Document:

EXPORT
        PREPAYMENT AGREEMENT

       

      This
        EXPORT
        PREPAYMENT AGREEMENT
        (the
“Prepayment Agreement”) is made as of June 22, 2007 by and among:

       

      VOTORANTIM
        CELULOSE E PAPEL S.A. - VCP,
        a
        corporation organised and existing under the laws of t the Federative Republic
        of Brazil, with its head office located at 1357, Alameda Santos, 6th
        floor,
        Sao Paulo, Brazil, ("VCP"
        or
the
        “Borrower” or the “Exporter”);

      

      VCP
        OVERSEAS HOLDING
        LTD. Budapeste, ZUG Branch,
        a
        branch of VCP Overseas Holding Limited Liability Company (a company organised
        and existing under the laws of Hungary), licensed in the commercial register
        of
        the canton of ZUG, Switzerland with its principal offices located at ZUG,
        Switzerland (the “Paying Agent”);

      

      And

      

      BANCO
        BILBAO VIZCAYA ARGENTARIA, S.A.,
        a bank
        duly o[rganized] and existing under the laws of the Kingdom of Spain, acting
        through its New York branch which is located at 1345 Avenue of the Americas,
        45th
        floor,
        New York, NY 10105, in the United States of America (the “Bank”).

      

      WITNESSETH

      

      WHEREAS,
        the Exporter and/or the Paying Agent, as the case may be, has entered or
        will
        enter into one or more Export Agreements with the Importers, pursuant to
        which
        the Exporter will export Goods from Brazil to the Importers (all capitalised
        terms used herein have the meanings assigned to them below);

      

      WHEREAS,
        the Exporter’s and/or Paying Agent’s, as the case may be, sales of Goods under
        the Export Agreements will be made through several shipments (the “Covered
        Shipments”) with the aggregate Purchase Price for such Covered Shipments being
        at least US$ 100,000,000 (One hundred million United States Dollars);
        

      

      WHEREAS,
        the Exporter and/or the Paying Agent, as the case may be, shall instruct
        each of
        the Importers to make payment due in respect of the Covered Shipments made
        to
        such Importer by forwarding the Purchase Price for the Goods so shipped to
        the
        Collection Account which shall be an account held in the name of the Bank;
        

      

      WHEREAS,
        the Paying Agent, or any substitute or replacement thereof, will act as paying
        agent for the Exporter and will comply with the payment instructions given
        by
        the Exporter to
        fulfil
        the
        Exporter’s obligation to make payments to the Bank through the Collection
        Account as set forth herein;

      

      WHEREAS,
        the Bank has agreed to make an anticipated payment of future exports to the
        Exporter in accordance with Central Bank regulations including without
        limitation Resolution No. 1834 dated June 26, 1991 of the National Monetary
        Council and Circular No. 3027 dated February 2, 2001 of the Central Bank,
        with
        respect to the payments to be due from the Importers to the Exporter as provided
        above; and

       

      WHEREAS,
        the Exporter has agreed to assign to
        the
        Bank 15
        days
        prior to each Instalment (a) its rights under the Export Agreements
        and (b)
        export
        receivables with a value in aggregate not less than 1.10 times the amount
        of
        such Instalment and any interest due thereon.

      

      NOW,
        THEREFORE, In consideration of the undertakings contained herein, the parties
        agree as follows:

       

      Section
        1. Definitions

      

      The
        following terms shall have the meanings ascribed hereunder (all the terms
        defined in the singular to have the same meaning when used in the plural
        and
        vice versa):

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      “Advance”
shall
        mean the amount made available
        to the
        Exporter by the Bank under this Prepayment Agreement for the anticipated
        payment
        of certain future exports.

      

      “Advance
        Amount”
shall
        mean any amount disbursed under this Prepayment Agreement as designated in
        each
        Promissory Note for the Advance, provided the aggregate amount of all
        disbursements shall not exceed US$100,000,000.00 (One Hundred Million United
        States Dollars).

      

      “Advance
        Document”
shall
        mean any
        of
this
        Prepayment Agreement, the Promissory Note, and the Disbursement
        Request.

      

      “Affiliate”
shall
        mean any Person directly or indirectly controlling, controlled by, or under
        common control with, any other Person. For this purpose, “control” of any Person
        means ownership of 10% or more of the Voting Stock
        of the
        Person or the ability, directly or indirectly, to direct or cause the direction
        of the management and policies of such Person, whether by contract or
        otherwise;
        provided that Aracruz Celulose S.A.
        shall
        not be considered an Affiliate of the Obligors unless the Votorantim Group
        (in
        the aggregate) possesses, directly or indirectly, the power to vote 30% or
        more
        of the Voting Stock of Aracruz Celulose S.A. or to direct or cause the direction
        of the management and policies of Aracruz Celulose S.A., whether through
        ownership of the Voting Stock, by contract or otherwise.

      

      “Applicable
        Maturity Date”
shall
        mean, in relation to each disbursement, the Final Maturity Date unless the
        Bank
        exercises its rights in Section 5(f) hereof, in which case it shall mean
        the
        Early Maturity Date.

       

      “Assignment”
shall
        mean the assignment made by the Exporter in Section 19 of this Prepayment
        Agreement.

      

      “Availability
        Period”
shall
        mean the period commencing on the date hereof and ending on the
        28th
        day of
June,
        2007 during which the Bank agrees to make Advances in accordance with Section
        2
        of this Prepayment Agreement.

      

      “Banking
        Day”
shall
        mean any day (other than a Saturday or a Sunday) on which commercial banks
        are
        open for business in New York City, United
        States of America,
        London,
        England and São Paulo, Brazil. 

      

      “Brazil”
shall
        mean the Federative Republic of Brazil.

      

      “Brazilian
        GAAP”
        shall
        mean the accounting principles prescribed by Brazilian corporate
        law.

      

      “Breakage
        Costs”
        shall
        mean the costs referred to in Section 13(a)
        of
        this Prepayment Agreement.

      

      “Business”
        shall
        mean (i)
        the
        business of producing
        pulp and paper and/or other related products and (ii) other lines of business
        that are related or incidental to the business described under clause (i)
        of
        this definition.

      

      “Capital
        Lease Obligations”
        means,
        as to a Surviving Entity, the obligations of such Person to pay rent or other
        amounts under a lease of (or other agreement conveying the right to use)
        real
        and/or personal property, which obligations are required to be classified
        and
        accounted for as a capital lease on a balance sheet of such Person under
        GAAP
        and, for purposes
        of this
        Prepayment Agreement,
        the
        amount of such obligations shall be the capitalised amount thereof determined
        in
        accordance with GAAP.

      

      “Capital
        Stock”
means
        any and all shares, interests, participations, quotas or other equivalents
        (however designated) of capital stock of a corporation, any and all ownership
        interests in a Person other than a corporation and any and all warrants or
        options to purchase any of the foregoing.

       

      “Cash
        Equivalents”
means
        any of the following: (a) readily marketable direct obligations of the
        government of the United States of America or any agency or instrumentality
        thereof or obligations unconditionally guaranteed by the full faith and credit
        of the government of the United States, (b) insured certificates of deposit
        of
        or time deposits with the Bank or a member of the Federal Reserve System,
        which
        issues (or the parent of which issues) commercial paper rated as described
        in
        clause (c), is organised under the laws of the United States of America or
        any State (or the District of Columbia) thereof and has combined capital
        and
        surplus of at least $1,000,000,000, (c) commercial paper in an aggregate
        amount
        of no more than $10,000,000 per issuer outstanding at any time, issued by
        any
        corporation organised under the laws of any State (or the District of Columbia)
        of the United States of America and rated at least “Prime-1” (or the then
        equivalent grade) by Moody’s and “A-1” (or the then equivalent grade) by
        S&P, or (d) other investments considered as cash equivalents under Brazilian
        GAAP.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      “Central
        Bank”
shall
        mean Banco Central do Brasil.

       

      “Closing
        Fee”
shall
        have the meaning set forth in Section 3(c) hereof.

      

      “Collection
        Account”
        shall
        mean that account named “VCP” at Banco Bilbao Vizcaya Argentaria, S.A. New York
        referred to in Section 5(b), into which the Exporter or the Paying Agent
        will
        irrevocably instruct each Importer to deposit the Purchase Price for Covered
        Shipments exported by the Exporter to such Importer as provided
        herein.

      

      “Debt”
means,
        with respect to any Person (determined without duplication): (a) all
        indebtedness of such Person for borrowed money, (b) all obligations of such
        Person for the deferred purchase price of Property or services (other than
        trade
        payables (whether payable to Affiliates or other Persons) incurred in the
        ordinary course of such Person’s business, but only if and for so long as such
        trade payables remain payable on customary trade terms, and accrued expenses
        incurred in the ordinary course of business), (c) all obligations of such
        Person
        evidenced by notes, bonds, debentures or other similar documents, (d) all
        obligations, contingent or otherwise, of such Person in connection with any
        securitization of any products, receivables or other Property, (e) all
        obligations of such Person created or arising under any conditional sale
        or
        other title retention agreement with respect to Property acquired by such
        Person
        (even though the rights and remedies of the seller or the lender under such
        agreement in the event of default are limited to repossession or sale of
        such
        Property), (f) all Capital Lease Obligations and similar obligations under
        “synthetic leases” of such Person, (g) all obligations, contingent or otherwise,
        of such Person in respect of acceptances, letters of credit, financial guaranty
        insurance policies or similar extensions of credit (excluding trade payables
        to
        the extent excluded from clause (b)), (h) all obligations of such Person to
        redeem, retire, defease or otherwise make any payment in respect of any Capital
        Stock of such Person, (i) all net obligations of such Person in respect of
        any
        interest rate protection agreement or any currency swap, cap or collar agreement
        or similar arrangement entered into by such Person providing for the transfer
        or
        mitigation of interest rate or currency risks either generally or under specific
        contingencies (but without regard to any notional principal amount relating
        thereto), (j) all Debt of other Persons referred to in clauses (a) through
        (i) or clause (k) that is Guaranteed by such Person and (k) all Debt
        referred to in clauses (a) through (j) secured by (or for which the holder
        of such Debt has an existing right, contingent or otherwise, to be secured
        by)
        any Lien on Property of such Person even though such Person has not assumed
        or
        become liable for the payment of such Debt.

       

      “Disbursement
        Date”
shall
        mean the date of disbursement of the Advance in accordance with the applicable
        Disbursement Request.

      

      “Disbursement
        Request”
shall
        mean each Disbursement Request substantially in the form of Exhibit B
        hereto.

