As filed with the U.S. Securities and Exchange Commission on August 14, 2002
Registration No. 333-92044
333-92044-01
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM F-3/A
(PRE-EFFECTIVE AMENDMENT No. 2
to
FORM F-3)
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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Petroleo Brasileiro S.A.--Petrobras Petrobras International Finance Company
(Exact name of each registrant as specified in its charter)
Brazilian Petroleum Corporation--Petrobras Not Applicable
(Translation of registrant's name into English)
The Federative Republic of Brazil Cayman Islands
(Jurisdiction of incorporation or organization)
Not Applicable Not Applicable
(I.R.S. employer identification number)
Avenida Republica do Chile, 65 Anderson Square Building, P.O. Box 714
20035-900--Rio de Janeiro--RJ, Brazil George Town, Grand Cayman
(55-21) 2534-4477 Cayman Islands, B.W.I.
(55-21) 2534-1410
(Address and telephone number of registrant's principal executive offices)
Petroleo Brasileiro S.A.--Petrobras Petroleo Brasileiro S.A.--Petrobras
570 Lexington Avenue, 43rd Floor 1330 Avenue of the Americas, 16th Floor
New York, NY 10022 New York, NY 10019-5422
(212) 829-1517 (212) 829-1517
(Name, address and telephone number of agent for service)
Copy to:
Carmen Amalia Corrales
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, NY 10006
(212) 225-2982
Approximate date of commencement of proposed sale to the public: At such
time (from time to time) after the effective date of this Registration
Statement as agreed upon by the registrants and any underwriters or agents in
light of market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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The information in this preliminary prospectus is not complete and may be
changed. These securities may not be sold until the registration statement
filed with the Securities and Exchange Commission is effective. This
preliminary prospectus is not an offer to sell nor does it seek an offer to buy
these securities in any jurisdiction where the offer or sale is not permitted.
Subject to Completion, Dated . , 2002
PROSPECTUS
$8,000,000,000
[LOGO]
PETROLEO BRASILEIRO S.A.
PETROBRAS
Petroleo Brasileiro S.A. -- PETROBRAS
(BRAZILIAN PETROLEUM CORPORATION -- PETROBRAS)
Debt Securities, Warrants,
Preferred Shares,
Preferred Shares Represented by American Depositary Shares,
Common Shares,
Common Shares Represented by American Depositary Shares,
Mandatory Convertible Securities,
Guarantees and
Standby Purchase Agreements
[LOGO]
PETROBRAS INTERNATIONAL
FINANCE COMPANY
Petrobras International Finance Company
Debt Securities accompanied by Guarantees or
Standby Purchase Agreements
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Petroleo Brasileiro S.A. -- Petrobras may offer from time to time debt
securities, warrants, preferred shares, common shares and mandatory convertible
securities guarantees and standby purchase agreements, and Petrobas
International Finance Company may issue debt securities accompanied by
guarantees or standby purchase agreements of Petrobras, with an aggregate
offering price of up to $8,000,000,000 (or the equivalent amount in other
currencies, currency units or composite securities). Petrobras may issue its
common shares or preferred shares in the form of American depositary shares. An
accompanying prospectus supplement will specify the terms of the securities.
We may sell these securities directly or to or through underwriters or
dealers, and also to other purchasers or through agents. The names of any
underwriters or agents will be set forth in an accompanying prospectus
supplement.
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Neither the Securities and Exchange Commission nor any other regulatory
body has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is
a criminal offense.
-----------------
Prospectus dated August 14, 2002.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
U.S. Securities and Exchange Commission (which we refer to as the SEC)
utilizing a "shelf" registration process. Under this shelf process, Petrobras
may sell any combination of debt securities, warrants, preferred shares, common
shares and securities mandatorily convertible into its preferred or common
shares, and PIFCo may sell debt securities accompanied by guarantees or standby
purchase agreements of Petrobras in one or more offerings. Any preferred shares
or common shares of Petrobras, in one or more offerings, may be in the form of
American depositary shares (which we refer to as ADSs) and evidenced by
American depositary receipts (which we refer to as ADRs). From the sales of the
debt securities, warrants, preferred shares, common shares, mandatory
convertible securities and debt securities accompanied by guarantees and
standby purchase agreements, we will receive an aggregate amount of up to
$8,000,000,000 (which is the aggregate issue price of all securities issued).
This prospectus, and the documents incorporated by reference in this
prospectus, provide you with a general description of the debt securities,
warrants, preferred shares, common shares, securities mandatorily convertible
into our preferred or common shares, guarantees and standby purchase agreements
that we may offer. Each time we offer securities pursuant to this prospectus,
we will provide one or more prospectus supplements, attached to the front of
this prospectus, that will contain specific information about the terms of
those securities and their offering. The prospectus supplements may also add,
update or change other information contained in this prospectus. The
registration statement that we filed with the SEC includes exhibits that
provide more detail on the matters discussed in this prospectus. Before you
invest in any securities offered by this prospectus, you should read this
prospectus, any related prospectus supplements and the related exhibits filed
with the SEC, together with the additional information described under the
heading "Where You Can Find More Information".
FORWARD-LOOKING STATEMENTS
Many statements made or incorporated by reference in this prospectus are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are not
based on historical facts and are not assurances of future results. Many of the
forward-looking statements contained in this prospectus may be identified by
the use of forward-looking words, such as "believe", "expect", "anticipate",
"should", "planned", "estimate" and "potential", among others. We have made
forward-looking statements that address, among other things, our:
. regional marketing and expansion strategy;
. drilling and other exploration activities;
. import and export activities;
. projected and targeted capital expenditures and other costs, commitments
and revenues;
. liquidity; and
. development of additional revenue sources.
Because these forward-looking statements involve risks and uncertainties,
there are important factors that could cause actual results to differ
materially from those expressed or implied by these forward-looking statements.
These factors include:
. our ability to obtain financing;
. general economic and business conditions, including crude oil and other
commodity prices, refining margins and prevailing exchange rates;
. competition;
. technical difficulties in the operation of our equipment and the
provision of our services;
. changes in, or failure to comply with, governmental regulations;
. receipt of governmental approvals and licenses;
. business abilities and judgment of personnel;
. availability of qualified personnel;
. international and Brazilian political, economic and social developments;
. military operations, terrorist attacks, wars or embargoes; and
. the costs and availability of adequate insurance coverage.
These statements are not guarantees of future performance and are subject
to certain risks, uncertainties and assumptions that are difficult to predict.
Therefore, our actual results could differ materially from those expressed or
forecast in any forward-looking statements as a result of a variety of factors,
including those in "Risk Factors" set forth in supplements to this prospectus
and in documents incorporated by reference in this prospectus.
All forward-looking statements attributed to us or a person acting on our
behalf are expressly qualified in their entirety by this cautionary statement,
and you should not place reliance on any forward-looking statement contained
herein.
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PETROBRAS AND PIFCO
In this prospectus, unless the context otherwise requires, references to
"Petrobras" means Petroleo Brasileiro S.A. and its consolidated subsidiaries
taken as a whole and references to "PIFCo" means Petrobras International
Finance Company and its consolidated subsidiaries taken as a whole. Terms such
as "we", "us" and "our" generally refer to Petroleo Brasileiro S.A. and
Petrobras International Finance Company, unless the context requires otherwise.
Petrobras
Petroleo Brasileiro S.A. is a mixed-capital company created pursuant to Law
No. 2,004 (effective as of October 3, 1953).
A mixed-capital company is a Brazilian corporation created by special law
of which a majority of the voting capital must be owned by the Brazilian
federal government, a state or a municipality. Petrobras is controlled by the
Brazilian federal government, but its common and preferred shares are publicly
traded.
Petrobras is one of the world's largest integrated oil and gas companies,
engaging in a broad range of oil and gas activities. Based upon its 2001
consolidated revenues, Petrobras is the largest corporation in Brazil and the
third largest industrial corporation in Latin America. For the year ended
December 31, 2001, Petrobras had sales of products and services of U.S.$34,145
million, net operating revenues of U.S.$24,549 million and net income of
U.S.$3,491 million.
Petrobras began operations in Brazil in 1954 as a wholly-owned government
enterprise responsible for all hydrocarbon activities in Brazil. From that time
until 1995, Petrobras had a government-granted monopoly for all crude oil and
gas production, refining and distribution in Brazil. On November 9, 1995, the
Brazilian Constitution was amended to authorize the Brazilian government to
contract with any state or privately owned company to carry out the activities
related to the upstream and downstream segments of the Brazilian oil and gas
sector. This amendment eliminated Petrobras' effective monopoly.
Petrobras engages in a broad range of activities, which cover the following
segments of its operations:
. exploration, development and production of crude oil and oil products in
Brazil;
. refining, transportation and marketing of crude oil, oil products and
fuel alcohol, including investments in petrochemicals;
. distribution of oil products and fuel alcohol to end-users;
. commercialization and transportation of natural gas produced in or
imported into Brazil, including participation in natural gas
distribution and transportation companies in Brazil and development of
thermoelectric power projects and related power activities; and
. international activities, including exploration and production,
transportation, distribution and natural gas and power activities
outside of Brazil.
The crude oil and natural gas industry in Brazil has experienced
significant reforms since the enactment of Law No. 9,478, or the Oil Law, on
August 6, 1997, which established competition in Brazilian markets for crude
oil, oil products and natural gas in order to benefit end-users. Effective
January 2, 2002, the Brazilian government deregulated prices for crude oil and
oil products. The gradual transformation of the oil and gas industry since 1997
has led to increased participation by international companies in Brazil across
all segments of our business, both as Petrobras' competitors and as its
partners.
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In conjunction with the reforms in the Brazilian energy industry, Petrobras
has completed a reorganization designed to ensure its competitiveness and
improved profitability in the evolving Brazilian energy markets. This
reorganization included:
. creation of functional business segments to improve information flow and
decision-making;
. incorporation of rate-of-return hurdles for individual segments;
. increased emphasis on integrated energy projects that allow it to
competitively participate in all aspects of the energy value chain; and
. amendment of its by-laws to enhance transparency and corporate
efficiency.
Petrobras' principal executive office is located at Avenida Republica do
Chile, 65 20035-900 -- Rio de Janeiro -- RJ, Brazil, and its telephone number
is (55-21) 2534 4477.
PIFCo
Petrobras International Finance Company is a Cayman Islands company
established on September 24, 1997 as a wholly-owned subsidiary of Braspetro Oil
Services Company, or Brasoil, a wholly-owned subsidiary of Petrobras
Internacional S.A. (Braspetro). PIFCo was initially incorporated under the name
Brasoil Finance Company, which was changed by special resolution of its
shareholders to Petrobras International Finance Company on September 25, 1997.
On January 14, 2000, the board of directors of Braspetro and Petrobras approved
the transfer of 100% of its voting shares of PIFCo from Brasoil to Petrobras.
Since April 1, 2000, PIFCo has operated as a wholly-owned subsidiary of
Petrobras.
PIFCo was incorporated in order to facilitate and finance the import of
crude oil and oil products into Brazil. Accordingly, its primary purpose is to
act as an intermediary between third-party oil suppliers and Petrobras by
engaging in crude oil and oil product purchases from international suppliers
and resales in U.S. dollars to Petrobras on a deferred payment basis, which
resale price includes a premium to compensate PIFCo for its financing costs.
PIFCo is generally able to obtain credit to finance purchases on the same terms
granted to Petrobras, and it buys crude oil and oil products at the same price
that suppliers would charge Petrobras directly. In strategic terms, Petrobras
uses PIFCo to provide additional access to international capital markets in
order to establish a comprehensive approach to its offshore trade and financing
activities.
In addition to its import business, PIFCo also engages in a number of
non-core activities that are conducted by three wholly-owned subsidiaries
incorporated in 2001:
. Petrobras Netherlands B.V., or PNBV, a Dutch company, incorporated to
engage in leasing activities of primarily offshore exploration and
production of crude oil and natural gas equipment to be used by
Petrobras, while taking advantage of the import and export tax benefits
provided by the Netherlands and Brazil;
. Petrobras Europe Ltd., or PEL, a U.K. company, intended to act as an
agent and advisor in connection with Petrobras' activities in Europe,
the Middle East, the Far East and North Africa; and
. Petrobras Finance Limited, or PFL, a Cayman Islands company,
incorporated with the purpose of facilitating Petrobras' export
receivables securitization program.
Under the laws of the Cayman Islands, PIFCo is an exempted company
incorporated with limited liability. Its registered office is located at
Anderson Square Building, P.O. Box 714, George Town, Cayman Islands, and its
telephone number is (55-21) 2534-1410.
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RECENT DEVELOPMENTS
Perez Companc Acquisition
Petrobras announced on July 22, 2002 that it has reached an agreement in
principle to acquire a controlling interest in Perez Companc S.A. from the
Perez Companc family and the Perez Companc Foundation. Under this agreement,
Petrobras intends to acquire 58.6% of the capital stock of Perez Companc. The
consideration to be paid to the Perez Companc family and the Foundation will
consist of a combination of U.S.$754,621,000 in cash and U.S.$370,548,000 in
debt securities to be issued by Petrobras with a 6% annual coupon and a 7 year
final maturity. The debt securities may, in some circumstances, be settled by
delivery of Petrobras preferred shares in the form of American Depositary
Shares. In addition, Petrobras announced that it has reached an agreement in
principle with the Perez Companc family to acquire 47.1% of the capital stock
of Petrolera Perez Companc S.A. that is owned directly by the family for
U.S.$56,700,000 in cash.
Petrobras has no immediate plans to launch a tender offer for the remaining
outstanding class B shares of Perez Companc. The closing of the transaction is
subject to:
. the execution of a definitive Share Sale and Purchase Agreement;
. the closing of the exchange offer of Perez Companc's subsidiary, Pecom
Energia S.A., in respect of its outstanding Notes, as well as
refinancing of Pecom Energia S.A. bank loans, in both cases leading to
an acceptable debt profile for Perez Companc;
. additional due diligence;
. final approval of the Board of Directors of Petrobras, and
. certain required regulatory approvals.
Investment Considerations
Petrobras cannot assure you that the acquisition of Perez Companc and
Petrolera Perez will be completed or, if it is completed, when or on what terms
it will be completed or whether Petrobras will benefit from the transaction. In
particular, Petrobras cannot assure you that, if the proposed acquisition is
completed, the anticipated timing, efficiencies and benefits of integrating
Perez Companc into the business of Petrobras will be achieved. Differing
corporate cultures, legal and regulatory environments, personalities, languages
and other factors may pose challenges to the success of the acquisition.
In addition, Perez Companc is subject to substantial risks relating to
Argentina and other Latin American countries, particularly Venezuela, and
relating to its business specifically. If one or more of these risks were to
materialize, Petrobras may not be able to realize the benefits that it
currently intends to realize from the Perez Companc acquisition. You should
refer to the documents that Perez Companc has filed with the Securities and
Exchange Commission, and in particular to "Item 3.D.--Risk Factors--Factors
Relating to Argentina" and "--Factors Relating to Us" in Perez Companc's most
recent Annual Report on Form 20-F filed with the Commission, for detailed
information regarding these risks and for further information about Perez
Companc. Petrobras was not involved in the preparation of the Annual Report on
Form 20-F of Perez Companc.
About Perez Companc S.A.
Perez Companc's business activities include oil and gas exploration and
production, refining, petrochemicals, electricity generation, transmission and
distribution and hydrocarbons marketing and transportation. It conducts
operations in Argentina, Bolivia, Brazil, Ecuador, Peru and Venezuela. A
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copy of the Annual Report on Form 20-F of Perez Companc can be obtained from
the U.S. Securities and Exchange Commission in the manner described in "Where
You Can Find More Information."
About Petrolera Perez Companc S.A.
Petrolera Perez Companc S.A.--PPC operates and participates in the
concession of hydrocarbons production in the Entre Lomas area, located in the
Neuquen basin in Argentina. PPC is jointly controlled by the Perez Companc
family (47.1%) and Perez Companc (19.2%).
Petrolera Sante Fe Acquisition
Petrobras announced on August 13, 2002 that it has executed a definitive
agreement to acquire full control of Petrolera Sante Fe, an Argentine oil
company and subsidiary of Devon Energy Corporation, for U.S.$89,550,000,
payable at the closing of the transaction. Petrobras intends for the
transaction to be completed during the last quarter of 2002, subject to
approval of applicable Argentine authorities.
