Document:

<PAGE>
                                                                     EXHIBIT 4.2

                            Dated as of March 8, 2002

                             VALE OVERSEAS LIMITED,
                                    AS ISSUER

                                       and

                           COMPANHIA VALE DO RIO DOCE,
                                  AS GUARANTOR

                                       and

                              JPMORGAN CHASE BANK,
                                   AS TRUSTEE

                          FIRST SUPPLEMENTAL INDENTURE

                                U.S.$300,000,000
                              Series A and Series B
                    8.625% Enhanced Guaranteed Notes due 2007

                                            LINKLATERS
                                            1345 Avenue of the Americas
                                            19th Floor
                                            New York, NY 10105

                                            Telephone: (1-212) 424 9000
                                            Facsimile: (1-212) 424 9100

                                            Ref: PERR/SEYB

                                            LINKLATERS & ALLIANCE
                                            Linklaters is a
                                            member firm of Linklaters & Alliance
                                            a non-partnership association

<PAGE>
                               TABLE OF CONTENTS
<Table>
<Caption>
                                                                       PAGE
<S>   <C>                                                               <C>
1    DEFINITIONS.......................................................  3

     1.1  PROVISIONS OF THE ORIGINAL INDENTURE.........................  3

     1.2  DEFINITIONS..................................................  3

2    GENERAL TERMS AND CONDITIONS OF THE NOTES.........................  8

     2.1  DESIGNATION AND PRINCIPAL AMOUNT.............................  8

     2.2  FORMS GENERALLY..............................................  9

     2.3  TRANSFERS AND EXCHANGES...................................... 21

     2.4  FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.............. 25

     2.5  MAINTENANCE OF OFFICE OR AGENCY.............................. 25

     2.6  LUXEMBOURG LISTING........................................... 25

     2.7  REGISTRATION RIGHTS.......................................... 25

     2.8  SUSPENSION OF PAYMENT OF PRINCIPAL OF GUARANTY............... 25

     2.9  PRESCRIPTION PERIOD.......................................... 26

3    RESERVE ACCOUNT AND LETTERS OF CREDIT............................. 26

     3.1  RESERVE ACCOUNT AND LETTERS OF CREDIT........................ 26

     3.2  WITHDRAWALS FROM THE RESERVE ACCOUNT AND
          DRAWDOWNS ON LETTERS OF CREDIT............................... 27

     3.3  RELEASE OF COLLATERAL........................................ 29

4    MISCELLANEOUS PROVISIONS.......................................... 29

     4.1  SEPARABILITY OF INVALID PROVISIONS........................... 29

     4.2  EXECUTION IN COUNTERPARTS.................................... 29

5    REPRESENTATIONS AND WARRANTIES.................................... 29

6    COVENANTS OF THE COMPANY AND THE GUARANTOR........................ 34

7    DISCLOSURE TO MOODY'S............................................. 34

     ANNEX A........................................................... 37

     ANNEX B........................................................... 39

     ANNEX C........................................................... 41

     ANNEX D........................................................... 44

</Table>

                                      -i-
<PAGE>

FIRST SUPPLEMENTAL INDENTURE, dated as of March 8, 2002, among VALE OVERSEAS
LIMITED, a Cayman Islands exempted company incorporated with limited liability
(herein called the "COMPANY"), having its principal office at Walker House, P.O.
Box 908 GT, Mary Street, Georgetown, Grand Cayman, Cayman Islands, COMPANHIA
VALE DO RIO DOCE, a company organized under the laws of the Federative Republic
of Brazil (herein called the "GUARANTOR"), having its principal office at
Avenida Graca Aranha, No. 26, 17(Degree) Andar, 20005-900 Rio de Janeiro, RJ,
Brazil, and JPMORGAN CHASE BANK, a bank duly organized and existing under the
laws of the State of New York, having its principal corporate trust office at
450 West 33rd Street, New York, New York 10001, as Trustee (herein called the
"Trustee") to the Indenture, dated as of March 8, 2002, among the Company, the
Guarantor and the Trustee (herein called the "ORIGINAL INDENTURE").

                              W I T N E S S E T H :

WHEREAS, the Original Indenture provides for the issuance from time to time
thereunder, in series, of Securities of the Company carrying the Guaranty of the
Guarantor, and Section 9.1 of the Original Indenture provides for the
establishment of the form or terms of Securities issued thereunder through one
or more supplemental indentures;

WHEREAS, the Company and the Guarantor desire by this First Supplemental
Indenture to create two series of Securities to be issuable under the Original
Indenture, as supplemented by this First Supplemental Indenture, and to be known
as the Company's 8.625% Series A Enhanced Guaranteed Notes due 2007 (the "SERIES
A NOTES") and the Company's 8.625% Series B Enhanced Guaranteed Notes due 2007
(the "SERIES B NOTES", and, together with the Series A Notes, the "NOTES"),
which are to be limited in aggregate principal amount as specified in this First
Supplemental Indenture and the terms and provisions of which are to be as
specified in this First Supplemental Indenture;

WHEREAS, the Company and the Guarantor will be required under the Registration
Rights Agreement to exchange the Series A Notes, which are Restricted Notes (as
defined below) for Series B Notes freely tradable due to their registration
under the Securities Act;

WHEREAS, the Company and the Guarantor wish to secure the payment of the Notes
by causing to be issued in favor of the Trustee for the benefit of the Holders
(as defined in the Original Indenture) of the Notes a Letter of Credit (as
defined below) in an amount equal to the Political Risk Coverage (as defined
below);

WHEREAS, the Company and the Guarantor may, in their sole discretion, substitute
any portion or all the amounts available under the letter of credit for funds
deposited in the Reserve Account (as defined below) and vice versa, and wish to
hereby grant a security interest in favor of the Trustee for the benefit of the
Holders (as defined in the Original Indenture) of Notes over such Reserve
Account and the funds deposited therein;

WHEREAS, the Company and the Guarantor have duly authorized the execution and
delivery of this First Supplemental Indenture to establish the Notes as series
of Securities under the Original Indenture and to provide for, among other
things, the issuance of and the form and terms of the Notes and additional
covenants for the benefit of the Holders thereof and the Trustee; and

WHEREAS, all things necessary to make this First Supplemental Indenture a valid
and binding legal obligation of the Company and the Guarantor according to its
terms have been done.

                                      -1-
<PAGE>
NOW, THEREFORE, for and in consideration of the premises and the purchase and
acceptance of the Notes by the Holders thereof and for the purpose of setting
forth, as provided in the Original Indenture, the form of the Notes and the
terms, provisions and conditions thereof, the Company and the Guarantor covenant
and agree with the Trustee as follows:

That in order to secure the due and punctual payment of interest and the payment
of all fees and expenses (including legal fees and expenses) of the Trustee in
relation to the Notes under this First Supplemental Indenture (collectively, the
"OBLIGATIONS"), the Company hereby grants, mortgages, assigns, transfers and
pledges unto the Trustee, for the benefit and security of the Holders of the
Notes and the Trustee, and their respective successors and assigns, and grants
to the same a security interest in all of the Company's estate, right, title and
interest in the property described in clauses First and Second below, whether
now owned or hereafter acquired (all such property described in clauses First
and Second below, being herein called the "COLLATERAL"), to wit:

                                      FIRST

                               THE RESERVE ACCOUNT

All right, title and interest of the Company in the Reserve Account (as defined
below), any successor account thereto, any and all property held therein or
credited thereto, including, without limitation, all instruments, money or cash,
and all amounts on deposit from time to time therein.

                                     SECOND

                                    PROCEEDS

All right, title and interest, present and future, of the Company in and to all
proceeds, profits, products, revenues and other income, and in and to all
proceeds and payments, from and on account of the property, rights and
privileges described in clause FIRST above.

To have and to hold the Collateral unto the Trustee and its successors and
assigns in mortgage, pledge and trust for the benefit and security of the
Holders from time to time of all the Notes issued and Outstanding hereunder and
the Trustee and for the uses and purposes and subject to the terms and
provisions set forth in this First Supplemental Indenture.

In trust nevertheless, upon the terms and trusts set forth, for the equal and
proportionate benefit and security of all Holders of the Notes issued and to be
issued hereunder, without preference, distinction or priority as to Lien (as
defined in the Original Indenture) or otherwise of any Note over any other Note
by reason of priority in time of issue, sale or negotiation thereof, or by
reason of the purpose of issue, or otherwise howsoever, except as herein
otherwise expressly provided.

The Company does hereby constitute the Trustee the true and lawful attorney of
the Company irrevocably, with full power (in the name of the Company or
otherwise) to ask, require, demand, receive, settle, compromise, compound and
give acquittance for any and all moneys and claims for moneys due and to become
due under or arising out of any of the Collateral, to endorse any checks or
other instruments or orders in connection therewith and to file any claims or
take any action or institute any proceedings which the Trustee may deem to be
necessary or advisable in the premises.

The Company agrees that any time and from time to time, upon the written request
of the Trustee, it will promptly and duly execute and deliver any and all such
further instruments and documents as the

                                      -2-
<PAGE>

Trustee may reasonably deem desirable in obtaining the full benefits of the
foregoing clauses FIRST and SECOND and of the rights and powers herein granted.

The Company does hereby warrant and represent that, except as otherwise
contemplated by this Indenture, it has not mortgaged, assigned or pledged, and
hereby covenants that it will not mortgage, assign or pledge, so long as this
First Supplemental Indenture shall remain in effect, any of the right, title or
interest hereby mortgaged, assigned or pledged to anyone other than the Trustee.

It is hereby covenanted and agreed that the terms and conditions upon which the
Notes are issued, authenticated, delivered and accepted by all Persons (as
defined on the Original Indenture) who shall from time to time be or become the
Holders thereof, and the terms and conditions upon which the property herein
mortgaged and pledged is to be held and disposed of, which said terms and
conditions the Trustee hereby accepts and agrees to discharge pursuant to the
terms hereof, are as follows:

1      DEFINITIONS

       1.1      PROVISIONS OF THE ORIGINAL INDENTURE

                Except insofar as herein otherwise expressly provided, all the
                definitions, provisions, terms and conditions of the Original
                Indenture shall remain in full force and effect. The Original
                Indenture, as amended and supplemented by this First
                Supplemental Indenture, is in all respects ratified and
                confirmed, and the Original Indenture and this First
                Supplemental Indenture shall be read, taken and considered as
                one and the same instrument for all purposes.

       1.2      DEFINITIONS

                For all purposes of this First Supplemental Indenture and the
                Notes, except as otherwise expressly provided or unless the
                subject matter or context otherwise requires:

                 1.2.1  any  reference to an "Article" or a "Section"  refers to
                        an Article or Section,  as the case may be, of this
                        First  Supplemental Indenture;

                 1.2.2  the words "herein", "hereof" and "hereunder" and other
                        words of similar import refer to this First Supplemental
                        Indenture as a whole and not to any particular Article,
                        Section or other subdivision;

                 1.2.3  all terms used in this First Supplemental Indenture that
                        are defined in the Original Indenture have the meanings
                        assigned to them in the Original Indenture, except as
                        otherwise provided in this First Supplemental Indenture
                        and except that all capitalized terms used in Section 5
                        shall have the meanings ascribed to such terms in the
                        Purchase Agreement (as defined below);

                 1.2.4  the term "Securities" as defined in the Original
                        Indenture and as used in any definition therein, shall
                        be deemed to include or refer to, as applicable, the
                        Notes; and

                 1.2.5  the following terms have the meanings given to them in
                        this Section 1.2.5.

                 "AGENT MEMBER TRANSFEREE" has the meaning specified in Section
                 2.3.2 hereof.

                 "AGENT MEMBER TRANSFEROR" has the meaning specified in Section
                 2.3.2 hereof.

                                      -3-
<PAGE>
                "APPLICABLE PROCEDURES" means with respect to any transfer or
                transaction involving a Global Note or beneficial interest
                therein, the rules and procedures of the Depositary, Euroclear
                and Clearstream, Luxembourg for such Global Note, in each case
                to the extent applicable to such transaction and as in effect
                from time to time.

                "COLLATERAL" has the meaning specified in the granting clause
                above.

                "DISTRIBUTION COMPLIANCE PERIOD" means the period of 40
                consecutive days beginning on and including the later of (i) the
                day on which the Series A Notes are first offered to persons
                other than distributors (as defined in Regulation S) in reliance
                on Regulation S notice of such day to be given by the Company to
                the Trustee and (ii) the day on which the closing of the
                offering of the Original Notes pursuant to the Purchase
                Agreement occurs.

                "EVENT OF DEFAULT" shall have the same meaning as set forth in
                the Original Indenture, except that:

                (A) the failure of the Company and Guarantor to (i) notify the
                Trustee in a notice in the form of Annex D attached hereto of
                the occurrence of a Political Risk Event within five Business
                Days of such occurrence, or (ii) to notify the Trustee in a
                notice in the form of Annex D attached hereto of the termination
                of a Political Risk Event within five Business Days after such
                termination or (iii) notify the Trustee in a notice in the form
                of Annex E attached hereto at least one Business Day prior to
                each Interest Payment Date during the period when a Political
                Risk Event is in existence or (iv) notify the Trustee in a
                notice in the form of Annex E attached hereto, contemporaneously
                with a notice pursuant to paragraph (i) above, if there was an
                Interest Payment Date falling on or after the occurrence of a
                Political Risk Event and prior to notice being given pursuant to
                paragraph (i) above, shall constitute an Event of Default;

                (B) the giving of notice of the existence of a Political Risk
                Event by the Company or the Guarantor when a Political Risk
                Event is not in existence shall also constitute an Event of
                Default and such Event of Default shall be cause for
                acceleration of the maturity of the Notes upon the affirmative
                vote of only 10% of the principal amount of the Notes then
                Outstanding; PROVIDED, HOWEVER, that the Trustee, for all
                purposes of this First Supplemental Indenture shall not be
                charged with notice or knowledge of the occurrence, continuance
                or termination of a Political Risk Event unless it shall have
                received written notice thereof from the Company or the
                Guarantor; and

                (C) the incorrectness in any material respect of any
                representation or warranty made by the Company or the Guarantor
                in this First Supplemental Indenture or any notice in the form
                of Annex D or Annex E delivered hereunder or any other notice or
                certificate delivered hereunder (and which other notice or
                certificate, if it is incorrect in any material respect, is not
                corrected by the Company or the Guarantor within 30 days of its
                delivery) when made shall constitute an Event of Default.

                "EXCHANGE OFFER" means the "Exchange Offer" contemplated by the
                Registration Rights Agreement, i.e. the exchange of the Series A
                Notes for Series B Notes which are subject to a registration
                statement declared effective by the Commission.

                                      -4-
<PAGE>
                "GLOBAL NOTE" means a Note that evidences all or part of the
                Notes and is authenticated and delivered to, and registered in
                the name of, the Depositary for such Notes or a nominee thereof.
                Global Notes shall include Restricted Global Notes, Regulation S
                Global Notes and Unrestricted Global Notes and shall be Global
                Securities for purposes of the Original Indenture.

                "GOVERNMENTAL AUTHORITY" means any public legal entity or public
                agency of Brazil, including, but not limited to, any central
                bank, whether created by any competent authority, federal, state
                or local government, or any other legal entity now existing or
                hereafter created, or now or hereafter owned or controlled,
                directly or indirectly, by any public legal entity or public
                agency of Brazil including, but not limited to, any central
                bank.

                "GOVERNMENT OF BRAZIL" means the government of Brazil or any
                state or other political subdivision thereof and any entity
                exercising executive, legislative, judicial, regulatory or
                administrative functions of or pertaining to government.

                "INITIAL PURCHASERS" means the initial purchasers of the Series
                A Notes listed in Schedule I to the Purchase Agreement.

                "LETTER OF CREDIT" means an irrevocable stand-by letter of
                credit issued by a qualifying institution naming the Trustee as
                the sole beneficiary and being drawable at the Trustee's sole
                request. Each institution serving as the issuer of a Letter of
                Credit must be a bank or a trust company (a) organized and
                located in a country (other than Brazil) which is a member of
                the Organization for Economic Cooperation and Development, (b)
                with a long-term unsecured debt rating with respect to U.S.
                dollar obligations of at least Aa3 or its equivalent rating by
                Moody's and (c) with commercial paper rated P-1 or better by
                Moody's.

                "MOODY'S" means Moody's Investors Service, Inc.

                "NOTES" has the meaning specified in the recitals hereof.

                "OBLIGATIONS" has the meaning specified in the granting clause
                above. "OWNER TRANSFEREE" has the meaning specified in Section
                2.3.2 hereof.

                "OWNER TRANSFEROR" has the meaning specified in Section 2.3.2
                hereof.