       

      “EBITDA”
means,
        during any period, the total earnings of a Surviving Entity (on a consolidated
        basis) before income taxes, Interest Expense, depreciation and amortisation
        during such period, eliminating from the calculation of such earnings: (a)
        any
        net income or gain (or net loss), net of any tax effect, during such period
        from
        any extraordinary items, (b) any interest income during such period, (c)
        gains
        or losses during such period on the sale of Property (other than the sale
        of
        inventory in the ordinary course of business), (d) any other extraordinary
        non-cash items deducted from or included in the calculation of pre-tax net
        income for such period (other than items that will require cash payments
        and for
        which an accrual or reserve has been, or is required by GAAP to be, made),
        (e)
        the EBITDA for such period of any Subsidiaries or other Property disposed
        of or
        discontinued during such period and (f) any net income or gain (or net loss)
        on
        any foreign exchange transactions or net monetary positions.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      “Export
        Agreements”
shall
        mean the agreements between the Exporter and the Importers pursuant to which
        the
        Exporter will export Goods from Brazil to the Importers.

      

      “Event
        of Default”
shall
        have the meaning set forth in Section 12 hereof.

      

      “Final
        Maturity Date”
shall
        mean, subject
        to Section 5(e), in
        relation to each disbursement, the day which is 96 (ninety six) months after
        the
        Disbursement Date. 

      

      “Final
        Disbursement Date”
        shall
        mean the last day of the Availability Period where the Borrower is entitled
        to
        make drawdowns against the Commitment.

      

      “First
        Instalment
        Date”
shall
        mean the Banking
        Day
        that is
        48 (forty eight) months after
        the
        Final Disbursement Date. 

      

      “Fiscal
        Semester”
means
        each period from and including January 1 through and including June 30 of
        each
        year and from and including July 1 through and including December 31 of each
        year.

      

      “GAAP”
means,
        with respect to any Person, the generally accepted accounting principles
        (as in
        effect from time to time) applicable to it in its home
        jurisdiction.

      

      “Goods”
shall
        mean pulp
        and
paper
        and/or
        other related products.

      

      “Governmental
        Authority”
shall
        mean any nation or government, any state or other political subdivision thereof,
        any central bank (or similar monetary or regulatory authority) and any entity
        exercising executive, legislative, judicial, regulatory or administrative
        authority of or pertaining to government (whether such authority is recognised
        as a de jure
        government or is a de facto
        government). 

       

      “Instalment
        Dates” shall
        mean the Banking Days that are referred to the Schedule #2

      

      “Importers”
shall
        mean,
        jointly or severally:

       

      
        	 	
                (i)

              	
                Certain
                  OECD-based commercial counterparts acceptable to the Bank to be
                  determined
                  prior to the date hereof, (collectively the "Initial Importers")
                  as
                  evidenced in Schedule I hereto; 

              

      

      
        	 	
                (ii)

              	
                At
                  any time after the date hereof, certain other importers approved
                  by the
                  Bank, 

              

      

      
        	 	
                (iii)

              	
                Commercial
                  counterparts whose obligations to the Exporter or the Paying Agent
                  as the
                  case may be, are insured by certain policies or guaranteed by letters
                  of
                  credit issued by financial institutions acceptable to the Bank
                  and rated
                  at least A by Standard & Poors' or A2 by Moody's, with exceptions to
                  be agreed with the Bank; 

              

      

      
        	 	
                (iv)

              	
                Commercial
                  counterparts located in any country and whose dealings with which
                  are not
                  generally prohibited by United States law or by the United Nations,
                  who
                  enter into sales agreements with the Exporter or the Paying Agent
                  as the
                  case may be, which call for payment in full to a US Dollar account
                  domiciled in the United States of America on a pre-shipment
                  basis.

              

      

      

      “Instalments” shall
        have the meaning set forth in Section 5(a).

       

      “Interest
        Expense”
means,
        for any period, interest (or similar) expense on the Debt of a Surviving
        Entity
        (on a consolidated basis), including (without duplication): (a) fees (including
        commitment fees and insurance premiums), (b) net payments under any interest
        rate protection agreement or other hedging agreement, (c) the interest portion
        of any deferred payment obligations, (d) all fees and charges owed with respect
        to letters of credit or performance or other bonds, (e) all accrued or
        capitalised interest, (f) any amortisation of debt discount and (g) all but
        the
        principal component of payments relating to Capital Lease
        Obligations.

      

      “Interest
        Payment Date” shall
        mean the last day of each Interest Period according to Schedule 1

      

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      

      Schedule
        1

       

      
        	
                Interest
                  Period

              	 	
                Maturity
                  Date

              	 	
                Outstanding
                  Days

              
	
                1

              	 	
                12/26/07

              	 	
                183

              
	
                2

              	 	
                06/25/08

              	 	
                183

              
	
                3

              	 	
                12/26/08

              	 	
                183

              
	
                4

              	 	
                06/25/09

              	 	
                182

              
	
                5

              	 	
                12/28/09

              	 	
                183

              
	
                6

              	 	
                06/25/10

              	 	
                182

              
	
                7

              	 	
                12/27/10

              	 	
                183

              
	
                8

              	 	
                06/27/11

              	 	
                182

              
	
                9

              	 	
                12/26/11

              	 	
                183

              
	
                10

              	 	
                06/25/12

              	 	
                183

              
	
                11

              	 	
                12/26/12

              	 	
                183

              
	
                12

              	 	
                06/25/13

              	 	
                182

              
	
                13

              	 	
                12/26/13

              	 	
                183

              
	
                14

              	 	
                06/25/14

              	 	
                182

              
	
                15

              	 	
                12/26/14

              	 	
                183

              
	
                16

              	 	
                06/25/15

              	 	
                182

              
	 	 	 	 	
                Final
                  Maturity Date

              

      

      

      “Interest
        Period”
shall
        mean in
        relation
        to each Advance, the
        time
        period commencing on and including the date of which the first drawdown has
        been
        made and
        ending on but excluding the
        date
        that is
        6 months after such date according to Schedule 1, provided
        that the final day of any such Interest Period shall be the Final Maturity
        Date.
        

      

      “Interest
        Rate”
for
        an
        Interest Period shall mean LIBOR plus the Margin.

      

      “LIBOR”
shall
        mean, for any Interest Period, an interest rate per annum determined on the
        basis of the London interbank offered rate for deposits in Dollars for a
        period
        of time comparable to the relevant Interest
        Period,
        shown
        on the display page designated British Bankers Association Interest Settlement
        Rates, “LIBOR 01” Page, on the Reuters screen or such other page as may replace
        that page in that service, at approximately 11:00 a.m., London time, 2 (two)
        Banking Days prior to the first day of such Interest Period. In the event
        that
        such rate does not appear on such LIBOR 01 Reuters screen page, or such other
        page as may replace that page in that service, then LIBOR shall be the
        arithmetic mean (expressed as an annual rate and rounded upwards, if necessary,
        to the nearest 1/16 of 1%) of the rates quoted at approximately 11:00 a.m.
        London time by 3 (three) leading banks, chosen by the Bank and agreed by
        the
        parties
        hereto
        as the rate at which deposits in Dollars are offered to such Banks by prime
        banks,
        in the
        London interbank market
        for a
        period of time comparable to the relevant Interest Period,
        at
        approximately 11:00 a.m.
        2 (two)
        Banking Days prior to the first day of such Interest Period. If the Exporter
        does not agree with the LIBOR quoted by the Bank, the Bank shall have no
        obligation to make the disbursement related to the Advance or if the Advance
        has
        already been made, the rate will be reasonably determined by the
        Bank.

      

      “Lien”
means
        any mortgage, lien, pledge, usufruct, fiduciary transfer (alienação
        fiduciária),
        charge, encumbrance or other security interest or any preferential arrangement
        (including a securitization) that has the practical effect of creating a
        security interest.

      

      “Margin”
shall
        mean 0.38% p.a. (percent per annum).

      

      “Material
        Adverse Effect”
shall
        mean a material adverse effect on the business, operations, property, or
        financial condition of the Exporter
        and its direct or indirect subsidiaries (taken as a whole)
        which
        will, in the opinion of the Bank, as
        justified in writing, impair
        the ability of the Exporter to perform its obligations under any of the Advance
        Documents; provided that there should be no Material Adverse Effect in the
        event
        the Bank receives a remedy,
        that it considers satisfactory, from the Exporter and or the Paying Agent
        upon
        demand.

       

      “Net
        Debt”
means,
        as of the date of the consummation of any merger, consolidation, sale, transfer,
        lease or other disposition pursuant to Section 11(a), a Surviving Entity's
        Total
        Debt as of such day minus the sum of: (a) the aggregate amount of cash on
        its
        consolidated balance sheet as of such day plus (b) the sum of, for each
        marketable security (including Cash Equivalents) on such Surviving Entity's
        consolidated balance sheet as of such day, the lower of: (i) the face value
        and
        (ii) the market value of such marketable security as of such day. For the
        purpose of clarification, the calculation of Net Debt (and all components
        thereof) shall be made using Brazilian GAAP.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      “Net
        Debt to EBITDA Ratio”
means,
        as of the date of the consummation of any merger, consolidation, sale, transfer,
        lease or other disposition pursuant to Section 11(a), the ratio (expressed
        as a
        decimal) of a Surviving Entity's: (a) Net Debt as of such date to (b) EBITDA
        for
        the two most recent Fiscal Semesters preceding such date. For the purpose
        of
        clarification, the calculation of Net Debt to EBITDA Ratio (and all components
        thereof) shall be made using Brazilian GAAP.

      

      “Obligors”
        shall
        mean either of the Borrower, the Paying Agent and the Importers.

      

      “OECD
        Country”
means,
        at any time, any nation that is a member of the Organisation for Economic
        Co-operation and Development at such time.

      

      “Person”
        shall
        mean any individual, corporation, partnership, trust, unincorporated
        organisation, joint stock company or other legal entity or organisation and
        any
        government or agency or political subdivision thereof.

      

      “Promissory
        Note”
shall
        mean each promissory note substantially in the form of Exhibit A hereto duly
        executed and delivered by an authorised signatory of the Exporter.

      

      “Property”
of
        any
        Person means any property, rights or revenues, or interest therein, of such
        Person.

      

      “Purchase
        Price”
shall
        mean in relation to each Covered Shipment the purchase price to be paid therefor
        by the relevant Importer.

      

      “Receivable”
means
        each account or payment intangible or similar obligation arising under any
        Export Agreement.

      

      “Relevant
        Person”
        shall
        mean any Affiliate, subsidiary or group company of the Borrower.