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RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
Petrobras
The following table contains the consolidated ratios of earnings to fixed
charges and preferred dividends of Petrobras for the periods indicated:
Three Months
Year Ended December 31, Ended
------------------------ March 31,
1997 1998 1999 2000 2001 2002
---- ---- ---- ---- ---- ------------
Ratio of earnings to fixed charges and
preferred dividends................. 2.27 0.38 1.57 4.97 4.17 5.07
For purposes of computing the ratio of earnings to fixed charges, earnings
are divided by fixed charges. Earnings represent the sum of income from
continuing operations before income taxes and minority interests for Petrobras
and its consolidated subsidiaries plus fixed charges, minus interest
capitalized, plus amortization of interest capitalized. Fixed charges represent
interest accrued on indebtedness of Petrobras and its consolidated
subsidiaries, including interest capitalized, plus one-third of rents, the
proportion deemed representative of the interest factor.
PIFCo
The following table contains the consolidated ratios of earnings to fixed
charges and the consolidated ratios of earnings to fixed charges and preferred
dividends of PIFCo for the periods indicated:
Year Ended December 31,
-----------------------
1998 1999 2000 2001
---- ---- ---- ----
Ratio of earnings to fixed charges 1.02 1.14 1.29 0.89
For purposes of computing the ratio of earnings to fixed charges, earnings
are divided by fixed charges. Earnings represent the sum of income from
continuing operations before income taxes and minority interests for PIFCo and
its consolidated subsidiaries plus fixed charges, minus interest capitalized,
plus amortization of interest capitalized. Fixed charges represent interest
accrued on indebtedness of PIFCo and its consolidated subsidiaries, including
interest capitalized, plus one-third of rents, the proportion deemed
representative of the interest factor.
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USE OF PROCEEDS
Petrobras
Unless otherwise indicated in an accompanying prospectus supplement,
Petrobras intends to use the net proceeds from the sale of the securities for
general corporate purposes, which may include funding working capital and
capital expenditures, financing potential acquisitions and the repayment of
existing debt. Additional information on the use of net proceeds from the sale
of offered securities will be described in the prospectus supplement relating
to those securities. Petrobras may temporarily invest funds that it does not
need immediately for these purposes in marketable securities.
PIFCo
Unless otherwise indicated in an accompanying prospectus supplement, PIFCo
will use the proceeds of the issuance of its debt securities after deduction of
commissions for general corporate purposes, including the financing of the
purchase of oil product imports and the repayment of existing trade-related
debt. Additional information on the use of net proceeds from the sale of
offered securities will be described in the prospectus supplement relating to
those securities. PIFCo may temporarily invest funds that it does not need
immediately for these purposes in marketable securities.
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THE SECURITIES
We may from time to time offer under this prospectus, separately or
together:
. senior or subordinated debt securities that may be convertible into our
common shares or preferred shares, which may be in the form of ADSs and
evidenced by ADRs;
. securities that are mandatorily convertible into preferred or common
shares (or ADSs representing our preferred or common shares);
. common shares, which may be in the form of ADSs and evidenced by ADRs;
. preferred shares, which may be in the form of ADSs and evidenced by ADRs;
. warrants to purchase common shares, which may be in the form of ADSs and
evidenced by ADRs;
. warrants to purchase preferred shares, which may be in the form of ADSs
and evidenced by ADRs;
. warrants to purchase debt securities;
. guarantees accompanying debt securities of PIFCo; and
. standby purchase agreements accompanying debt securities of PIFCo.
The aggregate initial offering price of all the offered securities will not
exceed $8,000,000,000.
LEGAL OWNERSHIP
In this prospectus and in any attached prospectus supplement, when we refer
to the "holders" of securities as being entitled to specified rights or
payments, we mean only the actual legal holders of the securities. While you
will be the holder if you hold a security registered in your name, more often
than not the registered holder will actually be either a broker, bank, other
financial institution or, in the case of a global security, a depositary. Our
obligations, as well as the obligations of the trustee, any warrant agent, any
transfer agent, any registrar, any depositary and any third parties employed by
us or the other entities listed above, run only to persons who are registered
as holders of our securities, except as may be specifically provided for in a
warrant agreement, warrant certificate, deposit agreement or other contract
governing the securities. For example, once we make payment to the registered
holder, we have no further responsibility for the payment even if that
registered holder is legally required to pass the payment along to you as a
street name customer but does not do so.
If we choose to issue preferred shares or common shares, they may be
evidenced by ADRs and you will hold them indirectly through ADSs. The
underlying preferred shares or common shares will be directly held by a
depositary. Your rights and obligations will be determined by reference to the
terms of the relevant deposit agreement. A copy of the deposit agreements, as
amended from time to time, with respect to our preferred shares and common
shares is on file with the SEC and incorporated by reference in this
prospectus. You may obtain copies of the deposit agreements from the SEC's
Public Reference Room. See "Where You Can Find More Information".
Street Name and Other Indirect Holders
Holding securities in accounts at banks or brokers is called holding in
"street name". If you hold our securities in street name, we will recognize
only the bank or broker, or the financial institution that the bank or broker
uses to hold the securities, as a holder. These intermediary banks, brokers,
other financial institutions and depositaries pass along principal, interest,
dividends and other payments, if any, on the securities, either because they
agree to do so in their customer agreements or because
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they are legally required to do so. This means that if you are an indirect
holder, you will need to coordinate with the institution through which you hold
your interest in a security in order to determine how the provisions involving
holders described in this prospectus and any prospectus supplement will
actually apply to you. For example, if the debt security in which you hold a
beneficial interest in street name can be repaid at the option of the holder,
you cannot redeem it yourself by following the procedures described in the
prospectus supplement relating to that security. Instead, you would need to
cause the institution through which you hold your interest to take those
actions on your behalf. Your institution may have procedures and deadlines
different from or additional to those described in the applicable prospectus
supplement.
If you hold our securities in street name or through other indirect means,
you should check with the institution through which you hold your interest in a
security to find out:
. how it handles payments and notices with respect to the securities;
. whether it imposes fees or charges;
. how it handles voting, if applicable;
. how and when you should notify it to exercise on your behalf any rights
or options that may exist under the securities;
. whether and how you can instruct it to send you securities registered in
your own name so you can be a direct holder as described below; and
. how it would pursue rights under the securities if there were a default
or other event triggering the need for holders to act to protect their
interests.
Global Securities
A global security is a special type of indirectly held security. If we
choose to issue our securities, in whole or in part, in the form of global
securities, the ultimate beneficial owners can only be indirect holders. We do
this by requiring that the global security be registered in the name of a
financial institution we select and by requiring that the securities included
in the global security not be transferred to the name of any other direct
holder unless the special circumstances described below occur. The financial
institution that acts as the sole direct holder of the global security is
called the "depositary". Any person wishing to own a security issued in global
form must do so indirectly through an account with a broker, bank or other
financial institution that in turn has an account with the depositary. The
prospectus supplement indicates whether the securities will be issued only as
global securities.
As an indirect holder, your rights relating to a global security will be
governed by the account rules of your financial institution and of the
depositary, as well as general laws relating to securities transfers. We will
not recognize you as a holder of the securities and instead deal only with the
depositary that holds the global security.
You should be aware that if our securities are issued only in the form of
global securities:
. you cannot have the securities registered in your own name;
. you cannot receive physical certificates for your interest in the
securities;
. you will be a street name holder and must look to your own bank or
broker for payments on the securities and protection of your legal
rights relating to the securities;
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. you may not be able to sell interests in the securities to some
insurance companies and other institutions that are required by law to
own their securities in the form of physical certificates;
. the depositary's policies will govern payments, dividends, transfers,
exchange and other matters relating to your interest in the global
security. We, the trustee, any warrant agent, any transfer agent and any
registrar have no responsibility for any aspect of the depositary's
actions or for its records of ownership interests in the global
security. We, the trustee, any warrant agent, any transfer agent and any
registrar also do not supervise the depositary in any way; and
. the depositary will require that interests in a global security be
purchased or sold within its system using same-day funds for settlement.
In a few special situations described below, a global security representing
our securities will terminate and interests in it will be exchanged for
physical certificates representing the securities. After that exchange, the
choice of whether to hold securities directly or in street name will be up to
you. You must consult your bank or broker to find out how to have your
interests in the securities transferred to your name, so that you will be a
direct holder.
Unless we specify otherwise in the prospectus supplement, the special
situations for termination of a global security representing our securities are:
. when the depositary notifies us that it is unwilling or unable to
continue as depositary and we do not or cannot appoint a successor
depositary within 90 days;
. when we notify the trustee that we wish to terminate the global
security; or
. when an event of default on debt securities has occurred and has not
been cured. (Defaults are discussed later under "Description of Debt
Securities--Events of Default".)
The prospectus supplement may also list additional situations for
terminating a global security that would apply only to the particular series of
securities covered by the prospectus supplement. When a global security
terminates, the depositary (and not us, the trustee, any warrant agent, any
transfer agent or any registrar) is responsible for deciding the names of the
institutions that will be the initial direct holders.
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In the remainder of this document, "you" means direct holders and not street
name or other indirect holders of securities. Indirect holders should read the
previous subsection starting on page 7 entitled "Street Name and Other
Indirect Holders".
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DESCRIPTION OF DEBT SECURITIES
The following summary describes certain provisions of the debt securities
and the Petrobras or PIFCo indenture that will govern these debt securities.
This summary does not purport to be complete and is subject to, and qualified
in its entirety by reference to, the provisions of such indenture, the debt
securities and the prospectus supplement relating to each series of debt
securities.
Indenture
As required by U.S. federal law for all bonds and notes of companies that
are publicly offered, any debt securities that we issue will be governed by a
document called an indenture. The indenture is a contract entered into between
any one of us and JPMorgan Chase Bank, which acts as trustee. The trustee has
two main roles:
. first, the trustee can enforce your rights against us if we default,
although there are some limitations on the extent to which the trustee
acts on your behalf that are described under "Default and Related
Matters--Events of Default--Remedies if an Event of Default Occurs"; and
. second, the trustee performs administrative duties for us, such as
sending interest payments to you, transferring your debt securities to a
new buyer if you sell and sending notices to you.
The indenture and its associated documents contain the full legal text of
the matters described in this section. We have agreed that New York law governs
the indenture and the debt securities. We have filed a copy of the Petrobras
indenture and PIFCo indenture with the SEC as exhibits to our registration
statement. We have consented to the non-exclusive jurisdiction of any U.S.
federal court sitting in the borough of Manhattan in the City of New York, New
York, United States and any appellate court from any thereof.
Types of Debt Securities
Together or separately, we may issue as many distinct series of debt
securities under our indentures as are authorized by the corporate bodies that
are required under applicable law and our corporate organizational documents to
authorize the issuance of debt securities. Specific issuances of debt
securities will also be governed by a supplemental indenture, an officer's
certificate or a document evidencing the authorization of any such corporate
body. This section summarizes material terms of the debt securities that are
common to all series and to each of the Petrobras and PIFCo indentures, unless
otherwise indicated in this section and in the prospectus supplement relating
to a particular series.
Because this section is a summary, it does not describe every aspect of the
debt securities. This summary is subject to and qualified in its entirety by
reference to all the provisions of the indenture, including the definition of
various terms used in the indenture. For example, we describe the meanings for
only the more important terms that have been given special meanings in the
indenture. We also include references in parentheses to some sections of the
indenture. Whenever we refer to particular sections or defined terms of the
indenture in this prospectus or in any prospectus supplement, those sections or
defined terms are incorporated by reference herein or in such prospectus
supplement.
We may issue the debt securities at par, at a premium or as original issue
discount securities, which are debt securities that are offered and sold at a
substantial discount to their stated principal amount. We may also issue the
debt securities as indexed securities or securities denominated in currencies
other than the U.S. dollar, currency units or composite currencies, as
described in more
12
detail in the prospectus supplement relating to any such debt securities. We
will describe the U.S. federal income tax consequences and any other special
considerations applicable to original issue discount, indexed or foreign
currency debt securities in the applicable prospectus supplement(s).
In addition, the material financial, legal and other terms particular to a
series of debt securities will be described in the prospectus supplement(s)
relating to that series. Those terms may vary from the terms described here.
Accordingly, this summary also is subject to and qualified by reference to the
description of the terms of the series described in the applicable prospectus
supplement(s).
The prospectus supplement relating to a series of debt securities will
describe the following terms of the series:
. the title of the debt securities of the series;
. any limit on the aggregate principal amount of the debt securities of
the series (including any provision for the future offering of
additional debt securities of the series beyond any such limit);
. whether the debt securities will be issued in registered or bearer form;
. whether the debt securities will be accompanied by a standby purchase
agreement or guarantee;
. the date or dates on which the debt securities of the series will mature
and any other date or dates on which we will pay the principal of the
debt securities of the series;
. the annual rate or rates, which may be fixed or variable, at which the
debt securities will bear interest, if any, and the date or dates from
which that interest will accrue;
. the date or dates on which any interest on the debt securities of the
series will be payable and the regular record date or dates we will use
to determine who is entitled to receive interest payments;
. the place or places where the principal and any premium and interest in
respect of the debt securities of the series will be payable;
. any period or periods during which, and the price or prices at which, we
will have the option to redeem or repurchase the debt securities of the
series and the other material terms and provisions applicable to our
redemption or repurchase rights;
. whether the debt securities will be senior or subordinated securities;
. whether the debt securities will be our secured or unsecured obligations;
. any obligation we will have to redeem or repurchase the debt securities
of the series, including any sinking fund or analogous provision, the
period or periods during which, and the price or prices at which, we
would be required to redeem or repurchase the debt securities of the
series and the other material terms and provisions applicable to our
redemption or repurchase obligations;
. if other than $1,000 or an even multiple of $1,000, the denominations in
which the series of debt securities will be issuable;
. if other than U.S. dollars, the currency in which the debt securities of
the series will be denominated or in which the principal of or any
premium or interest on the debt securities of the series will be payable;
. if we or you have a right to choose the currency, currency unit or
composite currency in which payments on any of the debt securities of
the series will be made, the currency, currency unit or composite
currency that we or you may elect, the period during which we or you
must make the election and the other material terms applicable to the
right to make such elections;
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. if other than the full principal amount, the portion of the principal
amount of the debt securities of the series that will be payable upon a
declaration of acceleration of the maturity of the debt securities of
the series;
. any index or other special method we will use to determine the amount of
principal or any premium or interest on the debt securities of the
series;
. the applicability of the provisions described under "Defeasance and
Discharge";
. if we issue the debt securities of the series in whole or part in the
form of global securities as described under "Legal Ownership--Global
Securities", the name of the depositary with respect to the debt
securities of the series, and the circumstances under which the global
securities may be registered in the name of a person other than the
depositary or its nominee if other than those described under "Legal
Ownership--Global Securities";
. whether the debt securities will be convertible or exchangeable at your
option or at our option into equity securities, and, if so, the terms
and conditions of conversion or exchange;
. any covenants to which we will be subject with respect to the debt
securities of the series; and
. any other special features of the debt securities of the series that are
not inconsistent with the provisions of the indenture.
In addition, the prospectus supplement will state whether we will list the debt
securities of the series on any stock exchange(s) and, if so, which one(s).
Additional Mechanics
Form, Exchange and Transfer
The debt securities will be issued, unless otherwise indicated in the
applicable prospectus supplement, in denominations that are even multiples of
$1,000 and in global registered form. (Section 3.02)
You may have your debt securities broken into more debt securities of
smaller denominations or combined into fewer debt securities of larger
denominations, as long as the total principal amount is not changed. This is
called an exchange. (Section 3.05)
You may exchange or transfer your registered debt securities at the office
of the trustee. The trustee will maintain an office in New York, New York. The
trustee acts as our agent for registering debt securities in the names of
holders and transferring registered debt securities. We may change this
appointment to another entity or perform the service ourselves. The entity
performing the role of maintaining the list of registered holders is called the
"security registrar". It will also register transfers of the registered debt
securities. (Section 3.05)
You will not be required to pay a service charge to transfer or exchange
debt securities, but you may be required to pay any tax or other governmental
charge associated with the exchange or transfer. The transfer or exchange of a
registered debt security will only be made if the security registrar is
satisfied with your proof of ownership.
If we designate additional transfer agents, they will be named in the
prospectus supplement. We may cancel the designation of any particular transfer
agent. We may also approve a change in the office through which any transfer
agent acts. (Section 10.02)
If the debt securities are redeemable and we redeem less than all of the
debt securities of a particular series, we may block the transfer or exchange
of debt securities in order to freeze the list of
14
holders to prepare the mailing during the period beginning 15 days before the
day we mail the notice of redemption and ending on the day of that mailing. We
may also refuse to register transfers or exchanges of debt securities selected
for redemption. However, we will continue to permit transfers and exchanges of
the unredeemed portion of any debt security being partially redeemed. (Section
3.05)
Payment and Paying Agents
If your debt securities are in registered form, we will pay interest to you
if you are a direct holder listed in the trustee's records at the close of
business on a particular day in advance of each due date for interest, even if
you no longer own the security on the interest due date. That particular day,
usually about two weeks in advance of the interest due date, is called the
"regular record date" and will be stated in the prospectus supplement. (Section
3.07)
We will pay interest, principal, additional amounts and any other money due
on the registered debt securities at the corporate trust office of the trustee
in New York City (which is currently located at 450 W. 33rd St., 15th Floor,
New York, New York 10001, Attention: Institutional Trust Services) or at the
office of J.P. Morgan Trust Bank Ltd., a bank established under the laws of
Japan (which is currently located at Akasaka Park Building, 13th Floor, 2-20
Akasaka, 5-chome, Minato-ku, Tokyo 107-6151, Japan). You must make arrangements
to have your payments picked up at or wired from that office. We may also
choose to pay interest by mailing checks. Interest on global securities will be
paid to the holder thereof by wire transfer of same-day funds.
