ta x i n c e n t i v e s

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Created by Decree Law 288, on fabric 28th 1967, the Manaus Free Trade Zone (MFTZ) is a business center established by the Brazilian government in order to build up an economic base in the Western Amazon to promote economic and social integration in this region and the rest of the country, support technology development, attracts technical and intellectual capital and especially assure and strengthen national sovereignty over borders.

The Project offers tax and nontax incentives at state and federal level through the following agencies: Office of the Superintendent of the Manaus Free Trade Zone (SUFRAMA), the Office of the Superintendent for Development in Amazonia (SUDAM) and the Amazon State Economic Development and Planning Department (SEPLAN).

TAX I NCEN T I V ES I N T H E MANAUS F R E E T RADE ZONE

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• Import Tax (IT) exemption for raw materials, secondary materials and packaging materials used to manufacture products consumed within the MFTZ;

• 88% fixed discount on IT for raw materials, secondary materials and packaging materials used to manufacture products for sale in any region of the country, except information technologyand automotive vehicles, tractors and other terrestrial vehicles, excluded from position 1711 to 1714;

• Variable discount on IT for information technology and motor vehicles, tractors and other terrestrial vehicles;

• Exemption from Tax on Industrialized Products (IPI);

• IPI exemption for products manufactured using agricultural or vegetable raw materials of regionalorigin;

• IPI credit, calculated as though payable, for purchasers located throughout the country of products manufactured using regional materials, offset against products subject to the aforementioned tax;

• Export Tax Exemption.

• PIS-Imports and COFINS-Imports are suspended on imports of raw materials, intermediate products and packaging materials used in manufacturing processes by companies located in the MFTZ and subject to project approval by the SUFRAMA Administrative Board (CAS);

• PIS/COFINS assessed at 0% on revenues from the sale of goods for consumption or manufacturing in the MFTZ by companies organized outside the MFTZ;

• Exemption from PIS and COFINS on sales within the Manaus FTZ;

• PIS assessed at 0.65% and COFINS at 3% on sales by companies located in the MFTZ, subject to project approval by the SUFRAMA Administrative Board – CAS.

- Types of Non-Tax Incentives

• Symbolic pricing for land purchases to set up a businesses in the Industrial District.

2 | Eligibility Prerequisites for Tax Incentives

• Products manufactured in accordance with projects approved by the CAS, in line with the approved Basic Production Process (BPP).

3 | Conditions for Continued Enjoyment of Tax Incentives

• Present a Technical and Economic Project compatible with the BPP approved for the relevant product;

• Implement the Technical and Economic Project in line with approved parameters;

S U F RAMA

TAX INCENTIVES FOR the INDUSTRY

1 | Types of Federal Tax incentive managed by Suframa

- Other Federal Tax Incentives

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• Hold a Resolution and/or Ordinance of Approval issued for the products covered by the Technical and Economic Project;

• Fulfill the product BPP;

• Obtaining Operational Report (OR) and Production Report (PR) on the approved Technical and Economic Project;

• Implement a quality system based on ABNT standard NBR ISO 9000;

• Present an annual Independent Audit Technical Report (IATR) for the approved Technical and Economic Project;

• Submit monthly production, billing, labor and other information to the SUFRAMA Performance Indicators System;

• Ensure the company records held by SUFRAMA are up-to-date;

• In relation to Information Technology goods, invest in Research and Development (R&D) or when required in the Resolution of approval;

• Employ a director domiciled for tax purposes in the Western Amazon;

• Install a sign in a visible location on company premises listing SUFRAMA tax incentives, in accordance with the approved model;

• Comply with all IPAAM – Amazonas Environmental Protection Institute obligation;

• Display the PIM logo on packaging, advertising and promotional products manufactured by the company;

• Start up operations within 36 months from publication of the approval resolution in the Federal Register.