      

      “Responsible
        Officer”
of
        a
        Person shall mean any Executive Officer of that Person.

      

      “Shipping
        Documents”
shall
        mean in relation to each Covered Shipment, originals or copies of (a) the
        “despacho
        aduaneiro”
        (customs receipt) related thereto, (b) the bill of lading or other shipping
        document evidencing such shipment, and (c) any draft or other payment document
        presented to the relevant Importer.

      

      “Subsidiary”
means
        with respect to any Person, any corporation or other entity more than 50%
        of the
        Voting Stock of which is owned or controlled directly or indirectly, by such
        Person and/or by any Subsidiary of such Person.

      

      “Surviving
        Entity”
means
        any surviving Person as described in Section 11(a)(i)(A)(1) or Person to
        whom
        substantially all of the assets of the Exporter, as the case may be, shall
        have
        been transferred as described in Section 11(a)(i)(A)(2), in each case, that
        is
        not VCP, the Exporter or a Subsidiary thereof.

      

      “Total
        Debt”
means,
        as of the date of the consummation of any merger, consolidation, sale, transfer,
        lease or other disposition pursuant to Section 11(a), the aggregate outstanding
        principal amount of Debt of a Surviving Entity (on a consolidated basis)
        as of
        such day.

      

      “Undertaking”
        means
        all of the Exporter’s present and future, rights and remedies under the Export
        Agreement together with all present and future rights under any security,
        guarantee or other form of credit support
        created
        in its favour in respect of an Importer’s obligations under the
        Export
Agreements
        (collectively, the “Undertakings”).

      

      “US
        Dollars”,
        “Dollars”
or
        “US$”
shall
        mean the lawful currency of the United States of America.

      

      “Votorantim
        Group”
means
        the group of related companies commonly known as the “Votorantim Group”
comprised of Hejoassu Administração Ltda. and its Subsidiaries.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      “Voting
        Stock”
of
        a
        Person means Capital Stock in such Person having power to vote for the election
        of directors or similar officials of such Person or otherwise voting with
        respect to actions of such Person (other than such Capital Stock having such
        power only by reason of the happening of a contingency).

       

      Section
        2. The
        Commitment

      

      (a) Subject
        to the terms and conditions set forth in this Prepayment Agreement, the Bank
        hereby agrees to make several Advances during the Availability Period as
        an
        anticipated payment of certain future exports in accordance with Central
        Bank
        regulations.

      

      (b) Each
        Advance Amount shall be evidenced by a single Promissory Note dated the
        applicable Disbursement Date and duly completed and executed by the Exporter.
        

       

      Section
        3. Making
        of the Advance; Use of Proceeds

      

      Subject
        to the satisfaction of the conditions set forth in Section 8 herein, the
        Bank
        shall make any
        Advance
        provided that (i) the Bank shall have received from the Exporter a Disbursement
        Request at least three (3) Banking Days, and not later than 11:00 a.m. (São
        Paulo time), prior to the applicable Disbursement Date of the Advance and
        (ii)
        the Bank shall send to the Exporter its acknowledgement and agreement to
        the
        Disbursement Request on the same date.

      

      (a) The
        Exporter
        or any
        of its affiliates
        shall
        use the proceeds of the Advance for capital expenditures, investments and
        its
        general working capital requirements thereof.

       

      (b) The
        Exporter agrees to pay to the Bank a Closing Fee of 0.25% flat (Zero point
        twenty five percent) on the Advance Amount the earliest of the date hereof
        or on
        the 30th
        day of
        June, 2007.

       

      (c) The
        Exporter shall treat the proceeds of the Advance as a prepayment of future
        exports of the Goods to the Importers, all in accordance with and pursuant
        to
        the terms and conditions of current Brazilian laws and regulations applicable
        to
        export prepayment operations. 

       

      Section
        4. Interest

      

      (a) The
        Exporter shall pay interest on the unpaid Advance Amount
        on
        each
        Interest Payment Date during the relevant Interest Periods at the Interest
        Rate
        for the Advance, from the Disbursement Date until the Applicable Maturity
        Date.
        Such payment shall be made, at Exporter’s option, except as provided in
        paragraph (d) below, either (i) directly by the Exporter to the Bank’s account
        as listed herein
        in
        Section 5(b)
        or (ii)
        if so determined by the Exporter as notified in writing to the Bank, through
        the
        Paying Agent. The Paying Agent hereby agrees to make such payment of interest
        then due in accordance with the terms hereof if so instructed by the Exporter.
        

      

      (b) The
        Advance Amount, any interest thereon (to the extent permitted by law), and
        any
        other amount due and payable under this Prepayment Agreement that is past
        due
        (whether at the Applicable Maturity Date, by acceleration or otherwise) shall
        bear interest from the date such amount is due until such amount is paid
        in full
        at the per annum rate that is the then applicable Interest Rate plus 1% (one
        percent). 

      

      (c) Interest
        shall be calculated on the basis of a year of 360 days for the actual number
        of
        days elapsed
        (including the first day, but excluding the last day).
        Accrued
        interest shall be due and payable in arrears upon any payment of the Advance
        and
        on each applicable Interest Payment Date. However, interest accruing according
        to paragraph (b) shall be due and payable from time to time on demand of
        the
        Bank.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      (d) In
        the
        event that the Exporter (or the Paying Agent, as provided in paragraph (a)
        above) is unable for any reason, including without limitation, because of
        an
        action or inaction by any Governmental Authority of Brazil, to pay interest
        as
        provided hereunder, the Exporter shall make additional Covered Shipments
        to
        Importers at such times and in such amounts as permitted by the relevant
        Governmental Authority so that the aggregate Purchase Prices paid for such
        Covered Shipments by the Importers and deposited in the Collection Account
        are
        sufficient to pay to the Bank the amount of interest due hereunder as and
        when
        due. In such case, the Paying Agent, on behalf of the Exporter, shall make
        such
        payments of interest to the Bank using funds available in the Collection
        Account.

       

      Section
        5. Repayments;
        Prepayments 

      

      (a) On
        the
        last day of the Availability Period, the outstanding amount accrued for each
        and
        all of the Advances shall be due and payable in 9 (nine) semi-annual instalments
        (each, an “Instalment”) beginning on the First
        Instalment Date and ending on the Applicable Maturity Date, according to
        the
        following Schedule 2.

      

      Schedule
        2 

      

      
        	
                Instalment

              	 	
                Date

              	 	
                Outstanding Balance

              	 	
                Outstanding Days

              
	
                1

              	 	
                06/27/11

              	 	
                100.000.000,00

              	 	
                182

              
	
                2

              	 	
                12/26/11

              	 	
                88.888.888,89

              	 	
                183

              
	
                3

              	 	
                06/25/12

              	 	
                77.777.777,77

              	 	
                183

              
	
                4

              	 	
                12/26/12

              	 	
                66.666.666,66

              	 	
                183

              
	
                5

              	 	
                06/25/13

              	 	
                55.555.555,55

              	 	
                182

              
	
                6

              	 	
                12/26/13

              	 	
                44.444.444,44

              	 	
                183

              
	
                7

              	 	
                06/25/14

              	 	
                33.333.333,33

              	 	
                182

              
	
                8

              	 	
                12/26/14

              	 	
                22.222.222,22

              	 	
                183

              
	
                9

              	 	
                06/25/15

              	 	
                11.111.111,11

              	 	
                182

              
	
                Total

              	 	 	 	 	 	 

      

      

      Notwithstanding
        the foregoing, any monies received by the Bank shall be applied by the Bank
        in
        the following order: (a) Breakage Costs (if any); (b) interest due
        and
        unpaid;
        (c) to
        reduce the amount of principal due and
        unpaid on
        the
        next Instalment; and (d) to reduce the amount of principal due
        and
        unpaid
        on
        subsequent Instalments. 

      

      (b) The
        Exporter shall itself, or shall cause the Paying Agent (for the benefit and
        on
        behalf of the Exporter) make all payment due hereunder in US Dollars, in
        same
        day funds, on the dates such payments are due, without set-off, counterclaim
        or
        deduction, directly to the Bank at its internal account number 30444, via
        Federal Reserve Bank, ABA Number 026001847, International Trade and Lending
        Administration with the (Swift Id BBVAUS33), in favour of Banco Bilbao Vizcaya
        Argentaria, New York Branch under reference VCP.

      

      (c) Repayment
        of the Advance shall be made by payment of funds to the Collection Account.
        To
        that end, the Exporter
        or the
        Paying Agent
        agrees
        to (i) instruct each Importer to direct all payments of the Purchase Price
        of
        the Covered Shipments thereto in connection to the Export Agreements to the
        Collection Account, but
        only
        to the extent that such Purchase Price is sufficient to cover the unpaid
        Advance
        Amount, (ii)
        upon
        request, but in any case not before 10 (ten) days after the relevant repayment
        date, provide the Bank with originals or copies of all Shipping Documents
        related to such Covered Shipments.
        The
        Bank
        shall apply all funds held in the Collection Account towards repayment of
        the
        Exporter’s indebtedness hereunder.

       

      (d) The
        Exporter and the Paying Agent, on behalf of the Exporter, shall make available,
        when and as due, funds in the Collection Account sufficient to satisfy the
        payment obligations of the Exporter hereunder and under the Promissory
        Note
        on
        the due dates thereof, notwithstanding any other obligations which the Exporter
        or the Paying Agent may have to any other Person, repayment of which is intended
        to be
        made
        from
        funds in such Collection Account.

      

      (e) If
        the
        due date of any payment under this Prepayment Agreement or under the Promissory
        Note would fall on a day which is not a Banking Day, such date shall be extended
        to the next Banking Day (and interest shall be payable for the Advance Amount
        so
        extended for the period of such extension), unless such Banking Day falls
        in the
        next calendar month, in which case the payment shall be due on the immediately
        preceding Banking Day.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      (f)  If
        the
        Bank determines that a Material Adverse Effect has occurred, the Bank shall
        provide written notice thereof to the Exporter
        and, in
        case the Bank does not receive satisfactory remedy from the Exporter and/or
        the
        Paying Agent, the
        Bank
        shall provide to the Exporter a written demand for prepayment of the then
        outstanding principal amount of the Advance and within
        90
        (ninety)
        Banking Days of
        receipt
        of such
        demand
        by the Exporter,
        the Exporter shall prepay in full the then outstanding principal amount of
        the
        Advance, together with accrued interest thereon.