Holders buying and selling debt securities must work out between themselves
how to compensate for the fact that we will pay all the interest for an
interest period to, in the case of registered debt securities, the one who is
the registered holder on the regular record date. The most common manner is to
adjust the sales price of the debt securities to pro-rate interest fairly
between the buyer and seller. This pro-rated interest amount is called "accrued
interest".
----------------------------------------------------------------------
Street name and other indirect holders should consult their banks or
brokers for information on how they will receive payments.
----------------------------------------------------------------------
We may also arrange for additional payment offices, and may cancel or
change these offices, including our use of the trustee's corporate trust
office. These offices are called "paying agents". We may also choose to act as
our own paying agent. We must notify you of changes in the paying agents for
the debt securities of any series that you hold. (Section 10.02)
Notices
We and the trustee will send notices only to direct holders, using their
addresses as listed in the trustee's records. (Section 1.06)
Regardless of who acts as paying agent, all money that we pay to a paying
agent that remains unclaimed at the end of two years after the amount is due to
direct holders will be repaid to us. After that two-year period, direct holders
may look only to us for payment and not to the trustee, any other paying agent
or anyone else. (Section 10.03)
Special Situations
Mergers and Similar Events
Under the indenture, we are generally permitted to consolidate or merge
with another entity. We are also permitted to sell or lease substantially all
of our assets to another entity or to buy or lease
15
substantially all of the assets of another entity. No vote by holders of debt
securities approving any of these actions is required, unless as part of the
transaction we make changes to the indenture requiring your approval, as
described later under "--Modification and Waiver". We may take these actions as
part of a transaction involving outside third parties or as part of an internal
corporate reorganization. We may take these actions even if they result in:
. a lower credit rating being assigned to the debt securities; or
. additional amounts becoming payable in respect of withholding tax, and
the debt securities thus being subject to redemption at our option, as
described later under "--Optional Tax Redemption".
We have no obligation under the indenture to seek to avoid these results,
or any other legal or financial effects that are disadvantageous to you, in
connection with a merger, consolidation or sale or lease of assets that is
permitted under the indenture. However, we may not take any of these actions
unless all the following conditions are met:
. If we merge out of existence or sell or lease our assets, the other
entity must unconditionally assume our obligations on the debt
securities, including the obligation to pay the additional amounts
described under "Payment of Additional Amounts". This assumption may be
by way of a full and unconditional guarantee in the case of a sale or
lease of substantially all of our assets.
. If such other entity is organized under the laws of a country other than
the United States, a state thereof or Brazil, it must indemnify you
against any tax, assessment or governmental charge or other cost
resulting from the transaction.
. We must not be in default on the debt securities immediately prior to
such action and such action must not cause a default. For purposes of
this no-default test, a default would include an event of default that
has occurred and not been cured, as described later under "Default and
Related Matters--Events of Default--What is An Event of Default?" A
default for this purpose would also include any event that would be an
event of default if the requirements for notice of default or existence
of defaults for a specified period of time were disregarded.
. The entity to which we sell or lease such assets guarantees our
obligations or the entity into which we merge or consolidate with must
execute a supplement to the indenture, known as a supplemental
indenture. In the supplemental indenture, the entity must promise to be
bound by every obligation in the indenture. Furthermore, in this case,
the trustee must receive an opinion of counsel stating that the entity's
guarantees are valid, that certain registration requirements applicable
to the guarantees have been fulfilled and that the supplemental
indenture complies with the Trust Indenture Act of 1939. The entity that
guarantees our obligations must also deliver certain certificates and
other documents to the trustee.
. We must deliver certain certificates, opinions of our counsel and other
documents to the trustee.
. If a transaction of this type occurs with respect to PIFCo, PIFCo must
deliver a notice of describing that transaction to Moody's to the extent
that Moody's is at that time rating the PIFCo debt securities.
. We must satisfy any other requirements specified in the prospectus
supplement. (Section 8.01)
It is possible that the U.S. Internal Revenue Service may deem a merger or
other similar transaction to cause for U.S. federal income tax purposes an
exchange of debt securities for new securities by the holders of the debt
securities. This could result in the recognition of taxable gain or loss for
U.S. federal income tax purposes and possible other adverse tax consequences.
16
Modification and Waiver
There are three types of changes we can make to the indenture and the debt
securities.
Changes Requiring Your Approval. First, there are changes that cannot be
made to your debt securities without your specific approval. These are the
following types of changes:
. change the stated maturity of the principal, interest or premium on a
debt security;
. reduce any amounts due on a debt security;
. change any obligation to pay the additional amounts described under
"Payment of Additional Amounts";
. reduce the amount of principal payable upon acceleration of the maturity
of a debt security following a default;
. change the place or currency of payment on a debt security;
. impair any of the conversion or exchange rights of your debt security;
. impair your right to sue for payment, conversion or exchange;
. reduce the percentage of holders of debt securities whose consent is
needed to modify or amend the indenture;
. reduce the percentage of holders of debt securities whose consent is
needed to waive compliance with various provisions of the indenture or
to waive specified defaults; and
. modify any other aspect of the provisions dealing with modification and
waiver of the indenture. (Section 9.02)
Changes Requiring a Majority Vote. The second type of change to the
indenture and the debt securities is the kind that requires a vote of approval
by the holders of debt securities that together represent a majority of the
outstanding principal amount of the particular series affected. Most changes
fall into this category, except for clarifying changes, amendments, supplements
and other changes that would not adversely affect holders of the debt
securities in any material respect. For example, this vote would be required
for us to obtain a waiver of all or part of any covenants described in an
applicable prospectus supplement or a waiver of a past default. However, we
cannot obtain a waiver of a payment default or any other aspect of the
indenture or the debt securities listed in the first category described
previously beginning above under "Changes Requiring Your Approval" unless we
obtain your individual consent to the waiver. (Sections 5.13 and 9.02)
Changes Not Requiring Approval. The third type of change does not require
any vote by holders of debt securities. This type is limited to clarifications
of ambiguities, omissions, defects and inconsistencies, amendments, supplements
and other changes that would not adversely affect holders of the debt
securities in any material respect, such as adding covenants, additional events
of default or successor trustees. (Section 9.01)
Further Details Concerning Voting. When taking a vote, we will use the
following rules to decide how much principal amount to attribute to a security:
. For original issue discount securities, we will use the principal amount
that would be due and payable on the voting date if the maturity of the
debt securities were accelerated to that date because of a default.
. Debt securities that we, any of our affiliates and any other obligor
under the debt securities acquire or hold will not be counted as
outstanding when determining voting rights.
17
. For debt securities whose principal amount is not known (for example,
because it is based on an index), we will use a special rule for that
security described in the prospectus supplement for that security.
. For debt securities denominated in one or more foreign currencies,
currency units or composite currencies, we will use the U.S. dollar
equivalent as of the date on which such debt securities were originally
issued.
Debt securities will not be considered outstanding, and therefore will not
be eligible to vote, if we have deposited or set aside in trust for you money
for their payment or redemption. Debt securities will also not be eligible to
vote if they have been fully defeased as described under "Defeasance and
Discharge". (Section 1.01)
We will generally be entitled to set any day as a record date for the
purpose of determining the holders of outstanding debt securities that are
entitled to vote or take other action under the indenture. In limited
circumstances, the trustee will be entitled to set a record date for action by
holders. If we or the trustee set a record date for a vote or other action to
be taken by holders of a particular series, that vote or action may be taken
only by persons who are holders of outstanding debt securities of that series
on the record date and must be taken within 180 days following the record date
or another period that we or, if it sets the record date, the trustee may
specify. We may shorten or lengthen (but not beyond 180 days) this period from
time to time. (Section 1.04)
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Street name and other indirect holders should consult their banks or brokers
for information on how approval may be granted or denied if we seek to change
the indenture or the debt securities or request a waiver.
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Redemption and Repayment
Unless otherwise indicated in the applicable prospectus supplement, your
debt security will not be entitled to the benefit of any sinking fund; that is,
we will not deposit money on a regular basis into any separate custodial
account to repay your debt securities. In addition, other than as set forth in
"Optional Tax Redemption" below, we will not be entitled to redeem your debt
security before its stated maturity unless the applicable prospectus supplement
specifies a redemption commencement date. You will not be entitled to require
us to buy your debt security from you, before its stated maturity, unless the
applicable prospectus supplement specifies one or more repayment dates.
If the applicable prospectus supplement specifies a redemption commencement
date or a repayment date, it will also specify one or more redemption prices or
repayment prices, which may be expressed as a percentage of the principal
amount of your debt security or by reference to one or more formulae used to
determine the redemption price(s). It may also specify one or more redemption
periods during which the redemption prices relating to a redemption of debt
securities during those periods will apply.
If the applicable prospectus supplement specifies a redemption commencement
date, we may redeem your debt security at our option at any time on or after
that date. If we redeem your debt security, we will do so at the specified
redemption price, together with interest accrued to the redemption date. If
different prices are specified for different redemption periods, the price we
pay will be the price that applies to the redemption period during which your
debt security is redeemed. If less than all of the debt securities are
redeemed, the trustee will choose the debt securities to be redeemed by lot, or
in the trustee's discretion, pro rata. (Section 11.03)
If the applicable prospectus supplement specifies a repayment date, your
debt security will be repayable by us at your option on the specified repayment
date(s) at the specified repayment price(s), together with interest accrued and
any additional amounts to the repayment date. (Section 11.04)
18
In the event that we exercise an option to redeem any debt security, we
will give to the trustee and the holder written notice of the principal amount
of the debt security to be redeemed, not less than 30 days nor more than 60
days before the applicable redemption date. We will give the notice in the
manner described above under "Additional Mechanics--Notices".
If a debt security represented by a global security is subject to repayment
at the holder's option, the depositary or its nominee, as the holder, will be
the only person that can exercise the right to repayment. Any indirect holders
who own beneficial interests in the global security and wish to exercise a
repayment right must give proper and timely instructions to their banks or
brokers through which they hold their interests, requesting that they notify
the depositary to exercise the repayment right on their behalf. Different firms
have different deadlines for accepting instructions from their customers, and
you should take care to act promptly enough to ensure that your request is
given effect by the depositary before the applicable deadline for exercise.
----------------------------------------------------------------------
Street name and other indirect holders should contact their banks or
brokers for information about how to exercise a repayment right in a
timely manner.
----------------------------------------------------------------------
In the event that the option of the holder to elect repayment as described
above is deemed to be a "tender offer" within the meaning of Rule 14e-1 under
the Securities Exchange Act of 1934, we will comply with Rule 14e-1 as then in
effect to the extent it is applicable to us and the transaction.
Subject to any restrictions that will be described in the prospectus
supplement, we or our affiliates may purchase debt securities from investors
who are willing to sell from time to time, either in the open market at
prevailing prices or in private transactions at negotiated prices. Debt
securities that we or they purchase may, in our discretion, be held, resold or
canceled.
Optional Tax Redemption
Unless otherwise indicated in a prospectus supplement, we may have the
option to redeem, in whole but not in part, the debt securities where, as a
result of a change in, execution of or amendment to any laws or treaties or the
official application or interpretation of any laws or treaties, we would be
required to pay additional amounts as described later under "Payment of
Additional Amounts". This applies only in the case of changes, executions or
amendments that occur on or after the date specified in the prospectus
supplement for the applicable series of debt securities and in the jurisdiction
where we are incorporated. If succeeded by another entity, the applicable
jurisdiction will be the jurisdiction in which such successor entity is
organized, and the applicable date will be the date the entity became a
successor. (Section 11.08)
If the debt securities are redeemed, the redemption price for debt
securities (other than original issue discount debt securities) will be equal
to the principal amount of the debt securities being redeemed plus accrued
interest and any additional amounts due on the date fixed for redemption. The
redemption price for original issue discount debt securities will be specified
in the prospectus supplement for such securities. Furthermore, we must give you
between 30 and 60 days' notice before redeeming the debt securities.
Conversion
Your debt securities may be convertible into or exchangeable for shares of
our capital stock at your option or at our option, which may be represented by
ADSs, or other securities if your prospectus supplement so provides. If your
debt securities are convertible or exchangeable, your prospectus supplement
will include provisions as to whether conversion or exchange is at your option
or at our option. Your prospectus supplement would also include provisions
regarding the adjustment of the number of securities to be received by you upon
conversion or exchange.
19
Payment of Additional Amounts
Brazil (including any authority therein or thereof having the power to tax)
may require us to withhold amounts from payments on the principal or any
premium or interest on a debt security for taxes or any other governmental
charges. If Brazil requires a withholding of this type, we are required,
subject to the exceptions listed below, to pay you an additional amount so that
the net amount you receive will be the amount specified in the debt security to
which you are entitled. However, in order for you to be entitled to receive the
additional amount, you must not be resident of Brazil.
We will not have to pay additional amounts under any of the following
circumstances:
. The withholding is imposed only because the holder has some connection
with Brazil other than the mere holding of the debt security or the
receipt of the relevant payment in respect of the debt security.
. The withholding is imposed due to the presentation of a debt security,
if presentation is required, for payment on a date more than 30 days
after the security became due or after the payment was provided for.
. The amount is required to be deducted or withheld by any paying agent
from a payment on or in respect of the debt security, if such payment
can be made without such deduction or withholding by any other payment
agent and we duly provide for such other paying agent.
. The withholding is on account of an estate, inheritance, gift, sale,
transfer, personal property or similar tax or other governmental charge.
. The withholding is for any taxes, duties, assessments or other
governmental charges that are payable otherwise than by deduction or
withholding from payments on the debt security.
. The withholding is imposed or withheld because the holder or beneficial
owner failed to comply with any of our requests for the following that
the statutes, treaties, regulations or administrative practices of
Brazil required as a precondition to exemption from all or part of such
withholding:
--to provide information about the nationality, residence or identity of
the holder or beneficial owner; or
--to make a declaration or satisfy any information requirements.
. The holder is a fiduciary or partnership or other entity that is not the
sole beneficial owner of the payment in respect of which the withholding
is imposed, and the laws of Brazil require the payment to be included in
the income of a beneficiary or settlor of such fiduciary or a member of
such partnership or another beneficial owner who would not have been
entitled to such additional amounts had it been the holder of such debt
security.
. where any additional amounts are imposed on a payment on the debt
securities to an individual and is required to be made pursuant to any
European Union directive on the taxation of savings income relating to
the directive approved by the European Parliament on March 14, 2002, or
otherwise implementing the conclusions of the Economic and Financial
Council of Ministers of the member states of the European Union (ECOFIN)
Council meeting of November 26 and 27, 2000 or any law implementing or
complying with, or introduced in order to conform to, any such directive.
The prospectus supplement relating to the debt securities may describe
additional circumstances in which we would not be required to pay additional
amounts. (Section 10.04)
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Additional Terms of the PIFCo Debt Securities
The debt securities will have the following basic terms:
. The PIFCo debt securities will have an investment grade rating at
issuance from at least one nationally recognized statistical rating
organization as that term is defined under the Securities Exchange Act
of 1934; and
. Payments of amounts due by PIFCo under the debt securities and the PIFCo
indenture will be effectively guaranteed by Petrobras through the
operation of a standby purchase agreement or, in limited circumstances,
a guarantee. In each case, any and all payments by Petrobras will be
made free and clear of and without withholding or deduction of any
taxes, subject to certain limitations and conditions. See "Description
of the Standby Purchase Agreements" and "Description of the Guarantees".
Restrictive Covenants
The Petrobras indenture does not contain any covenants restricting the
ability of Petrobras to make payments, incur indebtedness, dispose of assets,
enter into sale and leaseback transactions, issue and sell capital stock, enter
into transactions with affiliates, create or incur liens on Petrobras' property
or engage in business other than its present business. Restrictive covenants,
if any, with respect to any securities of Petrobras or PIFCo will be contained
in the applicable supplemental indenture and described in the applicable
prospectus supplement with respect to those securities.