                "PERMITTED HOLDER" at any time means any Person who, at such
                time, is the holder of at least $5,000,000 in aggregate
                principal amount of Notes.

                "PERMITTED INVESTMENTS" means, with respect to amounts on
                deposit in the Reserve Account:

                (i)    direct obligations of the United States (including
                       obligations issued or held in book-entry form on the
                       books of the Department of the Treasury of the United
                       States) or obligations the timely payment of the
                       principal of and interest on which is fully guaranteed by
                       the United States;

                (ii)   obligations,  debentures,  notes or other evidence of
                       indebtedness issued or guaranteed by agencies or
                       instrumentalities of the United States and backed by

                                      -5-
<PAGE>
                       the full faith and credit of the United States,
                       including, but not limited to, any of the following:
                       United States  Treasury,  Export-Import  Bank of the
                       United States and  Government  National Mortgage
                       Association;

                (iii)  repurchase agreements with financial institutions
                       (including the Trustee) or savings and loan associations
                       with a long-term rating of Aa2 and a short-term rating of
                       P-1 or better by Moody's and having a combined capital
                       and surplus of at least two hundred fifty million dollars
                       ($250,000,000) fully secured by collateral security,
                       actually delivered to the Trustee or its agent, described
                       in clauses (i) or (ii) of this definition and
                       continuously having a market value at least equal to the
                       amount so invested;

                (iv)   banker's acceptances issued by, or interest-bearing
                       demand or time deposits (including certificates of
                       deposit) in, a bank with either (x) a long-term credit
                       rating of Aa2 or better by Moody's or (y) a short-term
                       rating of P-1 or better by Moody's;

                (v)    commercial paper rated P-1 or better by Moody's; and

                (vi)   money market funds rated Aaa or better by Moody's.

                Notwithstanding the foregoing, a Permitted Investment must have
                a stated maturity at least one Business Day prior to the
                immediately following Interest Payment Date. Nothing contained
                herein shall be construed to prohibit the Company, the Guarantor
                and the Trustee from entering into any transactions or
                agreements that, except for the identity of the parties, would
                otherwise be permitted hereunder.

                "POLITICAL RISK COVERAGE" means an amount represented by
                deposits in the Reserve Account and/or available under Letters
                of Credit with an aggregate value of $41,421,565 comprising the
                sum of (i) 18 months interest on the principal amount of the
                Notes, (ii) an amount equal to 0.50% interest on the principal
                amount of the Notes for 18 months, (iii) 30 days Default Rate of
                Interest on the amounts described in (i) and (ii) above, and
                (iv) the fees and reasonable expenses of the Trustee hereunder
                for 18 months; provided, however, that (A) Political Risk
                Coverage shall be reduced by the amount equal to (ii) above upon
                the earlier of (x) the completion of the Exchange Offer
                (regardless of how many Notes are exchanged therein), (y) the
                effectiveness of the Shelf Registration Statement and (z) the
                Notes are freely transferable under the Securities Act; and (B)
                Political Risk Coverage shall be reduced to zero at such time as
                the Guarantor has obtained a long-term foreign currency rating
                (without the benefit of pledging collateral or any other credit
                support) from Moody's of Baa2 or better, or none of the Notes
                remain Outstanding and all Obligations hereunder have been
                satisfied. The reduction of the Political Risk Coverage allowed
                under items (A) and (B) above shall not occur without the
                Trustee first receiving in writing from Moody's confirmation
                that any such reduction will not reduce the rating then
                currently assigned to the Notes. The Trustee shall not be
                charged with notice or knowledge of the fact that the Guarantor
                has obtained such a rating unless it shall have received written
                notice thereof from the Company or the Guarantor.

                                      -6-
<PAGE>
                "POLITICAL RISK EVENT" means (i) any measures taken, directed,
                authorized, ratified or approved by the Government of Brazil or
                Governmental Authority that prevent the Company or the Guarantor
                from converting Brazilian currency into U.S. dollars and/or
                remitting U.S. dollars outside Brazil, or (ii) the failure of
                the Government of Brazil or Governmental Authority (or of
                entities authorized under the laws of Brazil to operate in the
                foreign exchange markets) to effect such conversion and/or
                remittance by the Company or the Guarantor, in each case as
                otherwise required in accordance with the terms and conditions
                of the Notes or (iii) expropriation, confiscation,
                nationalization, discriminatory legislative actions or other
                governmental measures taken by the Government of Brazil or
                Governmental Authority which have the effect of depriving the
                Company or the Guarantor of the use or control of Brazilian
                currency or U.S. dollars in connection with its Obligations
                hereunder. A Political Risk Event shall be deemed to have
                occurred without regard to whether the Company or the Guarantor
                may be able to make a scheduled interest payment under the Notes
                in U.S. dollars from offshore sources outside of Brazil. Where
                an event meets the definition of Political Risk Event and
                Illegality Event, it shall be considered a Political Risk Event
                and shall not constitute an Illegality Event.

                "PREDECESSOR NOTE" of any particular Note means every previous
                Note evidencing all or a portion of the same debt as that
                evidenced by such particular Note; and, for the purposes of this
                definition, any Note authenticated and delivered under Section
                3.5 of the Original Indenture in exchange for or in lieu of a
                mutilated, destroyed, lost or stolen Note shall be deemed to
                evidence the same debt as the mutilated, destroyed, lost or
                stolen Note.

                "PURCHASE AGREEMENT" means the Purchase Agreement, dated March
                1, 2002, among the Company, the Guarantor and the Initial
                Purchasers.

                "QUALIFIED INSTITUTIONAL BUYER" means a "qualified institutional
                buyer" as defined in Rule 144A(a)(1) under the Securities Act.

                "REGISTRATION RIGHTS AGREEMENT" has the meaning specified in
                Section 2.7 hereof.

                "REGULATION S" means Regulation S under the Securities Act.

                "REGULATION S GLOBAL NOTE" has the meaning specified in Section
                2.2 hereof.

                "RELEVANT DATE" in respect of any payment means the date on
                which such payment first becomes due or (if the full amount of
                the monies payable has not been received by the Trustee on or
                prior to such due date) the date on which notice is given to the
                Holders that such monies have been so received.

                "RESERVE ACCOUNT" has the meaning specified in Section 3.1
                hereof.

                "RESTRICTED GLOBAL NOTE" has the meaning specified in Section
                2.2 hereof.

                "RESTRICTED GLOBAL TRANSFERRED AMOUNT" has the meaning specified
                in Section 2.3.2 hereof.

                "RESTRICTED NOTES" means Notes offered and sold in their initial
                distribution in transactions exempt from the registration
                requirements of the Securities Act other than

                                      -7-
<PAGE>
                pursuant to Regulation S and shall include all Notes issued upon
                registration of transfer of, in exchange for or in lieu of
                Restricted Notes except as otherwise provided in Section 2.3
                hereof.

                "RESTRICTIVE LEGENDS" has the meaning specified in Section 2.3.1
                hereof.

                "RULE 144A" means Rule 144A under the Securities Act.

                "SECURITIES INTERMEDIARY" means JPMorgan Chase Bank.

                "SERIES A NOTES" has the meaning specified in the recitals
                hereof.

                "SERIES B NOTES" has the meaning specified in the recitals
                hereof.

                "SHELF REGISTRATION STATEMENT" means the Shelf Registration
                Statement contemplated by the Registration Rights Agreement,
                i.e. a registration statement with respect to the Series A Notes
                declared effective by the Commission.

                "STATED MATURITY DATE" has the meaning specified in Section 2.1
                hereof.

                "UNRESTRICTED GLOBAL NOTE" has the meaning specified in Section
                2.2 hereof.

2      GENERAL TERMS AND CONDITIONS OF THE NOTES

       2.1      DESIGNATION AND PRINCIPAL AMOUNT

                There is hereby authorized and established two series of
                Securities designated the 8.625% Series A Enhanced Guaranteed
                Notes due 2007 and the 8.625% Series B Enhanced Guaranteed Notes
                due 2007, initially limited to an aggregate principal amount of
                $300,000,000 (which amount does not include Notes authenticated
                and delivered upon registration of transfer of, or in exchange
                for, or in lieu of, other Securities of such series pursuant to
                Sections 3.4, 3.5, 9.6 or 11.5 of the Original Indenture), which
                amount shall be specified in the Company Order for the
                authentication and delivery of Notes pursuant to Section 3.3 of
                the Original Indenture. The principal of the Notes shall be due
                and payable at the Stated Maturity Date.

                The Company may, from time to time and without the consent of
                the Holders, issue additional notes on terms and conditions
                identical to those of the Notes, which additional notes shall
                increase the aggregate principal amount of, and shall be
                consolidated and form a single series with, the Notes. The Notes
                shall be known and designated as the "8.625% Enhanced Guaranteed
                Notes due 2007" of the Company. Their Stated Maturity Date shall
                be on March 8, 2007, (the "STATED MATURITY DATE"). If a
                Political Risk Event is in existence at the Stated Maturity
                Date, then the Stated Maturity Date will automatically be
                extended to the earlier of (i) the date five Business Days after
                the Political Risk Event terminates, (ii) September 8, 2008 and
                (iii) the Interest Payment Date after the Reserve Account and
                all amounts available to be drawn under any Letters of Credit
                have been fully depleted. The Notes shall bear interest at the
                rate of 8.625% per annum, from March 8, 2002 or from the most
                recent Interest Payment Date to which interest has been paid or
                duly provided for, as the case may be, payable semi-annually on
                March 8 and September 8, commencing September 8, 2002 (an
                "INTEREST PAYMENT DATE"), until the principal thereof is paid or
                made available for payment. To the extent interest due on any

                                      -8-
<PAGE>
                Interest Payment Date is not paid, interest shall accrue thereon
                at the Default Rate of Interest, except as provided herein,
                until such unpaid interest and interest accrued thereon are paid
                in full. As provided in the Registration Rights Agreement, in
                the event that either the Exchange Offer is not completed or the
                Shelf Registration Statement, if required by the Registration
                Rights Agreement, is not declared effective on or prior to
                September 8, 2002 then, pursuant to and subject to the
                Registration Rights Agreement, the interest rate on the Notes
                will increase by 0.25% per annum, and will increase an
                additional 0.25% per annum if the same is not completed or
                effective on December 8, 2002, for an aggregate maximum
                additional interest of 0.50% per annum. These additional amounts
                will be payable on the Notes, pursuant to and subject to the
                Registration Rights Agreement, until the earlier of (i)
                completion of the Exchange Offer, regardless of how many Notes
                are exchanged therein, (ii) effectiveness of the Shelf
                Registration Statement or (iii) the Notes becoming freely
                tradable under the Securities Act. The Notes shall have such
                other terms as are set forth therein.

                The Series A Notes and the Series B Notes shall be considered
                collectively to be a single class for all purposes of this
                Indenture, including, without limitation, waivers, amendments,
                redemptions and offers to purchase.

       2.2      FORMS GENERALLY

                The Notes shall be in substantially the forms set forth in this
                Section 2.2, with such appropriate insertions, omissions,
                substitutions and other variations as are required or permitted
                by this First Supplemental Indenture, and may have such letters,
                numbers or other marks of identification and such legends or
                endorsements placed thereon as may be required to comply with
                the rules of any securities exchange or as may, consistently
                herewith, be determined by the officers executing such Notes, as
                evidenced by their execution thereof.

                The Trustee shall authenticate (i) the Series A Notes for
                original issue on the date hereof in the aggregate principal
                amount of $300,000,000 and (ii) the Series B Notes from time to
                time for issue only in exchange for a like principal amount of
                Series A Notes, in each case upon a Company Order, which written
                order shall specify the amount of Series B Notes to be
                authenticated and the date of original issue thereof.

                Upon their original issuance, Notes offered and sold to
                Qualified Institutional Buyers in accordance with Rule 144A
                shall be issued in the form of one or more Global Notes in
                definitive, fully registered form without coupons, substantially
                in the form set forth in this Section 2.2, with such applicable
                legends as provided herein (each, a "RESTRICTED GLOBAL NOTE").
                Such Restricted Global Notes shall be registered in the name of
                the Depositary, or its nominee, and deposited with the Trustee,
                at its Corporate Trust Office, as custodian for the Depositary,
                duly executed by the Company, and by the Guarantor, in the case
                of the Guaranty endorsed thereon, and authenticated by the
                Trustee as hereinafter provided. The aggregate principal amount
                of any Restricted Global Notes may from time to time be
                increased or decreased by adjustments made on the records of the
                Trustee, as custodian for the Depositary, as provided in Section
                2.3 hereof.

                Upon their original issuance, Notes offered and sold in reliance
                on Regulation S shall initially be issued in the form of one or
                more Global Notes in definitive, fully registered

                                      -9-
<PAGE>
                form without coupons, substantially in the form set forth in
                this Section 2.2, with such applicable legends as provided
                herein (each, a "REGULATION S GLOBAL NOTE"). Such Regulation S
                Global Notes shall be registered in the name of the Depositary,
                or its nominee, and deposited with the Trustee, at its Corporate
                Trustee Office, as custodian for the Depositary, duly executed
                by the Company, and by the Guarantor, in the case of the
                Guaranty endorsed thereon, and authenticated by the Trustee as
                herein provided, for credit by the Depositary to the respective
                accounts of beneficial owners of such Notes (or to such other
                accounts as they may direct) at Euroclear or Clearstream,
                Luxembourg. After such time as the applicable Distribution
                Compliance Period shall have terminated, each such Regulation S
                Global Note shall be referred to herein as an "UNRESTRICTED
                GLOBAL NOTE". The aggregate principal amount of any Regulation S
                Global Note or any Unrestricted Global Note may from time to
                time be increased or decreased by adjustments made on the
                records of the Trustee, as custodian for the Depositary, as
                provided in Section 2.3 hereof.

                Notwithstanding the foregoing, upon consummation of an Exchange
                Offer, the Company shall issue and, upon receipt of a Company
                Order as described above, the Trustee shall authenticate one or
                more Unrestricted Global Notes in aggregate principal amount
                equal to the principal amount of the Global Notes accepted for
                exchange in the Exchange Offer. Concurrently with the issuance
                of such Unrestricted Global Notes, the Trustee shall reduce
                accordingly the aggregate principal amount of the Global Notes
                accepted for exchange.

                2.2.1    FORM OF FACE OF NOTE

                         [INCLUDE IF NOTE IS A GLOBAL NOTE -- THIS IS A GLOBAL
                         NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
                         REFERRED TO, AS SUPPLEMENTED BY THE FIRST SUPPLEMENTAL
                         INDENTURE, AND IS REGISTERED IN THE NAME OF THE
                         DEPOSITARY OR A NOMINEE OF THE DEPOSITARY, WHICH MAY BE
                         TREATED BY VALE OVERSEAS LIMITED, COMPANHIA VALE DO RIO
                         DOCE AND THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND
                         HOLDER OF THIS NOTE FOR ALL PURPOSES.

                         UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
                         FOR REGISTERED NOTES IN DEFINITIVE REGISTERED FORM IN
                         THE LIMITED CIRCUMSTANCES REFERRED TO IN SECTION 3.4.2
                         OF THE INDENTURE, AS SUPPLEMENTED BY THE FIRST
                         SUPPLEMENTAL INDENTURE, THIS GLOBAL NOTE MAY NOT BE
                         TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
                         NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
                         DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
                         DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO
                         A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
                         DEPOSITARY.]

                         [INCLUDE IF NOTE IS A GLOBAL NOTE AND THE DEPOSITARY IS
                         THE DEPOSITORY TRUST COMPANY -- UNLESS THIS CERTIFICATE
                         IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE

                                      -10-
<PAGE>
                         DEPOSITORY TRUST COMPANY TO VALE OVERSEAS LIMITED OR
                         ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
                         PAYMENT, AND ANY CERTIFICATE ISSUED IN EXCHANGE FOR
                         THIS CERTIFICATE OR ANY PORTION HEREOF IS REGISTERED IN
                         THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
                         REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
                         DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS MADE TO
                         CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
                         AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
                         COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
                         VALUE OR OTHERWISE BY OR TO ANY PERSON OTHER THAN THE
                         DEPOSITORY TRUST COMPANY OR A NOMINEE THEREOF IS
                         WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
                         & CO., HAS AN INTEREST HEREIN.]