      

      (g) The
        Exporter may,
        on a
        Banking Day,
        prepay
        all or a portion of any Advance Amounts at any time or from time to time,
        which
        pre-payment shall in each case, be made together with accrued and unpaid
        interest on the principal amount, so
        prepaid and all other amounts then payable under this Prepayment Agreement
        (including the
        costs
        and expenses described in Section 13,
        solely in the event such prepayment is made on a day other than the final
        day of
        an Interest Period);
        provided that: (a) the Exporter shall give the Bank notice of each such
        pre-payment at least three (3) Banking Days prior to the date of such prepayment
        (and, upon the date specified in any such notice, the amount to be prepaid
        shall
        become due and payable hereunder), (b) each such notice of pre-payment shall
        specify the amount of the Advance Amount being prepaid and (c) each partial
        pre-payment shall be applied to the outstanding Advances in the inverse order
        of
        maturity. 

       

      Section
        6. Taxes

      

      (a) The
        Exporter will pay all amounts due to the Bank under this Prepayment Agreement
        and the Promissory Note free and clear of all deduction of any present or
        future
        taxes, levies, imposts, charges, withholdings, penalties, fines, additions
        to
        tax and interest, imposed or levied in Brazil or any other jurisdictions
        from
        which any payment hereunder or under the Promissory Note is remitted, or
        any
        political subdivision or taxing authority thereof (the “Taxes”), except taxes
        imposed on the Bank's income by the jurisdiction under which the Bank is
        incorporated.

      

      (b) In
        the
        event the Exporter is required to deduct or withhold any Taxes, the Exporter
        hereby agrees to pay the required deductions contemplated in Section 6(a)
        herein, including deductions applicable to the additional amounts payable
        thereunder, so that the Bank shall receive an amount equal to the sum it
        would
        have received had no such deductions been made.

      

      (c) Upon
        the
        Bank’s request, the Exporter shall, within thirty (30) days, furnish to the Bank
        a copy of the official receipts evidencing payment of Taxes made according
        to
        this Section 6, if any.

      

      (d) The
        Exporter shall indemnify the Bank for the full amount of Taxes or any penalties,
        interest and expenses arising therefrom paid by the Bank. This indemnification
        shall be made within 45 days from the date the Bank makes written request
        therefor, subject to Central Bank authorisation.

       

      Section
        7. Illegality

      

      (a) If,
        after
        the date of this Prepayment Agreement, the introduction of, or any change
        in,
        any applicable law, rule or regulation or in the interpretation or
        administration thereof by any Governmental Authority charged with the
        interpretation or administration thereof or compliance by the Bank with any
        request or directive (whether or not having the force of law) of any such
        authority shall make it unlawful or impossible for the Bank to make, maintain
        or
        fund the Advance, and after the Bank has made reasonable efforts to make,
        maintain or fund the Advance using other alternatives such as lending
        offices
        in
        other
        jurisdictions, the Bank forthwith shall so notify the Exporter in writing,
        whereupon the obligation of the Bank to make or maintain the Advance shall
        be
        terminated. Upon receipt of such notice, the Exporter shall prepay in full
        the
        then outstanding principal amount of the Advance, together with accrued interest
        thereon, on the later of either (a) the last day of Interest Period applicable
        thereto or
        (b)
        within sixty-six (66)
        Banking
        Days.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      (b) If
        Brazil
        or any competent authority thereof shall declare a moratorium on the payment
        of
        or default on, all or a substantial part of the Indebtedness of Brazil or
        any
        governmental agency or authority thereof or persons or corporations therein,
        the
        effect of which does or will prevent or impede any payment in respect of
        the
        Advance and the validity of “pre-pagamento”
        agreements in Brazil, then the Exporter forthwith shall so notify the Bank
        in
        writing within ten (10) Banking Days. Whereupon, unless within 20 (twenty)
        Banking Days the Bank certifies in writing that it is satisfied that the
        Exporter and/or the Paying Agent, shall be able to meet their respective
        obligations hereunder, the Exporter shall prepay
        in
        full the then outstanding principal amount of the Advance, together with
        accrued
        interest thereon, on the later of either (a) the last day of Interest Period
        applicable thereto or (b) within ninety
        (90)
        Banking
        Days. 

      

      (c) If,
        after
        the date of this Prepayment Agreement, the introduction of, or any change
        in the
        law in the Exporter’s country shall occur which renders this Prepayment
        Agreement invalid, illegal or unenforceable, the Exporter shall prepay in
        full
        the then outstanding principal amount of the Advance, together with accrued
        interest thereon, on the later of either (a) the last day of Interest Period
        applicable thereto or
        (b)
        within sixty-six
        (66)
        Banking
        Days

      

      (d) Prepayment
        pursuant to this Section 7 shall be made without premium.

       

      Section
        8. Conditions
        Precedent

      

      (a) The
        obligation of the Bank to make the Advance is subject to the condition precedent
        that the Bank shall have received the following documents and instruments,
        duly
        executed, created or issued, as the case may be:

      

      
        	 	
                (i)

              	
                This
                  Prepayment Agreement and the Promissory
                  Note;

              

      

      

      
        	 	
                (ii)

              	
                A
                  copy of the Financial Transaction Registration (“Registro
                  de Operações Financeiras –
                  ROF”)
                  issued by Central Bank of Brazil;

              

      

      

      
        	 	
                (iii)

              	
                A
                  Disbursement Request;

              

      

      

      
        	 	
                (iv)

              	
                The
                  Exporter's balance sheet and statement of income, stockholders'
                  equity and
                  cash flows as of and for the fiscal year ended 2006, certified
                  by its
                  independent public accountants;

              

      

      

      
        	 	
                (v)

              	
                Legal
                  opinion from Brazilian counsel to the Exporter addressed to the
                  Bank in
                  form and substance acceptable to the Bank and regarding matters
                  requested
                  by the Bank;

              

      

      

      
        	 	
                (vi)

              	
                Copies
                  of (A) the by-laws of the Exporter, the Paying Agent and Articles
                  of
                  Incorporation, if applicable, and (B) relevant corporate authorisations
                  of
                  the Exporter and the Paying Agent necessary to authorise the execution,
                  delivery and performance of the Advance Documents;
                  and

              

      

      

      
        	 	
                (vii)

              	
                A
                  certificate from a duly authorised Responsible Officer of each
                  of the
                  Exporter and the Paying Agent as to the incumbency and signatures
                  of its
                  duly authorised officers that are authorised to execute and deliver
                  the
                  Advance Documents in form and substance acceptable to the
                  Bank;

              

      

      

      (b) The
        obligation of the Bank to make the Advance is also subject to the satisfaction
        of the following conditions precedent, and the disbursement by the Bank of
        the
        Advance shall constitute a representation by the Exporter that items (i),
        (ii)
        and (iii) below shall have been satisfied on and as of the Disbursement
        Date:

      

      
        	 	
                (i)

              	
                the
                  representations and warranties made by the Exporter and the Paying
                  Agent
                  herein shall be true and correct on and as of the Disbursement
                  Date;

              

      

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (ii)

              	
                both
                  immediately prior to the making of the Advance and after giving
                  effect
                  thereto and to the intended use of the proceeds thereof, no Event
                  of
                  Default shall have occurred and be continuing;
                  and

              

      

      

      
        	 	
                (iii)

              	
                there
                  has been no material adverse change,
                  since
                  the last audited financial statements of the Exporter and the Paying
                  Agent
                  received by the Bank, in the economic
                  and/or financial condition of
                  the Exporter.

              

      

      

      Section
        9. Representations
        and Warranties

      

      (a) Each
        of
        the
        Exporter
        and the Paying Agent hereby represent and warrant that: 

      

      
        	 	
                (i)

              	
                It
                  is duly organised and validly existing under the laws of the jurisdiction
                  of its organisation and has full power, authority and legal right
                  to
                  borrow the Advance and to execute, deliver and perform this Prepayment
                  Agreement and any
                  Promissory Note
                  in
                  the form set forth in Exhibit A.
                  

              

      

      

      
        	 	
                (ii)

              	
                The
                  Advance contemplated herein and the execution, delivery and performance
                  of
                  this Prepayment Agreement are within its powers, and have been
                  duly
                  authorised by all necessary actions, and do not violate any provision
                  of
                  applicable law, regulation or order of any court or regulatory
                  body.
                  Furthermore, the Advance contemplated under this Prepayment Agreement
                  will
                  not result in the breach of, constitute a default, or require any
                  consent
                  under any agreement, instrument or document to which it is a party
                  or by
                  which it or any of its property may be bound or affected.
                  

              

      

      

      
        	 	
                (iii)

              	
                This
                  Prepayment Agreement constitutes its legal, valid and binding obligation,
                  enforceable against it in accordance with its
                  terms.

              

      

      

      
        	 	
                (iv)

              	
                There
                  are no actions, suits or proceedings pending or, to its knowledge,
                  threatened against or affecting it before any court, governmental
                  agency
                  or arbitrator, which may, in any one case or in the aggregate,
                  have a
                  Material Adverse Effect and which as
                  of
                  the Disbursement
                  Date
                  have
                  not been remedied in full or otherwise are not being remedied in
                  a manner satisfactory
                  to the Bank.

              

      

      

      
        	 	
                (v)

              	
                It
                  has good title to, or valid leasehold interests in, all its real
                  and
                  personal property material to its business, except for defects
                  in title
                  that do not interfere with its ability to conduct its business
                  as
                  currently conducted or to utilise such property for its intended
                  purposes.
                  It owns or is licensed or otherwise has the right to use all of
                  the
                  patents, contractual franchises, licenses, authorisations and other
                  rights
                  that are reasonably necessary for the operation of its business,
                  without
                  conflict with the rights of any other Person.

              

      

      

      (b) The
        Exporter hereby represents and warrants further that: 

      

      
        	 	
                (i)

              	
                It
                  has furnished to the Bank its balance sheet and statement of income,
                  stockholders’ equity and cash flows as of and for the fiscal year ended
                  2006 a certified by its independent public accountants. Such financial
                  statements are complete and correct, and fairly present the Exporter’s
                  financial condition and the results of its operations and cash
                  flows as of
                  such dates and for such periods in accordance with Brazilian GAAP.
                  Since
                  30 December 2006, there has been no development or event that has
                  had or
                  could reasonably be expected to have a Material Adverse
                  Effect.

              

      

      

      
        	 	
                (ii)

              	
                Other
                  than the approval of the Central Bank, which will
                  be
                  obtained
                  as
                  per Section 8(a)(ii),
                  no authorisation or approval or other action by, and no notice
                  to or
                  filing with, any Governmental Authority or regulatory body is required
                  for
                  the due execution, delivery and performance of this Prepayment
                  Agreement
                  (except that the Exporter shall have to enter into an exchange
                  contract
                  with a bank authorised to operate in the exchange market in Brazil
                  whenever it shall pay interest hereunder) or any of the other Advance
                  Documents.