Defeasance and Discharge
The following discussion of full defeasance and discharge and covenant
defeasance and discharge will only be applicable to your series of debt
securities if we choose to apply them to that series, in which case we will
state that in the prospectus supplement. (Section 14.01)
Full Defeasance
We can legally release ourselves from any payment or other obligations on
the debt securities, except for various obligations described below (called
"full defeasance"), if we, in addition to other actions, put in place the
following arrangements for you to be repaid:
. We must irrevocably deposit in trust for your benefit and the benefit of
all other direct holders of the debt securities a combination of money
and U.S. government or U.S. government agency debt securities or bonds
that, in the opinion of a firm of nationally recognized independent
public accounts, will generate enough cash to make interest, principal
and any other payments, including additional amounts, on the debt
securities on their various due dates.
. We must deliver to the trustee a legal opinion of our counsel, based
upon a ruling by the U.S. Internal Revenue Service or upon a change in
applicable U.S. federal income tax law, confirming that under then
current U.S. federal income tax law we may make the above deposit
without causing you to be taxed on the debt securities any differently
than if we did not make the deposit and just repaid the debt securities
ourselves.
. If the debt securities are listed on any securities exchange, we must
deliver to the trustee a legal opinion of our counsel confirming that
the deposit, defeasance and discharge will not cause the debt securities
to be delisted. (Section 14.04)
If we ever did accomplish full defeasance as described above, you would
have to rely solely on the trust deposit for repayment on the debt securities.
You could not look to us for repayment in the unlikely event of any shortfall.
Conversely, the trust deposit would most likely be protected from claims
21
of our lenders and other creditors if we ever become bankrupt or insolvent.
However, even if we take these actions, a number of our obligations relating to
the debt securities will remain. These include the following obligations:
. to register the transfer and exchange of debt securities;
. to replace mutilated, destroyed, lost or stolen debt securities;
. to maintain paying agencies; and
. to hold money for payment in trust.
Covenant Defeasance
We can make the same type of deposit described above and be released from
all or some of the restrictive covenants (if any) that apply to the debt
securities of any particular series. This is called "covenant defeasance". In
that event, you would lose the protection of those restrictive covenants but
would gain the protection of having money and securities set aside in trust to
repay the debt securities. In order to achieve covenant defeasance, we must do
the following:
. We must irrevocably deposit in trust for your benefit and the benefit of
all other direct holders of the debt securities a combination of money
and U.S. government or U.S. government agency debt securities or bonds
that, in the opinion of a nationally recognized firm of independent
accountants, will generate enough cash to make interest, principal and
any other payments, including additional amounts, on the debt securities
on their various due dates.
. We must deliver to the trustee a legal opinion of our counsel confirming
that under then current U.S. federal income tax law we may make the
above deposit without causing you to be taxed on the debt securities any
differently than if we did not make the deposit and just repaid the debt
securities ourselves.
. If the debt securities are listed on any securities exchange, we must
deliver to the trustee a legal opinion of our counsel confirming that
the deposit, defeasance and discharge will not cause the debt securities
to be delisted. (Section 14.04)
If we accomplish covenant defeasance, the following provisions of the
indenture and/or the debt securities would no longer apply:
. Any covenants applicable to the series of debt securities and described
in the applicable prospectus supplement.
. The events of default relating to breach of those covenants being
defeased and acceleration of the maturity of other debt, described later
under "What Is An Event of Default?".
If we accomplish covenant defeasance, you can still look to us for
repayment of the debt securities if there were a shortfall in the trust
deposit. In fact, if any event of default occurred (such as our bankruptcy) and
the debt securities become immediately due and payable, there may be such a
shortfall. Depending on the event causing the default, you may not be able to
obtain payment of the shortfall. (Sections 14.03 and 14.04)
Default and Related Matters
Ranking
The applicable prospectus supplement will indicate whether the debt
securities are subordinated to any of our other debt obligations and whether
they will be secured by any of our assets. If they are not subordinated, they
will rank equally with all our other unsecured and unsubordinated indebtedness.
If they are not secured, the securities will effectively be subordinate to our
secured indebtedness and to the indebtedness of our subsidiaries.
22
Events of Default
You will have special rights if an event of default occurs and is not
cured, as described later in this subsection.
What Is an Event of Default? The term event of default means any of the
following:
. We do not pay the principal or any premium on a debt security within 14
days of its due date.
. We do not pay interest, including any additional amounts, on a debt
security within 30 days of its due date.
. We remain in breach of any covenant or any other term of the indenture
for 60 days after we receive a notice of default stating that we are in
breach. The notice must be sent by either the trustee or holders of 25%
of the principal amount of debt securities of the affected series.
. We remain in default in the conversion of any convertible security of a
given series for 30 days after we receive a notice of default stating
that we are in default. The notice must be sent by either the trustee or
the holders of 25% of the principal amount of debt securities of the
affected series.
. If the total aggregate principal amount of all of our indebtedness which
meets one of the following conditions equals or exceeds U.S.$100,000,000
(or its equivalent in another currency):
--the acceleration of any of our indebtedness in accordance with the
terms of such indebtedness, it being understood that prepayment or
redemption by us of any indebtedness is not acceleration for this
purpose; and
--we fail to pay any indebtedness when due or, as the case may be,
beyond any applicable grace period specified in the underlying
transaction document; and
--we fail to pay when due any amount payable by us under any guarantee
for, or indemnity in respect of, the indebtedness of any other person.
. We stop paying or we admit that we are generally unable to pay our debts
as they become due, we are adjudicated or found bankrupt or insolvent or
we are ordered by a court or pass a resolution to dissolve.
. We voluntarily commence proceedings under any applicable liquidation,
insolvency, composition, reorganization or any other similar laws, or we
file an application for the appointment of an administrative or other
receiver, manager or administrator, or any such or other similar
official, in relation to us.
. We enter into any composition or other similar arrangement with our
creditors under applicable Brazilian law (such as a concordata, which is
a type of liquidation agreement) or a receiver, administrator or similar
person is appointed in relation to, or a distress, execution,
attachment, sequestration or other process is levied, enforced upon,
sued out or put in force against, the whole or a substantial part of our
undertakings or assets and is not discharged or removed within 90 days.
. Any other event of default described in the applicable prospectus
supplement occurs. (Section 5.01)
For these purposes, "indebtedness" means any obligation (whether present or
future, actual or contingent and including 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 United States, would be a capital lease obligation).
23
An event of default for a particular series of debt securities does not
necessarily constitute an event of default for any other series of debt
securities issued under the indenture, although the default and acceleration of
one series of debt securities may trigger a default and acceleration of another
series of debt securities.
Remedies if an Event of Default Occurs. If an event of default has
occurred and has not been cured, the trustee or the holders of 25% in principal
amount of the debt securities of the affected series may declare the entire
principal amount of all the debt securities of that series to be due and
immediately payable. This is called a declaration of acceleration of maturity.
If an event of default occurs because of certain events in bankruptcy,
insolvency or reorganization, or an equivalent proceeding under Brazilian law,
the principal amount of all the debt securities of that series will be
automatically accelerated without any action by the trustee, any holder or any
other person. A declaration of acceleration of maturity may be canceled by the
holders of at least a majority in principal amount of the debt securities of
the affected series. (Section 5.02)
Except in cases of default, where the trustee has some special duties, the
trustee is not required to take any action under the indenture at the request
of any holders unless the holders offer the trustee reasonably satisfactory
protection from expenses and liability. This protection is called an
"indemnity". (Section 6.03) If reasonable indemnity is provided, the holders of
a majority in principal amount of the outstanding debt securities of the
relevant series may direct the time, method and place of conducting any lawsuit
or other formal legal action seeking any remedy available to the trustee. These
majority holders may also direct the trustee in performing any other action
under the indenture. (Section 5.12) Before you bypass the trustee and bring
your own lawsuit or other formal legal action or take other steps to enforce
your rights or protect your interests relating to the debt securities, the
following must occur:
. You must give the trustee written notice that an event of default has
occurred and remains uncured.
. The holders of 25% in principal amount of all outstanding debt
securities of the relevant series must make a written request that the
trustee take action because of the default, and must offer satisfactory
indemnity to the trustee against the cost and other liabilities of
taking that action.
. The trustee must have not taken action for 60 days after receipt of the
above notice and offer of indemnity.
. The holders of a majority in principal amount of all outstanding debt
securities of the relevant series must not have given the trustee a
direction that is inconsistent with the above notice. (Section 5.07)
However, you are entitled at any time to bring a lawsuit for the payment of
money due on your debt security on or after its due date and if your debt
security is convertible or exchangeable into another security to bring a
lawsuit for the enforcement of your right to convert or exchange your debt
security or to receive securities upon conversion or exchange. (Section 5.08)
----------------------------------------------------------------------
Street name and other indirect holders should consult their banks or
brokers for information on how to give notice or direction to or make
a request of the trustee and to make or cancel a declaration of
acceleration.
----------------------------------------------------------------------
We will furnish to the trustee within 90 days after the end of our fiscal
year every year a written statement of certain of our officers that will either
certify that, to the best of their knowledge, we are in compliance with the
indenture and the debt securities or specify any default. (Section 10.05) In
24
addition, we will notify the trustee within 15 days (or promptly in the case of
certain bankruptcy-related events of default) after becoming aware of the
occurrence of any event of default.
Regarding the Trustee
We and some of our subsidiaries maintain banking relations with the trustee
in the ordinary course of our business.
If an event of default occurs, or an event occurs that would be an event of
default if the requirements for giving us default notice or our default having
to exist for a specified period of time were disregarded, the trustee may be
considered to have a conflicting interest with respect to the debt securities
or the indenture for purposes of the Trust Indenture Act of 1939. In that case,
the trustee may be required to resign as trustee under the applicable indenture
and we would be required to appoint a successor trustee.
25
DESCRIPTION OF MANDATORY CONVERTIBLE SECURITIES
We may issue mandatorily convertible securities under which holders receive
a specified number of our common shares or preferred shares at a future date or
dates. The price per mandatory convertible security and the number of common
shares or preferred shares, as the case may be, that holders receive at
maturity may be fixed at the time mandatory convertible securities are issued
or may be determined by reference to a specific formula set forth in the
mandatory convertible security. The mandatory convertible securities also may
require us to make periodic payments to the holders of the mandatory
convertible securities, and such payments may be secured.
The applicable prospectus supplement will describe the terms of the
mandatory convertible securities. The description in the prospectus supplement
will not necessarily be complete, and reference will be made to the mandatory
convertible securities, and, if applicable, collateral, depositary or custodial
arrangements, relating to the mandatory convertible securities. Material U.S.
and Brazilian federal income tax considerations applicable to the holders of
the mandatory convertible securities will also be discussed in the applicable
prospectus supplement.
26
DESCRIPTION OF WARRANTS
We may issue warrants to purchase our debt securities, preferred shares
(which may be in the form of ADSs) or common shares (which may be in the form
of ADSs). Warrants may be issued independently or together with any securities
and may be attached to or separate from those securities. Each series of
warrants will be issued under a separate warrant agreement to be entered into
by us and a bank or trust company, as warrant agent, all as will be set forth
in the applicable prospectus supplement.
Debt Warrants
The following briefly summarizes the material terms that will generally be
included in a debt warrant agreement. However, we may include different terms
in the debt warrant agreement for any particular series of debt warrants and
such other terms and all pricing and related terms will be disclosed in the
applicable prospectus supplement. You should read the particular terms of any
debt warrants that are offered by us and the related debt warrant agreement
which will be described in more detail in the applicable prospectus supplement.
The prospectus supplement will also state whether any of the generalized
provisions summarized below do not apply to the debt warrants being offered.
General
We may issue warrants for the purchase of our debt securities. As explained
below, each debt warrant will entitle its holder to purchase debt securities at
an exercise price set forth in, or to be determined as set forth in, the
applicable prospectus supplement. Debt warrants may be issued separately or
together with debt securities.
The debt warrants are to be issued under debt warrant agreements to be
entered into by us and one or more banks or trust companies, as debt warrant
agent, all as will be set forth in the applicable prospectus supplement. At or
around the time of an offering of debt warrants, a form of debt warrant
agreement, including a form of debt warrant certificate representing the debt
warrants, reflecting the alternative provisions that may be included in the
debt warrant agreements to be entered into with respect to particular offerings
of debt warrants, will be filed by amendment as an exhibit to the registration
statement of which this prospectus forms a part.
Terms of the Debt Warrants to Be Described In the Prospectus Supplement
The particular terms of each issue of debt warrants, the debt warrant
agreement relating to such debt warrants and such debt warrant certificates
representing debt warrants will be described in the applicable prospectus
supplement. This description will include:
. the initial offering price;
. the currency, currency unit or composite currency in which the exercise
price for the debt warrants is payable;
. the title, aggregate principal amount and terms of the debt securities
that can be purchased upon exercise of the debt warrants;
. the title, aggregate principal amount and terms of any related debt
securities with which the debt warrants are issued and the number of the
debt warrants issued with each debt security;
. if applicable, whether and when the debt warrants and the related debt
securities will be separately transferable;
. the principal amount of debt securities that can be purchased upon
exercise of each debt warrant and the exercise price;
27
. the date on or after which the debt warrants may be exercised and any
date or dates on which this right will expire in whole or in part;
. if applicable, a discussion of material U.S. federal and Brazilian
income tax, accounting or other considerations applicable to the debt
warrants;
. whether the debt warrants will be issued in registered or bearer form,
and, if registered, where they may be transferred and registered;
. the maximum or minimum number of debt warrants that you may exercise at
any time; and
. any other terms of the debt warrants.
You may exchange your debt warrant certificates for new debt warrant
certificates of different denominations but they must be exercisable for the
same aggregate principal amount of debt securities. If your debt warrant
certificates are in registered form, you may present them for registration of
transfer at the corporate trust office of the debt warrant agent or any other
office indicated in the applicable prospectus supplement. Except as otherwise
indicated in a prospectus supplement, before the exercise of debt warrants,
holders of debt warrants will not be entitled to payments of principal or any
premium or interest on the debt securities that can be purchased upon such
exercise, or to enforce any of the covenants in the indenture relating to the
debt securities that may be purchased upon such exercise.
Exercise of Debt Warrants
Unless otherwise provided in the applicable prospectus supplement, each
debt warrant will entitle the holder to purchase a principal amount of debt
securities for cash at an exercise price in each case that will be set forth
in, or to be determined as set forth in, the applicable prospectus supplement.
Debt warrants may be exercised at any time up to the close of business on the
expiration date specified in the applicable prospectus supplement. After the
close of business on the expiration date or any later date to which we extend
the expiration date, unexercised debt warrants will become void.
Debt warrants may be exercised as set forth in the prospectus supplement
applicable to the particular debt warrants. Upon delivery of payment of the
exercise price and the debt warrant certificate properly completed and duly
executed at the corporate trust office of the debt warrant agent or any other
office indicated in the applicable prospectus supplement, we will, as soon as
practicable, forward the debt securities that can be purchased upon such
exercise of the debt warrants to the person entitled to them. If fewer than all
of the debt warrants represented by the debt warrant certificate are exercised,
a new debt warrant certificate will be issued for the remaining unexercised
debt warrants. Holders of debt warrants will be required to pay any tax or
governmental charge that may be imposed in connection with transferring the
underlying debt securities in connection with the exercise of the debt warrants.
-------------------------------------------------------------------------------
Street name and other indirect holders of debt warrants should consult their
bank or brokers for information on how to exercise their debt warrants.
-------------------------------------------------------------------------------
Modification and Waiver
There are three types of changes we can make to the debt warrant agreement
and the debt warrants of any series.
Changes Requiring Your Approval. First, there are changes that cannot be
made to your debt warrants or the debt warrant agreement under which they were
issued without your specific approval. These are the following types of changes:
. any increase in the exercise price;
28
. any impairment of your ability to exercise the warrant;
. any decrease in the principal amount of debt securities that can be
purchased upon exercise of any debt warrant;
. any reduction of the period of time during which the debt warrants may
be exercised;
. any other change that materially and adversely affects the exercise
rights of a holder of debt warrant certificates or the debt securities
that can be purchased upon such exercise; and
. any reduction in the number of outstanding unexercised debt warrants
whose consent is required for any modification or amendment described
under "Changes Requiring a Majority Vote".
Changes Requiring a Majority Vote. The second type of change to the debt
warrant agreement or debt warrants of any series is the kind that requires a
vote of approval by the holders of not less than a majority in number of the
then outstanding unexercised debt warrants of that series. This category
includes all changes other than those listed above under "Changes Requiring
Your Approval" or changes that would not adversely affect holders of debt
warrants or debt securities in any material respect.
Changes Not Requiring Approval. The third type of change does not require
any vote or consent by the holders of debt warrant certificates. This type is
limited to clarifications and other changes that would not adversely affect
such holders in any material respect.
-------------------------------------------------------------------------------
Street name and other indirect holders of debt warrants should consult their
bank or brokers for information on how approval may be granted or denied if we
seek to change your debt warrants or the debt warrant agreement under which
they were issued or request a waiver.
