the Standby Purchaser that it is obligated to pay the Total Non-Payment Amount immediately. To the extent that the Standby Purchaser fails to pay the Total Non-Payment Amount immediately when required pursuant to this Section 3(a) (whether or not it has received the Total Non-Payment Notice), the Standby Purchaser shall be obligated hereunder to pay, in addition to the amounts specified above, interest on such amount at the Default Rate from the Total Non-Payment Due Date to and including the actual date of payment by the Standby Purchaser (the “ Total Non-Payment Overdue Interest ” and, together with the Total Non-Payment Amount, the “ Total Non-Payment Amount With Interest ”), which date of payment shall be a Business Day. Notwithstanding anything to the contrary herein, the failure by the Trustee to deliver a Total Non-Payment Notice as provided herein shall not release the Standby Purchaser of its obligations to pay the Total Non-Payment Amount With Interest in the manner set forth in this Section 3(a).

 

(b) Payment of the Total Non-Payment Amount With Interest by the Standby Purchaser shall be in consideration of the purchase by the Standby Purchaser of the rights of the Noteholders to receive such amount from the Issuer. The Noteholders shall have no right to retain such rights, and, following the purchase and sale provided for in this Section 3, the Standby Purchaser shall be subrogated to the Noteholders to the extent of any payment under this Section 3.

 

(c) The obligation of the Standby Purchaser to pay the Total Non-Payment Amount With Interest shall be absolute and unconditional upon failure of the Issuer to make, at the Stated Maturity of the principal of the Notes (or earlier upon any acceleration thereof in accordance with the terms of the Indenture), any payment in respect of principal, interest or other amounts due under the Indenture and the Notes on the date any such payment is due. All amounts payable by the Standby Purchaser hereunder in respect of any Total Non-Payment Amount With Interest shall be payable in U.S. dollars and in immediately available funds to the Trustee at the account specified in Section 12 below, or to such other account as may be specified by the Trustee in the applicable Total Non-Payment Notice. The Standby Purchaser shall not be relieved of its obligations hereunder unless and until the Trustee shall have received all amounts required to be paid by it hereunder (and any related Event of Default under the Indenture has been cured), including payment of the Total Non-Payment Overdue Interest.

 

(d) All payments actually received by the Trustee pursuant to this Section 3 after 1:00 p.m. (New York time) on any Business Day will be deemed, for purposes of this Agreement, to have been received by the Trustee on the next succeeding Business Day.

 

SECTION 4. Obligations Absolute . The Standby Purchaser’s obligation to pay one or more Partial Non-Payment Amounts With Interest or the Total Non-Payment Amount With Interest (collectively, the “ Purchase Obligations ”) are absolute and unconditional regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of any Noteholder under its Notes or the Indenture. The Purchase Obligations and the other obligations of the Standby Purchaser under or in respect of this Agreement are

 

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independent of any obligations of the Issuer, the Issuer’s Subsidiaries or the Standby Purchaser’s Subsidiaries under or in respect of the Indenture and the Notes or any other document or agreement, and a separate action or actions may be brought and prosecuted against the Standby Purchaser to enforce this Agreement, irrespective of whether any action is brought against the Issuer or whether the Issuer is joined in any such action or actions. The liability of the Standby Purchaser under this Agreement shall be irrevocable, absolute and unconditional irrespective of, and the Standby Purchaser hereby irrevocably waives any defenses it may now have or hereafter acquire in any way relating to, any or all of the following:

 

(a) any lack of validity or enforceability of any of the Transaction Documents;

 

(b) any provision of applicable Law or regulation purporting to prohibit the payment by the Standby Purchaser of any amount payable by it under this Agreement;

 

(c) any change in the time, manner or place of payment of, or in any other term of, all or any of the Purchase Obligations or any other obligations of any other person or entity under or in respect of the Transaction Documents, or any other amendment or waiver of or any consent to departure from any Transaction Document, including, without limitation, any increase in the obligations of the Issuer under the Indenture and the Notes as a result of further issuances, any rescheduling of the Issuer’s obligations under the Notes or the Indenture or otherwise;