              

      

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      
        	 	
                (iii)

              	
                Its
                  obligations evidenced by this Prepayment Agreement and the Advance
                  Documents to which it is a party are its direct and unconditional
                  obligations, and rank
                  in
                  priority of payment and in all other respects at least pari
                  passu
                  with all its other unsecured and unsubordinated indebtedness, subject
                  to
                  statutorily preferred exceptions.

              

      

      

      
        	 	
                (iv)

              	
                It
                  is not in default under or with respect to any agreement, instrument
                  or
                  undertaking to which it is a party or by which it or any of its
                  property
                  or assets are bound which default would have or cause a Material
                  Adverse
                  Effect. 

              

      

      

      
        	 	
                (v)

              	
                Neither
                  it nor any of its property or assets has any immunity (sovereign
                  or
                  otherwise) from jurisdiction of any court or from any legal process
                  (whether through service or notice, attachment prior to judgement,
                  attachment in aid of execution, execution or otherwise) under the
                  laws of
                  the jurisdiction of its organisation, except for public
                  concessions.

              

      

       

      Section
        10. Affirmative
        Covenants 

      

      The
        Exporter covenants and agrees with the Bank that, so long as any part of
        the
        Advance is outstanding it
        will:

      

      (a) Furnish
        to the Bank (i) upon demand, but not earlier than 120 days after the end
        of each
        fiscal year, its consolidated and, if available, consolidated balance sheet,
        as
        of the end of its fiscal year, and the related statement of earnings,
        shareholders’ equity and changes in financial condition prepared in accordance
        with Brazilian GAAP, in each case setting forth in comparative form the figures
        for the previous fiscal year, and certified by independent public accountants
        of
        recognised international standing; (ii) promptly after it knows that any
        Event
        of Default has occurred, however not later than 20 days after such
        occurrence, a certificate from a duly authorised officer notifying the Bank
        as
        to the occurrence of such Event of Default, describing the same in reasonable
        detail and describing the actions that it proposes to take with respect thereto;
        (iii) immediately after the commencement thereof, notice in writing of all
        actions, suits and proceedings before any court or governmental agency or
        instrumentality of any jurisdiction which, if determined adversely to it,
        will
        have a Material Adverse Effect; and (iv) such other publicly available
        information with respect to its business, properties or its condition or
        operations, financial or otherwise, as the Bank may from time to time reasonably
        request.

      

      (b) Keep
        proper books of record and account in which full, true and correct entries
        in
        conformity with Brazilian GAAP and the requirements of applicable law shall
        be
        made of all dealings and transactions in relation to its business.

      

      (c) Comply
        with the requirements of all applicable laws, rules, regulations and orders
        of
        Governmental Authorities; and take all necessary actions in order to obtain
        and
        maintain in full force and effect all such governmental authorisations,
        approvals and consents as may be required for it to comply with its obligations
        under this Prepayment Agreement and the other Advance Documents.

      

      (d) Continue
        to
engage
        in
        its
        existing Business
        and
        preserve, renew and keep in full force and effect its corporate existence
        and
        take all reasonable action to maintain all rights, privileges and franchises
        necessary or desirable in the normal conduct of its business, and comply
        with
        all contractual obligations binding on it and its property.

      

      (e) Take
        any
        and all actions necessary so that its obligations under the Advance Documents
        to
        which it is a party shall at all times rank at least pari
        passu
        in
        priority of payment and in all other respects with all present and future
        unsecured and unsubordinated indebtedness, subject to statutorily preferred
        exceptions.

       

      Section
        11. Negative
        Covenants

      

      The
        Exporter covenants and agrees with the Bank that, so long as any part of
        the
        Advance is outstanding it
        will
        not:

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      (a) enter
        into any transaction of merger, amalgamation or consolidation, or liquidate,
        wind up or dissolve itself (or suffer any liquidation or dissolution), or
        sell,
        transfer, lease
        or
        otherwise dispose of
        (in one
        transaction or in
        a
        series
        of transactions) all
        or
        substantially all of its assets; provided that:

       

      
        	
              	(i)	
                it
                  may merge or consolidate with or into, or sell or transfer all
                  or
                  substantially all of its assets to, any other Person that is organised
                  in
                  an OECD Country (or, if not an OECD Country, its current jurisdiction
                  of
                  organisation) if, immediately after giving effect
                  thereto:

              

      

      
        	
              	(A)	
                (1)
                  with respect to any merger or consolidation, it is the surviving
                  Person
                  or, if not, the surviving Person has validly assumed its obligations
                  under
                  the Advance Documents to which it is a party, or (2) with respect
                  to a
                  sale, transfer, lease or other disposition of all or substantially
                  all of
                  its assets, the Person to whom the assets have been sold, transferred,
                  leased or otherwise disposed has validly assumed all obligations
                  under the
                  Advance Documents to which the transferor is a party (which assumption
                  may
                  constitute a novation of such obligations under applicable
                  law);

              

      

      
        	
              	(B)	
                no
                  Event of Default or event that (with notice, lapse of time or both)
                  would
                  become an Event of Default (including under Section 12(m) or
                  resulting from a breach of Section 10(d)) exists or would exist
                  immediately after such merger, consolidation, sale, transfer, lease
                  or
                  other disposition,

              

      

      
        	
              	(C)	
                the
                  Bank shall have received any other opinions, evidence of security
                  interest
                  filings and other documents or evidence as it may reasonably request
                  in
                  connection therewith, 

              

      

      
        	
              	(D)	
                to
                  the extent reasonably requested by the Bank, the Advance Documents
                  shall have been amended (or amended and restated) to reflect such
                  merger,
                  consolidation, sale, transfer, lease or other disposition,
                  and

              

      

      
        	
              	(E)	
                notwithstanding
                  the foregoing clauses (A)-(D), the Net Debt to EBITDA Ratio of
                  any
                  Surviving Entity shall not exceed 3.00 as of the date of consummation
                  of
                  such merger, consolidation, sale, transfer, lease or other
                  disposition.

              

      

      
        	
              	(ii)	
                it
                  may sell, lease, transfer or otherwise dispose of obsolete or worn-out
                  property or equipment no longer used or useful in its business
                  and any
                  inventory or other assets sold or disposed of in the ordinary course
                  of
                  its business, and

              

      

      
        	
              	(iii)	
                it
                  may sell or otherwise transfer Goods and other assets to the Exporter
                  in
                  the manner contemplated in the Advance
                  Documents.

              

      

      

      (b) Enter
        into any transaction or series of related transactions with any Affiliate
        thereof (other than its wholly-owned Subsidiaries), other than in the ordinary
        course of their respective businesses and on terms and conditions substantially
        as favourable to it as would reasonably be obtained at that time in a comparable
        arm's-length
        transaction with a Person other than such Affiliate. Notwithstanding
        the foregoing, this provision shall not apply to: (a) any loan or similar
        financial transaction (or series of related financial transactions) entered
        into
        for the sole purpose of performing cash management or other financial management
        functions of an Affiliate or Subsidiary as the case may be and/or (b) tax
        allocation agreements entered into from time to time between an Affiliate
        or a
        Subsidiary as the case may be provided always none of the foregoing shall
        materially
        impair
        the ability of the Exporter to comply with their respective obligations under
        this Prepayment Agreement.

       

      Section
        12. Events
        of Default If
        one,
        or more, of the following events (each an “Event of Default”) shall occur and be
        continuing:

      

      (a) The
        Exporter shall default in the payment of any portion of the Advance or any
        interest on the Advance or any other amount payable by the Exporter hereunder
        and such default is not remedied within 3 (three) Banking Days after notice
        thereof to the Exporter by the Bank; 

      

      (b) Any
        representation, warranty or certification made herein (or any modification
        or
        supplement hereto) by the Exporter shall prove to have been false or misleading
        in any material respect as of the time made or furnished, and is not cured
        within 22
        (twenty-two)
        Banking
        Days upon notice of the Bank; 

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      (c) The
        Exporter, the Paying Agent or the Guarantor shall default in the performance
        of
        any other obligation under this Prepayment Agreement and such default continue
        unremedied for a period of 22
        (twenty-two)
        Banking
        Days after notice thereof to the Exporter by the Bank provided always that
        the
        Guarantee shall always be legally binding and effective on the Guarantor;
        

      

      (d) The
        Exporter shall admit in writing its inability to be generally able to pay
        its
        debts;

      

      (e) The
        Paying Agent shall admit in writing its inability to be generally able to
        pay
        its debts and the Exporter shall not have designated a substitute or replacement
        thereof reasonably acceptable to the Bank within 22
        (twenty-two)
        Banking
        Days
        after
        notice thereof to the Exporter by the Bank;

      

      (f) The
        Exporter shall (i) apply for or consent to the appointment of, or the taking
        of
        possession by, a receiver, custodian, trustee, examiner or liquidator of
        itself
        or of all,
        or
        substantially all,
        its
        respective property
        or assets, (ii) make a general assignment for the benefit of creditors, (iii)
        file a petition seeking to take advantage of any law relating to bankruptcy,
        insolvency, liquidation, dissolution, arrangement or winding-up, or composition
        or readjustment of its respective debts, or (iv) take any corporate action
        for
        purpose of effecting any of the foregoing; 

      

      (g) The
        Paying Agent shall (i) apply for or consent to the appointment of, or the
        taking
        of possession by, a receiver, custodian, trustee, examiner or liquidator
        of
        itself or of all or substantially
        all its respective property
        or assets, (ii) make a general assignment for the benefit of creditors, (iii)
        file a petition seeking to take advantage of any law relating to bankruptcy,
        insolvency, liquidation, dissolution, arrangement or winding-up, or composition
        or readjustment of its respective debts, or (iv) take any corporate action
        for
        purpose of effecting any of the foregoing and the Exporter shall not have
        designated a substitute or replacement thereof reasonably acceptable to the
        Bank
        within 22
        (twenty-two)
        Banking
        Days
        after
        notice thereof to the Exporter by the Bank;

       

      (h) A
        proceeding or case shall be commenced, without the application or consent
        of the
        Exporter,
        in any
        court of competent jurisdiction, seeking (i) its liquidation, dissolution,
        arrangement or winding-up, or the composition or readjustment of its respective
        debts, (ii) the appointment of a receiver, custodian, trustee, examiner,
        liquidator or the like of the Exporter or the Paying Agent of all or
        substantially all of its respective property or assets, or (iii) similar
        relief
        in respect of the Exporter or the Paying Agent under any law relating to
        bankruptcy, insolvency, winding-up, or composition or adjustment of debts,
        and
        such proceeding or case shall continue undismissed, or any order, judgement
        or
        decree approving or ordering any of the foregoing shall be entered and continue
        unstayed and in effect, for a period of 44
        (forty-four)
        Banking
        Days;