-------------------------------------------------------------------------------
Merger, Consolidation, Sale or Other Dispositions
Unless otherwise indicated in a prospectus supplement, under the debt
warrant agreement for each series of debt warrants, we may consolidate with, or
sell, convey or lease all or substantially all of our assets to, or merge with
or into, any other corporation or firm to the extent permitted by the indenture
for the debt securities that can be purchased upon exercise of such debt
warrants. If we consolidate with or merge into, or sell, lease or otherwise
dispose of all or substantially all of our assets to, another corporation or
firm, that corporation or firm must become legally responsible for our
obligations under the debt warrant agreements and debt warrants. If we sell or
lease substantially all of our assets, one way the other firm or company can
become legally responsible for our obligations is by way of a full and
unconditional guarantee of our obligations. If the other company becomes
legally responsible by a means other than a guarantee, we will be relieved from
all such obligations.
Enforceability of Rights; Governing Law
The debt warrant agent will act solely as our agent in connection with the
issuance and exercise of debt warrants and will not assume any obligation or
relationship of agency or trust for or with any holder of a debt warrant
certificate or any owner of a beneficial interest in debt warrants. The holders
of debt warrant certificates, without the consent of the debt warrant agent,
the trustee, the holder of any debt securities issued upon exercise of debt
warrants or the holder of any other debt warrant certificates, may, on their
own behalf and for their own benefit, enforce, and may institute and maintain
any suit, action or proceeding against us to enforce, or otherwise in respect
of, their rights to exercise debt warrants evidenced by their debt warrant
certificates. Except as may otherwise be provided in the applicable prospectus
supplement, each issue of debt warrants and the related debt warrant agreement
will be governed by the laws of the State of New York.
29
Equity Warrants
The following briefly summarizes the material terms that will generally be
included in an equity warrant agreement. However, we may include different
terms in the equity warrant agreement for any particular series of equity
warrants and such other terms and all pricing and related terms will be
disclosed in the applicable prospectus supplement. You should read the
particular terms of any equity warrants that are offered by us and the related
equity warrant agreement which will be described in more detail in the
applicable prospectus supplement. The prospectus supplement will also state
whether any of the general provisions summarized below do not apply to the
equity warrants being offered.
General
We may issue warrants for the purchase of our equity securities (i.e., our
common shares and preferred shares, which may be in the form of ADSs). As
explained below, each equity warrant will entitle its holder to purchase equity
securities at an exercise price set forth in, or to be determined as set forth
in, the applicable prospectus supplement. Equity warrants may be issued
separately or together with equity securities.
We may issue equity warrants in connection with preemptive rights of our
shareholders in connection with any capital increase, and in those
circumstances we may choose to issue equity warrants in uncertificated form to
the extent permitted by Brazilian law. In addition, if any equity warrants are
offered in connection with preemptive rights, we may exclude holders resident
in the United States from that offering to the extent permitted by Brazilian
law. Equity warrants (other than equity warrants issued in connection with
preemptive rights) are to be issued under equity warrant agreements to be
entered into by us and one or more banks or trust companies, as equity warrant
agent, all as will be set forth in the applicable prospectus supplement. At or
around the time of an offering of equity warrants, a form of equity warrant
agreement, including a form of equity warrant certificate representing the
equity warrants, reflecting the alternative provisions that may be included in
the equity warrant agreements to be entered into with respect to particular
offerings of equity warrants, will be filed by amendment as an exhibit to the
registration statement of which this prospectus forms a part.
Terms of the Equity Warrants to Be Described in the Prospectus Supplement
The particular terms of each issue of equity warrants, the equity warrant
agreement (if any) relating to such equity warrants and the equity warrant
certificates (if any) representing such equity warrants will be described in
the applicable prospectus supplement. This description will include:
. the initial offering price;
. the currency, currency unit or composite currency in which the exercise
price for the equity warrants is payable;
. the designation and terms of the equity securities (i.e., preferred
shares or common shares) that can be purchased upon exercise of the
equity warrants;
. the total number of preferred shares or common shares that can be
purchased upon exercise of each equity warrant and the exercise price;
. the date or dates on or after which the equity warrants may be exercised
and any date or dates on which this right will expire in whole or in
part;
. the designation and terms of any related preferred shares or common
shares with which the equity warrants are issued and the number of the
equity warrants issued with each preferred share or common share;
. if applicable, whether and when the equity warrants and the related
preferred shares or common shares will be separately transferable;
. whether the equity warrants will be in registered or bearer form;
30
. if applicable, a discussion of material U.S. federal and Brazilian
income tax, accounting or other considerations applicable to the equity
warrants; and
. any other terms of the equity warrants, including terms, procedures and
limitations relating to the exchange and exercise of the equity warrants.
You may exchange your equity warrant certificates for new equity warrant
certificates of different denominations but they must be exercisable for the
same aggregate principal amount of equity securities. If your equity warrant
certificates are in registered form, you may present them for registration of
transfer and exercise them at the corporate trust office of the equity warrant
agent or any other office indicated in the applicable prospectus supplement.
Unless otherwise indicated in a prospectus supplement, before the exercise of
equity warrants, holders of equity warrants will not be entitled to receive
dividends or exercise voting rights with respect to the equity securities that
can be purchased upon such exercise, to receive notice as shareholders with
respect to any meeting of shareholders for the election of our directors or any
other matter, or to exercise any rights whatsoever as a shareholder.
Unless the applicable prospectus supplement states otherwise, the exercise
price payable and the number of common shares or preferred shares that can be
purchased upon the exercise of each equity warrant (other than equity warrants
issued in connection with preemptive rights) will be subject to adjustment in
certain events, including the issuance of a stock dividend to holders of common
shares or preferred shares or a stock split, reverse stock split, combination,
subdivision or reclassification of common shares or preferred shares. Instead
of adjusting the number of common shares or preferred shares that can be
purchased upon exercise of each equity warrant, we may elect to adjust the
number of equity warrants. No adjustments in the number of shares that can be
purchased upon exercise of the equity warrants will be required until
cumulative adjustments require an adjustment of at least 1% of those shares. We
may, at our option, reduce the exercise price at any time. We will not issue
fractional shares or ADSs upon exercise of equity warrants, but we will pay the
cash value of any fractional shares otherwise issuable.
Notwithstanding the previous paragraph, if there is a consolidation, merger
or sale or conveyance of substantially all of our property, the holder of each
outstanding equity warrant will have the right to the kind and amount of shares
and other securities and property (including cash) receivable by a holder of
the number of common shares or preferred shares into which that equity warrant
was exercisable immediately prior to the consolidation, merger, sale or
conveyance.
Exercise of Equity Warrants
Unless otherwise provided in the applicable prospectus supplement, each
equity warrant will entitle the holder to purchase a number of equity
securities for cash at an exercise price in each case that will be set forth
in, or to be determined as set forth in, the prospectus supplement. Equity
warrants may be exercised at any time up to the close of business on the
expiration date specified in the applicable prospectus supplement. After the
close of business on the expiration date or any later date to which we extend
the expiration date, unexercised equity warrants will become void. Equity
warrants for the purchase of preferred shares or common shares may be issued in
the form of ADSs.
Equity warrants may be exercised as set forth in the prospectus supplement
applicable to the particular equity warrants. Upon delivery of payment of the
exercise price, delivery of the equity warrant certificate (if any) properly
completed and duly executed at the corporate trust office of the equity warrant
agent or any other office indicated in the applicable prospectus supplement and
satisfaction of any other applicable requirements specified in the applicable
prospective supplement, we will, as soon as practicable, forward the equity
securities that can be purchased upon such exercise of the equity warrants to
the person entitled to them. If fewer than all of the equity warrants
represented by the equity warrant certificate are exercised, a new equity
warrant certificate will be
31
issued for the remaining equity warrants. Holders of equity warrants will be
required to pay any tax or governmental charge that may be imposed in
connection with transferring the underlying equity securities in connection
with the exercise of the equity warrants.
-------------------------------------------------------------------------------
Street name and other indirect holders of equity warrants should consult
their bank or brokers for information on how to exercise their equity
warrants.
-------------------------------------------------------------------------------
Modification and Waiver
There are three types of changes we can make to the equity warrant
agreement and the equity warrants of any series.
Changes Requiring Your Approval. First, there are changes that cannot be
made to your equity warrants or the equity warrant agreement under which they
were issued without your specific approval. These are the following types of
changes:
. any increase in the exercise price;
. any impairment of your ability to exercise the warrant;
. any decrease in the total number of preferred shares or common shares
that can be purchased upon exercise of any equity warrant;
. any reduction of the period of time during which the equity warrants may
be exercised;
. any other change that materially and adversely affects the exercise
rights of a holder of equity warrant certificates or the equity
securities that can be purchased upon such exercise; and
. any reduction in the number of outstanding unexercised equity warrants
whose consent is required for any modification or amendment described
under "--Changes Requiring a Majority Vote".
Changes Requiring a Majority Vote. The second type of change to the equity
warrant agreement or equity warrants of any series is the kind that requires a
vote of approval by the holders of not less than a majority in number of the
then outstanding unexercised equity warrants of that series. This category
includes all changes other than those listed above under "--Changes Requiring
Your Approval" or changes that would not adversely affect holders of equity
warrants in any material respect.
Changes Not Requiring Approval. The third type of change does not require
any vote or consent by the holders of equity warrant certificates. This type is
limited to clarifications, amendments, supplement and other changes that would
not adversely affect such holders in any material respect.
-------------------------------------------------------------------------------
Street name and other indirect holders of equity warrants should consult
their bank or brokers for information on how approval may be granted or
denied if we seek to change your equity warrants or the equity warrant
agreement under which they were issued or request a waiver.
-------------------------------------------------------------------------------
Merger, Consolidation, Sale or Other Dispositions
Unless otherwise indicated in a prospectus supplement, under the equity
warrant agreement for each series of equity warrants, we may consolidate with,
or sell, convey or lease all or substantially all of our assets to, or merge
with or into, any other corporation or firm to the extent permitted by the
terms of the equity securities that can be purchased upon exercise of such
equity warrants. If we
32
consolidate with or merge into, or sell, lease or otherwise dispose of all or
substantially all of our assets to, another corporation or firm, that
corporation or firm must become legally responsible for our obligations under
the equity warrant agreements and equity warrants and we will be relieved from
all such obligations.
Enforceability of Rights; Governing Law
The equity warrant agent will act solely as our agent in connection with
the issuance and exercise of equity warrants and will not assume any obligation
or relationship of agency or trust for or with any holder of an equity warrant
certificate or any owner of a beneficial interest in equity warrants. The
holders of equity warrant certificates, without the consent of the equity
warrant agent, the holder of any equity securities issued upon exercise of
equity warrants or the holder of any other equity warrant certificates, may, on
their own behalf and for their own benefit, enforce, and may institute and
maintain any suit, action or proceeding against us to enforce, or otherwise in
respect of, their rights to exercise equity warrants evidenced by their equity
warrant certificates. Except as may otherwise be provided in the applicable
prospectus supplement, each issue of equity warrants and the related equity
warrant agreement will be governed by the laws of the State of New York.
33
DESCRIPTION OF THE STANDBY PURCHASE AGREEMENTS
The following description of the terms and provisions of the standby
purchase agreements summarizes the general terms that will apply to each
standby purchase agreement that Petrobras delivers in connection with an
issuance of debt securities by PIFCo. When PIFCo sells a series of its debt
securities, Petrobras may execute and deliver a standby purchase agreement
relating to that series of debt securities for the benefit of the holders of
that series of debt securities.
Pursuant to the standby purchase agreements, Petrobras will agree, from
time to time upon the receipt of notice from the trustee that PIFCo has failed
to make the required payments under a series of debt securities and the PIFCo
indenture, to purchase your claims against PIFCo, whether those claims are for
principal, interest or any other amounts. The purchase price to be paid by us
will be an amount equal to the amount of those claims plus interest thereon
from the date PIFCo was otherwise obligated to make its payments under the
PIFCo indenture to the date Petrobras actually makes payment under the standby
purchase agreement. Petrobras will be obligated to make the payments by the
expiration of any applicable grace periods under the PIFCo indenture. Petrobras
may defer its obligation under the standby purchase agreement to make payments
under certain circumstances described in the applicable prospectus supplement.
The description in the prospectus supplement will not necessarily be
complete and reference will be made to the standby purchase agreement. Certain
U.S. federal and Brazilian income tax considerations applicable to the holders
of PIFCo debt securities that benefit from a standby purchase agreement
delivered by Petrobras will also be discussed in the applicable prospectus
supplement.
34
DESCRIPTION OF THE GUARANTEES
The following description of the terms and provisions of the guarantees
summarizes the general terms that will apply to each guarantee that we deliver
in connection with an issuance of debt securities by PIFCo. When PIFCo sells a
series of its debt securities, Petrobras may, in limited circumstances, execute
and deliver a guarantee of that series of debt securities under a guarantee
agreement for the benefit of the holders of that series of debt securities.
Pursuant to any guarantee, Petrobras will agree, from time to time upon the
receipt of notice from the trustee that PIFCo has failed to make the required
payments under a series of debt securities and the PIFCo indenture, to
indemnify you for unpaid claims against PIFCo, whether those claims are in
respect of principal, interest or any other amounts. The amount to be paid by
Petrobras under the guarantee will be an amount equal to the amount of those
claims plus interest thereon from the date PIFCo was otherwise obligated to
make its payments under the PIFCo indenture to the date Petrobras actually
makes payment under the guarantee. Petrobras will be obligated to make these
payments by the expiration of any applicable grace periods under the PIFCo
indenture. Petrobras may defer its obligation under the guarantee to make
payments under certain circumstances described in the applicable prospectus
supplement.
Only one guarantee will be issued by Petrobras in connection with the
issuance of a series of debt securities by PIFCo. Each guarantee agreement will
be qualified as an indenture under the Trust Indenture Act of 1939. Unless the
applicable prospectus supplement states otherwise, JPMorgan Chase Bank will act
as guarantee trustee under each guarantee agreement.
The description in the prospectus supplement will not necessarily be
complete, and reference will be made to the guarantee agreement. Certain U.S.
federal and Brazilian income tax considerations applicable to the holders of
PIFCo debt securities guaranteed by Petrobras will also be discussed in the
applicable prospectus supplement.
35
DESCRIPTION OF AMERICAN DEPOSITARY RECEIPTS
General
Citibank, NA. has agreed to act as the depositary for the American
depositary shares. Citibank's depositary offices are located at 111 Wall
Street, New York, New York 10005. American depositary shares are frequently
referred to as ADSs and represent ownership interests in securities that are on
deposit with the depositary. ADSs are normally represented by certificates that
are commonly known as American depositary receipts or ADRs. The depositary has
appointed a custodian to safekeep the securities on deposit. In this case, the
custodian is Camara de Liquidacao e Custodia do Rio do Janeiro, located at
Praca XV de Novembro, 20-7th floor--Rio de Janeiro--RJ 20010-010, Brazil.
Petrobras appointed Citibank as depositary under the terms of a deposit
agreement for the common shares, dated July 14, 2000. Petrobras appointed
Citibank as depositary under the terms of an amended and restated deposit
agreement for the preferred shares, dated February 21, 2001, as amended by
Amendment No. 1, dated March 23, 2001, to the amended and restated deposit
agreement. A copy of each of these agreements is on file with the Securities
and Exchange Commission under cover of a registration statement on Form F-6.
You may obtain a copy of each such agreement from the Securities and Exchange
Commission's Public Reference Room. See "Where You Can Find Additional
Information." Please refer to Registration Number 333-12298 for the common
shares deposit agreement; to Registration Number 333-13168 for the amended and
restated deposit agreement; and to Registration Number 333-13660 for Amendment
No. 1 to the amended and restated deposit agreement, when retrieving your copy.
Petrobras is providing you with a summary description of the material terms
of the ADSs and of your material rights as an owner of ADSs. Your rights and
obligations as an owner of ADSs will be determined by reference to the terms of
the applicable deposit agreement and not by this summary. This summary is not
intended as a substitute for the applicable deposit agreement. Petrobras urges
you to review the applicable deposit agreement in its entirety.
Each ADS represents one of Petrobras' preferred shares or common shares on
deposit with the custodian. An ADS will also represent any other property
received by the depositary or the custodian on behalf of the owner of the ADS
but that has not been distributed to the owners of ADSs because of legal
restrictions or practical considerations.
If you become an owner of ADSs, you will become a party to the applicable
deposit agreement and therefore will be bound by its terms and to the terms of
the ADR that represents your ADSs. The applicable deposit agreement and the ADR
specify Petrobras' rights and obligations as well as your rights and
obligations and those of the depositary. As an ADS holder you have agreed to
appoint the depositary to act on your behalf in certain circumstances. The
deposit agreements and the ADRs are governed by New York law. However,
Petrobras' obligations to the holders of the preferred shares and common shares
will continue to be governed by the laws of Brazil, which may be different from
the laws in the United States.