                         [INCLUDE IF NOTE IS A RESTRICTED GLOBAL NOTE (UNLESS,
                         PURSUANT TO SECTION 2.3 OF THE FIRST SUPPLEMENTAL
                         INDENTURE, THE COMPANY DETERMINES AND CERTIFIES TO THE
                         TRUSTEE THAT THE LEGEND MAY BE REMOVED) -- NEITHER THIS
                         GLOBAL NOTE, THE GUARANTY HEREOF NOR ANY BENEFICIAL
                         INTEREST HEREIN HAS BEEN REGISTERED UNDER THE UNITED
                         STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT")
                         AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
                         TRANSFERRED EXCEPT (1) TO A PERSON WHOM THE SELLER
                         REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
                         WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES
                         ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
                         OF A QUALIFIED INSTITUTIONAL BUYER OR BUYERS IN A
                         TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
                         IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR
                         RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3)
                         PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
                         SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
                         AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION
                         STATEMENT UNDER THE SECURITIES ACT (PROVIDED THAT AS A
                         CONDITION TO REGISTRATION OF TRANSFER OF THIS GLOBAL
                         NOTE AS SET FORTH ABOVE, VALE OVERSEAS LIMITED MAY
                         REQUIRE DELIVERY OF ANY DOCUMENTS OR OTHER EVIDENCE
                         THAT IT, IN ITS ABSOLUTE DISCRETION, DEEMS NECESSARY OR
                         APPROPRIATE TO EVIDENCE COMPLIANCE WITH SUCH
                         EXEMPTION), AND, IN EACH CASE, IN ACCORDANCE WITH ALL
                         APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
                         STATES AND OTHER JURISDICTIONS. NOTES OWNED BY AN
                         INVESTOR THAT IS NOT A QUALIFIED INSTITUTIONAL BUYER OR
                         A NON U.S. PERSON MAY NOT BE HELD IN BOOK-ENTRY FORM
                         AND MAY NOT BE TRANSFERRED WITHOUT CERTIFICATION THAT
                         THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS,
                         AS PROVIDED IN THE FIRST SUPPLEMENTAL INDENTURE UNDER
                         WHICH THE NOTES ARE ISSUED.]

                                      -11-
<PAGE>
                         [INCLUDE IF NOTE IS A REGULATION S GLOBAL NOTE (UNLESS,
                         PURSUANT TO SECTION 2.3 OF THE FIRST SUPPLEMENTAL
                         INDENTURE, THE COMPANY DETERMINES AND CERTIFIES TO THE
                         TRUSTEE THAT THE LEGEND MAY BE REMOVED) -- THIS NOTE
                         AND THE GUARANTY HEREOF HAVE NOT BEEN REGISTERED UNDER
                         THE UNITED STATES SECURITIES ACT OF 1933 (THE
                         "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD OR
                         DELIVERED IN THE UNITED STATES OR TO, OR FOR THE
                         ACCOUNT OR BENEFIT OF, ANY U.S. PERSON, UNLESS SUCH
                         NOTES AND GUARANTY ARE REGISTERED UNDER THE SECURITIES
                         ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
                         THEREOF IS AVAILABLE. THE FOREGOING SHALL NOT APPLY
                         FOLLOWING THE EXPIRATION OF FORTY DAYS FROM THE LATER
                         OF (i) THE DATE ON WHICH THESE NOTES WERE FIRST OFFERED
                         AND (ii) THE DATE OF ISSUANCE OF THESE NOTES.]

                              VALE OVERSEAS LIMITED
                              [SERIES A] [SERIES B]
                    8.625% ENHANCED GUARANTEED NOTES DUE 2007
                    GUARANTEED BY COMPANHIA VALE DO RIO DOCE

                         [If Restricted Global Note - CUSIP Number
                         91911TAA1/ISIN Number US91911TAA16]

                         [If Regulation S Global Note - CINS Number
                          G9317UAA3/ ISIN

                         Number USG9317UAA37/Common Code Number 014456856]

                         No. [                   ]   $[         ]

                         Vale Overseas Limited, a company duly organized and
                         existing under the laws of the Cayman Islands (herein
                         called the "COMPANY", which term includes any successor
                         Person under the Indenture, as supplemented by the
                         First Supplemental Indenture hereinafter referred to),
                         for value received, hereby promises to pay to [ ], or
                         registered assigns, the principal sum of [ ] Dollars
                         [IF THE NOTE IS A GLOBAL NOTE, THEN INSERT -- , or such
                         other principal amount as set forth in the Schedule of
                         Increases or Decreases in Global Note attached hereto]
                         on March 8, 2007, or if a Political Risk Event is in
                         existence on such date, on the earlier of (i) the date
                         five Business Days after the Political Risk Event
                         terminates, (ii) September 8, 2008 and (iii) the
                         Interest Payment Date after the Reserve Account and all
                         amounts available to be drawn under any Letter of
                         Credit have been fully depleted, and to pay interest
                         thereon from March 8, 2002 or from the most recent
                         Interest Payment Date to which interest has been paid
                         or duly provided for, as the case may be, semi-annually
                         on March 8 and September 8 in each year, commencing
                         September 8, 2002 at the rate of 8.625% per annum,
                         until the principal hereof is paid or made available
                         for payment, PROVIDED that any amount of interest on
                         this Note which is overdue shall bear interest (to the
                         extent that payment thereof shall be legally
                         enforceable) at the Default Rate of Interest, except as
                         provided for herein, from the date such amount is due
                         to but not including the day it is paid

                                      -12-
<PAGE>
                         or made available for payment, and such overdue
                         interest shall be paid as provided in Section 3.6 of
                         the Original Indenture. As provided in the Registration
                         Rights Agreement, in the event that either the Exchange
                         Offer is not completed or the Shelf Registration
                         Statement, if required by the Registration Rights
                         Agreement, is not declared effective on or prior to
                         September 8, 2002 then, pursuant to and subject to the
                         Registration Rights Agreement, the interest rate on the
                         Notes will increase by 0.25% per annum, and will
                         increase an additional 0.25% per annum if the same is
                         not completed or effective on December 8, 2002, for an
                         aggregate maximum additional interest of 0.50% per
                         annum. These additional amounts will be payable on the
                         Notes, pursuant to and subject to the Registration
                         Rights Agreement, until the earlier of (i) completion
                         of the Exchange Offer, regardless of how many Notes are
                         exchanged therein, (ii) effectiveness of the Shelf
                         Registration Statement or (iii) the Notes becoming
                         freely tradable under the Securities Act.

                         The interest so payable, and punctually paid or duly
                         provided for, on any Interest Payment Date will, as
                         provided in such Indenture and First Supplemental
                         Indenture, be paid to the Person in whose name this
                         Note (or one or more Predecessor Notes) is registered
                         at the close of business on the Regular Record Date for
                         such interest, which shall be February 21 or August 24
                         (whether or not a Business Day), as the case may be,
                         next preceding such Interest Payment Date. Any such
                         interest not so punctually paid or duly provided for
                         will forthwith cease to be payable to the Holder on the
                         relevant Regular Record Date and may either be paid to
                         the Person in whose name this Note (or one or more
                         Predecessor Notes) is registered at the close of
                         business on a Special Record Date for the payment of
                         such Defaulted Interest to be fixed by the Trustee,
                         notice whereof shall be given to Holders of the Notes
                         not less than 10 days prior to such Special Record
                         Date, or be paid at any time in any other lawful manner
                         not inconsistent with the requirements of any
                         securities exchange on which the Notes may be listed,
                         and upon such notice as may be required by such
                         exchange, all as more fully provided in the Indenture
                         or First Supplemental Indenture. Interest on this Note
                         shall be computed on the basis set forth in the
                         Indenture, as supplemented by the First Supplemental
                         Indenture.

                         Payment of the principal of and interest on this Note
                         will be made to the Person entitled thereto according
                         to the Security Register at the office of the Trustee
                         or agency of the Company in the Borough of Manhattan,
                         The City of New York, New York, maintained for such
                         purpose and at any other office or agency maintained by
                         the Company for such purpose, in such coin or currency
                         of the United States of America as at the time of
                         payment is legal tender for payment of public and
                         private debts upon surrender of this Note in the case
                         of any payment due at the Maturity of the principal
                         thereof (other than any payment of interest payable on
                         an Interest Payment Date); PROVIDED, HOWEVER, that at
                         the option of the Company payment of interest may be
                         made by check mailed to the address of the Person
                         entitled thereto as such address shall appear in the
                         Security Register; PROVIDED, FURTHER, that all payments
                         of the principal of and

                                      -13-
<PAGE>
                         interest on this Note, the Permitted Holders of which
                         have given wire transfer instructions to the Trustee,
                         the Company, or its agent at least 10 Business Days
                         prior to the applicable payment date, will be required
                         to be made by wire transfer of immediately available
                         funds to the accounts with financial institutions in
                         the United States specified by such Permitted Holders
                         in such instructions. [IF THE NOTE IS A GLOBAL NOTE,
                         THEN INSERT -- Notwithstanding the foregoing, payment
                         of any amount payable in respect of a Global Note will
                         be made in accordance with the Applicable Procedures of
                         the Depositary.]

                         Reference is hereby made to the further provisions of
                         this Note set forth on the reverse hereof, which
                         further provisions shall for all purposes have the same
                         effect as if set forth at this place.

                         Payment of interest on the Notes has been secured in
                         part by the establishment of the Reserve Account (as
                         defined in the First Supplemental Indenture) or the
                         issue of Letters of Credit (as defined in the First
                         Supplemental Indenture) or any combination of the
                         foregoing, which provide funds sufficient to pay up to
                         18 months of interest on the Notes plus certain fees
                         and expenses, such funds to be paid to the Holders of
                         the Notes upon the occurrence of certain
                         inconvertibility, transferability or expropriation
                         events.

                         Unless the certificate of authentication hereon has
                         been executed by the Trustee referred to on the reverse
                         hereof by manual signature, this Note shall not be
                         entitled to any benefit under the Indenture, as
                         supplemented by the First Supplemental Indenture or be
                         valid or obligatory for any purpose.

                         IN WITNESS WHEREOF, the Company has caused this Note to
                         be duly executed under its corporate seal.

                         Dated:

                         VALE OVERSEAS LIMITED

                         By:        _____________________
                           Name:
                           Title:

                         By:        _____________________
                           Name:
                           Title:

                         The undersigned (the "GUARANTOR") hereby irrevocably
                         and unconditionally guarantees the full and punctual
                         payment (whether at the Stated Maturity Date, upon
                         redemption, purchase pursuant to an offer to purchase
                         or acceleration or otherwise) of the principal,
                         premium, interest, Additional Amounts and all other
                         amounts that may come due and payable under this Note.

                                      -14-
<PAGE>
                         IN WITNESS WHEREOF, the Guarantor has caused this
                         instrument to be duly endorsed.

                         COMPANHIA VALE DO RIO DOCE

                         By:        _____________________
                         Name:
                         Title:

                         By:        _____________________
                         Name:
                         Title:

                2.2.2    FORM OF REVERSE OF NOTE

                         This Note is a duly authorized issue of securities of
                         the Company issued in one or more series (the
                         "SECURITIES") under an Indenture, dated as of March 8,
                         2002 (herein called the "INDENTURE", which term shall
                         have the meaning assigned to it in such instrument), as
                         supplemented by a First Supplemental Indenture dated as
                         of March 8, 2002 (herein called the "FIRST SUPPLEMENTAL
                         INDENTURE"), among the Company, the Guarantor and
                         JPMorgan Chase Bank, as Trustee (herein called the
                         "TRUSTEE", which term includes any successor trustee
                         under the Indenture), and reference is hereby made to
                         the Indenture, as supplemented by the First
                         Supplemental Indenture, for a statement of the
                         respective rights, limitations of rights, duties and
                         immunities thereunder of the Company, the Guarantor,
                         the Trustee and the Holders of the Securities and of
                         the terms upon which the Securities are, and are to be,
                         authenticated and delivered. This Security is one of
                         the series designated on the face hereof (herein called
                         the "NOTES"), initially limited in aggregate principal
                         amount to $300,000,000.

                         The full and punctual payment of the principal,
                         premium, if any, and interest and all other amounts
                         payable under this Note is irrevocably and
                         unconditionally guaranteed by the Guarantor. Payment of
                         principal under such guaranty shall be suspended in the
                         event (i) the payment of principal and other amounts
                         due under the Notes is automatically accelerated in
                         accordance with Sections 5.1.5 or 5.1.6 of the Original
                         Indenture with respect to the Company, (ii) the
                         Guarantor is not the subject of Event of Default under
                         Section 5.1.5 or 5.1.6 of the Original Indenture and
                         (iii) at that time there exists a Political Risk Event.
                         In that case, the Guarantor's obligations to make
                         payment of principal under the Guaranty will be
                         suspended until the earlier of (x) five Business Days
                         after the Political Risk Event terminates, (y) the date
                         on which the funds in the Reserve Account or available
                         under the Letters of Credit have been fully depleted
                         and (z) 18 months after the date of acceleration.

                                      -15-
<PAGE>
                         Additional notes on terms and conditions identical to
                         those of this Note may be issued by the Company without
                         the consent of the Holders of the Notes. The amount
                         evidenced by such additional Notes shall increase the
                         aggregate principal amount of, and shall be
                         consolidated and form a single series with, the Notes.

                         If an Event of Default or Illegality Event with respect
                         to Notes shall occur and be continuing, the principal
                         of all of the Notes may be declared due and payable in
                         the manner and with the effect provided in the
                         Indenture, as supplemented by the First Supplemental
                         Indenture.

                         All payments of principal and interest in respect of
                         the Notes shall be made without withholding or
                         deduction for any present or future taxes, duties,
                         assessments or governmental charges of whatever nature
                         imposed, levied, collected, withheld or assessed by or
                         on behalf of the Cayman Islands or Brazil, or any
                         Successor Jurisdiction or any authority therein or
                         thereof having power to tax ("FOREIGN TAXES") except to
                         the extent that such Foreign Taxes are required by the
                         Cayman Islands, Brazil, such Successor Jurisdiction or
                         any such authority to be withheld or deducted. In the
                         event of any withholding or deduction for any Foreign
                         Taxes, the Company or the Guarantor, as the case may
                         be, shall pay such additional amounts ("ADDITIONAL
                         AMOUNTS") as will result in receipt by the Holders of
                         Notes on the respective due dates of such amounts as
                         would have been received by them had no such
                         withholding or deduction (including for any Foreign
                         Taxes payable in respect of Additional Amounts) been
                         required, except that no such Additional Amounts shall
                         be payable with respect to any payment on a Note:

                         (i)   to, or to a third  party on behalf of, a Holder
                               who is liable for any such taxes, duties,
                               assessments or other governmental charges which
                               would not have been imposed but for (A) a
                               connection between the Holder and the Cayman
                               Islands or Brazil other than the mere holding of
                               such Note and the receipt of payments with
                               respect to such Note or (B) failure by the Holder
                               to comply with any certification, identification
                               or other reporting requirement concerning the
                               nationality, residence, identity or connection
                               between the Cayman Islands, Brazil or a Successor
                               Jurisdiction, or applicable political subdivision
                               or authority thereof or therein having power to
                               tax, of such Holder, if compliance is required by
                               such Successor Jurisdiction, or any political
                               subdivision or authority thereof or therein
                               having power to tax, as a precondition to
                               exemption from, or reduction in the rate of, the
                               tax, assessment or other governmental charge and
                               the Company has given the Holders at least 30
                               days' notice that Holders will be required to
                               provide such certification, identification or
                               other requirement;

                         (ii)  in respect of any such taxes, duties, assessments
                               or other governmental charges with respect to a
                               Note surrendered (if surrender is required) more
                               than 30 days after the date on which such payment
                               became due and payable or the date on which
                               payment thereof is duly

                                      -16-
<PAGE>
                               provided for and notice thereof given to Holders,
                               whichever occurs later, except to the extent that
                               the Holder of such Note would have been entitled
                               to such Additional Amounts on surrender of such
                               Note for payment on the last day of such 30-day
                               period;

                         (iii) in respect of estate, inheritance, gift, sales,
                               transfer, personal property or similar tax,
                               assessment or governmental charge imposed with
                               respect to a Note;

                         (iv)  in respect of any tax, assessment or other
                               governmental charge payable otherwise than by
                               deduction or withholding from payments on the
                               Notes or by direct payment by the Company or the
                               Guarantor in respect of claims made against the
                               Company or the Guarantor;

                         (v)   where such Additional Amount is imposed on a
                               payment to an individual and is required to be
                               made pursuant to any European Union Directive on
                               the taxation of savings implementing the
                               conclusions of the ECOFIN Council meeting of
                               November 26-27, 2000 or any law implementing or
                               complying with, or introduced in order to conform
                               to, such directive; or

                         (vi)  in respect of any combination of the above.

