EXCHANGE AGREEMENT

between

VOTORANTIM CELULOSE E PAPEL S.A.

and

INTERNATIONAL PAPER INVESTMENTS (HOLLAND) B.V.

EXCHANGE AGREEMENT

By this EXCHANGE AGREEMENT (this Agreement) between, on one side, VOTORANTIM CELULOSE E PAPEL S.A., a company (sociedade por aes) organized under the laws of the Federative Republic of Brazil, with head offices in the City of So Paulo, State of So Paulo, at Al. Santos, 1357, 6^th floor, enrolled with the Legal Entities Taxpayers Registry (CNPJ/MF) under No. 60.643.228/0001-21, herein represented in accordance with its bylaws (VCP), and, on the other side, INTERNATIONAL PAPER INVESTMENTS (HOLLAND) B.V., a company organized under the laws of The Netherlands, with head offices at Rokin 55, 1012 KK, in the city of Amsterdam, enrolled with the Legal Entities Taxpayers Registry (CNPJ/MF) under No 05.501.662/0001-69, herein represented in accordance with its corporate documents (IP).

W I T N E S S E T H:

WHEREAS, IP and/or its Affiliates is the legal holder and registered owner of an eucalyptus plantation in the Brazilian state of Mato Grosso do Sul (the Forest) and other existing assets related to the construction of a pulp mill adjacent to the Forest, which are part of the Chamflora Assets (as defined below);

WHEREAS, VCP is the legal holder and registered owner of an eucalyptus plantation and an integrated pulp and printing and writing paper plant in the city of Luiz Antnio, State of So Paulo and related assets, including the LA Establishment (as defined below);

WHEREAS, VCP wishes to own, operate, develop, exploit and further improve the Chamflora Assets and IP wishes to own, operate, develop, exploit and further improve the LA Establishment;

WHEREAS, in furtherance of the desire expressed in the preceding whereas clause, IP and VCP wish to exchange the Chamflora Assets for the LA Assets (as defined below);

WHEREAS, as an inducement for IP to agree to this exchange of assets, VCP agrees to segregate the LA Assets into a newly-formed, operational company;

WHEREAS, as an inducement for VCP to agree to this exchange of assets, IP will transfer certain remaining Chamflora Assets to Chamflora;

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements set forth herein, the Parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

SECTION 1.01. Definitions. (a) The following terms, as used herein, have the following meanings:

Affiliate means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with such Person;

Agreement means this Exchange Agreement and the schedules attached hereto;

AMCHAM CA means the Centro de Arbitragem of the Cmara Americana de Comrcio, the arbitration chamber of the American Chamber of Commerce;

Biotechnology Property Rights means specific germplasm (eucalyptus and pine), such as commercial clones, test clones, clone banks, commercial plantations from seed, progeny trials and seed production areas, and research practices currently applied specifically to each of the LA Establishment and Chamflora, as the case may be; and know-how pertaining to the manufacturing and production processes and techniques and research and development information for the eucalyptus and pine plantings (commercial and experimental) as they are currently grown in each of the LA Establishment and Chamflora, as the case may be, plantations as they are currently grown in each of the LA Establishment and Chamflora, as the case may be, proprietary process. It does not include corporate germplasms and research projects which are not exclusive to Chamflora and the LA Establishment;

Brazilian GAAP means generally accepted accounting principles in Brazil;

Business Day means any day other than a Saturday, Sunday, or other day on which commercial banks in the City of So Paulo, State of So Paulo are authorized by law to close;

CADE means Conselho Administrativo de Defesa Econmica, the Brazilian antitrust authority;

Chamflora means Chamflora Trs Lagoas Agroflorestal Ltda., a company (sociedade limitada) organized under the laws of the Federative Republic of Brazil, with head offices in the City of Trs Lagoas, State of Mato Grosso do Sul, at Rodovia MS 395, Km 20, enrolled with the Legal Entities Taxpayers Registry (CNPJ/MF) under No. 36.785.418/0001-07;

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Chamflora Assets means the Forest and the Chamflora Related Assets, as described in Schedule 1.01(a) hereto;

Chamflora Biotechnology Property Rights has the meaning set forth in Section 4.15 of this Agreement;

Chamflora Financial Statements has the meaning set forth in Section 4.07 of this Agreement;

Chamflora Contracts means the agreements to be entered into by Chamflora and existing on the Closing Date for the construction of the Project Mill and the acquisition of additional land to develop eucalyptus plantations;

Chamflora Operating Systems has the meaning set forth in Section 4.14 of this Agreement;

Chamflora Permits has the meaning set forth in Section 4.12 of this Agreement;