As an owner of ADSs, your ADSs may be represented either by an ADR
registered in your name or through a brokerage or safekeeping account. If you
decide to hold your ADSs through your brokerage or safekeeping account, you
must rely on the procedures of your broker or bank to assert your rights as an
ADS owner. Please consult with your broker or bank to determine what those
procedures are. This summary description assumes you have opted to own the ADSs
directly by means of an ADR registered in your name and, as such, Petrobras
will refer to you as the "holder." When Petrobras refers to "you," Petrobras
assumes the reader owns ADSs and will own ADSs at the relevant time.
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Dividends and Distributions
As a holder, you will generally have the right to receive the distributions
Petrobras makes on the securities deposited with the custodian bank. Your
receipt of these distributions may be limited, however, by practical
considerations and legal limitations. You will receive distributions under the
terms of the applicable deposit agreement in proportion to the number of ADSs
held as of a specified record date.
Distributions of Cash. Whenever Petrobras makes a cash distribution for
the securities on deposit with the custodian, it will notify the depositary.
Upon receipt of that notice the depositary will arrange for the funds to be
converted into U.S. dollars and for the distribution of the U.S. dollars to the
holders, subject to Brazilian laws and regulations.
The conversion into U.S. dollars will take place only if practicable and if
the U.S. dollars are transferable to the United States. The depositary will
reduce the distribution of cash to holders by applicable fees, expenses, taxes
and governmental charges payable by holders under the terms of the applicable
deposit agreement. The depositary will apply the same method for distributing
the proceeds of the sale of any property (such as undistributed rights) held by
the custodian in respect of securities on deposit.
Distributions of Shares. Whenever Petrobras makes a distribution
consisting of a dividend and a free distribution of preferred shares or common
shares on securities on deposit with the custodian, it will notify the
depositary and deposit the applicable number of preferred shares or common
shares with the custodian. Upon receipt of notice of such deposit the
depositary will either distribute to holders new ADSs representing the
aggregate preferred shares or common shares deposited or modify the ratio of
ADSs to preferred shares or common shares, in which case each ADS you already
hold will represent rights and interests in the additional preferred shares or
common shares deposited. Only whole new ADSs will be distributed. Fractional
entitlements will be sold and the proceeds of the sale will be distributed to
holders as in the case of a cash distribution described above.
The distribution of new ADSs or the modification of the ADS-to-share ratio
upon a distribution of preferred shares or common shares will be reduced by
applicable fees, expenses, taxes and governmental charges payable by holders
under the terms of the deposit agreement. In order to pay the taxes or
governmental charges, the depositary may sell all or a portion of the new
preferred shares or common shares so distributed.
No distribution of new ADSs as described above will be made if it would
violate the U.S. securities laws, or any other law, or if it is not
operationally practicable. If the depositary does not distribute new ADSs as
described above, it will use its best efforts to sell the preferred shares or
common shares received and will distribute the proceeds of the sale as in the
case of a distribution of cash.
Distributions of Rights. If Petrobras distributes rights to subscribe for
additional preferred shares or common shares, it will give at least 60 days
prior notice to the depositary and it will assist the depositary in determining
whether it is lawful and reasonably practicable to make these additional rights
available to holders.
The depositary will establish procedures for the distribution of rights to
purchase additional ADSs to holders and to enable holders to exercise rights
when lawful and reasonably practicable. You may have to pay fees, expenses,
taxes and other governmental charges to subscribe for the new ADSs upon the
exercise of your right. The depositary is not obligated to make available to
holders of rights a method to exercise rights to subscribe to preferred shares
or common shares directly rather than American depositary shares.
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The depositary will not distribute rights to you if:
. Petrobras does not timely request that the rights be distributed to you
or it requests that the rights not be distributed to you; or
. Petrobras fails to deliver satisfactory documents to the depositary; or
. it is not reasonably practicable to distribute the rights.
The depositary will sell rights that are not exercised or distributed if
the sale is lawful and reasonably practicable. The proceeds of the sale will be
distributed to holders as in the case of a cash distribution described above.
If the depositary is unable to sell the rights, it will allow the rights to
lapse.
Elective Distribution. If Petrobras distributes a dividend payable at the
election of shareholders either in cash or in additional shares, it will give
prior notice to the depositary and it will indicate whether it wishes the
elective distribution to be made available to you. In this case, Petrobras will
assist the depositary in determining whether the distribution is lawful and
reasonably practicable.
The depositary will make the election available to you only if it is
reasonably practical and if Petrobras has provided all of the documentation
contemplated in the applicable deposit agreement. In this case, the depositary
will establish procedures to enable you to elect to receive either cash or
additional ADSs, in each case, as described in the applicable deposit agreement.
If the election is not made available to you, you will receive either cash
or additional ADSs, depending on what a shareholder in Brazil would receive
upon failing to make an election, as described more fully in the applicable
deposit agreement.
Other Distributions. If Petrobras distributes property other than cash,
preferred shares, rights to purchase preferred shares, common shares or rights
to purchase additional common shares, it will notify the depositary in advance
and will indicate whether it wishes the distribution to be made to you. If so,
Petrobras will assist the depositary in determining whether the distribution to
holders is lawful and reasonably practicable.
If it is reasonably practicable to distribute the property to you and if
Petrobras provides all of the documentation contemplated in the applicable
deposit agreement, the depositary will distribute the property to the holders
in a manner it deems practicable.
The distribution will be reduced by any applicable fees, expenses, taxes
and governmental charges payable by holders under the terms of the applicable
deposit agreement. In order to pay the taxes and governmental charges, the
depositary may sell all or a portion of the property received.
The depositary will not distribute the property to you and will sell the
property if:
. Petrobras does not request that the property be distributed to you or if
it asks that the property not be distributed to you; or
. Petrobras does not deliver satisfactory documents to the depositary; or
. the depositary determines that all or a portion of the distribution to
you is not reasonably practicable.
The proceeds of the sale will be distributed to holders as in the case of a
cash distribution as described above.
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Redemption
If Petrobras decides to redeem any of the securities on deposit with the
custodian, it will notify the depositary at least 60 days prior to the date of
redemption. If it is reasonably practicable and if Petrobras provides all of
the documentation contemplated in the applicable deposit agreement, the
depositary will provide the holder with notice of the proposed redemption.
The custodian will be instructed to surrender the shares being redeemed
against payment of the applicable redemption price. After the redemption has
taken place, the depositary will convert, transfer and distribute the proceeds,
reduced by any applicable fees, expenses, taxes and other government charges.
The depositary will then retire the ADSs and cancel the ADRs. If less than all
of the outstanding ADSs are being redeemed, the ADSs to be retired will be
selected by lot or on a pro rata basis, as may be determined by the depositary.
Changes Affecting the Preferred Shares and Common Shares
The preferred shares or common shares held on deposit for your ADSs may be
affected by changes from time to time. For example, there may be a change in
nominal or par value, a split-up, cancellation, consolidation or
reclassification of such preferred shares or common shares or a
recapitalization, reorganization, merger, consolidation or sale of assets.
If a change were to occur, your ADSs would, to the extent permitted by law,
represent the right to receive the property received or exchanged in respect of
the preferred shares or common shares, as applicable, held on deposit. The
depositary may in those circumstances deliver new ADSs to you or call for the
exchange of your existing ADSs for new ADSs. If the depositary may not lawfully
distribute such property to you, the depositary may sell the property and
distribute the net proceeds to you as in the case of a cash distribution as
described above.
Issuance of ADSs upon Deposit of Preferred Shares or Common Shares
The depositary may create ADSs on your behalf if you or your broker
deposits preferred shares or common shares with the custodian. The depositary
will deliver these ADSs to the person you indicate only after you pay any
applicable issuance fees and any charges and taxes payable for the transfer of
the preferred shares or common shares, as applicable, to the custodian. Your
ability to deposit preferred shares or common shares and receive ADSs may be
limited by U.S. and Brazilian legal considerations applicable at the time of
deposit.
The issuance of ADSs may be delayed until the depositary or the custodian
receives confirmation that all required approvals have been given and that the
preferred shares or common shares, as applicable, have been duly transferred to
the custodian. The depositary will only issue ADSs in whole numbers.
When you make a deposit of preferred shares or common shares, you will be
responsible for transferring good and valid title to the depositary. As such,
you will be deemed to represent and warrant that:
. the preferred shares or common shares, as applicable, are duly
authorized, validly issued, fully paid, non-assessable and legally
obtained;
. all preemptive (and similar) rights, if any, with respect to the
preferred shares or common shares, as applicable, have been validly
waived or exercised;
. you are duly authorized to deposit the preferred shares or common
shares, as applicable;
39
. the preferred shares or common shares, as applicable, presented for
deposit are free and clear of any lien, encumbrance, security interest,
charge, mortgage or adverse claim, and are not, and the ADSs issuable
upon such deposit will not be, "restricted securities" (as defined in
the deposit agreement); and
. the preferred shares or common shares, as applicable, presented for
deposit have not been stripped of any rights or entitlements.
If any of the representations or warranties, are incorrect in any way,
Petrobras and the depositary may, at your cost and expense, take any and all
actions necessary to correct the consequences of the misrepresentations.
Withdrawal of Shares Upon Cancellation of ADSs
As a holder, you will be entitled to present your ADSs to the depositary,
at the custodian's offices, for cancellation and receive the corresponding
number of underlying preferred shares or common shares, as applicable. Your
ability to withdraw the preferred shares or common shares, as applicable, may
be limited by U.S. and Brazilian law applicable at the time of withdrawal. In
order to withdraw the preferred shares or common shares represented by your
ADSs, you will be required to pay to the depositary the fees for cancellation
of ADSs and any charges and taxes payable upon the transfer of the preferred
shares or common shares being withdrawn. You assume the risk of delivery of all
funds and securities upon withdrawal. Once canceled, the ADSs will not have any
rights under the applicable deposit agreement.
If you hold an ADR registered in your name, the depositary may ask you to
provide proof of identity and genuineness of any signature and such other
documents as the depositary may deem appropriate before it will cancel your
ADSs. The withdrawal of the preferred shares or common shares represented by
your ADSs may be delayed until the depositary receives satisfactory evidence of
compliance with all applicable laws and regulations. The depositary will only
accept ADSs for cancellation that represent a whole number of securities on
deposit.
You will have the right to withdraw the securities represented by your ADSs
at any time unless any of these conditions exist:
. delays that may arise out of temporary closing of transfer books of the
preferred shares or common shares, as applicable, or ADSs, or temporary
suspension of transferability of preferred shares or common shares, as
applicable, are immobilized due to a shareholders' meeting or a payment
of dividends;
. unsatisfied obligations to pay fees, taxes and similar charges; or
. restrictions imposed by laws or regulations applicable to ADSs or the
withdrawal of securities on deposit.
The applicable deposit agreement may not be modified to impair your right
to withdraw the securities represented by your ADSs except to comply with
mandatory provisions of law.
Voting Rights
According to Petrobras' charter, preferred shares do not entitle the holder
to vote except as provided by Brazilian law upon default in the payment of
dividends for three consecutive years. A holder of an ADS representing a common
share will generally have the right under the applicable deposit agreement to
instruct the depositary to exercise the voting rights for the common shares
represented by your ADSs. The voting rights of holders of preferred shares and
common shares are
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described in "Item 10. Memorandum and Articles of Association of
Incorporation--Voting Rights" in the annual report on Form 20-F of Petrobras
for the year ended December 31, 2001, which is incorporated by reference in
this prospectus.
At Petrobras' request, the depositary will distribute to you any notice of
shareholders' meeting received from Petrobras, together with information
explaining how to instruct the depositary to exercise your voting rights on the
securities represented by ADSs.
If the depositary timely receives voting instructions from a holder of
ADSs, it will endeavor to vote the securities represented by the holder's ADSs
in accordance with the voting instructions. If voting instructions are not
timely received by the depositary, the holder will be deemed to have given a
discretionary proxy to a person designated by Petrobras to vote your shares.
The ability of the depositary to carry out voting instructions may be
limited by practical and legal limitations and the terms of the securities on
deposit. Petrobras cannot assure you that you will receive voting materials in
time to enable you to return voting instructions to the depositary in a timely
manner.
Fees and Charges
As an ADS holder, you will be required to pay the following service fees to
the depositary:
Service Fees Fees
------------ ----
Issuance of ADS............................... Up to U.S.$5.00 per 100 ADSs issued
Cancellation of ADS........................... Up to U.S.$5.00 per 100 ADSs canceled
Exercise of rights to purchase additional ADSs Up to U.S.$5.00 per 100 ADSs issued
Distribution of cash dividends................ No fee (so long as prohibited by NYSE)
Distribution of ADSs in connection with stock
dividends or other free stock distributions. No fee (so long as prohibited by NYSE)
Distribution of cash.......................... Up to U.S.$2.00 per 100 ADSs held (i.e., upon
sale of rights or other entitlements)
As an ADS holder you will also be responsible for paying some of the fees
and expenses incurred by the depositary and certain taxes and governmental
charges, including:
. fees and expenses as are incurred by the depositary in connection with
compliance with exchange control regulations and other regulatory
requirements applicable to preferred shares or common shares, ADSs and
ADRs;
. expenses incurred in converting foreign currency into U.S. dollars;
. cable, telex and fax transmissions and delivery expenses, as expressly
provided for in the applicable deposit agreement; and
. taxes and duties upon the transfer of securities (i.e., when preferred
shares or common shares are deposited or withdrawn from deposit).
Petrobras has agreed to pay certain other charges and expenses of the
depositary, however, it will not pay or be liable for fees or related charges
with respect to shares or ADSs. The fees and charges you may be required to pay
may vary over time and may be changed by Petrobras and by the depositary. You
will receive prior notice of any changes in the amount you may be required to
pay.
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Amendments and Termination
Petrobras may agree with the depositary to modify any applicable deposit
agreement at any time without your consent. Any amendment which will increase
any fees or charges or which will otherwise materially prejudice an existing
right you may have will not become effective until 30 days after notice of the
amendment is given to the holders. Petrobras will not deem any modifications or
supplements that are reasonably necessary for the ADSs to be registered under
the Securities Act of 1933 or to be traded solely in electronic book-entry
form, and which do not impose or increase the fees and charges you are required
to pay, to be materially prejudicial to your substantive rights. In addition,
Petrobras may not be able to provide you with prior notice of any modifications
or supplements that are required to comply with applicable provisions of law.
You will be bound by the modifications to the applicable deposit agreement
if you continue to hold your ADSs after the modifications to the applicable
deposit agreement become effective. Except as permitted by law, the applicable
deposit agreement cannot be amended so as to prevent you from withdrawing the
preferred shares or common shares represented by your ADSs.
Petrobras has the right to direct the depositary to terminate the
applicable deposit agreement. Similarly, the depositary may terminate the
applicable deposit agreement. In either case, the depositary must give notice
to the holders at least 30 days before termination.
For a period of six months after termination of the applicable deposit
agreement, you will be able to request the cancellation of your ADSs and the
withdrawal of the preferred shares or common shares represented by your ADSs
and the delivery of all other property held by the depositary in respect of
those preferred shares or common shares on the same terms as prior to the
termination. During this six month period, the depositary will continue to
collect all distributions received on the preferred shares or common shares on
deposit but will not distribute anything to you until you request the
cancellation of your ADSs.
After the expiration of the six month period, the depositary may sell the
securities held on deposit. The depositary will hold the proceeds from the sale
and any other cash then held for the holders of ADSs in a non-interest bearing,
unsegregated account. After making the sale, the depositary will have no
further obligations to holders under the applicable deposit agreement, other
than to account for the net proceeds and other cash then held for the holders
of ADSs still outstanding.
Books of Depositary
The depositary will maintain ADS holder records at its depositary office.
You may inspect these records at its office during regular business hours;
provided, however, that the inspection will not be carried out for the purpose
of communicating with holders of ADRs in the interest of a business or object
other than Petrobras' business or other than a matter related to the applicable
deposit agreement or ADRs.
The depositary will maintain an office and facilities in New York to record
and process the issuance, cancellation, combination, split-up and transfer of
ADRs. These facilities may be closed from time to time, to the extent not
prohibited by law.