                         For purposes of the provisions described in Clause (i)
                         above, the term "HOLDER" of any Note means the direct
                         nominee of any beneficial owner of such Note, which
                         holds such beneficial owner's interest in such Note.
                         Notwithstanding the foregoing, the limitations on the
                         Company's or the Guarantor's obligation to pay
                         Additional Amounts set forth in Clause (i) above shall
                         not apply if (a) the provision of information,
                         documentation or other evidence described in such
                         Clause (i) would be materially more onerous, in form,
                         in procedure or in the substance of information
                         disclosed, to a Holder or beneficial owner of a Note
                         (taking into account any relevant differences between
                         U.S. and Cayman Islands or Brazilian law, regulation or
                         administrative practice) than comparable information or
                         other reporting requirements imposed under U.S. tax law
                         (including tax treaties between the United States and
                         the Cayman Islands or Brazil), regulation (including
                         proposed regulations) and administrative practice.

                         The Company or the Guarantor, as the case may be shall
                         promptly provide the Trustee with documentation (which
                         may consist of certified copies of such documentation)
                         satisfactory to the Trustee evidencing the payment of
                         Foreign Taxes in respect of which the Company or the
                         Guarantor has paid any Additional Amounts. Copies of
                         such documentation shall be made available to the
                         Holders of the Notes or the Paying Agent, as
                         applicable, upon request therefor.

                         The Company or the Guarantor, as the case may be shall
                         pay all stamp, issue, registration, documentary or
                         other similar duties, if any, which may be imposed by
                         the Cayman Islands or Brazil or any governmental entity
                         or political subdivision therein or thereof, or any
                         taxing authority of or in any of the

                                      -17-
<PAGE>
                         foregoing, with respect to the Indenture, the First
                         Supplemental Indenture or the issuance of the Notes or
                         the Guaranty.

                         All references herein, in the Indenture or in the First
                         Supplemental Indenture, to principal, premium or
                         interest in respect of any Note shall be deemed to
                         include all Additional Amounts, if any, payable in
                         respect of such principal, premium or interest, unless
                         the context otherwise requires, and express mention of
                         the payment of Additional Amounts in any provision
                         hereof shall not be construed as excluding reference to
                         Additional Amounts in those provisions hereof where
                         such express mention is not made.

                         In the event that Additional Amounts actually paid with
                         respect to the Notes pursuant to the preceding
                         paragraph are based on rates of deduction or
                         withholding of withholding taxes in excess of the
                         appropriate rate applicable to the Holder of such
                         Notes, and, as a result thereof such Holder is entitled
                         to make claim for a refund or credit of such excess
                         from the authority imposing such withholding tax, then
                         such Holder shall, by accepting such Notes, be deemed
                         to have assigned and transferred all right, title, and
                         interest to any such claim for a refund or credit of
                         such excess to the Company. However, by making such
                         assignment, the Holder makes no representation or
                         warranty that the Company will be entitled to receive
                         such claim for a refund or credit and incurs no other
                         obligation with respect thereto.

                         All references in the Indenture, the First Supplemental
                         Indenture and the Notes to principal in respect of any
                         Note shall be deemed to mean and include any Redemption
                         Price payable in respect of such Note pursuant to any
                         redemption right hereunder (and all such references to
                         the Stated Maturity Date of the principal in respect of
                         any Note shall be deemed to mean and include the
                         Redemption Date with respect to any such Redemption
                         Price), and all such references to principal, premium,
                         interest or Additional Amounts shall be deemed to mean
                         and include any amount payable in respect hereof
                         pursuant to Section 10.7 of the Indenture.

                         The Notes are subject to redemption upon not less than
                         30 nor more than 60 days' notice by mail, at any time,
                         as a whole but not in part, at the election of the
                         Company, at a cash price equal to the sum of (i) the
                         principal amount of the Notes being redeemed, (ii)
                         accrued and unpaid current interest thereon to but not
                         including the date fixed for redemption, and (iii) any
                         Additional Amounts (as defined in the Indenture) which
                         would otherwise be payable up to but not including the
                         date fixed for redemption, if, as a result of any
                         amendment to, or change in, the laws (or any laws,
                         rules, or regulations thereunder) of the Cayman Islands
                         or Brazil or any political subdivision or taxing
                         authority thereof or therein affecting taxation or any
                         amendment to or change in an official interpretation,
                         administration or application of such laws, rules, or
                         regulations (including a holding by a court of
                         competent jurisdiction), which amendment or change of
                         such laws, rules, or regulations or the interpretation
                         thereof becomes effective on or after the date of the
                         First Supplemental Indenture, the Company would be
                         obligated, after taking measures the Company considers
                         reasonable

                                      -18-
<PAGE>
                         to avoid such requirement, to pay Additional Amounts in
                         excess of the Additional Amounts that the Company would
                         be obligated to pay if payments made on the Notes were
                         subject to withholding or deduction of Foreign Taxes at
                         the rate of 15 percent.

                         The Indenture, as supplemented by a supplemental
                         indenture, permits, with certain exceptions as therein
                         provided, the amendment thereof and the modification of
                         the rights and obligations of the Company and the
                         rights of the Holders of the Securities of each series
                         to be affected under the Indenture, as supplemented, at
                         any time by the Company and the Trustee with the
                         consent of the Holders of a majority in principal
                         amount of the Securities at the time Outstanding of
                         each series to be affected. The Indenture also contains
                         provisions (i) permitting the Holders of a majority in
                         principal amount of the Securities at the time
                         Outstanding of any series to be affected under the
                         Indenture, as supplemented, on behalf of the Holders of
                         all Securities of such series, to waive compliance by
                         the Company with certain provisions of the Indenture,
                         as supplemented, and (ii) permitting the Holders of a
                         majority in principal amount of the Securities at the
                         time Outstanding of any series to be affected under the
                         Indenture as supplemented, on behalf of the Holders of
                         all Securities of such series, to waive certain past
                         defaults under the Indenture as supplemented by the
                         First Supplemental Indenture and their consequences.
                         Any such consent or waiver by the Holder of this Note
                         shall be conclusive and binding upon such Holder and
                         upon all future Holders of this Note and of any Note
                         issued upon the registration of transfer hereof or in
                         exchange herefor or in lieu hereof, whether or not
                         notation of such consent or waiver is made upon this
                         Note.

                         As provided in and subject to the provisions of the
                         Indenture, as supplemented by the First Supplemental
                         Indenture, the Holder of this Note shall not have the
                         right to institute any proceeding with respect to the
                         Indenture, the First Supplemental Indenture, or for the
                         appointment of a receiver or trustee, or for any other
                         remedy thereunder, unless such Holder shall have
                         previously given the Trustee written notice of a
                         continuing Event of Default or Illegality Event with
                         respect to the Notes, the Holders of not less than 25%
                         (or 10% in the instance of Event of Default due to a
                         false report of a Political Risk Event) in principal
                         amount of the Notes at the time Outstanding shall have
                         made written request to the Trustee to institute
                         proceedings in respect of such Event of Default or
                         Illegality Event as Trustee and offered the Trustee
                         indemnity reasonably satisfactory to it, and the
                         Trustee shall not have received from the Holders of a
                         majority in principal amount of Notes at the time
                         Outstanding a direction inconsistent with such request,
                         and shall have failed to institute any such proceeding,
                         for 60 days after receipt of such notice, request and
                         offer of indemnity. The foregoing shall not apply to
                         any suit instituted by the Holder of this Note for the
                         enforcement of any payment of principal hereof or any
                         interest hereon on or after the respective due dates
                         expressed herein.

                                      -19-
<PAGE>
                         No reference herein to the Indenture or the First
                         Supplemental Indenture and no provision of this Note or
                         of the Indenture or the First Supplemental Indenture
                         shall alter or impair the obligation of the Company,
                         which is absolute and unconditional, to pay the
                         principal of and any interest on this Note at the
                         times, place and rate, and in the coin or currency,
                         herein prescribed.

                         As provided in the Indenture and the First Supplemental
                         Indenture and subject to certain limitations therein
                         set forth (including, without limitation, the
                         restrictions on transfer under Sections 2.2 and 2.3 of
                         the First Supplemental Indenture) the transfer of this
                         Note is registrable in the Security Register, upon
                         surrender of this Note for registration of transfer at
                         the office of the Trustee or agency of the Company in
                         any place where the principal of and any interest on
                         this Note are payable, duly endorsed by, or accompanied
                         by a written instrument of transfer in form
                         satisfactory to the Company and the Security Registrar
                         duly executed by, the Holder hereof or his attorney
                         duly authorized in writing, and thereupon one or more
                         new Notes of this series and of like tenor, of
                         authorized denominations and for the same aggregate
                         principal amount, will be issued to the designated
                         transferee or transferees.

                         The Notes are issuable only in registered form without
                         coupons in denominations of [IF THE NOTE IS NOT A
                         RESTRICTED CERTIFICATED NOTE, THEN INSERT -- $1,000 and
                         any multiple thereof] [IF THE NOTE IS A RESTRICTED
                         CERTIFICATED NOTE, THEN INSERT -- $100,000 and any
                         integral multiple of $1,000 in excess thereof]. As
                         provided in the Indenture, as supplemented by the First
                         Supplemental Indenture, and subject to certain
                         limitations therein set forth, Notes are exchangeable
                         for a like aggregate principal amount of Notes of like
                         tenor of a different authorized denomination, as
                         requested by the Holder surrendering the same.

                         No service charge shall be made for any such
                         registration of transfer or exchange, but the Company
                         may require payment of a sum sufficient to cover any
                         tax or other governmental charge payable in connection
                         therewith.

                         Prior to due surrender of this Note for registration of
                         transfer, the Company, the Guarantor, the Trustee and
                         any agent of the Company, the Guarantor or of the
                         Trustee may treat the Person in whose name this Note is
                         registered as the owner hereof for all purposes,
                         whether or not this Note is overdue, and neither the
                         Company, the Guarantor, the Trustee nor any such agent
                         shall be affected by notice to the contrary.

                         [IF THE NOTE IS A GLOBAL NOTE, THEN INSERT -- This Note
                         is a Global Note and is subject to the provisions of
                         the Indenture and the First Supplemental Indenture
                         relating to Global Notes, including the limitations in
                         Section 2.3 of the First Supplemental Indenture on
                         transfers and exchanges of Global Notes.]

                         This Note, the Indenture and the First Supplemental
                         Indenture shall be governed by and construed in
                         accordance with the laws of the State of New York.

                                      -20-
<PAGE>
                         All terms used in this Note which are defined in the
                         Indenture, as supplemented by the First Supplemental
                         Indenture, shall have the meanings assigned to them in
                         the Indenture, as supplemented by the First
                         Supplemental Indenture.

                                       ABBREVIATIONS

                         The following abbreviations, when used in the
                         inscription of the face of this Note, shall be
                         construed as though they were written out in full
                         according to applicable laws or regulations:

                         TEN COM - as tenants in common TEN ENT - as tenants by
                         the entireties

                         JT TEN - as joint tenants with right of survivorship
                         and not as tenants in common

                         UNIF GIFT MIN ACT-- [                             ]
                         (Cust)
                         Custodian [                 ] under Uniform (Minor)
                         Gifts to Minors Act [                             ]
                         (State)

                    ADDITIONAL ABBREVIATIONS MAY ALSO BE USED
                          THOUGH NOT IN THE ABOVE LIST.

                        [TO BE ATTACHED TO GLOBAL NOTES]
                SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE

The initial principal amount of this Global Note is $[    ]. The following
increases or decreases in this Global Note have been made:

<TABLE>
<CAPTION>

                                                                       PRINCIPAL AMOUNT OF       SIGNATURE OF
                          AMOUNT OF DECREASE     AMOUNT OF INCREASE     THIS GLOBAL NOTE      AUTHORIZED OFFICER
                          IN PRINCIPAL AMOUNT   IN PRINCIPAL AMOUNT      FOLLOWING SUCH       OF TRUSTEE OR NOTES
   DATE OF EXCHANGE       OF THIS GLOBAL NOTE   OF THIS GLOBAL NOTE   DECREASE OR INCREASE         CUSTODIAN
------------------------ ---------------------- --------------------- ---------------------- ----------------------
<S>                      <C>                    <C>                   <C>                    <C>
------------------------ ---------------------- --------------------- ---------------------- ----------------------

------------------------ ---------------------- --------------------- ---------------------- ----------------------

------------------------ ---------------------- --------------------- ---------------------- ----------------------
</TABLE>

          2.3    TRANSFERS AND EXCHANGES

          2.3.1  RESTRICTED NOTES Restricted Notes shall be subject to the
                 restrictions on transfer (the "TRANSFER RESTRICTIONS") provided
                 in the applicable legend(s) (the "RESTRICTIVE LEGENDS")
                 required to be set forth on the face of each Restricted

                                      -21-
<PAGE>
                 Note pursuant to Section 2.2, unless compliance with the
                 Transfer Restrictions shall be waived by the Company in writing
                 delivered to the Trustee.

                 The Transfer Restrictions shall cease and terminate with
                 respect to any particular Restricted Note upon receipt by the
                 Company of evidence satisfactory to it (which may include an
                 opinion of independent counsel experienced in matters of United
                 States federal securities law) that, as of the date of
                 determination, such Restricted Note (a) has been transferred by
                 the Holder thereof pursuant to Rule 144 promulgated under the
                 Securities Act, (b) has been sold pursuant to an effective
                 registration statement under the Securities Act, or (c) has
                 been transferred in a transaction satisfying all the
                 requirements of Rule 903 or 904 (as applicable) of Regulation
                 S, and receipt by the Trustee of an Officer's Certificate
                 certifying that the Company has received such evidence which
                 may include an opinion of counsel stating that the Transfer
                 Restrictions have ceased and terminated with respect to such
                 Note. All references in the preceding sentence to any
                 regulation, rule or provision thereof shall be deemed also to
                 refer to any successor provisions thereof. In addition, the
                 Company may terminate the Transfer Restrictions with respect to
                 any particular Restricted Note in such other circumstances as
                 it determines are appropriate for this purpose and shall
                 deliver to the Trustee an opinion of counsel, if any, and
                 Officer's Certificate certifying that the Transfer Restrictions
                 have ceased and terminated with respect to such Note.

                 At the request of the Holder and upon the surrender of such
                 Restricted Notes to the Trustee or Security Registrar for
                 exchange in accordance with the provisions of this Section 2.3,
                 any Restricted Note as to which the Transfer Restrictions shall
                 have terminated in accordance with the preceding paragraph
                 shall be exchanged for a new Note of like aggregate principal
                 amount, but without the Restrictive Legends. Any Restricted
                 Note as to which the Restrictive Legends shall have been
                 removed pursuant to this paragraph (and any Note issued upon
                 registration of transfer of, exchange for or in lieu of such
                 Restricted Note) shall thereupon cease to be a "Restricted
                 Note" for all purposes of this First Supplemental Indenture.

                 The Trustee shall not be liable for any action taken or omitted
                 to be taken by it in good faith and without negligence on its
                 part in accordance with such notice or any opinion of counsel.

                 As used in this Section 2.3.1, the term "transfer" encompasses
                 any sale, pledge, transfer or other disposition of any Notes
                 referred to herein.

          2.3.2  TRANSFERS BETWEEN GLOBAL NOTES

                 (i)    RESTRICTED  GLOBAL  NOTE TO  REGULATION  S GLOBAL  NOTE
                        If the owner of a  beneficial  interest  (an  "OWNER
                        TRANSFEROR")  in a Restricted  Global  Note  wishes at
                        any time to  transfer  such  beneficial  interest to a
                        Person (an "OWNER  TRANSFEREE")  who wishes to take
                        delivery thereof in the form of a beneficial  interest
                        in a Regulation S Global Note, such transfer may be
                        effected, subject to the Applicable Procedures,  only in

                                      -22-
<PAGE>
                        accordance with the provisions of this Section 2.3.2(i).
                        Upon receipt by the Trustee, as Security Registrar,  at
                        the Corporate  Trust Office of (l) written  instructions
                        given in accordance with the Applicable  Procedures
                        from the Agent  Member,  whose  account  is to be
                        debited  (an "AGENT  MEMBER TRANSFEROR")  with  respect
                        to the  Restricted  Global  Note,  directing  the
                        Trustee,  as  Security Registrar,  to credit or cause to
                        be  credited  to a specified  account of another  Agent
                        Member (an "AGENT MEMBER  TRANSFEREE")  (which shall be
                        an account with Euroclear or Clearstream,  Luxembourg or
                        both) a  beneficial  interest  in a  Regulation  S
                        Global  Note in a  principal  amount  equal to the
                        beneficial  interest in the  Restricted  Global Note to
                        be so  transferred  (the  "RESTRICTED  GLOBAL
                        TRANSFERRED  AMOUNT"),  (2) a  written  order  given in
                        accordance  with the  Applicable  Procedures containing
                        information regarding the account of the Agent Member
                        Transferee to be credited with, and the Agent Member
                        Transferor to be debited by, the Restricted  Global
                        Transferred  Amount,  and (3) a certificate  in
                        substantially  the form set  forth in  Annex A given by
                        the  Owner  Transferor,  the Trustee, as Security
                        Registrar,  shall instruct the Depositary to reduce the
                        principal amount of the Restricted  Global Note, and to
                        increase the principal amount of the Regulation S Global
                        Note, by the Restricted Global  Transferred  Amount, and
                        to credit, or cause to be credited to, the account of
                        the Agent Member  Transferee  a beneficial  interest in
                        the  Regulation S Global Note,  and to debit,  or cause
                        to be debited to, the  account of the Agent  Member
                        Transferor  a  beneficial  interest in the Restricted
                        Global  Note,  in each case  having a principal  amount
                        equal to the  Restricted  Global Transferred Amount.