      

      (i) Any
        default or event of default shall occur or be continuing under any agreement,
        instrument or other document of the Exporter evidencing External Indebtedness
        (as defined below) in excess of Fifty Million Dollars (or its equivalent
        in
        other currencies) and such default or event of default causes the acceleration
        of such External Indebtedness
        and
        shall not have been waived. For purposes of this paragraph (h), “External
        Indebtedness” shall mean indebtedness for borrowed money which is payable or may
        be paid (i) in a currency other than the lawful currency of Brazil an (ii)
        to a
        Person resident or having its principal place of business outside of
        Brazil;

      

      (j) Any
        judgement or order from which no further appeal is permissible under applicable
        law for the payment of money aggregating in excess of Fifty Million Dollars
        (or
        its equivalent in another currency) shall be rendered against the Exporter
        and
        such judgement or order shall continue unsatisfied and in effect for a period
        of
        30 (thirty) calendar days; 

      

      (k) A
        Change
        of Control shall occur;

      then,
        in
        such event, the Bank may by notice to the Exporter, declare
        the Advance Amount then outstanding, the accrued interest on the Advance
        and all
        other amounts payable by the Exporter hereunder to be, whereupon the same
        shall
        become, forthwith due and payable, without presentment, demand, protest or
        other
        formalities of any kind, all of which are hereby expressly waived by the
        Exporter.
        Notwithstanding the foregoing, any event referred to in clause (a) above
        existing for a period of up to 5
        (five)
        Banking Days after the applicable grace period will not constitute an Event
        of
        Default if such delay or failure could not have been prevented by the exercise
        of reasonable diligence by the Exporter and such delay or failure was caused
        by
        an act of God, riot, an act of war, terrorism, epidemic, flood, weather,
        landslide, fire, earthquake, electrical outage or similar causes.

      

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      

      Section
        13. Costs
        and Expenses 

      

      (a) If
        the
        Exporter makes any payment of principal of the Advance (excluding as a result
        of
        the provision set forth in Section 7 hereof) on any day, other than the last
        day
        of the Interest Period applicable thereto, or fails to borrow the Advance
        on the
        date specified therefor in the notice to the Bank pursuant to Section 3 hereof,
        the Exporter shall reimburse the Bank, on demand, for any financial loss,
        excluding loss of anticipated profits, incurred by it as a result of the
        timing
        of such payment or such failure, or as a result of liquidating or employing
        deposits from third parties, provided that the Bank shall have delivered
        to the
        Exporter a certificate as to the amount of such loss, which certificate shall be
        conclusive in the absence of manifest error.

      

      (b) The
        Exporter agrees to reimburse the Bank on demand for all reasonable and
        documented costs and expenses (including without limitation legal fees and
        registration costs) incurred by the Bank in connection with the preparation,
        execution and enforcement of the Advance Documents, subject
        to a
        maximum amount of US$10,000.00 (ten thousand US Dollars), provided that the
        Exporter shall not be obliged to reimburse such costs and expenses if the
        Bank
        decides, in its sole and arbitrary discretion, other than due to the absence
        of
        satisfaction of one or more of the conditions precedent included in Section
        8,
        not to make the disbursement of the Advance.

       

      Section
        14. Governing
        Law and Jurisdiction

      

      This
        Prepayment Agreement shall be governed by and construed in accordance with
        the
        Law of the State of New York.

      

      (a) The
        Exporter and the Paying Agent irrevocably agree for the exclusive benefit
        of the
        Bank that the courts of the State of New York shall have jurisdiction to
        hear
        and determine any suit action or proceeding, and to settle any disputes,
        which
        may arise out of in connection with this Prepayment Agreement and for such
        purposes you hereby irrevocably submit to the jurisdiction of such
        courts.

      

      (b) Nothing
        contained in this Section shall limit the right of us, the Bank, to take
        proceedings against the Exporter in any other court of competent jurisdiction,
        nor shall the taking of any such proceedings in one or more jurisdictions
        preclude the taking of proceedings in any other jurisdiction, whether
        concurrently or not (unless precluded by applicable law).

      

      (c) The
        Exporter and the Paying Agent waive
        any
        objection which it may have now or in the future to the courts of the State
        of
        New York being nominated for the purpose of Section 14(b)
        above
        and agree not to claim that any such court is not a convenient or appropriate
        forum.

       

      (d)
         The
        Exporter hereby authorises and appoints Andrew
        W.
        Sheldrick, 300 Park Avenue, Suite 1700, New York, NY 10022
        (or
        such
        other person being a firm of solicitors or authorised institution in New
        York
        USA as it may substitute by notice to the Bank) to accept service of all
        legal
        process arising out of or connected with this Prepayment Agreement. Service
        on
        such person(s) (or substitute) shall be deemed to be service on the Exporter
        whether or not process is forwarded to or received by it. Except upon such
        a
        substitution, the Exporter undertakes not to revoke any such authority or
        appointment, at all times to maintain an agent for service of process in
        New
        York and, if any such agent ceases for any reason to be an agent for this
        purpose, forthwith to appoint another agent and advise the Bank accordingly.
        Failing such appointment, the Bank shall be entitled by notice to the Exporter
        to appoint such a replacement agent to act on behalf of the Exporter.

       

      Section
        15. Successors
        and Participations

      

      (a) This
        Prepayment Agreement and the Promissory Note shall be binding on the Exporter
        and the Paying Agent and its respective successors and assigns and shall
        inure
        to the benefit of the Bank and its successors and assigns.

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      (b) Except
        as
        provided herein, neither the Exporter, nor the Paying Agent may assign or
        otherwise transfer all or any part of its respective rights or obligations
        under
        this Prepayment Agreement and the Promissory Note without the prior written
        consent of the Bank.

       

      (c) The
        Bank
        may: (i) assign in whole and in part its rights and obligations under this
        Prepayment Agreement and the Promissory Note, provided, however, that such
        assignment (A) does not increase the overall cost hereunder to the Exporter,
        in
        any way whatsoever, and (B) is consented to by the Exporter in writing (such
        consent not to be unreasonably withheld);
        provided, however that no such consent is required in the event (x) the Bank
        assigns its rights and obligations to another branch of the Bank or any entity
        directly or indirectly controlled by, controlling or under common control
        with,
        the Bank, or (y) at any time that an Event of Default of payment
        as
        described in Section
        12 (a)
        has occurred and is continuing; (ii) sell participations in, all or any part
        of
        this Prepayment Agreement and the Promissory Notes to another bank or other
        entity without the prior written consent of the Exporter, provided that the
        Bank
        shall advise the Exporter of each such sale of participations within five
        Banking Days from such sale.

      

      For
        the
        purposes hereof, (a) “assignment” shall mean any agreement entered into by the
        buyer (the assignee) of specified rights and obligations of the seller (the
        assignor) in respect of a loan, and whereby the buyer will substitute the
        seller
        as Bank of record and (b) a “participation” shall mean any agreement entered
        into by the Bank whereby the Bank sells to any third party (a “Participant”) its
        interest in all or any part of this Prepayment Agreement and the Promissory
        Note; provided, however, that in any such case the contractual relation between
        the parties hereto shall not be affected, and the Participant itself shall
        have
        no right to directly enforce this Prepayment Agreement and the Promissory
        Note
        against the Exporter. 

       

      Section
        16. Indemnification

      

      The
        Exporter and the Paying Agent agree to indemnify and hold harmless the Bank
        and
        its officers, directors, employees, agents and representatives (together,
        the
“Indemnified Parties”) from and against any and all liabilities, losses,
        damages, penalties, actions, judgements, suits, costs, expenses (including
        the
        reasonable documented fees and expenses of external counsels) or disbursements
        of any kind whatsoever (together, “Liabilities”) which may at any time
        (including following the repayment of the Advance) be imposed upon, incurred
        by
        or asserted against the Indemnified Parties as a result of, relating to,
        or
        arising out of any of the Advance Documents or any document contemplated
        by or
        referred to herein or the transactions contemplated hereby or any action
        taken
        or omitted by the Indemnified Parties under or in connection with any of
        the
        foregoing
        and that
        are duly
        evidenced by the Bank,
        provided, however, that the Liabilities do not result directly from the gross
        negligence or wilful misconduct of the relevant Indemnified Party.

      

      Section
        17. Miscellaneous

      

      (a) Any
        amendment or waiver of any provision of this Prepayment Agreement, or consent
        to
        any departure by the parties herefrom must be in writing and signed by the
        Exporter and the Paying Agent and the Bank. Such waiver or consent shall
        be
        effective only in the specific instance for which it is stipulated. Any failure
        or delay by the parties in exercising their rights hereunder shall not be
        deemed
        a waiver and shall not preclude the parties from the exercise of their
        rights.

      

      (b) All
        notices, designations, consents, offers, acceptances, or any other
        communications provided pursuant to this Prepayment Agreement shall be given
        in
        writing and sent, to the Bank, the Paying Agent and the Exporter at the
        following addresses or to such other addresses as may be designated in writing
        from time to time by the parties:

      

      BANCO
        BILBAO VIZCAYA ARGENTARIA, S.A.,
        

      Attn: Mr.
        Mauricio Paz 

      Address:
        1345 Av.
        of the Americas, 45th
        Floor

      New
        York,
        NY 10105, USA

      Tel.:
        +1-212-728-1639

      Fax:
        +1-212-333-2904

      

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

      

      EXPORTER

      Attn: Mr.
        Fernando
        Volpe Estato 

      Address:
        1357
        Alameda Santos

      São
        Paulo, Brazil

      Tel.:
        +55-11-2138-4161

      Fax:
        +55-11-2138-4068

      

      PAYING
        AGENT

      Attn: Mr.
        Fernando
        Volpe Estato 

      Address: Baarerstrasse
        8, 6300 

      Zug
        Switzerland 

      Tel.:
        +55-11-2138-4165

      Fax:
        +55-11-2138-4068

      

      All
        such
        notices and communications shall be deemed given: (i) upon
        delivery if delivered by hand to the addresses provided in this Section 17(b);
        (ii) upon receipt if delivered by facsimile transmission to the number
        provided herein; or (iii) five
        (5)
        Banking Days after the date of deposit in the
        courier
        agency if delivered by reputable
        courier, return receipt requested if available, postage prepaid.