4 | Exclusions

• Weapons and ammunition;

• Tobacco and alcoholic beverages;

• Passenger vehicles;

• Perfumes, toiletries and cosmetic products, except those listed in positions 3303 to 3307, for consumption within the MFTZ or when produced using regional fauna and flora.

TAX I N CEN T I V ES ON T R ADE

1 | Types of Federal Tax incentive managed by Suframa

• Import Tax (IT) exemption on goods for consumption within the MFTZ;

• Tax on Industrialized Products (IPI) exemption on goods for consumption within the MFTZ;

• Exemption from the SUFRAMA Administrative Services Fee (ASF).

2 | Eligibility Prerequisites for Tax Incentives

• SUFRAMA Registration withexclusive enrollment for importing foreign and domestic products for the purpose of sale.

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3 | Exclusions

• Weapons and ammunition;

• Tobacco and alcoholic beverages;

• Passenger vehicles;

• Perfumes, toiletries and cosmetic products, except those listed in positions 3303 to 3307, for consumption within the MFTZ or when produced using regional fauna and flora.

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1 | ICMS Stimulus Credit - by product, based on the following percentages

• 100% - for vessels, portable mobile terminals, IT goods, printed circuit boards used for information technology products, radios, clothing, footwear, utility vehicles, police, industrial sewing machines, air-conditioning equipment, others, clothes and dishwashers and dryers, freezers, refrigerators, cathode Ray tubes, Christmas decorations, jute and mallow string, screens and bags, processed cashew nuts with or without husks, gymnastic equipment, bicycles, tires and inner tubes, aluminium trailers and articulated trailers, air freshness, insect repellent and occupational safety products;

• 90.25% - intermediate goods, cleaning products, ground and roasted coffee, vinegar, cookies and biscuits, pasta and other noodles;

• 75% - printed circuit boards for audio and video devices, capital goods, consumer goods for foodstuffs and agricultural and similar products; regional flora and fauna products;

• 55% - other manufactured consumer goods.

2 | ICMS deferral - on the following transactions

• Consumables imported for manufacturing;

• Shipments of intermediate goods for manufacturing at another incentivized manufacturing facility;

• Shipment of regional materials in the natural

S E P L AN

TAX INCENTIVES FOR INDUSTRY

state from the interior of the state, to incentivized manufacturing facilities for the manufacture of jute or mallow wire, screens or bags, processedcashew nuts with a without husks, phytotherapy products, phytocosmetics and generic drugs.

3 | Presumed Regional ICMS Tax Credit

• Presumed regional ICMS tax credit of 7% on the purchase of incentivized intermediary goods for deferral in accordance with item II, article 18 of decree 23,994/03 for manufacturers of incentivized end goods;

• The presumed regional ICMS tax credit is used to balance out taxation on companies located in the FTZ when procuring domestic intermediate goods/input from other federative units, compared with local purchases.

4 | Reduced ICMS Calculation Base

This benefit reduces the tax payable on imported consumables:

• 55% on imports of raw materials and secondary materials used to produce printed circuit boards used in the assembly of audio and video devices;

• 64.5% on imports of raw materials and secondary materials used to produce capital goods.

5 | ICMS exemptions

• Shipment of consumables produced in the state, or imported, as part of the SUFRAMA Western Amazon Special Export Program (PEXPAM), subject to the terms and conditions in the joint SEPLAN and SEFAZ Resolution;

• Domestic or imported machinery or equipment to be incorporated into the fixed assets of the company

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for direct and exclusive use in the production process, as well as spare parts;

• Outgoing shipments of consumables for training, research and development purposes at institutions registered with SEFAZ, without prejudice to ongoing tax credits.

6 | Financial contributions

When enjoying ICMS tax benefits, the company shall make financial contributions to:

- The FMPES (Micro and Small Business Promotion Fund)

• 6% of ICMS stimulus credit;

Note: The company is exempt from FMPES contributions when making payments to the UEA of 10% and 1.3% and to the FTI of 1%, calculated on gross revenues.