Limitations on Obligations and Liabilities
The deposit agreements limit Petrobras' obligations and the depositary's
obligations to you as follows:
. Petrobras and the depositary are obligated to take only the actions
specifically stated in the applicable deposit agreement without
negligence or bad faith;
42
. the depositary will not be liable for any failure to carry out voting
instructions, for the manner in which any vote is cast or for the effect
of any vote, provided that the depositary acts in good faith and in
accordance with the terms of the applicable deposit agreement;
. the depositary will not be liable for any failure by it to determine
that any distribution or action may be reasonably practicable, for the
content of any information submitted by Petrobras for distribution to
holders (or for any translation of a distribution), for any investment
risk associated with an investment in the common shares, for the
validity of the preferred shares or common shares or from any tax
consequences that result from ownership of the ADSs, for the
credit-worthiness of any third party, for allowing any rights to lapse
under the terms of the applicable deposit agreement, for the timeliness
of any of our notices or for our failure to give notice;
. Petrobras and the depositary will not be obligated to perform any act
that is inconsistent with the terms of the applicable deposit agreement;
. Petrobras and the depositary disclaim any liability if either of them is
prevented or forbidden from acting on account of any law or regulation,
any provision of either of their charters, any provision of any
securities on deposit or by reason of any act of God or war or other
circumstances beyond either of their control;
. Petrobras and the depositary disclaim any liability by reason of any
exercise of or failure to exercise, any discretion granted by the
deposit agreements or in either of their charters or in any provisions
of securities on deposit;
. Petrobras and the depositary further disclaim any liability for any
action or inaction in reliance on the advice or information received
from legal counsel, accountants, any person presenting preferred shares
or common shares for deposit, any holder of ADSs or authorized
representatives thereof, or any other person believed by either of
Petrobras and the depositary in good faith to be competent to give such
advice or information;
. Petrobras and the depositary also disclaim liability for the inability
by a holder to benefit from any distribution, offering, right or other
benefit which is made available to holders of preferred shares or common
shares but is not, under the terms of the applicable deposit agreement,
made available to you; and
. Petrobras and the depositary may rely without any liability upon any
written notice, request or other document believed to be genuine and to
have been signed or presented by the proper parties.
Pre-Release Transactions
The depositary may, in some circumstances, issue ADSs before receiving a
deposit of preferred shares or common shares or release preferred shares or
common shares before receiving ADSs. These transactions are commonly referred
to as "pre-release transactions". The deposit agreements limit the aggregate
size of pre-release transactions and impose a number of conditions on these
types of transactions such as:
. the need to receive collateral;
. the type of collateral required; and
. the representations required from brokers.
The depositary may retain for its own account the compensation received
from the pre-release transactions.
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You will be responsible for the taxes and other governmental charges
payable on the ADSs and the securities represented by the ADSs. Petrobras, the
depositary, and the custodian may deduct the taxes and governmental charges
payable by holders from any distribution and may sell any and all property on
deposit to pay the taxes and governmental charges payable by holders. You will
be liable for any deficiency if the sale proceeds do not cover the taxes that
are due.
The depositary may refuse to issue ADSs, to deliver, transfer, split and
combine ADRs or to release securities on deposit until all taxes and charges
are paid by the applicable holder. The depositary and the custodian may take
reasonable administrative actions to obtain tax refunds and reduced tax
withholding for any distributions on your behalf. However, you may be required
to provide to the depositary and to the custodian proof of taxpayer status and
residence and other information as the depositary and the custodian may require
to fulfill their legal obligations. Under the applicable deposit agreement, you
will be required to indemnify Petrobras, the depositary, and the custodian for
any claims with respect to taxes based on any tax benefit obtained for you.
Foreign Currency Conversion
The depositary will arrange for the conversion of all foreign currency
received into U.S. dollars if the conversion can be performed on a practicable
basis or by sale, and it will distribute the U.S. dollars in accordance with
the terms of the applicable deposit agreement. You may have to pay any fees and
expenses incurred in converting foreign currency, such as fees and expenses
incurred in complying with currency exchange controls and other governmental
requirements.
If the conversion of foreign currency is not practical or lawful, or if any
required approvals are denied or not obtainable at a reasonable cost or within
a reasonable period, the depositary may take the following actions in its
discretion:
. convert (or cause the custodian to convert) the foreign currency to the
extent practical and lawful and distribute the U.S. dollars to the
holders for whom the conversion and distribution is lawful and practical;
. distribute the foreign currency to holders for whom the distribution is
lawful and practical; or
. hold the foreign currency (without liability for interest) for the
accounts of the holders entitled to receive the foreign currency.
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PLAN OF DISTRIBUTION
Initial Offering and Sale of Securities
We may sell the securities from time to time in their initial offering as
follows:
. through agents;
. to dealers or underwriters for resale;
. directly to purchasers; or
. through a combination of any of these methods of sale.
In addition, we may issue the securities as a dividend or distribution or
in a subscription rights offering to our existing security holders. In some
cases, we or dealers acting with us or on our behalf may also purchase
securities and reoffer them to the public by one or more of the methods
described above. This prospectus may be used in connection with any offering of
our securities through any of these methods or other methods described in the
applicable prospectus supplement.
The securities we distribute by any of these methods may be sold to the
public, in one or more transactions, either:
. at a fixed price or prices, which may be changed;
. at market prices prevailing at the time of sale;
. at prices related to prevailing market prices; or
. at negotiated prices.
We may solicit offers to purchase securities directly from the public from
time to time. We may also designate agents from time to time to solicit offers
to purchase securities from the public on our behalf. The prospectus supplement
relating to any particular offering of securities will name any agents
designated to solicit offers, and will include information about any
commissions we may pay the agents, in that offering. Agents may be deemed to be
"underwriters" as that term is defined in the Securities Act of 1933.
From time to time, we may sell securities to one or more dealers acting as
principals. The dealers, who may be deemed to be "underwriters" as that term is
defined in the Securities Act of 1933, may then resell those securities to the
public.
We may sell securities from time to time to one or more underwriters, who
would purchase the securities as principal for resale to the public, either on
a firm-commitment or best-efforts basis. If we sell securities to underwriters,
we may execute an underwriting agreement with them at the time of sale and will
name them in the applicable prospectus supplement. In connection with those
sales, underwriters may be deemed to have received compensation from us in the
form of underwriting discounts or commissions and may also receive commissions
from purchasers of the securities for whom they may act as agents. Underwriters
may resell the securities to or through dealers, and those dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters and/or commissions from purchasers for whom they may act as
agents. The applicable prospectus supplement will include any required
information about underwriting compensation we pay to underwriters, and any
discounts, concessions or commissions underwriters allow to participating
dealers, in connection with an offering of securities.
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If we offer securities in a subscription rights offering to our existing
security holders, we may enter into a standby underwriting agreement with
dealers, acting as standby underwriters. We may pay the standby underwriters a
commitment fee for the securities they commit to purchase on a standby basis.
If we do not enter into a standby underwriting arrangement, we may retain a
dealer-manager to manage a subscription rights offering for us.
We may authorize underwriters, dealers and agents to solicit from third
parties offers to purchase securities under contracts providing for payment and
delivery on future dates. The applicable prospectus supplement will describe
the material terms of these contracts, including any conditions to the
purchasers' obligations, and will include any required information about
commissions we may pay for soliciting these contracts.
Underwriters, dealers, agents and other persons may be entitled, under
agreements that they may enter into with us, to indemnification by us against
certain liabilities, including liabilities under the Securities Act of 1933.
Each series of securities will be a new issue, and there will be no
established trading market for any security prior to its original issue date.
We may not list any particular series of securities on a securities exchange or
quotation system. No assurance can be given as to the liquidity or trading
market for any of the securities.
46
DIFFICULTIES OF ENFORCING CIVIL LIABILITIES AGAINST NON-U.S. PERSONS
Petrobras
Petrobras is a sociedade de economia mista (mixed-capital company), a
public sector company with some private sector ownership, established under the
laws of Brazil. All of its executive officers and directors and certain
advisors named herein reside in Brazil. In addition, substantially all of its
assets and those of its executive officers, directors and certain advisors
named herein are located in Brazil. As a result, it may not be possible for
investors to effect service of process upon Petrobras or its executive
officers, directors and advisors named herein within the United States or other
jurisdictions outside Brazil or to enforce against Petrobras or its executive
officers, directors and advisers named herein judgments obtained in the United
States or other jurisdictions outside Brazil.
Souza, Cescon Avedissian, Barrieu e Flesch--Advogados, Petrobras' special
Brazilian counsel, has advised Petrobras that, subject to the requirements
described below, judgments of United States courts for civil liabilities based
upon the United States federal securities laws may be enforced in Brazil. A
judgment against Petrobras or the other persons described above obtained
outside Brazil would be enforceable in Brazil, without reconsideration of the
merits, only if the judgment satisfies certain requirements and receives
confirmation from the Federal Supreme Court of Brazil. The foreign judgment
will only be confirmed if:
. it fulfills all formalities required for its enforceability under the
laws of the country where the foreign judgment is granted;
. it is for the payment of a sum certain of money;
. it was issued by a competent court in the jurisdiction where the
judgment was awarded after service of process was properly made in
accordance with applicable law;
. it is not subject to appeal;
. it is authenticated by a Brazilian consular office in the country where
it was issued, and is accompanied by a sworn translation into
Portuguese; and
. it is not contrary to Brazilian national sovereignty, public policy or
good morals.
Notwithstanding the foregoing, no assurance can be given that such
confirmation would be obtained, that the process described above could be
conducted in a timely manner or that a Brazilian court would enforce a monetary
judgment for violation of the U.S. securities laws with respect to any
securities issued by Petrobras.
Souza, Cescon Avedissian, Barrieu e Flesch--Advogados has also advised
Petrobras that:
. original actions based on the U.S. federal securities laws may be
brought in Brazilian courts and that, subject to Brazilian public policy
and national sovereignty, Brazilian courts may enforce liabilities in
such actions against Petrobras, certain of its directors and officers
and the advisors named herein;
. if an investor resides outside Brazil and owns no real property in
Brazil, he or she must provide a bond sufficient to guarantee court
costs and legal fees, including the defendant's attorneys' fees, as
determined by the Brazilian court, in connection with litigation in
Brazil, except in the case of the enforcement of a foreign judgment
which has been confirmed by the Brazilian Federal Supreme Court;
. Brazilian law limits an investor's ability as a judgment creditor of
Petrobras to satisfy a judgment against Petrobras by attaching certain
of its assets;
47
. according to recent changes to the Brazilian Corporate Law,
mixed-capital companies such as Petrobras, are no longer protected from
bankruptcy proceedings and its controlling shareholder, the federal
government of Brazil, is no longer contingently liable for Petrobras'
obligations; and
. certain of Petrobras' exploration and production assets may be subject
to reversion to the Brazilian government under Petrobras' concession
agreements. Such assets, under certain circumstances, may not be subject
to attachment or execution.
PIFCo
PIFCo is duly incorporated as an exempt limited liability company under the
laws of the Cayman Islands. All of the directors and officers of PIFCo reside
in Brazil. All or a substantial portion of the assets of PIFCo and of such
directors and officers are located outside of the United States. As a result,
it may be difficult for investors to effect service of process within the
United States upon PIFCo or such persons or to enforce, in the United States
courts, judgment against PIFCo or such persons or judgments obtained in such
courts predicated upon the civil liability provisions of the federal securities
laws of the United States.
PIFCo has been advised by its Cayman Islands counsel, Walkers, that
although there is no statutory enforcement in the Cayman Islands of judgments
obtained in New York, the courts of the Cayman Islands will, based on the
principal that a judgment by a competent foreign court imposes upon the
judgment debtor an obligation to pay the sum for which judgment has been given,
recognize and enforce a foreign judgment of a court having jurisdiction over
the defendant according to Cayman Islands conflict of law rules, if such
judgment is final, for a liquidated sum not in respect of taxes or a fine or
penalty, is not inconsistent with a Cayman Islands judgment in respect of the
same matters and was not obtained in a manner, and is not of a kind the
enforcement of which is, contrary to natural justice, statute or the public
policy of the Cayman Islands. There is doubt, however, as to whether the courts
of the Cayman Islands will (i) recognise or enforce judgments of United States
courts predicated upon the civil liability provisions of the securities laws of
the United States or any state thereof, or (ii) in original actions brought in
the Cayman Islands, impose liabilities upon the civil liability provisions of
the securities laws of the United States or any state thereof, on the grounds
that such provisions are penal in nature.
A Cayman Islands' court may stay proceedings if concurrent proceedings are
being brought elsewhere.
48
INDEPENDENT ACCOUNTANTS
The consolidated financial statements incorporated in this prospectus by
reference to the annual reports on Forms 20-F for Petrobras and PIFCo for the
year ended December 31, 2001, have been so incorporated in reliance on the
report of PricewaterhouseCoopers Auditores Independentes, independent
accountants, given on the authority of said firm as experts in accounting and
auditing.
With respect to the unaudited consolidated financial information of
Petrobras for the three-month periods ended March 31, 2002 and 2001,
incorporated by reference in this Registration Statement on Form F-3,
PricewaterhouseCoopers Auditores Independentes reported that they have applied
limited procedures in accordance with professional standards for a review of
such information. However, their separate report dated May 6, 2002,
incorporated by reference herein, states that they did not audit and they do
not express an opinion on that unaudited financial information. Accordingly,
the degree of reliance on their report on such information should be restricted
in light of the limited nature of the review procedures applied.
PricewaterhouseCoopers Auditores Independentes is not subject to the liability
provisions of Section 11 of the Securities Act of 1933 for their report on the
unaudited financial information because that report is not a "report" or a
"part" of the registration statement prepared or certified by
PricewaterhouseCoopers Auditores Independentes within the meaning of Sections 7
and 11 of the Act.
EXPERTS
The summary reports of DeGolyer and MacNaughton and of Gaffney, Cline and
Associates, independent petroleum engineering consultants, which are referenced
in this prospectus, have been referenced in this prospectus in reliance upon
the authority of the firms as experts in estimating proved oil and gas reserves.
LEGAL MATTERS
Souza, Cescon Avedissian, Barrieu e Flesch--Advogados, special Brazilian
counsel to Petrobras, will pass upon the validity of the debt securities,
warrants, preferred shares, common shares, mandatory convertible securities,
guarantees and standby purchase agreements for Petrobras as to certain matters
of Brazilian law. Walkers, special Cayman Islands counsel to PIFCo, will pass
upon the validity of the debt securities issued by PIFCo as to certain matters
of Cayman Islands law. The validity of the debt securities and debt warrants
will be passed upon by Cleary, Gottlieb, Steen & Hamilton or any other law firm
named in the applicable prospectus supplement as to certain matters of New York
law. A law firm named in the applicable prospectus supplement will pass upon
the validity of the debt securities and debt warrants for any underwriters or
agents as to certain matters of New York law. A law firm named in the
applicable prospectus supplement will pass upon the validity of the debt
securities, warrants, preferred shares, common shares, mandatory convertible
securities, guarantees and standby purchase agreements for the underwriters as
to certain matters of Brazilian law.
49
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement with the SEC on Form F-3 under the
Securities Act of 1933 relating to the securities offered by this prospectus.
This prospectus, which is a part of that registration statement, does not
contain all of the information set forth in the registration statement. For more
information with respect to our company and the securities offered by this
prospectus, you should refer to the registration statement and to the exhibits
filed with it. Statements contained or incorporated by reference in this
prospectus regarding the contents of any contract or other document are not
necessarily complete, and, where the contract or other document is an exhibit
to the registration statement or incorporated or deemed to be incorporated by
reference, each of these statements is qualified in all respects by the
provisions of the actual contract or other document.
You may review a copy of the registration statement without charge, and
copies of all or any portion of the registration statement can be obtained at
the Public Reference Section of the SEC, 450 Fifth Street, N.W., Washington
D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on
the public reference room. Although we do not currently file reports
electronically with the SEC, we may do so in the future. If we file reports
electronically with the SEC in the future, the filings will be available to you
over the Internet at the SEC website at http://www.sec.gov.
We are currently subject to the information requirements of the United
States Securities Exchange Act of 1934, as amended, or the Exchange Act,
applicable to a foreign private issuer, and accordingly file or furnish
reports, including annual reports on Form 20-F, reports on Form 6-K, and other
information with the SEC. These reports and other information filed can be
inspected at, and subject to the payment of any required fees, copies may be
obtained from, the public reference facilities maintained by the SEC at 450
Fifth Street, N.W., Washington D.C. 20549. These reports and other information
may also be inspected and copied at the offices of the New York Stock Exchange,
20 Broad Street, New York, New York 10005. As a foreign private issuer, we are
exempt from the rules under the Exchange Act prescribing the furnishing and
content of proxy statements and our officers, directors and principal
shareholders will be exempt from the reporting and "shortswing" profit recovery
provisions under the Exchange Act. The rules of the New York Stock Exchange may
require us to solicit proxies from our shareholders under some circumstances.