 

(d) any taking, release or amendment or waiver of, or consent to departure from, any other guaranty or agreement similar in function to this Agreement, for all or any of the obligations of the Issuer under the Indenture or the Notes;

 

(e) any manner of sale or other disposition of any assets of any Noteholder;

 

(f) any change, restructuring or termination of the corporate structure or existence of the Issuer or the Standby Purchaser or any Subsidiary thereof or any change in the name, purposes, business, capital stock (including ownership thereof) or constitutive documents of the Issuer or the Standby Purchaser;

 

(g) any failure of the Trustee to disclose to the Standby Purchaser any information relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of the Issuer or any of its Subsidiaries (the Standby Purchaser hereby waiving any duty on the part of the Trustee or any Noteholders to disclose such information);

 

(h) the failure of any other person or entity to execute or deliver any other Guarantee or agreement or the release or reduction of liability of any other guarantor or surety with respect to the Indenture;

 

(i) any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by the Trustee or any Noteholder that might otherwise constitute a defense available to, or a discharge of, the Issuer or the Standby Purchaser or any other party; or

 

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(j) any claim of set-off or other right which the Standby Purchaser may have at any time against the Issuer or the Trustee, whether in connection with this transaction or with any unrelated transaction.

 

This Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Purchase Obligations is rescinded or must otherwise be returned by any Noteholder or any other person or entity upon the insolvency, bankruptcy or reorganization of the Issuer or the Standby Purchaser or otherwise, all as though such payment had not been made.

 

SECTION 5. Independent Obligation . The obligations of the Standby Purchaser hereunder are independent of the Issuer’s obligations under the Notes and the Indenture. The Trustee, on behalf of the Noteholders, may neglect or forbear to enforce payment under the Indenture and the Notes, without in any way affecting or impairing the liability of the Standby Purchaser hereunder. The Trustee shall not be obligated to exhaust recourse or remedies against the Issuer to recover payments required to be made under the Indenture nor take any other action against the Issuer or, under any agreement, purchase any security which the Trustee may hold before being entitled to payment from the Standby Purchaser of all amounts contemplated in Sections 2 and 3 hereof owed hereunder or proceed against or have resort to any balance of any deposit account or credit on the books of the Trustee in favor of the Issuer or in favor of the Standby Purchaser. Without limiting the generality of the foregoing, the Trustee shall have the right to bring a suit directly against the Standby Purchaser, either prior or subsequent to or concurrently with any lawsuit against, or without bringing suit against, the Issuer.

 

SECTION 6. Waivers and Acknowledgments . (a) The Standby Purchaser hereby unconditionally and irrevocably waives promptness, diligence, notice of acceptance, presentment, demand for performance, notice of nonperformance, default, acceleration, protest or dishonor and any other notice with respect to any of the Purchase Obligations and this Agreement and any requirement that the Trustee, on behalf of the Noteholders, protect, secure, perfect or insure any Lien or any property subject thereto or exhaust any right or take any action against the Issuer or any other Person.

 

(b) The Standby Purchaser hereby unconditionally and irrevocably waives any right to revoke this Agreement and acknowledges that this Agreement is continuing in nature and applies to its Purchase Obligations, whether the same are existing now or in the future.

 

(c) The Standby Purchaser hereby unconditionally and irrevocably waives (i) any defense arising by reason of any claim or defense based upon an election of remedies by any Noteholder or the Trustee on behalf of the Noteholders that in any manner impairs, reduces, releases or otherwise adversely affects the subrogation, reimbursement, exoneration, contribution or indemnification rights of the Standby Purchaser or other rights of the Standby Purchaser to proceed against the Issuer or any other person or entity and (ii) any defense based on any right of set-off or counterclaim against or in respect of the Purchase Obligations of the Standby Purchaser hereunder.