Chamflora Related Assets means the real estate properties in connection with the Forest, the rights under the Chamflora Contracts, environmental licenses and applications, tax benefit agreements, project designs and engineering, Chamflora Intellectual Property Rights, Chamflora Operating Systems, and Chamflora Biotechnology Rights and all other rights and assets related to the Project Mill, including all real estate property registrations (matrculas) and total area, quality and age of trees, and all other existing assets related to the Forest;

Chamflora Reorganization means the steps necessary to transfer to Chamflora the Chamflora Assets in a way that, on or prior to the Closing Date, Chamflora shall be the legal holder and registered owner of the Chamflora Assets;

Chamfloras Quotas means 100% of the quotas of the capital stock of Chamflora;

Claim has the meaning set forth in Section 9.07 of this Agreement;

Closing has the meaning set forth in Section 3.01 of this Agreement;

Closing Date has the meaning set forth in Section 3.01 of this Agreement;

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Confidential Information has the meaning set forth in Section 7.02 of this Agreement;

Control means, in respect of any Person, the possession, directly or indirectly, of the power to permanently direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by voting agreement, contract or otherwise, and the terms Controlled and Controlling will be construed accordingly;

Environmental Laws means, as in effect on the date hereof, all laws, rules, regulations, judgments, injunctions, orders or decrees relating to pollution or protection of the environment, including, without limitation, laws relating to the release or threatened release of Waste and Discharge into the indoor or outdoor environment (including, without limitation, ambient air, surface water, groundwater, land, surface and sub-surface strata) or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, release, transport or handling of Waste and Discharge;

Environmental Permits has the meaning set forth in Section 4.18 of this Agreement;

Forest means Chamfloras eucalyptus plantation in the Brazilian state of Mato Grosso do Sul;

Governmental Authority means any government, governmental entity, regulatory authority, department, commission, board, agency or instrumentality, any recognized stock exchange and any court, arbitrator, tribunal, whether foreign or domestic with jurisdiction over the Parties;

Insurance Policies has the meaning set forth in Section 5.19 of this Agreement;

LA Intellectual Property Rights means, in relation to the LA Establishment all (i) inventions, whether or not patentable, including, without limitation, the paper packaging equipment and related technology, (ii) copyrights (whether or not registered) and registrations and applications for registration thereof, including all derivative works, moral rights, renewals, extensions, reversions or restorations associated with such copyrights, regardless of the medium of fixation or means of expression; and (iii) computer software, databases, technology, and related information to the maintenance of the activity of the LA Establishment, formulae, algorithms, models, user interfaces, inventions, source codes, object codes, methodologies and all related information;

IP has the meaning set forth in the preamble of this Agreement;

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IP Indemnified Parties has the meaning set forth in Section 9.02 of this Agreement;

IP Paper Machine means a paper machine of approximately 200,000 to 250,000 tonnes per year, adjacent and integrated with the Project Mill, to be built by IP, at IPs option and cost;

LA Assets means, except as otherwise provided for herein, the assets, rights and obligations pertaining to the LA Establishment, including the eucalyptus plantations, the industrial facilities, together with its fixed and operating assets, the real estate properties in connection therewith, environmental licenses and applications, accounts receivables, accounts payables, inventories of raw materials and inventory in process, finished goods (excluding any branded products), LA Operating Systems, LA Biotechnology Property Rights and other current assets and current liabilities related to the LA Establishment, but excluding the LA Excluded Assets;

LA Biotechnology Property Rights has the meaning set forth in Section 5.15 of this Agreement;

LA Company means the company to be organized by VCP under the laws of the Federative Republic of Brazil and that, on the Closing Date, shall be the legal holder and registered owner of the LA Assets;

LA Company Financial Information has the meaning set forth in Section 5.07;

LA Company Quotas means 100% of the quotas of the capital stock of the LA Company;

LA Distributors has the meaning set forth in Section 6.07(b) of this Agreement;

LA Employees has the meaning set forth in Section 5.17 of this Agreement;

LA Environmental Permits has the meaning set forth in Section 5.18 of this Agreement;

LA Excluded Assets means (i) the sales representatives/agents of the LA Establishment, (ii) KSR, VCPs distribution company, (iii) all domestic and international brands, including, but not limited to, the brands Copimax, Printmax, Mascote and Regatta, (iv) VCPs international offices, and (v) the assets that are not to be transferred as described in Section 5.21;

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LA Operating Systems has the meaning set forth in Section 5.14 of this Agreement;

LA Permits has the meaning set forth in Section 5.12 of this Agreement;

LA Reorganization means the steps necessary in order to convey the LA Assets into the LA Company on or prior to the Closing Date;

Lien means any mortgage, lien, pledge, charge, security interest, encumbrance, title defect, objections, rights of first refusal, options or other restriction of any kind, or any other right in favor of or claim by, any third party of whatsoever nature;

Losses has the meaning set forth in Section 9.01 of this Agreement;