                 (ii)   RESTRICTED GLOBAL NOTE TO UNRESTRICTED GLOBAL NOTE If an
                        Owner Transferor  wishes  at any time to  transfer  a
                        beneficial interest in a Restricted  Global Note to an
                        Owner  Transferee who wishes to take delivery  thereof
                        in the form of a beneficial  interest in an
                        Unrestricted  Global Note,  such  transfer may be
                        effected, subject to the Applicable  Procedures,  only
                        in accordance with this Section 2.3.2(ii).  Upon receipt
                        by the Trustee,  as Security  Registrar,  at the
                        Corporate  Trust Office of (l) written  instructions
                        given in accordance  with the Applicable  Procedures
                        from the Agent Member  Transferor  directing the
                        Trustee, as Security Registrar,  to credit or cause to
                        be credited to a specified account of an Agent Member
                        Transferee (which may but need not be an account with
                        Euroclear or Clearstream,  Luxembourg) a beneficial
                        interest in the  Unrestricted  Global Note in a
                        principal  amount equal to the Restricted Global
                        Transferred  Amount,  (2) a written order given in
                        accordance with the Applicable  Procedures containing
                        information regarding the account of the Agent Member
                        Transferee to be credited with, and the account of the
                        Agent  Member  Transferor  to be debited for, the
                        Restricted  Global  Transferred Amount,  and (3) a
                        certificate  in  substantially  the form set  forth in
                        Annex B given by the Owner Transferor,  the  Trustee,
                        as

                                      -23-
<PAGE>
                        Security  Registrar,  shall  instruct  the  Depositary
                        to reduce the principal  amount  of the  Restricted
                        Global  Note,  and to  increase  the  principal  amount
                        of the Unrestricted  Global Note, by the Restricted
                        Global Transferred Amount, and to credit, or cause to be
                        credited to, the account of the Agent Member  Transferee
                        a beneficial  interest in the  Unrestricted Global Note,
                        and to debit,  or cause to be debited to, the account of
                        the Agent Member  Transferor a beneficial  interest in
                        the Restricted  Global Note, in each case having a
                        principal  amount equal to the Restricted Global
                        Transferred Amount.

                 (iii)  REGULATION S GLOBAL NOTE OR UNRESTRICTED GLOBAL NOTE TO
                        RESTRICTED GLOBAL NOTE If an Owner Transferor wishes at
                        any time to transfer a beneficial interest in a
                        Regulation S Global Note or an Unrestricted Global Note
                        to an Owner Transferee who wishes to take delivery
                        thereof in the form of a beneficial interest in a
                        Restricted Global Note, such transfer may be effected,
                        subject to the Applicable Procedures, only in accordance
                        with this Section 2.3.2(iii). Upon receipt by the
                        Trustee, as Security Registrar, at the Corporate Trust
                        Office of (1) written instructions given in accordance
                        with the Applicable Procedures from the Agent Member
                        Transferor, directing the Trustee, as Security
                        Registrar, to credit, or cause to be credited to, a
                        specified account of an Agent Member Transferee a
                        beneficial interest in the Restricted Global Note in a
                        principal amount equal to that of the beneficial
                        interest in the Regulation S Global Note or Unrestricted
                        Global Note to be so transferred, (2) a written order
                        given in accordance with the Applicable Procedures
                        containing information regarding the account of the
                        Agent Member Transferee to be credited with, and the
                        account of the Agent Member Transferor (which, in the
                        case of beneficial interest in the Regulation S Global
                        Note, must be an account with Euroclear or Clearstream
                        or both) to be debited for, such beneficial interest,
                        and (3) with respect to a transfer of a beneficial
                        interest in the Regulation S Global Note (but not the
                        Unrestricted Global Note), a certificate in
                        substantially the form set forth in Annex C given by the
                        Owner Transferor, the Trustee, as Security Registrar,
                        shall instruct the Depositary to reduce the principal
                        amount of the Regulation S Global Note or Unrestricted
                        Global Note, as the case may be, and increase the
                        principal amount of the Restricted Global Note, by the
                        principal amount of the beneficial interest in the
                        Regulation S Global Note or Unrestricted Global Note to
                        be so transferred, and to credit, or cause to be
                        credited to, the account of the Agent Member Transferee
                        such beneficial interest in the Restricted Global Note,
                        and to debit, or cause to be debited to, the account of
                        the Agent Member Transferor such beneficial interest in
                        the Regulation S Global Note or Unrestricted Global
                        Note, as the case may be.

          2.3.3  In case of any transfer or exchange the procedures and
                 requirements for which are not addressed in detail in this
                 Section 2.3, such transfer or exchange will be

                                      -24-
<PAGE>
                 subject to such procedures and requirements as may be
                 reasonably prescribed by the Company from time to time and, in
                 the case of a transfer or exchange involving a Global Note, the
                 Applicable Procedures.

          2.3.4  Notwithstanding the foregoing, during the period of two years
                 after the issue date of the Notes, the Company shall not, and
                 shall not permit any of its Affiliates that are Subsidiaries
                 to, purchase or agree to purchase or otherwise acquire any
                 Restricted Notes, whether as beneficial owner or otherwise
                 (except as agent on behalf of and for the account of customers
                 in the ordinary course of business as a securities broker in
                 unsolicited broker's transactions) unless, immediately upon any
                 such purchase, the Company or any such Affiliate shall submit
                 such Restricted Notes to the Trustee for cancellation. The
                 Company further agrees to ask its Affiliates that are not
                 Subsidiaries to agree not to purchase or otherwise acquire any
                 Restricted Notes, whether as beneficial owner or otherwise,
                 except as permitted in the preceding sentence.

2.4    FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION

       The Trustee's certificate of authentication shall be in substantially the
       following form:

       This is one of the Notes referred to in the within mentioned Indenture,
       as supplemented by the First Supplemental Indenture.

       Dated:

       JPMORGAN CHASE BANK
       as Trustee

        By:  _____________________
             Authorized Officer

2.5    MAINTENANCE OF OFFICE OR AGENCY

       With respect to any Notes that are not in the form of a Global Note, the
       Company will maintain (i) in the Borough of Manhattan, The City of New
       York and (ii) in Luxembourg, so long as the Notes are listed on the
       Luxembourg Stock Exchange and the rules and regulations of the Luxembourg
       Stock Exchange so require, an office or agency, in each case in
       accordance with Section 10.2 of the Original Indenture.

2.6    LUXEMBOURG LISTING

       The Company shall use all reasonable efforts to cause the Notes to be
       duly authorized for listing on the Luxembourg Stock Exchange or another
       recognized securities exchange and shall from time to time take such
       other actions as shall be necessary or advisable to maintain the listing
       of the Notes thereon.

2.7    REGISTRATION RIGHTS

       The Holders of the Notes are entitled to the benefits of a Registration
       Rights Agreement dated the date hereof among the Company, the Guarantor
       and the Initial Purchasers (the "REGISTRATION RIGHTS AGREEMENT"), which
       Registration Rights Agreement provides

                                      -25-
<PAGE>
       for the registration of the Notes with the Commission or the issue of
       notes so registered in exchange for the outstanding Notes.

   2.8 SUSPENSION OF PAYMENT OF PRINCIPAL OF GUARANTY

       In the event payment of principal and other amounts due under the Notes
       is accelerated due to an Event of Default of the Company pursuant to
       Section 5.1.5 or 5.1.6 of the Original Indenture, if the Guarantor is not
       also the subject of such an Event of Default and a Political Risk Event
       is then in existence, then payments of principal under the Guaranty shall
       be suspended until the earlier of (i) five Business Days after such
       Political Risk Event terminates, (ii) the date on which the funds in the
       Reserve Account or available under the Letters of Credit have been
       depleted and (z) 18 months after the date of acceleration. During such
       suspension, the Notes will continue to accrue interest and pay such
       accrued interest on the Interest Payment Dates at the rate of 8.625% per
       annum.

   2.9 PRESCRIPTION PERIOD

       Claims for payment of principal in respect of the Notes shall be
       prescribed upon the expiration of 10 years, and claims for payment of
       interest in respect of the Notes shall be prescribed upon the expiration
       of 5 years, in each case from the Relevant Date thereof.

3    RESERVE ACCOUNT AND LETTERS OF CREDIT

   3.1  RESERVE ACCOUNT AND LETTERS OF CREDIT

          3.1.1  On the date hereof, the Company or the Guarantor shall deliver
                 to the Trustee a Letter of Credit in the amount of the
                 Political Risk Coverage, as determined on the date hereof.

          3.1.2  The Company or the Guarantor may at any time substitute all or
                 a portion of any Letters of Credit held by the Trustee for
                 deposits in the Reserve Account, and deposits in the Reserve
                 Account may also be so substituted for Letters of Credit;
                 PROVIDED, HOWEVER, that before any Letter of Credit may be so
                 substituted, the Trustee shall have received a confirmation in
                 writing from Moody's that such substitution will not result in
                 a downgrading of the then current rating assigned to the Notes.
                 Any Letter of Credit so substituted or otherwise required to be
                 disposed of under this First Supplemental Indenture shall be
                 returned to its issuer for cancellation.

          3.1.3  The Trustee shall establish and maintain in the United States a
                 U.S. dollar account (Account No. 161600) designated as
                 "JPMorgan Chase Bank, as Trustee FBO Holders of Vale Overseas
                 Limited U.S.$300,000,000 8.625% Enhanced Guaranteed Notes Due
                 2007 Reserve Account" with the Securities Intermediary (the
                 "RESERVE ACCOUNT"). All right, title and interest in and to the
                 amounts on deposit from time to time in the Reserve Account and
                 any property held therein or credited thereto, together with
                 any Permitted Investment from time to time made pursuant to
                 this Section, shall constitute part of the Collateral and shall
                 be held for the benefit of the Holders of Notes and the Trustee
                 as

                                      -26-
<PAGE>
                 their interests shall appear hereunder, and shall not
                 constitute payment of the Obligations (or any other obligations
                 to which such funds are provided hereunder to be applied) until
                 applied thereto as hereinafter provided. Neither the Company
                 nor the Guarantor shall have any right of withdrawal from the
                 Reserve Account nor any interest therein.

          3.1.4  Prior to the delivery to the Trustee of any such Letter of
                 Credit, the Company shall deliver to the Trustee an Officers'
                 Certificate to the effect that such Letter of Credit qualifies
                 as such under this First Supplemental Indenture.

          3.1.5  Amounts on deposit in the Reserve Account shall be invested and
                 reinvested by the Trustee at the written direction of the
                 Company from time to time in Permitted Investments, which
                 Permitted Investments shall mature at least one Business Day
                 prior to the next Interest Payment Date, which direction shall
                 specify the particular investment to be made and shall certify
                 that such investment constitutes a Permitted Investment
                 hereunder. The Trustee shall have no liability for any losses
                 resulting from any such Permitted Investments. Any income
                 received by, or on behalf of, the Trustee with respect to the
                 balance from time to time on deposit in the Reserve Account,
                 including any interest or capital gains on Permitted
                 Investments made with amounts on deposit in the Reserve
                 Account, shall remain, or be deposited, in the Reserve Account
                 and shall constitute part of the Reserve Account.

          3.1.6  The Reserve Account shall be under the sole dominion and
                 control of the Trustee and the Trustee shall have the sole
                 right to make withdrawals and disbursements from the Reserve
                 Account, to give any other instructions concerning the account
                 to the respective bank or Securities Intermediary maintaining
                 the account and to exercise all rights with respect to the
                 Collateral from time to time deposited therein in accordance
                 with the Original Indenture and this First Supplemental
                 Indenture. All Collateral delivered to or held by or on behalf
                 of the Trustee pursuant hereto shall be held in the Reserve
                 Account in accordance with the terms hereof and any
                 supplemental indenture, and shall be controlled solely by the
                 Trustee.

   3.2   WITHDRAWALS FROM THE RESERVE ACCOUNT AND DRAWDOWNS ON LETTERS OF CREDIT

          Funds on deposit in the Reserve Account and available under the
          Letters of Credit shall be applied by the Trustee at the following
          times and in the following amounts:

          3.2.1  First, if on any Business Day prior to an Interest Payment
                 Date, (i) a Political Risk Event is in effect as noticed to the
                 Trustee by the Company or the Guarantor, (ii) the Company and
                 the Guarantor have sent a notice to the Trustee in the form
                 attached hereto as Annex E and (iii) the Company or the
                 Guarantor has not deposited, or caused to be deposited, with
                 the Trustee funds sufficient to pay the Trustee's fees and
                 reasonable expenses for the next six months of service as
                 Trustee, then the Trustee shall pay such amounts to itself from
                 the Reserve Account or by drawing funds from any Letters of
                 Credit within 30 days of such Interest Payment Date.

                                      -27-
<PAGE>
          3.2.2  Second, if on any Business Day prior to an Interest Payment
                 Date, (i) a Political Risk Event is in effect as noticed to the
                 Trustee by the Company or the Guarantor, (ii) the Company and
                 the Guarantor have sent a notice to the Trustee in the form
                 attached hereto as Annex E and (iii) the Company or the
                 Guarantor has not deposited, or caused to be deposited, with
                 the Trustee funds sufficient to pay the interest and/or
                 Additional Amounts then due on the Notes, then the Trustee
                 shall pay such amounts to the Holders of the Notes from the
                 Reserve Account or by drawing funds from any Letters of Credit.

          3.2.3  Third, if on any Interest Payment Date (i) the Company or the
                 Guarantor has not deposited, or caused to be deposited, with
                 the Trustee funds sufficient to pay the interest and/or
                 Additional Amounts then due on the Notes, (ii) a Political Risk
                 Event was in effect on that Interest Payment Date as noticed to
                 the Trustee by the Company or the Guarantor after that Interest
                 Payment Date and (iii) the Company and the Guarantor have sent
                 a notice to the Trustee in the form attached hereto as Annex E
                 then as soon as practicable after receiving that notice the
                 Trustee shall pay such unpaid amounts together with default
                 interest thereon at the applicable default rate to the Holders
                 of the Notes from the Reserve Account or by drawing funds from
                 any Letters of Credit.

          3.2.4  Fourth, two Business Days after each Interest Payment Date the
                 Trustee shall, to the extent the aggregate amount of funds in
                 the Reserve Account and available under the Letters of Credit
                 exceed the Political Risk Coverage on that date, (i) pay to the
                 Company funds, if any, from the Reserve Account equal to such
                 excess or (ii) notify the issuer(s) of the Letter of Credit
                 requesting and allowing the reduction in the amount available
                 under the Letters of Credit in an amount equal to such excess,
                 or any combination of the foregoing; PROVIDED, HOWEVER, that
                 where the Political Risk Coverage has been reduced to zero,
                 such funds shall be payable to the Company and Letters of
                 Credit delivered to the issuer(s) for cancellation, in each
                 case as soon as practicable.

          3.2.5  Fifth, all funds available under a Letter of Credit shall be
                 drawn by the Trustee and deposited in the Reserve Account (i)
                 not less than 30 days before the Letter of Credit expires if
                 (x) the issuer of the Letter of Credit notifies the Trustee as
                 beneficiary of the Letter of Credit that the Letter of Credit
                 will not be automatically renewed and (y) the Company and the
                 Guarantor have failed to substitute such Letter of Credit for
                 another Letter of Credit or make a deposit in the Reserve
                 Account at least 40 days before the existing Letter of Credit
                 expires or (ii) if the issuer of the Letter of Credit suffers a
                 reduction in its long-term unsecured U.S. dollar debt rating
                 below Aa3 or its short-term debt rating below P-1 by Moody's.
                 The Trustee shall not be charged with notice or knowledge of
                 such a rating reduction unless it shall have received written
                 notice thereof from the Company or the Guarantor.