      

      (c) This
        Prepayment Agreement sets forth the entire understanding of the parties with
        respect to the subject matter hereof and supersedes all prior agreements
        and
        understandings between the parties with respect thereto.

      

      (d) The
        various provisions of this Prepayment Agreement are severable from each other.
        In the event that any provision in this Prepayment Agreement shall be held
        invalid or unenforceable by a court of competent jurisdiction, the remainder
        of
        this Prepayment Agreement shall be fully effective, operative and
        enforceable.

      

      (e) No
        party
        hereto shall be liable for any delay in performance of any obligation hereunder
        by reason of any act or circumstance beyond the control of such Party due
        to the
        occurrence of a force majeure.

      

      (f) The
        obligations of the Exporter and Paying Agent under Sections 6, 14, and 16
        hereof
        shall survive the repayment in full of the Advance.

      

      (g) This
        Prepayment Agreement may be executed in any number of counterparts, and this
        has
        the same effect as if the signatures on the counterparts were on a single
        copy
        of this Agreement.

      

      Section
        18. Assignment
        of Export Agreement 

      

      In
        consideration of the Bank entering in to this Prepayment Agreement:

      

      (a) The
        Exporter hereby assigns,
        as of
        each date that is 15 (fifteen) days prior to each date on which an Instalment
        is
        due and payable pursuant to Section 5(a),
        with
        full title guarantee and as a continuing security for the payment of its
        obligations hereunder
        (the
“Secured Obligation”), an absolute security interest (“Security Interest”) in
a
        portion
        of the
        Exporter’s rights, interest and remedies with respect to any and all of the
        Undertakings (including, but not limited to all of the Exporter’s rights to
        receive payment from Importers, including (but not limited to) all of the
        Exporter’s future acquired rights to payment under the Export Agreements whether
        in the form of a letter of credit or right to title to the Goods or
        otherwise)
        which
        portion shall have a value not less than the value of such
        Instalment.
        

      

      (b) The
        Exporter will fully perform all of its material obligations under the
        Export Agreements,
        and
        will enforce all of its rights and remedies thereunder as it deems appropriate
        in its reasonable business judgement; provided, however, that the Exporter
        will
        not take any action or fail to take any action which would result in a waiver
        or
        other loss of any material rights or remedy of the Exporter thereunder.

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      (c) The
        Exporter will not, without Bank’s prior written consent (which consent shall not
        be unreasonable withheld), modify,
        amend,
        supplement, compromise, satisfy, release or discharge the Export Agreements,
        any
        person liable directly or indirectly with respect thereto, or any agreement
        relating to the Export Agreements. 

      

      (d) The
        Exporter will at all times remain liable to observe and perform all of its
        duties and obligations under the Export Agreements, and Bank’s exercise of any
        of its rights with respect to this Prepayment
        Agreement
        will not release the Exporter from any of such duties or obligations. The
        Bank
        is not obligated to (I) perform or fulfil any of the Exporter’s duties or
        obligations under the Export Agreements (II) make any payment under the Export
        Agreements, (III) make any inquiry as to the sufficiency of any payment of
        property received by it under the Export Agreements or the sufficiency of
        performance by any party under the Export Agreements, or (IV) present or
        file
        any claim, or take any action to collect or enforce any performance or payment
        of any amounts, or delivery of any property.

      

      (e) Effective
        from and after the occurrence of any Event of Default and during the
        continuation thereof, the Exporter hereby irrevocably authorises and empowers
        Bank, in Bank’s sole discretion, to assert, either directly or on behalf of the
        Exporter any claims the Exporter may then or thereafter have against Importer
        with respect to the Undertakings
        that are
        subject to this Prepayment Agreement,
        in such
        a manner, as Bank may deem proper, to receive and collect any and all damages,
        awards and other monies resulting therefrom and to apply the proceeds therefrom
        on account of the Secured Obligations, whether or not then
        due, in
        accordance with the terms of the Prepayment Agreement. The Exporter hereby
        authorises Bank to collect all amounts due to the Exporter under and by virtue
        of the Export Agreements including any future acquired rights to payment
        thereunder. 

      

      (f) Power-of-Attorney:
        To facilitate the foregoing, the Exporter hereby irrevocably authorises and
        empowers the Bank as its attorney at any time after the occurrence and during
        the continuance of an Event of Default to (a) either directly or on behalf
        of
        the Exporter, assert any claims and demands and enforce any rights and remedies
        as the Exporter may have, from time to time, with respect to the
        Undertakings
        that
shall
        have been assigned to
        the
Bank
        pursuant to Section 19(a),
        as Bank
        may deem proper and (b) receive and collect any and all proceeds, awards
        or
        amounts due to the Exporter in respect of any indemnification claims under
        the
        Secured Obligations
        in such manner
        as the
        Exporter’s true and lawful attorney to assert, at any time after the occurrence
        and during the continuance of an Event of Default, any claims and demands
        or
        enforce any rights and remedies and collect such proceeds, awards and amounts
        and to apply such monies to the Secured Obligations in such manner as Bank
        shall
        elect. This power of attorney is coupled with an interest and is irrevocable
        by
        the Exporter.

      

      (g) This
        Prepayment Agreement creates a continuing security interest
        in the
        Undertakings and all representations, warranties, and agreements
        in each case, as specified in Section 19(a),
        and
        such
        security interest shall
        terminate only upon the full and irrevocable payment of all amounts owing
        to the
        Bank under this
        Prepayment Agreement;
        provided
        that
        the Bank
        has no other commitment to extend credit or make advance to or for the account
        of the Exporter.
        At
        such
        time, Bank will, at the request of the Exporter, reassign and redeliver to
        the
        Exporter all of its rights hereunder which have not been sold,
        which
        reassignment and redelivery will be without warranty by or recourse to Bank,
        except as to the absence of any prior assignments by Bank of its interest
        in the
        Undertakings, and will be at the expense of the Exporter.

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

      

      IN
        WITNESS WHEREOF,
        each of
        the Exporter, the Paying Agent and the Bank has executed this Prepayment
        Agreement in two (2) originals in
        English as of the date first above written herein. 

       

      BANCO
        BILBAO VIZCAYA ARGENTARIA, NEW YORK BRANCH 

       

      
        	
                By:
                  /s/ Maurício Paz

              	
              	 	
                By:
                  /s/ Nurys Maleki

              	
              
	 	 	 
	
                Name:
                  Maurício Paz 

              	 	
                Name:
                  Nurys Maleki

              
	 	 	 
	
                Title:
                  Vice-President, Global Trade Finance 

              	 	
                Title:
                  Vice-President, Global Trade
                  Finance

              

      

       

      VOTORANTIM
        CELULOSE E PAPEL, as Borrower and Exporter

       

      
        	
                By:
                  /s/ Valdir Roque

              	
              	 	
                By:
                  /s/ Francisco Fernandes Campos Valério

              	
              
	 	 	 
	
                Name:
                  Valdir Roque 

              	 	
                Name:
                  Francisco Fernandes Campos Valério

              
	 	 	 
	
                Title:
                  Officer

              	 	
                Title:
                  Officer

              

      

      

      VCP
        OVERSEAS HOLDING LTD., Budapeste, Zug Branch., as Paying
        Agent

       

      
        	
                By:
                  /s/ Guilherme Moralles

              	
              
	 
	
                Name:
                  Guilherme Moralles

              
	 
	
                Title:
                  Branch Manager

              

      

      

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

      Exhibit
        A

      

      PROMISSORY
        NOTE

      

      US$
        50,000,000.00 

      Place:

      Date:

      

      FOR
        VALUE
        RECEIVED, VOTORANTIM
        CELULOSE E PAPEL S.A. – VCP,
        a
        company duly organised and existing under the laws of the Federative Republic
        of
        Brazil, with its head office located at 1357
        Alameda Santos, São Paulo,
        Brazil,
        (the “Borrower”) hereby promises to pay to BANCO BILBAO VIZCAYA ARGENTARIA, NEW
        YORK BRANCH (the “Bank”), the principal sum of US$ 50,000,000.00 (FIFTY MILLION
        UNITED STATES DOLLARS) (the “Advance”), on June 25th,
        2015
        (the “Final Maturity Date”) or on such earlier date as may be required by the
        Bank in accordance with the terms of the Export Prepayment Agreement (as
        defined
        below). The Exporter also promises to pay interest on the unpaid principal
        amount hereof from the date hereof until such principal amount is paid in
        full,
        at such interest rates, and payable at such times, as are specified in the
        Export Prepayment Agreement. 

      

      Both
        principal and interest hereunder are payable in lawful money of the United
        States of America, in same day funds, to the Bank, Banco Bilbao Vizcaya
        Argentaria, S.A., International Trade and Lending Administration at its internal
        account number 30444 via Federal Reserve Bank ABA number 026001847 free
        and
        clear of all deductions of any present or future taxes, levies, imposts,
        charges, withholdings, penalties, fines, additions to tax and interest, imposed
        or levied in Brazil or any other jurisdictions from which any payment hereunder
        is remitted, or any political subdivision or taxing authority thereof, except
        taxes imposed on the Bank's income by the jurisdiction under which the Bank
        is
        incorporated.

      

      The
        Exporter hereby waives, to the fullest extent permitted by applicable law,
        presentment, demand, protest and all notices of any kind in connection with
        this
        Promissory Note. The failure of the Bank to exercise any of its rights hereunder
        in any particular instance shall not constitute a waiver thereof in that
        instance or any subsequent instance.

      

      This
        promissory note is the Promissory Note referred to in that Export Prepayment
        Agreement, dated as of June 22, 2007 (the “Export Prepayment Agreement”), by and
        between the Exporter and the Bank, which among other things, contains provisions
        for the acceleration of the maturity hereof upon the happening of certain
        events
        therein specified.

      

      This
        Promissory Note shall be governed by, and construed in accordance with, the
        law
        of the State of New York, without giving effect to its conflict of laws
        principles.

       

      VOTORANTIM
        CELULOSE E PAPEL S.A.

       

      
        	
                By:

              	 	 	
                By:
                  

              	 	 
	
                Name:

              	 	 	
                Name:

              	 	 
	
                Title:

              	 	 	
                Title:

              	 	 

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      Exhibit
        B

      

      DISBURSEMENT
        REQUEST

      

      (Place
        and Date)

      

      BANCO
        BILBAO VIZCAYA ARGENTARIA, NEW YORK BRANCH

       

      Ladies
        and Gentlemen:

      

      We
        refer
        to the Export Prepayment Agreement dated as of June XX, 2007 (the “Prepayment
        Agreement”) between Votorantim Celulose e Papel S.A, (the
“Borrower”),
        VCP
Overseas
        Holding Ltd. Budapeste, ZUG Branch, (the “Paying Agent”) and
        Banco
        Bilbao Vizcaya Argentaria, S.A.(the “Bank”). Terms defined in the Prepayment
        Agreement shall have the same meaning in this Disbursement Request.