LA Establishment means the establishment currently owned by VCP containing the eucalyptus plantation and the integrated pulp and printing and writing paper plant in the city of Luiz Antnio, State of So Paulo and related assets, such as the industrial facilities, including its fixed and operating assets, real estate properties in connection therewith, environmental licenses and applications and other assets further described in Schedule 5.21 attached hereto, as well as the LA Operating Systems, LA Intellectual Property Rights and LA Biotechnology Property Rights;

Option Paper Machine has the meaning set forth in Section 2.04(b) of this Agreement;

Paper Machine Agreements has the meaning set forth in Section 2.04(a) of this Agreement;

Paper Machine Notice has the meaning set forth in Section 2.04(a) of this Agreement;

Parties means VCP and IP; and Party means any of them;

Person means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof;

Project Mill means a pulp mill to be built in the region of the City of Trs Lagoas, in the State of Mato Grosso do Sul, with an annual capacity of approximately 1,000,000 tonnes, pursuant to the existing project, as well as any future assets and rights under agreements related to its construction;

Quotas means Chamflora Quotas and the LA Company Quotas;

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Representative means, with respect to a Person, its respective officers, directors, advisors or representatives;

Taxes means all taxes, charges, fees, levies or other assessments imposed by any taxing authority, including, without limitation, income, gross receipts, sales, use, goods and services, capital transfer, profits, license, withholding, payroll, employment, employer health, social contributions, social security, excise, severance, occupation, property, or other taxes, customs duties, fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts, including any amounts payable as a result of the application of monetary correction or any other similar factor imposed by any taxing authority;

Tax Returns means any report, return, document, declaration, schedule, or any other information or filing required to be supplied, including by electronic means or otherwise, to any Governmental Authority or jurisdiction with respect to Taxes including, without limitation, any amendments thereto;

US$ means the United States dollar;

VCP means Votorantim Celulose e Papel S.A.;

VCP Indemnified Parties has the meaning set forth in Section 9.01 of this Agreement;

Waste and Discharge means petroleum and petroleum products, by-products or breakdown products, radioactive materials, asbestos-containing materials, and any other chemicals, materials or substances regulated as toxic or hazardous or as pollutant, contaminant, discharge, emission or waste under any applicable Environmental Laws;

ARTICLE 2

CORPORATE REORGANIZATIONS, EXCHANGE OF QUOTAS AND OTHER

TRANSACTIONS

SECTION 2.01. Corporate Reorganizations. As an inducement for IP to exchange the Chamflora Assets for the LA Assets, VCP hereby agrees to carry out a corporate reorganization in order to convey the LA Assets into the newly-formed LA Company until the Closing Date. IP, in turn, shall carry out a corporate reorganization in order to have only and all of the Chamflora Assets in Chamflora on the Closing Date.

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SECTION 2.02 Exchange of Quotas. On the terms and subject to the conditions set forth in this Agreement, IP agrees to exchange with VCP, on the Closing Date, all the title and interest in the Chamflora Quotas, free and clear of any and all Liens, for all the title and interest in the LA Company Quotas, free and clear of any and all Liens, provided that Chamflora shall be the owner of the Chamflora Assets and the LA Company shall be the owner of the LA Assets, pursuant to the terms and conditions of this agreement.

SECTION 2.03. No consideration. The Parties agree that the exchange of Quotas provided in Section 2.02 above will occur without the payment of any consideration from one Party to the other.

SECTION 2.04. IP Paper Machine. (a) If IP informs VCP, in writing, within 45 (forty-five) days as of the date hereof, of its decision to build the IP Paper Machine (the Paper Machine Notice), including the production capacity and technical specifications thereof, then, as of the date of the Paper Machine Notice: (i) the Slush Pulp Supply Agreement and the Utilities Supply Agreement, separately executed between IP and VCP on the date hereof, shall enter into full force and effect and (ii) the other ancillary agreements, which terms and conditions are attached as exhibits to the Slush Pulp Supply Agreement and the Utilities Supply Agreement shall be executed and shall enter into full force and effect (all such agreements jointly referred to as the Paper Machine Agreements).

(b) IP shall also have an option to build a second paper machine of 200,000 to 250,000 tonnes per year (the Option Paper Machine), also at IPs option and cost, upon delivery of written notice within 3 (three) years from the Closing Date, provided, however, that IP shall deliver such notice to VCP at least 24 (twenty four) months prior to the start-up date of the Option Paper Machine, unless otherwise agreed by the Parties, that will also be supplied by the Project Mill under similar terms and conditions as those contained in the Paper Machine Agreements.

(c) In case IP provides the Paper Machine Notice to VCP regarding its intention to build the IP Paper Machine, then the real estate property described in Schedule 2.04(c) attached hereto, where the IP Paper Machine, the Option Paper Machine and IP offices shall be constructed by IP, and the related access roads, shall not be part of the Chamflora Assets.