          3.2.6  If the Company provides for the substitution of any portion or
                 all of the amount available under a Letter of Credit for cash
                 deposits in the Reserve Account, the Trustee shall notify the
                 issuer of the Letter of Credit that the amount available

                                      -28-
<PAGE>
                 thereunder shall be reduced by the amount of the cash deposit
                 and shall, at the option of the issuer thereof either surrender
                 the Letter of Credit to the issuer thereof in return for a
                 Letter of Credit having a stated amount reduced by the amount
                 of such cash or permit an amendment of the Letter of Credit
                 providing for the reduction of the stated amount thereof by the
                 amount of said cash deposit. If the Company provides for the
                 substitution of cash deposits in the Reserve Account for a
                 Letter of Credit having a stated amount equal to such cash, the
                 Trustee shall return such cash to the Company promptly after
                 receipt of such Letter of Credit and the effectiveness thereof
                 and the receipt of the Officers' Certificate required by
                 Section 3.1.4, subject to Section 3.1.2.

    3.3  RELEASE OF COLLATERAL

         All funds paid from the Reserve Account in accordance with Sections 3.1
         and 3.2 hereof shall be released from the Lien created hereby, and the
         Trustee shall, at the request and direction of the Company, take all
         reasonable steps and make all filings necessary to release the
         Collateral from the Liens created pursuant to this First Supplemental
         Indenture.

4   MISCELLANEOUS PROVISIONS

   4.1   SEPARABILITY OF INVALID PROVISIONS

         In case any one or more of the provisions contained in this First
         Supplemental Indenture should be invalid, illegal or unenforceable in
         any respect, such invalidity, illegality or unenforceability shall not
         affect any other provisions contained in this First Supplemental
         Indenture, and to the extent and only to the extent that any such
         provision is invalid, illegal or unenforceable, this First Supplemental
         Indenture shall be construed as if such provision had never been
         contained herein.

   4.2   EXECUTION IN COUNTERPARTS

         This First Supplemental Indenture may be simultaneously executed and
         delivered in any number of counterparts, each of which when so executed
         and delivered shall be deemed to be an original, and such counterparts
         shall together constitute but one and the same instrument.

5   REPRESENTATIONS AND WARRANTIES

    Each of the Company and the Guarantor, jointly and severally, represents and
    warrants to the Trustee, solely for the benefit of the holders of the Notes,
    that, except as otherwise provided herein and except as would not have a
    material adverse effect on the ability of the Guarantor to comply with its
    obligations under the Notes, on and as of the date hereof:

    5.1  the Final Offering Memorandum, in the form used by the Initial
         Purchasers to confirm sales of the Securities and as of the Closing
         Date, did not contain any untrue statement of a material fact or omit
         to state a material fact necessary in order to make the statements
         therein, in light of the circumstances existing at such dates, not
         misleading; PROVIDED, HOWEVER, that this representation and warranty
         shall not apply to any statements or

                                      -29-
<PAGE>
         statements or omissions made in reliance upon and in conformity with
         information relating to any Initial Purchaser furnished to the Company
         and the Guarantor in writing by such Initial Purchaser through the
         Representative expressly for use therein;

    5.2  the financial statements, and the related notes thereto, included in
         the Final Offering Memorandum present fairly the consolidated financial
         position of the Guarantor and its consolidated subsidiaries as of the
         dates indicated and the results of their operations and the changes in
         their consolidated cash flows for the periods specified; and said
         financial statements have been prepared in conformity with generally
         accepted accounting principles and practices of the United States
         applied on a consistent basis throughout the periods covered thereby;

    5.3  since the respective  dates as of which  information is given in the
         Final Offering  Memorandum,  (i) there has not been (x) any change in
         the  capital  stock or  long-term  debt of the  Guarantor  or any of
         its  Subsidiaries,  or any  dividend  or distribution of any kind
         declared,  set aside for payment, paid or made by the Company or the
         Guarantor on any class of capital  stock,  except to the extent that
         such change in capital stock or long-term debt or  distribution  or
         dividend do not, in the  aggregate,  have a material  adverse effect on
         the general  affairs,  business,  management,  financial position,
         stockholders'  equity or results of operations of the Guarantor and its
         Subsidiaries  taken as a whole,  or (y) any  material  adverse  change
         in or affecting  the general  affairs,  business,  management,
         financial  position, stockholders'  equity or results of operations of
         the Guarantor and the  Subsidiaries,  taken as a whole;  (ii) neither
         the  Guarantor  nor any of its  Subsidiaries  has entered  into any
         transaction  or  agreement  (whether or not in the ordinary course of
         business)  material to the Guarantor and its  Subsidiaries  taken as a
         whole;  and (iii) neither the Company,  the Guarantor nor any of its
         Subsidiaries  has sustained any material loss or interference  with its
         business (x) from fire,  explosion,  flood or other calamity not
         covered by insurance or (y) from any action, order or decree of any
         court or arbitrator or governmental or regulatory  authority  material
         to the Guarantor and its Subsidiaries  taken as a whole,  except in
         each case described in this Section 5.3 as otherwise  disclosed in the
         Final Offering Memorandum or as would not  materially  adversely
         affect the ability of the  Guarantor to comply with its  obligations
         under the Notes;

    5.4  each of the Company and the Guarantor has been duly
         incorporated and is validly existing as a corporation under the laws of
         its jurisdiction of incorporation, with power and authority (corporate
         and other) to own its properties and conduct its business as described
         in the Final Offering Memorandum, and neither the Company nor the
         Guarantor is the subject of any bankruptcy, insolvency, liquidation,
         reorganization or other related insolvency proceeding in or order of a
         court of competent jurisdiction and neither the Company nor the
         Guarantor has petitioned or sought consent for a plan of
         reorganization, receivership or liquidation;

    5.5  all of the outstanding shares of capital stock of the Company,
         Guarantor and Albras have been duly and validly authorized and issued,
         are fully paid and non-assessable, and in the case of the Company
         (except for any directors' qualifying shares and except as otherwise
         set forth in the Final Offering Memorandum or required pursuant hereto)

                                      -30-
<PAGE>
         are owned directly or indirectly by the Guarantor, free and clear of
         all liens, charges, security interests, restriction on voting or
         transfer, encumbrances, equities or claims;

    5.6  the Securities  have been duly  authorized,  and when issued and
         delivered  pursuant to the Purchase  Agreement,  will have been duly
         executed, authenticated,  issued and delivered and will constitute
         valid and binding obligations of the Company or the Guarantor,  as
         applicable,  entitled to the benefits  provided by this  Indenture,
         enforceable in accordance  with their terms, except as such
         enforceability may be limited by applicable  bankruptcy,  insolvency,
         moratorium and other similar laws affecting the rights of creditors
         generally and the  application  of general  equitable  principles  (the
         "Enforceability  Exceptions"),  this  Indenture,  the First
         Supplemental  Indenture,  the Exchange  Securities and the Registration
         Rights Agreement have been duly authorized and, when executed,
         authenticated and delivered by the parties thereto,  will constitute
         valid and binding  instruments,  enforceable in accordance with their
         terms,  except as such enforceability  may be limited by the
         Enforceability  Exceptions  and except that,  with  respect to the
         Registration Rights  Agreement,  the indemnity and  contribution
         provisions  thereunder may be limited by applicable law and public
         policy;  and on the Closing Date, this Indenture will conform in all
         material respects to the requirements of the Trust Indenture Act, and
         the rules and regulations of the Commission applicable to an indenture
         that is qualified thereunder;

    5.7  on the Closing Date, the Exchange Securities (including the related
         Guaranty) will have been duly authorized by the Company and the
         Guarantor and, when duly executed, authenticated, issued and delivered
         as contemplated by the Registration Rights Agreement, will be duly and
         validly issued and outstanding and will constitute valid and legally
         binding obligations of the Company, as issuer, and the Guarantor, as
         guarantor, enforceable against the Company and the Guarantor in
         accordance with their terms, subject to the Enforceability Exceptions,
         and will be entitled to the benefits of this Indenture;

    5.8  neither the Company nor the Guarantor is, or with the giving of notice
         or lapse of time or both would be, in violation of its constitutive
         documents nor is the Company or the Guarantor in default in the
         performance or observance of any material obligation, agreement,
         covenant or condition contained in any material contract, indenture,
         mortgage, loan agreement, note or any other material agreement or
         instrument to which it is a party or by which it is bound or to which
         any of its material properties or assets is subject; the issue and sale
         by the Company of the Notes and by the Guarantor of the Guaranty and
         the performance by each of the Company and the Guarantor of all its
         obligations under the Securities, the Exchange Securities, this
         Indenture, the First Supplemental Indenture, the Registration Rights
         Agreement and the Purchase Agreement and the consummation of the
         transactions herein and therein contemplated will not conflict with or
         result in a breach of any of the terms or provisions of any existing
         law applicable to the Company or the Guarantor or any of the terms or
         provisions of, or constitute a default under, the constitutive
         documents of the Company or the Guarantor, or any material indenture,
         trust deed, mortgage or other material agreement or instrument to which
         the Company or the Guarantor is a party or by which it is bound or to
         which the Company or the Guarantor or any of its properties or assets
         are subject or

                                      -31-
<PAGE>
         contravene any existing applicable law, rule, regulation, judgment,
         order or decree of any government, governmental body or agency or
         court, domestic or foreign, having jurisdiction over the Company or the
         Guarantor or any of its material properties or assets; and no consent,
         approval (including, but not limited to, exchange control approval),
         authorization, order, registration or qualification of or with any
         Brazilian or Cayman Islands court, government or governmental agency or
         body or any third party is required for the issue, sale, delivery or
         performance of the Securities or the consummation of the other
         transactions contemplated hereby, except in each case described in this
         Section 5.8 (i) for those which have been obtained and are in full
         force and effect; (ii) as may be required under federal or state
         securities or Blue Sky Laws; (iii) as would not have a material adverse
         effect on the ability of the Guarantor to comply with its obligations
         under the Notes; or (iv) for the approval of Banco Central do Brazil
         (the "Central Bank") for remittance of any payment in U.S. dollars, in
         case the Guarantor is required to make any payment under the Guaranty
         (it being understood that the approval of the Central Bank for the
         Guarantor to issue the Guaranty has been obtained pursuant to Circular
         No. 1504 dated June 30, 1989 and Carta Circular No. 2619 dated February
         14, 1996 of the Central Bank);

    5.9  other than as set forth or contemplated in the Final Offering
         Memorandum, there are no legal or governmental investigations, actions,
         suits or proceedings pending or, to the knowledge of the Company and
         the Guarantor, threatened against or affecting the Guarantor or any of
         its Subsidiaries or any of their respective properties or to which the
         Guarantor or any of its Subsidiaries is or may be a party or to which
         any property of the Guarantor or any of its Subsidiaries is or may be
         the subject which could individually or in the aggregate reasonably be
         expected to have, a material adverse effect on the ability of the
         Guarantor to perform its obligations under this Indenture or the
         Securities, and, to the best of the Company's and the Guarantor's
         knowledge, no such proceedings are threatened or contemplated by
         governmental authorities or threatened by others;

    5.10 the Guarantor and its  Subsidiaries  have good and marketable  title,
         or have valid rights to lease or otherwise use, all items of real and
         personal property that are material to the respective businesses of the
         Guarantor and its Subsidiaries,  in each case free and clear of all
         liens,  encumbrances,  claims and defects and  imperfections of title
         except those that (i) do not  materially  interfere  with the use made
         and proposed to be made of such  property by the Guarantor and its
         Subsidiaries  or (ii) could not reasonably be expected,  individually
         or in the aggregate,  to have a material  adverse effect on the general
         affairs, business, prospects,  management, financial position,
         stockholder's equity or results of operations of the Guarantor or its
         Subsidiaries taken as a whole;

    5.11 on September 30, 2001, the capitalization of the Guarantor was as set
         forth in the Final Offering Memorandum under the caption
         "Capitalization";

    5.12 (i) the Company,  the Guarantor  and Albras have filed or caused to be
         filed all tax returns required to be filed and have paid all taxes
         shown to be due and payable on said returns or on any assessments made
         against it or any of its properties and all other taxes, assessments,
         fees or other charges imposed on them or any of their properties by any
         governmental authority (other than those the amount or validity of
         which is currently being contested in good faith by appropriate
         proceedings and with respect to which

                                      -32-
<PAGE>
         reserves in conformity with Brazilian generally accepted accounting
         principles have been provided on its books); unless failure to file or
         pay said returns or any other taxes, fees, assessments or charges would
         not, in the aggregate, have a material adverse effect on the ability of
         the Guarantor to comply with its obligations under the Notes; (ii) all
         such tax returns so filed are correct and complete in all material
         aspects; and (iii) no material tax liens or material liens with respect
         to any assessments, fees or other charges have been filed and, to such
         respective parties' knowledge, no claims are being, or could reasonably
         be expected to be, asserted against the Company, the Guarantor or
         Albras or any of their respective properties or assets with respect to
         any such taxes, assessments, fees or other charge with such exceptions
         in (ii) and (iii) as would not have a material adverse effect on the
         ability of the Guarantor to comply with its obligations under the
         Notes;

    5.13 the Guarantor and its  Subsidiaries  (i) are in compliance with any and
         all applicable  federal,  provincial,  local and foreign laws and
         regulations  relating to the  protection of human health and safety,
         the  environment  or hazardous or toxic substances or wastes,
         pollutants or contaminants  (collectively,  "Environmental Laws"), and
         none of them has received notice of any outstanding  violations of any
         Environmental  Laws;  (ii) have  received all permits,  licenses or
         other approvals required of them under applicable  Environmental Laws
         to conduct their respective  businesses;  and (iii) are in compliance
         with all terms and conditions of any such permit, license or approval,
         except in any such case described in items (i),  (ii) and (iii) for any
         such failure to comply or  violations,  or failure to receive  required
         permits, licenses or approvals,  as would not,  individually or in the
         aggregate,  have a material adverse effect on the general affairs,
         business,  prospects,  management,  financial position,  stockholder's
         equity or results of operations of the Guarantor and its Subsidiaries
         taken as a whole;

    5.14 neither the Company nor the Guarantor nor any of their material
         properties or material assets has any immunity from the jurisdiction of
         any court or from any legal process (whether through service or notice,
         attachment prior to judgment, attachment in aid of execution, execution
         or otherwise), except for immunity under Brazilian law relating to
         public concessions granted by the Brazilian government to the
         Guarantor;

    5.15 on the date hereof and on the Closing Date, to ensure the legality,
         validity,  enforceability or admissibility into evidence of each of the
         Exchange  Securities,  this  Indenture,  the First  Supplemental
         Indenture  and the  Registration  Rights Agreement in Brazil and in the
         Cayman  Islands,  it is not  necessary  that any such document be
         submitted to, filed or recorded  with any court or other  authority in
         Brazil or the Cayman  Islands or that any tax,  imposition or charge be
         paid in Brazil or the Cayman  Islands on or in respect of any such
         document  except that (i) in order to be enforceable and admissible
         into evidence in the courts of Brazil (A) signatures of the parties to
         such documents  affixed  outside Brazil  must be  notarized  by a
         notary  public  licensed to act as such under the laws of the place of
         signing and the signature of such notary public must be  authenticated
         by a consular  office of Brazil and (B) each such document must be
         translated into Portuguese by a sworn translator in Brazil;  (ii) in
         order to be produced in evidence before a court in the Cayman Islands,
         stamp duty will be payable,  being a nominal stamp duty in respect of
         the Exchange  Securities, this Indenture,  the First  Supplemental
         Indenture,  the

                                      -33-
<PAGE>
         Registration  Rights Agreement and the Purchase Agreement and stamp
         duty in an amount of CI$0.25 per CI$100 or part  thereof of the face
         value of each Note,  subject to a maximum of CI$250  being  payable
         (the current rate of exchange  being  US$1.25 to CI$1.00) and (iii) the
         enforceability  of such documents in the courts of Brazil is also
         subject to the payment of certain  expenses and court fees in
         connection with enforcement thereof by the courts of Brazil;

    5.16 the payment obligations of the Company under the Notes and of the
         Guarantor under the Guaranty will rank at least pari passu with all
         other present and future unsecured and unsubordinated obligations of
         the Company and the Guarantor, respectively, except those which rank
         higher because of applicable law;

    5.17 the Guarantor maintains systems of internal accounting controls
         sufficient to provide reasonable assurance that (i) transactions are
         executed in accordance with management's general or specific
         authorizations; (ii) transactions are recorded as necessary to permit
         preparation of financial statements in conformity with generally
         accepted accounting principles and to maintain asset accountability;
         (iii) access to assets is permitted only in accordance with
         management's general or specific authorization; and (iv) the recorded
         accountability for assets is compared with the existing assets at
         reasonable intervals and appropriate action is taken with respect to
         any differences;

    5.18 the Guarantor and its Subsidiaries have insurance covering their
         respective properties, operations, personnel and businesses, including
         business interruption, which insurance is in amounts and insures
         against such losses and risks as are adequate to protect the Guarantor
         and its Subsidiaries and their respective businesses taken as a whole;
         and neither the Guarantor nor any of its Subsidiaries has (i) received
         notice from any insurer or agent of such insurer that capital
         improvements or other expenditures are required or necessary to be made
         in order to continue such insurance or (ii) any reason to believe that
         it will not be able to renew its existing insurance coverage as and
         when such coverage expires or to obtain similar coverage at reasonable
         cost from similar insurers as may be necessary to continue its business
         except in each case (i) and (ii) as would not materially adversely
         affect the ability of the Guarantor to comply with its obligations
         under the Notes; and

    5.19 the Company has not, prior to the issue of the Notes on the date hereof
         entered into any material transactions, entered into any material
         agreements, taken any material actions or otherwise done anything
         material, other than those things necessary to establish and maintain
         its corporate existence and issue the Notes.