      

      Pursuant
        to Section 3 of the Prepayment Agreement, we hereby request the Bank to make
        an
        advance to us in the amount of US$50,000,000.00 (the “Advance Amount”) on June
        26, 2007 (the “Disbursement Date”) for the purpose of financing future exports
        to be made by the Exporter to the Importers in accordance with the Prepayment
        Agreement.

      

      Not
        later
        than 2 (two) Banking Days prior to the Disbursement Date, we shall give you
        in
        writing the credit instructions for the Advance Amount.

      

      We
        confirm that, on the date hereof, the representations set out in Section
        9 of
        the Prepayment Agreement are true and correct and that no Event of Default
        has
        occurred and is continuing.

       

      Enclosed
        are the documents required pursuant to Section 8 of the Prepayment
        Agreement.

      

      Sincerely
        yours, 

      

      
        	
                By:

              	 	 	 	 	 
	 	 	 	 	 	 
	
                By:

              	
                 

              	 	
                By:
                  

              	 	 
	
                Name:

              	 	 	
                Name:

              	 	 
	
                Title:

              	 	 	
                Title:

              	 	 

      

       

      Acknowledged
        and agreed by BANCO BILBAO VIZCAYA ARGENTARIA., NEW YORK BRANCH, as the
        Bank

       

      
        	
                By:

              	
                 

              	 	
                By:
                  

              	 	 
	
                Name:

              	 	 	
                Name:

              	 	 
	
                Title:

              	 	 	
                Title:MSTI
      Holdings, Inc.

    259-263
      Goffle Road

    Hawthorne,
      New Jersey 07506

    

    January
      11, 2008

    

    

    To
      the
      MSTI Holdings, Inc. Debenture Holders:

    

    Reference
      is hereby made to that certain Securities Purchase Agreement, dated as of May
      24, 2007 (the “Purchase
      Agreement”),
      by
      and among MSTI Holdings, Inc., a Delaware corporation (the “Company”)
      and
      each entity identified on the signature pages thereto (each, including its
      successors and assigns, a “Purchaser”
and,
      collectively, the “Purchasers”).
      Capitalized terms used in this letter agreement and not otherwise defined shall
      have the meanings ascribed to them in the Purchase Agreement. 

     

    1.
       Subsequent
      Equity Sales.
      Pursuant to Section 4.13(a) of the Purchase Agreement, as amended, the Company
      is prohibited from issuing shares of Common Stock or Common Stock Equivalents
      until 90 days after the Registration Statement is declared effective, except
      for
      Exempt Issuances. The undersigned Purchasers hereby waive any non-compliance
      with the aforementioned Section 4.13(a), and waive any default or Event of
      Default (as such term is defined in the Debentures), and any breach or
      threatened breach, arising under the Purchase Agreement or any other Transaction
      Document, including without limitation the Debentures and the Warrants, and
      waive any and all penalties, damages, claims, and adjustments (including the
      price protection adjustment described in Section 3(b) of the Warrants) resulting
      or that could result from the issuance of (i) options to purchase an aggregate
      of 1,278,000 shares of Common Stock at an exercise price of $0.65 per share
      to certain employees, directors and consultants of the Company under its 2007
      Incentive Stock Plan, and (ii) an aggregate of up to 500,000 shares of
      Common Stock to certain consultants of the Company.

     

    2. Equipment
      Lease Financing.
      Pursuant
      to Section 7(b) of the Debentures, as long as the Debentures are outstanding,
      the Company is prohibited from creating any Liens (as such term is defined
      in
      the Debenture) on its assets. The undersigned hereby waive any non-compliance
      with such section and agree that the creation of Liens in connection with the
      Company entering into equipment lease financing(s) arrangements solely with
      respect to (i) the equipment listed on Schedule I attached hereto, and (ii)
      equipment purchased by the Company that is paid for after the date hereof,
      in an
      aggregate amount of up to $3 million, shall be permitted under such section
      and
      not constitute a default or Event of Default (as such term is defined in the
      Debentures).
      For
      purposes of clarity, the $3 million amount referenced in the preceding section
      includes, and is not in addition to, the equipment amounts listed on Schedule
      I
      hereto.

     

    3. Miscellaneous.
      Subject
      to the waivers and agreements provided herein, the Transactions Documents shall
      remain in full force and effect. Except as expressly set forth herein, this
      letter agreement shall not be deemed to be a waiver, amendment or modification
      of any provisions of the Transaction Documents or of any right, power or remedy
      of the Purchasers, or constitute a waiver of any provision of the Transaction
      Documents (except to the extent herein set forth), or any other document,
      instrument and/or agreement executed or delivered in connection therewith,
      in
      each case whether arising before or after the date hereof or as a result of
      performance hereunder or thereunder. The Purchasers reserve all rights,
      remedies, powers or privileges available under the Transaction Documents, at
      law
      or otherwise, subject to the terms of this letter agreement. This letter
      agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    4. Filing
      of 8-K.
      On or
      before 5:30 pm (New York time) on the date after all Purchasers have signed
      this
      letter agreement, the Company shall file a Current Report on Form 8-K,
      reasonably acceptable to each Purchaser disclosing the material terms of this
      letter agreement, which shall include this letter agreement as an attachment
      thereto.

     

    5. Independent
      Nature of Purchasers' Obligations and Rights.
      The
      Company has elected to provide all Purchasers with the same terms and letter
      agreement for the convenience of the Company and not because it was required
      or
      requested to do so by the Purchasers. The obligations of each Purchaser under
      this letter agreement, and any Transaction Document, are several and not joint
      with the obligations of any other Purchaser, and no Purchaser shall be
      responsible in any way for the performance or non-performance of the obligations
      of any other Purchaser under this letter agreement or any Transaction Document.
      Nothing contained herein or in any Transaction Document, and no action taken
      by
      any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers
      as
      a partnership, an association, a joint venture or any other kind of entity,
      or
      create a presumption that the Purchasers are in any way acting in concert or
      as
      a group with respect to such obligations or the transactions contemplated by
      this letter agreement or the Transaction Documents. Each Purchaser shall be
      entitled to independently protect and enforce its rights, including, without
      limitation, the rights arising out of this letter agreement or out of the other
      Transaction Documents, and it shall not be necessary for any other Purchaser
      to
      be joined as an additional party in any proceeding for such purpose. Each
      Purchaser has been represented by its own separate legal counsel in their review
      and negotiation of this letter agreement and the Transaction
      Documents.

     

    Please
      indicate your acknowledgment of and agreement to the foregoing by signing a
      copy
      of this letter and returning an executed original to the Company.
This
      letter agreement may be executed by the parties hereto in counterparts, and
      execution may be evidenced by facsimile or other electronic transmission of
      a
      signed signature page by any party hereto, and all of such counterparts together
      shall constitute one and the same instrument.

     

    
      	 	 	 
	 	 	Sincerely,
	 
 	 
 	 
 
	 	 	/s/ Frank
              Matarazzo
	 	 	 
	 	Frank Matarazzo
	 	Chief
              Executive Officer

    

     

     

    
      
         

      

      
        -
          2 -

        
          

        

      

      
         

      

    

     

    [DEBENTURE
      HOLDER SIGNATURE PAGE]

    

    

    ACCEPTED
      AND AGREED:

    

    DKR
      SOUNDSHORE OASIS HOLDING FUND LTD.

    

    By:
      DKR
      Oasis Management Company LP,

    its
      investment manager

     

    

      
        	
                By:/s/
                  Barbara Burger

              	 	
                Dated:
                  January 30, 2008

              
	
                Name:
                  Barbara
                  Burger

              	 	 
	
                Title:
                  Authorized
                  Signatory

              	 	 
	 	 	 
	 	 	 
	
                ALPHA
                  CAPITAL ANSTALT

              	 	 
	 	 	 
	
                By:
                  /s/
                  Konrad Ackerman

              	 	
                Dated:
                  January 30, 2008

              
	
                Name:
                  Konrad
                  Ackerman

              	 	 
	
                Title:
                  Director

              	 	 
	 	 	 
	 	 	 
	
                GEMINI
                  MASTER FUND, LTD.

              	 	 
	 	 	 
	
                By:
                  /s/
                  Steven W. Winters

              	 	
                Dated:
                  January 30, 2008

              
	
                Name:
                  Steven
                  W. Winters

              	 	 
	
                Title:
                  President

              	 	 
	 	 	 
	 	 	 
	
                WHALEHAVEN
                  CAPITAL FUND LIMITED

              	 	 
	 	 	 
	
                By:
                  /s/
                  Brian Mazzella

              	 	
                Dated:
                  January 29, 2008

              
	
                Name:
                  Brian
                  Mazzella

              	 	 
	
                Title:
                  CFO

              	 	 
	 	 	 
	 	 	 
	
                CMS
                  CAPITAL

              	 	 
	 	 	 
	
                By:
                  /s/
                  Howard Weiss

              	 	
                Dated:
                  January 29, 2008

              
	
                Name:
                  Howard
                  Weiss

              	 	 
	
                Title:
                  Director

              	 	 

      

       

       

    

    BRIO
      CAPITAL L.P.

    

      
        	
                By:
                  /s/
                  Shaye Hirsch

              	 	
                Dated:
                  January 29, 2008

              
	
                Name:
                  Shaye
                  Hirsch

              	 	 
	
                Title:
                  Mananger
                  of General Partner

              	 	 

      

       

    
      
         

      

      
        -
          3 -

        
          

        

      

      
         

      

    

     

    SCHEDULE
      I

     

    

      
        	
                Equipment
                  Description

              	 	
                 Amount

              	 
	 	 	 	 
	
                CSI
                  Digital IPTV headend equipment 

              	 	$	1,000,000.00	 
	 	 	 	 	 
	
                Blonder
                  Tongue headend equipment

              	 	
                $

              	
                150,000.00

              	 
	 	 	 	 	 
	
                WINCOM
                  microwave equipment 

              	 	$	31,389.00	 
	 	 	 	 	 
	
                NBS
                  telephone equipment 

              	 	
                $

              	
                44,100.00

              	 
	 	 	 	 	 
	
                Network
                  hardware resale internet switch  

              	 	$	49,895.00	 
	 	 	 	 	 
	
                TOTAL
                  

              	 	
                $

              	
                1,275,384.00

              	 

      

    
      
         

      

      
        -
          4 -

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