 

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(d) The Standby Purchaser hereby unconditionally and irrevocably waives any duty on the part of the Trustee or any Noteholder to disclose to the Standby Purchaser any matter, fact or thing relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of the Issuer now or hereafter known by the Trustee or any Noteholder, as applicable.

 

(e) The Standby Purchaser acknowledges that it will receive substantial direct and indirect benefits from the financing arrangements contemplated by the Transaction Documents and that the waivers set forth in this Section 6 are knowingly made in contemplation of such benefits.

 

SECTION 7. Claims Against the Issuer . The Standby Purchaser hereby unconditionally and irrevocably agrees not to exercise any rights that it may now have or hereafter acquire against the Issuer or any other guarantor that arise from the existence, payment, performance or enforcement of the Standby Purchaser’s Purchase Obligations under or in respect of this Agreement or any other Transaction Document, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to enforce any rights to payments in respect of the Partial Non-Payment Amount With Interest and/or the Total Non-Payment Amount With Interest purchased by the Standby Purchaser from the Noteholders as provided hereunder, or to participate in any claim or remedy of the Trustee, on behalf of the Noteholders, against the Issuer or any other person, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from the Issuer or any other person, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until all of the Purchase Obligations and all other amounts payable under this Agreement shall have been paid in full in cash. If any amount shall be paid to the Standby Purchaser in violation of the immediately preceding sentence at any time prior to the later of (a) the payment in full in cash of the Purchase Obligations and all other amounts payable under this Agreement and (b) the date on which all of the obligations of the Issuer under the Indenture and the Notes have been discharged in full (the later of such dates being the “ Termination Date ”), such amount shall be received and held by the Trustee in trust for the benefit of the Noteholders, shall be segregated from other property and funds of the Standby Purchaser and shall forthwith be paid or delivered to the Trustee in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to the Purchase Obligations and all other amounts payable under this Agreement, whether matured or unmatured, in accordance with the terms of the Indenture. If (i) the Standby Purchaser shall make payment to any Noteholder or the Trustee, on behalf of the Noteholders, of all or any part of the Purchase Obligations, (ii) all of the Purchase Obligations and all other amounts payable under this Agreement shall have been paid in full in cash and (iii) the Termination Date shall have occurred, then the Trustee, on behalf of the Noteholders, will, at the Standby Purchaser’s request and expense, execute and deliver to the Standby Purchaser appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to the Standby Purchaser of an interest in the Purchase Obligations resulting from such payment made by the Standby Purchaser pursuant to this Agreement.

 

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SECTION 8. Payments Free and Clear of Taxes, Etc. (a) Any and all payments by or on account of any obligation of the Standby Purchaser hereunder or under any other Transaction Document shall be made free and clear of and without deduction for any Indemnified Taxes; provided that if the Standby Purchaser shall be required to deduct any Indemnified Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional amounts payable under this Section), the Trustee, on behalf of the Noteholders, receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Standby Purchaser shall make such deductions and (iii) the Standby Purchaser shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable Law.

 

(b) Payment of Other Taxes by the Standby Purchaser . In addition, the Standby Purchaser shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable Law. The Standby Purchaser shall indemnify and make whole the Noteholders for any such Other Taxes payable by the Standby Purchaser under this paragraph paid by such Noteholders.

 