(d) In case IP fails to provide VCP with the Paper Machine Notice, then VCP shall be released from any obligation related to the IP Paper Machine or to the Option Paper Machine.

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ARTICLE 3

CLOSING

SECTION 3.01. Closing. Subject to the terms and conditions set forth herein, the exchange of the Quotas (the Closing) shall take place at the offices of Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga, at Alameda Joaquim Eugnio de Lima, 447, in the City of So Paulo, State of So Paulo, immediately after the fulfillment and/or waiver of all conditions to closing set forth in Article 8 below, provided that Closing shall occur, no later than February 1, 2007, unless another date or place is agreed in writing by the Parties (the day on which the Closing occurs shall be for purposes of this Agreement the Closing Date).

SECTION 3.02. Deliveries at Closing. At the Closing:

(a) IP shall deliver, or cause any of its Affiliates to deliver, to VCP, the duly signed Amendment to the Articles of Association of Chamflora providing for the transfer of Chamflora Quotas to VCP;

(b) VCP shall deliver, or cause any of its Affiliates to deliver, to IP, the duly signed Amendment to the Articles of Association of the LA Company providing for the transfer of the LA Company Quotas to IP;

(c) IP shall deliver, or cause any of its Affiliates to deliver, to VCP, with respect to Chamflora, each as valid as of the Closing Date, the Clearance Certificate of Federal Taxes and Contributions and the Overdue Taxes Clearance Certificate issued by the Federal Revenue Office (Certido de Quitao de Tributos e Contribuies Federais e de Dvida Ativa), the Debt Clearance Certificate issued by the National Institute of Social Security (Certido Negativa de Dbito do Instituto Nacional de Seguridade SocialINSS), the Certificate of Good Standing towards the Employment Guarantee Fund (Certido de Regularidade de Situao do Fundo de Garantia por Tempo de Servio FGTS) and the Clearance Certificate from the Office of Attorney General of the National Treasury (Certido Negativa de Inscrio de Dvida Ativa da Unio);

(d) VCP shall deliver, or cause any of its Affiliates to deliver, to IP, with respect to the LA Company, each as valid as of the Closing Date, the Clearance Certificate of Federal Taxes and Contributions and the Overdue Taxes Clearance Certificate issued by the Federal Revenue Office (Certido de Quitao de Tributos e Contribuies Federais e de Dvida Ativa), the Debt Clearance Certificate issued by the National Institute of Social Security (Certido Negativa de Dbito do Instituto Nacional de Seguridade SocialINSS), the Certificate of Good Standing towards the Employment Guarantee Fund (Certido de Regularidade de Situao do Fundo de Garantia por Tempo de Servio FGTS) and the Clearance Certificate from the Office of Attorney General of the National Treasury (Certido Negativa de Inscrio de Dvida Ativa da Unio);

(e) IP shall deliver, or cause any of its Affiliates to deliver, to VCP, the resignations (effective as of the Closing Date) of all of the officers of Chamflora;

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(f) VCP shall deliver, or cause any of its Affiliates to deliver, to IP, the resignations (effective as of the Closing Date) of all of the officers of the LA Company;

(g) VCP shall deliver to LA Company and LA Company shall deliver to VCP duly signed counterparts of the Wet Lap Pulp Supply Agreement (as defined in Section 8.02 below), to which IP hereby expressly consents.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES WITH RESPECT TO

CHAMFLORA, THE CHAMFLORA ASSETS AND IP

IP represents and warrants to VCP that each of the following representations and warranties will be on the Closing Date, true and correct and in full force and effect:

SECTION 4.01. Existence and Power. Chamflora is a company duly organized, validly existing and in good standing under the laws of the Federative Republic of Brazil and has all material corporate powers, governmental licenses, authorizations, permits, consents and approvals required to own the Chamflora Assets. On the Closing Date, Chamflora will be duly organized, validly existing and in good standing under the laws of the Federative Republic of Brazil and will have all material corporate powers, governmental licenses, authorizations, permits, consents and approvals required to own the Chamflora Assets.

SECTION 4.02. Authorization, Binding Effect. The execution, delivery and performance by IP of this Agreement and the consummation of the transactions contemplated hereby are within IPs powers. IP is duly authorized by all necessary corporate action to execute, deliver, perform and consummate the transactions contemplated in this Agreement. This Agreement constitutes a valid and binding agreement upon IP and is enforceable against IP in accordance with its terms.

SECTION 4.03. Governmental Authorization. The execution, delivery and performance by IP of this Agreement and the consummation of the transactions contemplated hereby require no action, approval, consent or declaration by or in respect of, notice or filing with, any Governmental Authority, agency or official other than the filing with CADE.

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