6   COVENANTS OF THE COMPANY AND THE GUARANTOR

    The Company and the Guarantor agree with the Trustee, solely for the
    benefit of the holders of the Notes, to give prompt written notice to the
    Trustee of the occurrence or termination of a Political Risk Event, in no
    case later than five Business Days after such occurrence or termination.
    For so long as any of the Notes are listed on the Luxembourg Stock
    Exchange, a copy of any such notice shall be delivered to the Luxembourg
    Stock Exchange and published in a newspaper with general circulation in
    Luxembourg, which is expected to be the Luxembourg

                                      -34-
<PAGE>
    Wort. The Company and the Guarantor also agree with the Trustee, solely for
    the benefit of the holders of the Notes, not to give a false notice of such
    occurrence or termination.

7   DISCLOSURE TO MOODY'S

    The Company and the Guarantor covenant and agree to provide to Moody's
    all financial statements, reports, notices, certificates, opinions and
    any other documents required to be delivered, or received, by the Company
    or the Guarantor to, or from, the Trustee or any of the Holders under the
    Original Indenture or this First Supplemental Indenture, in each case
    within one Business Day of the same being so received or delivered. In
    addition, the Company and the Guarantor covenant and agree to provide to
    Moody's, within 45 days of the end of each fiscal quarter of the
    Guarantor (or, in the case of Sections 7.2 and 7.3, within 60 days of the
    end of its first three fiscal quarters and within 90 days of the end of
    its final fiscal quarter), the following information as of the end of the
    most recent fiscal quarter:

    7.1  a list detailing the principal amount, rate of interest, maturity,
         credit enhancement, if any (including a guarantee by the Guarantor),
         rating trigger, if any, and other significant features of any
         Indebtedness of a Subsidiary in excess of $25,000,000 (or its
         equivalent);

    7.2  a list of all Significant Subsidiaries;

    7.3 (i) for the final fiscal quarter of the fiscal year, the annual audited
         financial statements of the Guarantor, as well as the consolidated
         annual audited financial statements of the Guarantor, prepared in
         accordance with Brazilian generally accepted accounting principles and
         standards; (ii) the quarterly consolidated unaudited financial
         statements of the Guarantor, prepared in accordance with Brazilian
         generally accepted accounting principles and standards; (iii) for the
         fiscal quarter that it is made available to the Commission, the most
         recent quarterly consolidated financial statements of the Guarantor
         prepared in accordance with U.S. generally accepted accounting
         principles, translated into U.S. Dollars; and (iv) for the fiscal
         quarter that it is made available to the Commission, a copy of the
         Guarantor's Form 20-F, which will include consolidated annual audited
         financial statements of the Guarantor prepared in accordance with U.S.
         generally accepted accounting principles and translated into U.S.
         Dollars;

    7.4  a list of all unencumbered liquid assets of the Company and the
         Guarantor; and

    7.5  a list of any sale of assets during such fiscal quarter involving
         assets with a then current market value at the date of sale in excess
         of $100,000,000.

                                      -35-
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed on their respective behalves, all as of the day
and year first written above.

EXECUTED AS A DEED BY
VALE OVERSEAS LIMITED,
the Company

By: /s/ Jorge Tadeu Moura Pinho
    ---------------------------------------
    Name: Jorge Tadeu Moura Pinho
    Title: Attorney

By: /s/ Bernadeth Vieira de Souza
    ---------------------------------------
    Name: Bernadeth Vieira de Souza
    Title: Attorney

COMPANHIA VALE DO RIO DOCE,
as Guarantor

By: /s/ Leonardo Moretzsohm de Andrade
    ---------------------------------------
    Name: Leonardo Moretzsohm de Andrade
    Title: Attorney

By: /s/ Andrea Marques de Almeida
    ---------------------------------------
    Name: Andrea Marques de Almeida
    Title: Attorney

JPMORGAN CHASE BANK,
as Trustee

By: /s/ Lesley Daley
    ---------------------------------------
   Name: Lesley Daley
   Title: Trust Officer

Sworn to before me this 8th day of March, 2002

/s/ James M. Foley
-------------------------------------
Notary Public

                                      -36-
<PAGE>

                                     ANNEX A

                          FORM OF TRANSFER CERTIFICATE
                       FOR TRANSFER FROM RESTRICTED GLOBAL
                        NOTE TO REGULATION S GLOBAL NOTE
                       (TRANSFERS PURSUANT TO SS. 2.3.2(I)
                         OF THE SUPPLEMENTAL INDENTURE)

JPMorgan Chase Bank,
as Trustee

RE: 8.625% SERIES A ENHANCED GUARANTEED NOTES DUE 2007 OF VALE OVERSEAS LIMITED
    (THE "NOTES")

Reference is hereby made to the First Supplemental Indenture, dated March 8,
2002 (the "SUPPLEMENTAL INDENTURE"), among Vale Overseas Limited, Companhia Vale
do Rio Doce, as Guarantor, and JPMorgan Chase Bank, as Trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Supplemental Indenture.

This letter relates to $[       ] principal amount of Notes which are evidenced
by one or more Restricted Global Notes (CUSIP No. 91911TAA1) and held with the
Depositary in the name of [INSERT NAME OF TRANSFEROR] (the "TRANSFEROR"). The
Transferor has requested a transfer of such beneficial interest in the Notes to
a person who will take delivery thereof in the form of an equal principal amount
of Notes evidenced by one or more Regulation S Global Notes (CINS No.
G9317UAA3), which amount, immediately after such transfer, is to be held with
the Depositary through Euroclear or Clearstream, Luxembourg or both (Common
Code: 14456856; ISIN: USG9317UAA37).

In connection with such request and in respect of such Notes, the Transferor
does hereby certify that such transfer has been effected pursuant to and in
accordance with Rule 903 or Rule 904 (as applicable) or Rule 144 under the
United States Securities Act of 1933 (the "SECURITIES ACT"), and accordingly the
Transferor does hereby further certify that:

(i)  If the transfer is being effected pursuant to Rule 903 and Rule 904:

     (1)  the offer of the Notes was not made to a person in the United States;

     (2)  either:

          (A)  at the time the buy order was originated, the transferee was
               outside the United States or the Transferor and any person acting
               on its behalf reasonably believed that the transferee was outside
               the United States, or

          (B)  the transaction was executed in, on or through the facilities of
               a designated offshore securities market and neither the
               Transferor nor any person acting on its behalf knows that the
               transaction was pre-arranged with a buyer in the United States;

     (3)  no directed selling efforts have been made in contravention of the
          requirements of Rule 903(b) or 904(b) of Regulations S, as applicable;

                                      -37-
<PAGE>
     (4) the transaction is not part of a plan or scheme to evade the
          registration requirements of the Securities Act; and

     (5) upon completion of the transaction, the beneficial interest being
          transferred as described above is to be held with the Depositary
          through Euroclear or Clearstream, Luxembourg or both.

(ii) If the transfer is being effected pursuant to Rule 144, the Notes are being
     transferred in a transaction permitted by Rule 144.

This certificate and the statements contained herein are made for your benefit
and the benefit of the Company and the underwriters or initial purchasers, if
any, of the initial offering of such Notes being transferred. Terms used in this
certificate and not otherwise defined in the Supplemental Indenture have the
meanings set forth in Regulation S or Rule 144 under the Securities Act.

[INSERT NAME OF TRANSFEROR]

By: ___________________
    Name:
    Title:

Date: _________________

cc:  Vale Overseas Limited

                                      -38-

<PAGE>

                                     ANNEX B

                          FORM OF TRANSFER CERTIFICATE
                       FOR TRANSFER FROM RESTRICTED GLOBAL
                        NOTE TO UNRESTRICTED GLOBAL NOTE
                      (TRANSFERS PURSUANT TO SS. 2.3.2(II)
                         OF THE SUPPLEMENTAL INDENTURE)

JPMorgan Chase Bank,
as Trustee

RE: 8.625% SERIES A ENHANCED GUARANTEED NOTES DUE 2007 OF VALE OVERSEAS LIMITED
    (THE "NOTES")

Reference is hereby made to the First Supplemental Indenture, dated March 8,
2002 (the "SUPPLEMENTAL INDENTURE"), among Vale Overseas Limited, Companhia Vale
do Rio Doce, as Guarantor, and JPMorgan Chase Bank, as Trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Supplemental Indenture.

This letter relates to $[        ] principal amount of Notes which are evidenced
by one or more Restricted Global Notes (CUSIP No. 91911TAA1) and held with the
Depositary in the name of [INSERT NAME OF TRANSFEROR] (the "TRANSFEROR"). The
Transferor has requested a transfer of such beneficial interest in the Notes to
a person that will take delivery thereof in the form of an equal principal
amount of Notes evidenced by one or more Unrestricted Global Notes (CINS No.
G9317UAA3).

In connection with such request and in respect of such Notes, the Transferor
does hereby certify that such transfer has been effected pursuant to and in
accordance with either (i) Rule 903 or Rule 904 (as applicable) under the United
States Securities Act of 1933 (the "SECURITIES ACT"), or (ii) Rule 144 under the
Securities Act, and accordingly the Transferor does hereby further certify that:

(i) If the transfer has been effected pursuant to Rule 903 and Rule 904:

    (1)  the offer of the Notes was not made to a person in the United States;

    (2)  either:

         (A) at the time the buy order was originated, the transferee was
             outside the United States or the Transferor and any person acting
             on its behalf reasonably believed that the transferee was outside
             the United States, or

         (B) the transaction was executed in, on or through the facilities of a
             designated offshore securities market and neither the Transferor
             nor any person acting on its behalf knows that the transaction was
             pre-arranged with a buyer in the United States;

    (3)  no directed selling efforts have been made in contravention of the
         requirements of Rule 903(b) or 904(b) of Regulation S, as applicable;
         and

    (4)  the transaction is not part of a plan or scheme to evade the
         registration requirements of the Securities Act.

                                      -39-
<PAGE>
(ii)  If the transfer has been effected pursuant to Rule 144, the Notes have
      been transferred in a transaction permitted by Rule 144.

This certificate and the statements contained herein are made for your benefit
and the benefit of the Company and the underwriters or initial purchasers, if
any, of the Notes being transferred. Terms used in this certificate and not
otherwise defined in the Supplemental Indenture have the meanings set forth in
Regulation S under the Securities Act.

[INSERT NAME OF TRANSFEROR]

By:  ___________________
     Name:
     Title

Dated:  _________________

cc: Vale Overseas Limited

                                      -40-

<PAGE>

                                     ANNEX C

                          FORM OF TRANSFER CERTIFICATES
                      FOR TRANSFER FROM REGULATION S GLOBAL
                        NOTE OR UNRESTRICTED GLOBAL NOTE
                            TO RESTRICTED GLOBAL NOTE
                      (TRANSFERS PURSUANT TO SS. 2.3.2(III)
                         OF THE SUPPLEMENTAL INDENTURE)

                            [TRANSFEROR CERTIFICATE]

JPMorgan Chase Bank,
as Trustee

RE: 8.625% SERIES A ENHANCED GUARANTEED NOTES DUE 2007 OF VALE OVERSEAS LIMITED
    (THE "NOTES")

Reference is hereby made to the First Supplemental Indenture, dated March 8,
2002 (the "SUPPLEMENTAL INDENTURE"), among Vale Overseas Limited, Companhia Vale
do Rio Doce, as Guarantor, and JPMorgan Chase Bank, as Trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Supplemental Indenture.

This letter relates to $[         ] principal amount of Notes which are
evidenced by one or more Regulation S Global Notes (CINS No. G9317UAA3) and held
with the Depositary through [Euroclear] [Clearstream, Luxembourg] (Common Code:
14456856; ISIN: USG9317UAA37) in the name of [INSERT NAME OF TRANSFEROR] (the
"TRANSFEROR"). The Transferor has requested a transfer of such beneficial
interest in the Notes to a person that will take delivery thereof (the
"TRANSFEREE") in the form of an equal principal amount of Notes evidenced by one
or more Restricted Global Notes (CUSIP No. 91911TAA1).

In connection with such request and in respect of such Notes, the Transferor
does hereby certify that:

    (1)  Such transfer is being effected in accordance with all applicable
         securities laws of any state of the United States or any other
         jurisdiction;

    (2)  the Notes are being transferred in accordance with Rule 144A to a
         transferee whom the Transferor reasonably believes is a qualified
         institutional buyer within the meaning of Rule 144A(a)(1) and is
         purchasing the Notes for its own account or any account with respect to
         which the transferee exercises sole investment discretion, in each case
         in a transaction meeting the requirements of Rule 144A; and

    (3)  it has notified the transferee that it has relied on Rule 144A as a
         basis for the exemption from the registration requirements of the
         Securities Act used in connection with the transfer.

                                      -41-
<PAGE>

This certificate and the statements contained herein are made for your benefit
and the benefit of the Company and the underwriters and initial purchasers, if
any, of the Notes being transferred.

[INSERT NAME OF TRANSFEROR]

By:  ___________________
     Name:
     Title

Dated:  _________________

cc: Vale Overseas Limited

                                      -42-
<PAGE>

                                     ANNEX D

                 NOTICE OF OCCURRENCE OF A POLITICAL RISK EVENT

To: JPMorgan Chase Bank (the "TRUSTEE")
    450 West 33rd Street, 15th Floor
    New York, NY 10001

                                                                 [Date]
Ladies and Gentlemen,

                      VALE OVERSEAS LIMITED (THE "ISSUER")
                                U.S.$300,000,000
             8.625% ENHANCED GUARANTEED NOTES DUE 2007 (THE "NOTES")
   UNCONDITIONALLY GUARANTEED BY COMPANHIA VALE DO RIO DOCE (THE "GUARANTOR")

We refer to the indenture dated as of March 8, 2002, among the Issuer, the
Guarantor and the Trustee (the "INDENTURE"), as supplemented by a first
supplemental indenture dated as of March 8, 2002, among the Issuer, the
Guarantor and the Trustee (the "FIRST SUPPLEMENTAL INDENTURE").

In compliance with the requirement in the First Supplemental Indenture to give
notice of the occurrence or termination of a Political Risk Event, as defined in
Section 1.2.5 of the First Supplemental Indenture, we hereby give notice that,
as of [Date], a Political Risk Event [came into existence][has terminated]. As
evidence of the [existence][termination] of the such Political Risk Event, we
attach hereto copies of [law, regulation, resolution, official release, bona
fide newspaper reports or any other material which demonstrates the
[existence][termination] of the Political Risk Event or an alteration as to its
existence].

Yours faithfully,

VALE OVERSEAS LIMITED
By:

COMPANHIA VALE DO RIO DOCE
By:

                                      -43-

<PAGE>

                                     ANNEX E

         NOTICE OF NON-PAYMENT OF INTEREST DUE TO A POLITICAL RISK EVENT

To: JPMorgan Chase Bank (the "TRUSTEE")
    450 West 33rd Street, 15th Floor
    New York, NY 10001

                                                                 [Date]
Ladies and Gentlemen,

                      VALE OVERSEAS LIMITED (THE "ISSUER")
                                U.S.$300,000,000
            8.625% ENHANCED GUARANTEED NOTES DUE 2007 (THE "NOTES")
   UNCONDITIONALLY GUARANTEED BY COMPANHIA VALE DO RIO DOCE (THE "GUARANTOR")

We refer to the indenture dated as of March 8, 2002, among the Issuer, the
Guarantor and the Trustee (the "INDENTURE"), as supplemented by a first
supplemental indenture dated as of March 8, 2002, among the Issuer, the
Guarantor and the Trustee (the "FIRST SUPPLEMENTAL INDENTURE").

