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| (a) | upon      the occurrence of an Event of Default which is continuing (as defined in      the Credit Agreement), to sell, assign, transfer or in any other way      dispose of all or part of the Equipment pledged to the Bank pursuant to      the Equipment Pledge and Security Agreement entered into between the Bank      and Qualytextil on May 13, 2008 (as from time to time amended, the “Equipment Pledge and      Security Agreement”), at market prices and upon market terms and      conditions and subject to applicable law irrespective of any prior or      subsequent notice to Qualytextil with respect thereto, in accordance with      the provisions set forth in the Equipment Pledge and Security Agreement      and in Article 1,433, Item IV, and Article 1,435, Item V, of the Brazilian      Civil Code, and apply the proceeds thus received for the payment of the      Secured Obligations the due and unpaid as well for the payment or      reimbursement of all other costs and expenses incurred as a result of such      sale, being vested with all necessary powers incidental thereto,      including, without limitation, the power and authority to execute transfer      documents, including discharge documentation with respect to the      Equipment, to purchase foreign currency and make all remittances abroad,      to sign any necessary foreign exchange contract with financial      institutions in Brazil that may be required to such remittances and to      represent the Grantor before the Central Bank of Brazil, financial      institutions, private and public law legal entities and any Brazilian      governmental authority when necessary to accomplish the purpose of the      Equipment Pledge and Security Agreement;and |
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|  | (b) | upon      the occurrence of an Event of Default which is continuing, to take any      action and to execute and deliver any instrument consistent with the terms      of the as deemed necessary or advisable to accomplish the purpose of the      Equipment Pledge and SecurityAgreement. |
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| By:      /s/ Miguel G.      Bastos |   | By:      /s/ Elder Marcos      Vieira da Conceicao |
|------------------------------------|--------|----------------------------------------------------|
| Name:      Miguel G. Bastos        |   | Name:      Elder Marcos Vieira da Conceicao        |
| Title:      CFO                    |   | Title:      CEO                                    |

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