Our preferred shares and common shares, each represented by ADSs, are
listed on the New York Stock Exchange under the symbols "PBRA" and "PBR",
respectively. Additional information concerning us and our securities may be
available through the New York Stock Exchange.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We are incorporating by reference the following documents that we have
filed with the SEC:
(1) the Petrobras Annual Report on Form 20-F for the year ended December
31, 2001, filed with the SEC on July 1, 2002;
(2) the Petrobras Quarterly Report on Form 6-K for the month of July 2002,
filed with the SEC on July 1, 2002;
(3) the PIFCo Annual Report on Form 20-F for the year ended December 31,
2001, filed with the SEC on July 1, 2002; and
(4) any future filings on Form 20-F made with the SEC under the Exchange
Act after the date of this prospectus and prior to the termination of the
offering of the securities offered by this prospectus, and any future filings
on Form 6-K during such period that are identified in such forms as being
incorporated into this prospectus.
50
Information that we file later with the SEC will automatically update and
supersede this information. This means that you should look at all of the SEC
filings that we incorporate by reference to determine if any of the statements
in this prospectus or in any documents previously incorporated by reference
have been modified or superseded.
Documents incorporated by reference in this registration statement are
available without charge, excluding all exhibits, unless an exhibit has been
specifically incorporated by reference in this document. Each person to whom
this prospectus is delivered may obtain documents incorporated by reference
into this document by requesting them either in writing or orally, by telephone
or by e-mail from us at the following address:
Luciana Bastos de Freitas Rachid
Executive Manager, Investor Relations
Petroleo Brasileiro S.A.--Petrobras
Avenida Republica do Chile, 65
20035-900--Rio de Janeiro--RJ, Brazil
Telephone: (55-21) 2534 4477
Email: petroinvest@petrobras.com.br
51
================================================================================
No dealer, salesperson or other person is authorized to give any information or
to represent anything not contained in this prospectus. You must not rely on
any unauthorized information or representations. This prospectus is an offer to
sell only the securities offered hereby, but only under circumstances and in
jurisdictions where it is lawful to do so. The information contained in this
prospectus is current only as of its date.
-------------
TABLE OF CONTENTS
Page
----
About This Prospectus..................................................... 1
Forward-Looking Statements................................................ 1
Petrobras and PIFCo....................................................... 3
Recent Developments....................................................... 5
Ratio of Earnings to Fixed Charges and Preferred Dividends................ 7
Use of Proceeds........................................................... 8
The Securities............................................................ 9
Legal Ownership........................................................... 9
Description of Debt Securities............................................ 12
Description of Mandatory Convertible Securities........................... 26
Description of Warrants................................................... 27
Description of the Standby Purchase Agreements............................ 34
Description of the Guarantees............................................. 35
Description of American Depositary Receipts............................... 36
Plan of Distribution...................................................... 45
Difficulties of Enforcing Civil Liabilities Against Non-U.S. Persons...... 47
Independent Accountants................................................... 49
Experts................................................................... 49
Legal Matters............................................................. 49
Where You Can Find More Information....................................... 50
Incorporation of Certain Documents by Reference........................... 50
================================================================================
Petroleo Brasileiro S.A. --
PETROBRAS
Debt Securities,
Warrants,
Preferred Shares,
Preferred Shares Represented by American Depositary Shares,
Common Shares,
Common Shares Represented by American Depositary Shares,
Mandatory Convertible Securities,
Guarantees and
Standby Purchase Agreements
Petrobras International Finance Company
Debt Securities Accompanied by
Guarantees and
Standby Purchase Agreements
-------------
PROSPECTUS
-------------
================================================================================
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 8. Indemnification of Directors and Officers
Our by-laws require us to defend our senior management in administrative
and legal proceedings and to maintain insurance coverage to protect senior
management from liability arising from the performance of senior manager's
functions. The policy reimburses losses and expenses incurred by us due to
wrongful acts of our directors and officers, such as breach of duty, neglect,
error, misstatement, misleading statements, omission or acts by our directors
and officers in the performance of their position, or any matter claimed
against them solely by reason of their functions or positions, including the
purchase or sale of our securities. Coverage includes the advancement of
defense costs.
Item 9. Exhibits
Exhibit
Number Description
------ -----------
1.1 Form of Underwriting Agreement for Debt Securities.*
1.2 Form of Underwriting Agreement for Warrants.*
1.3 Form of Underwriting Agreement for Preferred Shares, Common Shares and Mandatory
Convertible Securities.*
4.1 Deposit Agreement, dated as of July 14, 2000, among Petrobras, Citibank N.A., as
depositary, and registered holders and beneficial owners from time to time of the American
depositary shares, representing the common shares of Petrobras (incorporated by
reference to Petrobras' registration statement on Form F-1 (File No. 333-12298)).
4.2 Amended and Restated Deposit Agreement, dated as of February 21, 2001, among
Petrobras, Citibank N.A., as depositary, and the registered holders and beneficial owners
from time to time of the American depositary shares, representing the preferred shares of
Petrobras (incorporated by reference to Petrobras' registration statement on Form F-1
(File No. 333-13660)).
4.3 Amendment No. 1, dated as of March 23, 2001, to the Amended and Restated Deposit
Agreement, dated as of February 21, 2001, among Petrobras, Citibank N.A., as depositary,
and the registered holders and beneficial owners from time to time of the American
depositary shares representing the preferred shares of Petrobras (incorporated by
reference to the Petrobras' registration statement on Form F-1 (File No. 333-13660)).
4.4 Indenture, dated as of July 19, 2002, between Petrobras and JPMorgan Chase Bank.+
4.5 Indenture, dated as of July 19, 2002, between PIFCo and JPMorgan Chase Bank.+
4.6 Form of Debt Security (included in Exhibits 4.4 and 4.5).+
4.7 Form of Mandatory Convertible Security.*
4.8 Amended By-laws of Petrobras (together with an English translation) (incorporated by
reference to Exhibit 1(a) of the Petrobras annual report on Form 20-F, File No. 1-15106,
for the fiscal year ended December 31, 2001).
4.9 Memorandum and Articles of Association of PIFCo (incorporated by reference to Exhibit 1
of the PIFCo annual report on Form 20-F, File No. 1-15106, for the fiscal year ended
December 31, 2001).
4.10 Form of Debt Warrant Agreement between Petrobras and the Debt Warrant Agent,
including a form of Debt Warrant Certificate.*
4.11 Form of Equity Warrant Agreement between Petrobras and the Equity Warrant Agent,
including a form of Equity Warrant Certificate.*
5.1 Opinion of Souza, Cescon Avedissian, Barrieu e Flesch--Advogados, with respect to the
validity of the debt securities, warrants, preferred shares, common shares, mandatory
convertible securities, guarantees and standby purchase agreements.+
II-1
Exhibit
Number Description
------ -----------
5.2 Opinion of Walkers, with respect to the validity of the debt securities of PIFCo.+
5.3 Opinion of Cleary, Gottlieb, Steen & Hamilton, with respect to the validity of the debt
securities and warrants.+
12.1 Statement as to Computation of Ratio to Earnings to Fixed Charges and Preferred
Dividends of Petrobras.+
12.2 Statement as to Computation of Ratio of Earnings to Fixed Charges of PIFCo.+
15.1 Letter of PricewaterhouseCoopers Auditores Independentes concerning unaudited interim
financial information of Petrobras.+
23.1 Consents of PricewaterhouseCoopers Auditores Independentes.
23.2 Consent of Souza, Cescon Avedissian, Barrieu e Flesch--Advogados (included in
Exhibit 5.1).+
23.3 Consent of Walkers (included in Exhibit 5.2).+
23.4 Consent of Cleary, Gottlieb, Steen & Hamilton (included in Exhibit 5.3).+
23.5 Consent of DeGolyer and MacNaughton (incorporated by reference to Exhibit 10(a) of the
Petrobras annual report on Form 20-F, File No. 1-15106, for the fiscal year ended
December 31, 2001).
23.6 Consent of Gaffney, Cline and Associates (incorporated by reference to Exhibit 10(a) of the
Petrobras annual report on Form 20-F, File No. 1-15106, for the fiscal year ended
December 31, 2001).
24.1 Power of Attorney (contained on page II-4 of the original Registration Statement).+
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of JPMorgan Chase
Bank with respect to Petrobras indenture.+
25.2 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of JPMorgan Chase
Bank with respect to PIFCo indenture.+
--------
* To be filed by amendment or incorporated by reference. Petrobras and/or PIFCo
will file as an Exhibit to a report on Form 6-K that is incorporated by
reference into this registration statement any related form utilized in the
future and not previously filed by means of an amendment or incorporated by
reference.
+ Previously filed.
Item 10. Undertakings
The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change
to such information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof;
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering; and
(4) To file a post-effective amendment to the registration statement to
include any financial statements required by Item 8.A. of Form 20-F at the
start of any delayed offering or throughout a
II-2
continuous offering. Financial statements and information otherwise
required by Section 10(a)(3) of the Securities Act of 1933 need not be
furnished, provided, that the registrant includes in the prospectus, by
means of a post-effective amendment, financial statements required pursuant
to this paragraph (a)(4) and other information necessary to ensure that all
other information in the prospectus is at least as current as the date of
those financial statements. Notwithstanding the foregoing, with respect to
registration statements on Form F-3, a post-effective amendment need not be
filed to include financial statements and information required by Section
10(a)(3) of the Securities Act of 1933 or Rule 3-19 of Regulation S-X
promulgated by the Securities and Exchange Commission if such financial
statements and information are contained in periodic reports filed with or
furnished to the Securities and Exchange Commission by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the Form F-3.
The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrants
have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
The undersigned registrants hereby undertake to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Trust
Indenture Act.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Petroleo
Brasileiro S.A.--Petrobras certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form F-3 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, on August 14, 2002 in the City of Rio
de Janeiro, Brazil.
PETROLEO BRASILEIRO S.A--PETROBRAS
By: /S/ JOAO PINHEIRO NOGUEIRA BATISTA
--------------------------------------------
Name: Joao Pinheiro Nogueira Batista
Title: Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
indicated capacities and on August 14, 2002.
Signature Title
--------- -----
* Chairman of the Board
-----------------------------------
Pedro Pullen Parente
* Director and Presiden
----------------------------------- (Principal Executive Officer)
Francisco Roberto Andre Gros
/S/ JOAO PINHEIRO NOGUEIRA BATISTA Chief Financial Officer (Principal
----------------------------------- Financial Officer)
Joao Pinheiro Nogueira Batista
* Chief Accounting Officer (Principal
----------------------------------- Accounting Officer)
Marcos Antonio Silva Menezes
* Director
-----------------------------------
Gerald Dinu Reiss
* Director
-----------------------------------
Zenildo Gonzaga Zoroastro De Lucena
* Director
-----------------------------------
Jorge Gerdau Johannpeter
* Director
-----------------------------------
Eleazar de Carvalho
* Director
-----------------------------------
Roberto Egydio Setubal
* Director
-----------------------------------
Claudio Luiz da Silva Haddad
II-4
Signature Title
--------- -----
* Director
--------------------
Guilherme Gomes Dias
/S/ THEODORE HELMS Authorized U.S. Representative
--------------------
Theodore Helms
*By: /S/ JOAO PINHEIRO NOGUEIRA BATISTA
---------------------------------------------------
Name: Joao Pinheiro Nogueira Batista
Title: Chief Financial Officer (Principal Financial
Officer) and Attorney-in-Fact
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Petrobras
International Finance Company--PIFCo certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on Form F-3 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, on August 14, 2002 in the City of Rio
de Janeiro, Brazil.
PETROBRAS INTERNATIONAL FINANCE
COMPANY--PIFCo
By: /S/ ALMIR GUILHERME BARBASSA
-----------------------------------
Name: Almir Guilherme Barbassa
Title: Chairman of the Board
Directors, PIFCo
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
indicated capacities and on August 14, 2002.
Signature Title
--------- -----
/S/ ALMIR GUILHERME BARBASSA Chairman of the Board Directors,
--------------------------------- PIFCo
Almir Guilherme Barbassa
/S/ CARLOS NEY MARTIN DE ANDRADE Director, PIFCo
---------------------------------
Carlos Ney Martin de Andrade
/S/ DANIEL LIMA DE OLIVEIRA Financial Manager, PIFCo (Principal
--------------------------------- Financial Officer)
Daniel Lima de Oliveira
/S/ MARIANGELA MONTEIRO TIZATTO Accounting Manager, PIFCo (Principal
--------------------------------- Accounting Officer)
Mariangela Monteiro Tizatto
/S/ THEODORE HELMS Authorized U.S. Representative, PIFCo
---------------------------------
Theodore Helms
II-6
INDEX TO EXHIBITS
Exhibit
Number Description
------ -----------
1.1 Form of Underwriting Agreement for Debt Securities.*
1.2 Form of Underwriting Agreement for Warrants.*
1.3 Form of Underwriting Agreement for Preferred Shares, Common Shares and Mandatory
Convertible Securities.*
4.1 Deposit Agreement, dated as of July 14, 2000, among Petrobras, Citibank N.A., as
depositary, and registered holders and beneficial owners from time to time of the American
depositary shares, representing the common shares of Petrobras (incorporated by reference
to Petrobras' registration statement on Form F-1 (File No. 333-12298)).
4.2 Amended and Restated Deposit Agreement, dated as of February 21, 2001, among
Petrobras, Citibank N.A., as depositary, and the registered holders and beneficial owners
from time to time of the American depositary shares, representing the preferred shares of
Petrobras (incorporated by reference to Petrobras' registration statement on Form F-1 (File
No. 333-13660)).
4.3 Amendment No. 1, dated as of March 23, 2001, to the Amended and Restated Deposit
Agreement, dated as of February 21, 2001, among Petrobras, Citibank N.A., as depositary,
and the registered holders and beneficial owners from time to time of the American depositary
shares representing the preferred shares of Petrobras (incorporated by reference to the
Petrobras' registration statement on Form F-1 (File No. 333-13660)).
4.4 Indenture, dated as of July 19, 2002, between Petrobras and JPMorgan Chase Bank+.
4.5 Indenture, dated as of July 19, 2002, between PIFCo and JPMorgan Chase Bank.+
4.6 Form of Debt Security (included in Exhibits 4.4 and 4.5).+
4.7 Form of Mandatory Convertible Security.*
4.8 Amended By-laws of Petrobras (together with an English translation) (incorporated by
reference to Exhibit 1(a) of the Petrobras annual report on Form 20-F, File No. 1-15106, for
the fiscal year ended December 31, 2001).
4.9 Memorandum and Articles of Association of PIFCo (incorporated by reference to Exhibit 1 of
the PIFCo annual report on Form 20-F, File No. 1-15106, for the fiscal year ended
December 31, 2001).
4.10 Form of Debt Warrant Agreement between Petrobras and the Debt Warrant Agent, including
a form of Debt Warrant Certificate.*
4.11 Form of Equity Warrant Agreement between Petrobras and the Equity Warrant Agent,
including a form of Equity Warrant Certificate.*
5.1 Opinion of Souza, Cescon Avedissian, Barrieu e Flesch--Advogados, with respect to the
validity of the debt securities, warrants, preferred shares, common shares, mandatory
convertible securities, guarantees and standby purchase agreements.+
5.2 Opinion of Walkers, with respect to the validity of the debt securities of PIFCo.+
5.3 Opinion of Cleary, Gottlieb, Steen & Hamilton, with respect to the validity of the debt
securities and warrants.+
12.1 Statement as to Computation of Ratio to Earnings to Fixed Charges and Preferred Dividends
of Petrobras.+
II-7
Exhibit
Number Description
------ -----------
12.2 Statement as to Computation of Ratio of Earnings to Fixed Charges of PIFCo.+
15.1 Letter of PricewaterhouseCoopers Auditores Independentes concerning unaudited interim
financial information of Petrobras.+
23.1 Consents of PricewaterhouseCoopers Auditores Independentes.
23.2 Consent of Souza, Cescon Avedissian, Barrieu e Flesch--Advogados (included in Exhibit
5.1).+
23.3 Consent of Walkers (included in Exhibit 5.2).+
23.4 Consent of Cleary, Gottlieb, Steen & Hamilton (included in Exhibit 5.3).+
23.5 Consent of DeGolyer and MacNaughton (incorporated by reference to Exhibit 10(a) of the
Petrobras annual report on Form 20-F, File No. 1-15106, for the fiscal year ended December
31, 2001).
23.6 Consent of Gaffney, Cline and Associates (incorporated by reference to Exhibit 10(a) of the
Petrobras annual report on Form 20-F, File No. 1-15106, for the fiscal year ended December
31, 2001).
24.1 Power of Attorney (contained on page II-4 of the original Registration Statement).+
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of JPMorgan Chase
Bank with respect to Petrobras indenture.+
25.2 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of JPMorgan Chase
Bank with respect to PIFCo indenture.+
--------
* To be filed by amendment or incorporated by reference. Petrobras and/or PIFCo
will file as an Exhibit to a report on Form 6-K that is incorporated by
reference into this registration statement any related form utilized in the
future and not previously filed by means of an amendment or incorporated by
reference.
+ Previously filed.
II-8