Prior to or contemporaneously with this notice, we have notified you of the
occurrence of a Political Risk Event, as defined in Section 1.2.5 of the First
Supplemental Indenture, and have not notified you of the termination of the
Political Risk Event. In connection with the payment of interest and/or
Additional Amounts due on the Notes on [insert date] (the "PAYMENT"), we
represent to you as follows:

1   The Issuer does not have the funds to make the Payment.

2   The Guarantor has sufficient local currency funds in Brazil to make the
    Payment.

3   The Guarantor is unable to convert local currency funds into Dollars or to
    transfer Dollars outside Brazil to make the Payment and has used its best
    efforts to do so.

4   Neither the Issuer nor the Guarantor has funds available outside Brazil to
    make the Payment.

Yours faithfully,

VALE OVERSEAS LIMITED
By:

COMPANHIA VALE DO RIO DOCE
By:

                                      -44-<PAGE>
                                                                    EXHIBIT 10.1

                           Dated as of March 8, 2002

                             VALE OVERSEAS LIMITED,
                                   as Pledgor

                                      and

                              JPMORGAN CHASE BANK,
                                as Secured Party

                                      and

                              JPMORGAN CHASE BANK,
                      as Bank and Securities Intermediary

                           ACCOUNT CONTROL AGREEMENT

                                                  LINKLATERS
                                                  1345 Avenue of the Americas
                                                  19th Floor
                                                  New York, NY 10105

                                                  Telephone: (212)424-9000
                                                  Facsimile: (212)424-9100

                                                  Ref: REO/REXW

                                                  LINKLATEERS & ALLIANCE
                                                  Linklates is a member
                                                  firm of Linklaters & Alliance
                                                  a non-partnership association
<PAGE>

This Account Control Agreement is dated as of March 8, 2002 among Vale Overseas
Limited, a Cayman Islands exempted company incorporated with limited liability
(the "Pledgor"), JPMorgan Chase Bank, a banking corporation organized under the
laws of the State of New York, as Trustee under the Indenture (defined below)
(in its capacity as such, the "Secured Party") and as bank and securities
intermediary (in its capacity as such, the "Intermediary") (the "Agreement").

Recitals

(A)   The Pledgor has granted a security interest in the Collateral (as
      defined in the Supplemental Indenture) in favor of the Secured Party;
      and

(B)  In order to perfect the security interest granted by the Pledgor with
     respect to the Collateral, the parties hereto have entered into this
     Account Control Agreement.

1    Definitions

     Capitalized terms used herein but not otherwise defined herein shall have
     the meanings assigned in the Indenture dated as of March 8, 2002 (the
     "Base Indenture"), as supplemented by a first supplemental indenture dated
     as of March 8, 2002 (the "Supplemental Indenture," and collectively with
     the Base Indenture, the "Indenture") among the Pledgor, Companhia Vale Do
     Rio Doce, as guarantor, and the Secured Party, as Trustee.

      "UCC" means the Uniform Commercial Code as in effect from time to time in
      the State of New York.

2    Establishment of Reserve Account

     The Intermediary hereby agrees to act as securities intermediary and
     confirms and agrees that:

     2.1   The Intermediary has established account number 161600 in the name
           "JPMorgan Chase Bank, as Trustee FBO Holders of Vale Overseas Limited
           U.S.$300,000,000 8.625% Enhanced Guaranteed Notes Due 2007 Reserve
           Account" (such account and any successor account thereto, the
           "Reserve Account") and the Intermediary shall not change the name or
           account number of the Reserve Account without the prior written
           consent of the Secured Party;

    2.2    All securities and other property underlying any financial assets
           credited to the Reserve Account shall be in the name of the
           Intermediary and in no case will any funds credited to the Reserve
           Account be in the name of the Pledgor or payable to the order of the
           Pledgor except to the extent the foregoing have been specially
           indorsed to the Secured Party or in blank;

    2.3    All property delivered to the Intermediary pursuant to the Indenture
           will be promptly credited to the Reserve Account, as specified;

    2.4    The Reserve Account is an account to which financial assets are or
           may be credited, and the Intermediary shall treat the Pledgor as
           entitled to exercise the rights that comprise any financial
           assets credited to the Reserve Account; and

    2.5    The Intermediary is a securities intermediary within the meaning of
           UCC Section 8-102(a)(14) or a bank within the meaning of UCC Section
           9-104.

                                      -1-

<PAGE>

3   "Financial Assets" Election

    The Intermediary hereby agrees that each item of property (whether
    including, without limitation, any investment property, financial assets,
    securities, instruments, general intangibles or cash) credited to the
    Reserve Account shall be treated as a "financial asset" within the meaning
    of Section 8-102(a)(9) of the UCC.

4   Entitlement Orders

    4.1   The Secured Party exclusively may at any time in accordance with the
          Indenture (a) direct the transfer or redemption of, and give any
          entitlement orders (as defined in Section 8-102(a)(8) of the UCC) with
          respect to, any financial asset relating to the Reserve Account
          without further consent by the Pledgor or any other Person and (b)
          instruct the Intermediary to dispose of the funds in the Reserve
          Account without further consent by the Pledgor or any other Person.

    4.2   Irrespective of any other provision herein or in any other agreement,
          the Intermediary agrees to comply with all (a) entitlement orders
          issued by the Secured Party with respect to the Reserve Account and
          any property held therein and (b) instructions originated by the
          Secured Party directing disposition of the funds in the Reserve
          Account, in each case without further consent by the Pledgor or any
          other Person

    4.3   The Pledgor shall not have the right to issue any entitlement orders
          or originate any instructions directing disposition of the funds in
          the Reserve Account with respect to any financial assets or any other
          property held in or credited to the Reserve Account.

5   Subordination of Lien, Waiver of Set-Off

    In the event that the Intermediary has or subsequently obtains by agreement,
    by operation of law or otherwise a security interest in the Reserve Account
    or any security entitlement credited thereto, the Intermediary hereby agrees
    that such security interest shall be subordinate to the security interest of
    the Secured Party. The financial assets and other items deposited to the
    Reserve Account will not be subject to deduction, set-off, banker's lien, or
    any other right in favor of any person other than the Secured Party (except
    that the Intermediary may set off the face amount of any amounts which have
    been credited to the Reserve Account but are subsequently returned unpaid
    because of uncollected or insufficient funds).

6   Choice of Law

    Both this Agreement and the Reserve Account shall be governed by the laws of
    the State of New York. Regardless of any provision in any other agreement,
    for purposes of the UCC, New York shall be deemed to be the Intermediary's
    jurisdiction and the Reserve Account (as well as the securities entitlements
    related thereto) shall be governed by the laws of the State of New York.

                                      -2-

<PAGE>

7   Conflict with Other Agreements

    7.1   In the event of any conflict between this Agreement (or any portion
          thereof) and any other agreement now existing or hereafter entered
          into, the terms of this Agreement shall prevail.

    7.2   No amendment or modification of this Agreement or waiver of any right
          hereunder shall be binding on any party hereto unless it is in writing
          and is signed by all of the parties hereto.

    7.3   The Intermediary hereby confirms and agrees that:

          7.3.1   There are no other agreements entered into between the
                  Intermediary and the Pledgor with respect to the Reserve
                  Account except for the Indenture;

          7.3.2   It has not entered into, and until the termination of this
                  Agreement will not enter into, any agreement with any other
                  person relating to the Reserve Account and/or any financial
                  assets credited thereto pursuant to which it has agreed to
                  comply with entitlement orders (as defined in Section
                  8-102(a)(8) of the UCC) of such other person; and

          7.3.3   It has not entered into, and until the termination of this
                  Agreement will not enter into, any agreement with the Pledgor
                  or the Secured Party purporting to limit or condition the
                  obligation of the Intermediary to comply with entitlement
                  orders as set forth in Section 4 hereof.

8   Adverse Claims

    Except for the claims and interest of the Secured Party and of the Pledgor
    in the Reserve Account, the Intermediary does not know of any claim to, or
    interest in, the Reserve Account or in any "financial asset" (as defined in
    Section 8-102(a) of the UCC) credited thereto. If any person asserts any
    lien, encumbrance or adverse claim (including any writ, garnishment
    judgment, warrant of attachment, execution or similar process) against the
    Reserve Account or in any financial asset carried therein, the Intermediary
    will, after becoming aware thereof, promptly notify the Secured Party and
    the Pledgor thereof.

9   Maintenance of the Reserve Account

    In addition to, and not in lieu of, the obligation of the Intermediary to
    honor entitlement orders as agreed in Section 4 hereof, the Intermediary
    agrees to maintain the Reserve Account and promptly send copies of all
    statements, confirmations and other correspondence concerning the Reserve
    Account and/or any financial assets credited thereto to each of the Pledgor
    and the Secured Party at the address set forth for each in Section 13 of
    this Agreement.

                                      -3-
<PAGE>
10    Representations, Warranties and Covenants of the Intermediary

      The Intermediary hereby makes the following representations, warranties
      and covenants:

      10.1   The Reserve Account has been established as set forth in Section 2
             above and the Reserve Account will be maintained in the manner set
             forth herein until termination of this Agreement.

      10.2   This Agreement is the valid and legally binding obligation of the
             Intermediary.

11    Indemnification of Intermediary

      The Pledgor and the Secured Party hereby agree that (a) the Intermediary
      is released from any and all liabilities to the Pledgor and the Secured
      Party arising from the terms of this Agreement and the compliance of the
      Intermediary with the terms hereof (save for clause 5), except to the
      extent that such liabilities arise from the Intermediary's gross
      negligence and (b) the Pledgor, its successors and assigns shall at all
      times indemnify and save harmless the Intermediary from and against any
      and all claims, actions and suits of others arising out of the terms of
      this Agreement or the compliance of the Intermediary with the terms
      hereof, except to the extent that such arises from the Intermediary's
      gross negligence, and from and against any and all liabilities, losses,
      damages, costs, charges, counsel fees and other expenses of every nature
      and character arising by reason of the same.  This Section 11 shall
      survive the termination of this Agreement.

12    Successors, Assignment

      The terms of this Agreement shall be binding upon, and shall inure to the
      benefit of, the parties hereto and their respective corporate successors
      or heirs and personal representatives who obtain such rights solely by
      operation of law.

13    Notices

      Any notice, request or other communication required or permitted to be
      given under this Agreement shall be in writing and deemed to have been
      properly given when delivered in person, or when sent by telecopy or other
      electronic means and electronic confirmation of error free receipt is
      received or two days after being sent by certified or registered mail,
      return receipt requested, postage prepaid, addressed to the party at the
      address set forth below.

      Pledgor:

      Companhia Vale do Rio Doce
      Avenida Graca Aranha, 26 - 17th Floor
      Rio de Janeiro, RJ - Brazil
      20005-900

      Telephone no:   55-21-3814-4726
      Fax no:         55-21-3814-4679
      Attention:      CVRD Financial Director

                                      -4-
<PAGE>

      Secured Party:

      JPMorgan Chase Bank
      450 West 33rd Street, 15th Floor
      New York, NY 10001-2697

      Attention:    Institutional Trust Services

      Intermediary:

      JPMorgan Chase Bank
      450 West 33rd Street, 15th Floor
      New York, NY 10001-2697
      Attention:    Institutional Trust Services

      or at such other address or facsimile number as shall have been furnished
      in writing by any person described above to the party required to give
      notice hereunder.

14    Termination

      The obligations of the Intermediary to the Secured Party pursuant to this
      Agreement shall continue in effect until the security interests of the
      Secured Party in the Reserve Account have been terminated pursuant to the
      terms of the Indenture and the Secured Party has notified the Intermediary
      of such termination in writing. The Secured Party agrees to provide Notice
      of Termination in substantially the form of Exhibit A hereto to the
      Intermediary upon the request of the Pledgor on or after the termination
      of the Secured Party's security interest in the Reserve Account. The
      termination of this Agreement shall not terminate the Reserve Account or
      alter the obligations of the Intermediary and the Pledgor to each other
      pursuant to any other agreement with respect to the Reserve Account.

15    Jurisdiction; Waiver of Immunity; Appointment of Process Agent

      Each of the parties hereto irrevocably and unconditionally submits to the
      jurisdiction of any New York State or United States federal court sitting
      in the Borough of Manhattan, the City of New York and of any court of its
      own corporate domicile, with respect to any proceedings arising out of or
      relating to this Agreement. Each of the parties hereto irrevocably and
      unconditionally waives, to the fullest extent permitted by law, any
      objection which it may now or hereafter have to the laying of the venue of
      any such proceedings brought in such a court and any claim that any such
      proceedings brought in such a court have been brought in an inconvenient
      forum. Each of the parties hereto hereby waives any rights to which it may
      be entitled on account of place of residence or domicile. To the extent
      that the Pledgor has or hereafter may acquire any immunity from the
      jurisdiction of any court or from any legal process with respect to itself
      or its property, the Pledgor irrevocably waives, to the fullest extent
      permitted by law, such immunity in respect of its obligations hereunder.
      The Pledgor agrees that final judgment in any such Proceedings brought in
      such a court shall be conclusive and binding on it and may be enforced in
      any court to the jurisdiction of which the Pledgor is subject by a suit
      upon such judgment or in any manner provided by law, provided that service
      of process is effected upon the Pledgor as permitted by law. The Pledgor
      hereby irrevocably waives, to the fullest extent permitted by law,

                                      -5-
<PAGE>
      any requirement or other provision of law, rule, regulation or practice
      which requires or otherwise establishes as a condition to the institution,
      prosecution or completion of any proceedings (including appeals) arising
      out of or relating to this Agreement, the posting of any bond or the
      furnishing, directly or indirectly, of any Note.

      The Pledgor hereby designates and appoints Rio Doce America, Inc. ("RDA")
      located at 546 5th Avenue, 12th Floor, New York, New York, 10036, as its
      authorized agent upon which process may be served in any legal suit,
      action or proceeding arising out of or relating to this Agreement which
      may be instituted in any federal or state court in the Borough of
      Manhattan, The City of New York, New York, and agrees that service of
      process upon such agent, and written notice of said service to the Pledgor
      by the person serving the same, shall be deemed in every respect effective
      service of process upon the Pledgor in any such suit, action or proceeding
      and further designates the domicile of RDA specified above and any
      domicile RDA may have in the future as its domicile to receive service of
      process.  If for any reason RDA (or any successor agent for this purpose)
      shall cease to act as agent for service of process as provided above, the
      Pledgor will promptly appoint a successor agent for this purpose
      reasonably acceptable to the Trustee.  The Pledgor agrees to take any and
      all actions as may be necessary to maintain such designation and
      appointment of such agent in full force and effect.

16    Counterparts

      This Agreement may be executed in any number of counterparts, all of which
      shall constitute one and the same instrument, and any party hereto may
      execute this Agreement by signing and delivering one or more counterparts.

                                      -6-
<PAGE>
In Witness Whereof, the parties hereto have caused this Agreement to be
executed by their duly elected officers duly authorized as of the date first
above written.

VALE OVERSEAS LIMITED, as Pledgor

By: /s/ Jorge Tadeu Moura Pinho
    ---------------------------------------
    Name: Jorge Tadeu Moura Pinho
    Title: Attorney

By: /s/ Bernadeth Vieira de Souza
    ---------------------------------------
    Name: Bernadeth Vieira de Souza
    Title: Attorney

JPMORGAN CHASE BANK, as Secured Party

By: /s/ Lesley Daley
   ----------------------------------------
   Name: Lesley Daley
   Title: Trust Officer

Sworn to before me this 8th day of March, 2002.

/s/ James M. Foley
-------------------------------------------
Notary Public

JPMORGAN CHASE BANK, as Intermediary

By: /s/ Lesley Daley
   ----------------------------------------
   Name: Lesley Daley
   Title: Trust Officer

Sworn to before me this 8th day of March, 2002.

/s/ James M. Foley
-------------------------------------------
Notary Public

                                      -7-
<PAGE>
                                   Exhibit A

                         [Letterhead of Secured Party]

[Date]

JPMorgan Chase Bank
450 West 33rd Street, 15th Floor
New York, NY  10001-2697

Attention: Institutional Trust Services

Ladies and Gentlemen:

Re: Termination of Control Agreement

You are hereby notified that the Account Control Agreement between you, Vale
Overseas Limited and the undersigned dated March 8, 2002 (a copy of which is
attached) is terminated and you have no further obligations to the undersigned
pursuant to such Agreement. Notwithstanding any previous instructions to you,
you are hereby instructed to accept all future directions with respect to the
Reserve Account 161600 from Vale Overseas Limited.  This notice terminates any
obligations you may have to the undersigned with respect to such accounts;
however, nothing contained in this notice shall alter any obligations which you
may otherwise owe to Vale Overseas Limited pursuant to any other agreement.

You are instructed to deliver a copy of this notice by facsimile transmission to
Vale Overseas Limited.

Very truly yours,

JPMORGAN CHASE BANK

By: _______________________
    Name:
    Title:

                                      -8-

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