(c) Notwithstanding anything to the contrary in Section 8(a) of this Agreement, the Standby Purchaser will not be obligated to pay any Indemnified Taxes imposed with respect to the Notes due to (i) the Noteholder or the Trustee having a connection with the jurisdiction imposing the Indemnified Taxes (hereinafter, the “ Taxing Jurisdiction ”) other than from merely holding the Notes or receiving principal or interest payments on the Notes (such as citizenship, nationality, residence, domicile, or existence of a business, a permanent establishment, a dependent agent, a place of business or a place of management present or deemed present within the Taxing Jurisdiction), (ii) any tax imposed on, or measured by, net income, (iii) the Noteholder or the Trustee failing to comply with any certification, identification or other reporting requirements concerning its nationality, residence, identity or connection with the Taxing Jurisdiction, if (x) such compliance is required by applicable Law, regulation, administrative practice or treaty as a precondition to exemption from all or a part of the Indemnified Taxes, (y) the Noteholder or the Trustee is able to comply with such requirements without undue hardship and (z) at least 30 calendar days prior to the first Payment Date with respect to which such requirements under the applicable Law, regulation, administrative practice or treaty shall apply, the Standby Purchaser has notified all the Noteholders or the Trustee that they will be required to comply with such requirements, (iv) the Noteholder or the Trustee failing to present (where presentation is required) its Note within 30 calendar days after the Standby Purchaser has made available to the Noteholder or the Trustee a payment under this Agreement; provided that the Standby Purchaser will pay Indemnified Taxes which a Noteholder or the Trustee would have been entitled to under such Note had it been presented on any day (including the last day) within such 30 day period, (v) any estate, inheritance, gift, value added, use or sales taxes or any similar taxes, assessments or other governmental charges, (vi) such Indemnified Taxes being imposed on a payment on the Notes to an individual and are required to be made pursuant to European Union council Directive 2003/48/EC implementing the conclusions of the Economic and Financial Council of Ministers of the member states of the European Union (ECONFIN) Council meeting of November 26-27, 2000 on the taxation of savings income or any law implementing or complying with, or

 

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introduced in order to conform to, any such Directive, (vii) such Note being presented for payment by or on behalf of a Noteholder or Trustee who would have been able to avoid such withholding or deduction by requesting that a payment on the Notes be made by, or presenting the relevant Notes for payment to another paying agent located in a member state of the European Union, or (viii) the payment of any obligation of the Standby Purchaser to a Noteholder or Trustee who would have been able to cause the avoidance of the Indemnified Taxes by taking reasonable measures available to such Noteholder or the Trustee.

 

The Standby Purchaser shall, if European Council Directive 2003/48/EC or any other Directive implementing the conclusions of ECOFIN council meeting of November 26-27, 2000 is brought into force, ensure that it maintains a paying agent hereunder in a member state of the European Union that will not be obliged to withhold or deduct tax pursuant to such Directive.

 

(d) Evidence of Payments . As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Standby Purchaser to a Governmental Authority, the Standby Purchaser shall deliver to the Trustee the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Trustee.

 

SECTION 9. Representations and Warranties . The Standby Purchaser makes the following representations and warranties to the Trustee, on behalf of the Noteholders, all of which shall survive the execution and delivery of this Agreement:

 

(a) The Companies and the transactions contemplated in the Underwriting Agreement dated as of September 8, 2004 among the Standby Purchaser, the Issuer and the Underwriters (the “ Underwriting Agreement ”) in connection with the offer and sale of the Notes meet the requirements set forth in Form F-3 under the Securities Act for use of the Registration Statement in connection with the offering of the Notes that are the subject of this Agreement.

 

(b) The Standby Purchaser and the Issuer have filed the Registration Statement with the SEC, the Registration Statement has been declared effective under the Securities Act, no stop order suspending the effectiveness of the Registration Statement (including the Base Prospectus) is in effect and no proceedings for such purposes are pending or, to the best of the Companies’ knowledge, threatened by the SEC.

 

(c) The Standby Purchaser and the Issuer filed with the SEC on September 10, 2004 pursuant to Rule 424(b) under the Securities Act a final form of supplement to the Base Prospectus (the “ Final Prospectus Supplement ”) dated September 8, 2004 relating to the Notes and the distribution thereof. The Base Prospectus as supplemented by the Final Prospectus Supplement in the form in which it was filed with the SEC pursuant to Rule 424(b), together with any documents incorporated by reference therein, is herein referred to as the “ Final Offering Document ”.

 

(d) Each of the Companies has filed all the documents required to be filed by it with the SEC pursuant to the Exchange Act, including but not limited to the annual reports on Form 20-F for the year ended December 31, 2003 and Forms 6-K in connection with their

 

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