This excerpt taken from the PBR 6-K filed Jul 11, 2006.
I. ADDITIONAL CLARIFICATIONS
Given that this Extraordinary General Meeting had been adjourned for 10 days due to the Brazilian Securities and Exchange Commissions (CVM) negative response to the consultation submitted by PETROBRAS and by PETROQUISA, on the resumption of the Meeting on June 1 2006, the President notified shareholders that on May 24 2006, PETROBRAS published an Announcement of a Material Fact disclosing the Board of Directors approval of the Re-ratification of the Protocol and Justification of the Operation of Incorporation of Shares of Petrobras Química S.A. PETROQUISA by Petróleo Brasileiro S.A. PETROBRAS, dated May 22 2006. The said Material Fact cites the approval of the adoption of the criterion of book value of both companies as of December 31 2005 for determining the share exchange ratio, attributing 4.496 preferred shares issued by PETROBRAS for each round lot of 1,000 common or preferred shares issued by PETROQUISA, with the issue of 886,670 new preferred shares of PETROBRAS. Pursuant to Article 264 of Law 6,404/76, approval was also given for an alternative criterion based on the economic-financial valuation using the discounted cash flow methodology with a base date of December 31 2005, attributing 3.487 preferred shares issued by PETROBRAS for each round lot of 1,000 common or preferred shares issued by PETROQUISA. With the exception of the current amendments, all remaining conditions of the operation are unchanged. Furthermore, all information and documentation with respect to the share incorporation, the object of this Extraordinary General Meeting, including the Re-ratification of the Protocol and Justification of the Operation, reports, opinions and financial statements have been made available to shareholders at the Companys registered offices. Before opening discussion of the matters on the agenda to the floor, the President gave notice to the Meeting that the Brazilian Securities and Exchange Commission - CVM, in reply to a further consultation by the Company, had notified through an official letter dated May 30 2006, copies of which were made available by the Presiding Officers for eventual shareholder consultation, and based on technical factors raised by the CVMs technical area, that the said CVMs Board of Commissioners had approved the use of the economic value of the two companies calculated according to the discounted cash flow methodology as an acceptable alternative valuation criterion for the purposes of complying with the provisions of Article 264 of Law 6,404/76.