- UEA (Amazonas State University)

• 10% of the stimulus credit for companies enjoying 100% stimulus credit;

• 1.3% of gross revenues, subject to deferral, on the sale of intermediate goods to incentivized industrial companies;

•1.5% of ICMS stimulus credit in other cases.

Note: The company is exempt from UEA contributions for transactions involving information technology goods listed in the Schedule to decree 23,994/03.

- FTI (Funds to Promote Tourism, Infrastructure, Services and State Development in Amazonas)

• 2% of the FOB value of foreign imports involving consumables used to manufacture end goods;

• 1% of the value of imports involving consumables from other states used to manufacture end goods;

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• 1% of gross revenues for industrial companies on transactions enjoying a 100% credit stimulus;

• 1% of gross revenues, on the sale of intermediate goods to incentivized industrial companies;

• 2.5% of the outstanding ICMS balance for incentivized products enjoying additional credit stimulus benefits for agricultural enterprises located in the interior of the state.

Note 1: The company is exempt from FTI contributions on transactions involving information technology goods listed in the Schedule to decree 23,994/03.

Note 2: Transactions involving intermediate goods shipped to another manufacturer for manufacturing another intermediate good are exempt from FMPES, UEA and FTI contributions.

7 | Eligibility Prerequisites for Tax Incentives

ICMS tax benefits will be granted to products resulting from activities that are considered of specific interest to Amazonas state development. These companies activities must meet at least three of the following conditions:

• Seek to expand the production chain, in order to consolidate the industrial, agricultural sector andforestry industries throughout the state (mandatory condition, as applicable);

• Contribute towards increasing industrial, agricultural and forestry production in the state;

• Contribute towards increasing exports to domestic and international markets;

• Furthering investment in process and/or product technology research and development;

• Contributing towards substituting domestic and/or foreign imports;

• Furthering the transfer of social and economic development to the state;

• Increase the rational and sustainable use of forestry raw materials and active ingredients based on Amazonian biodiversity, as well as the resulting products;

• Contribute towards increasing agricultural, fisheries and forestry production in the state;• Generate direct and/or indirect Jobs within the state (mandatory condition);

• Promote tourism activities.

8 | Conditions for Continued Enjoyment of Tax Incentives

• Submit a Technical and Economic Project that demonstrates the feasibility of the enterprise and compliance with Decree 23994/03;

• Implement the Technical and Economic Project in line with approved parameters;

• Obtain a Concession Decree issued for the products approved in the Technical and Economic Project;

• Obtain a Technical Report demonstrating compliance with approved Project terms;

• Obtain Amazonas State Taxpayers Registration (CCA) to produce incentivized end and intermediarygoods;

• Start up operations within 24 months from publication of the Concession Decree in the State Register, which may be extended for an additional 12 months;

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• Employ a director domiciled for tax purposes in the State;

• Implement social benefit programs for employees, particularly those involving meals, health, leisure, education, transport and crèche;

• Install a sign in a visible location on company premises listing SEPLAN tax incentives, in accordance with the approved model;

• Comply with all IPAAM – Amazonas Environmental Protection Instituteobligation;

• Set aside a portion of end consumer goods produced to meet local demand, which will be subject to state ICMS at 7%;

• Make financial contributions to FMPES, UEA and FTI;

• Obtain SEPLAN consent to make changes to the premises and/or production process which will result in lower investment and labor absorption, pursuant to the approved Project terms;

• Maintain registration information up-to-date.

9 | Exclusions

• Packaging or repackaging;

• Refurbishing or reworking, except products specified in a resolution from the Amazonas State Development Board (CODAM);

• Primary processing and extraction of mineral products, including thoseresulting from basic processes;

• Salt processing; Preparation of foodstuffs in

industrial kitchens, restaurants, bars, ice cream parlors, confectioners, bakeries, general stores and similar businesses, for direct sales of the consumer, including those purchased by a company for employee consumption;

• Production of nonalcoholic beverages, except for those produced using extracts, syrup, juice, flavoring or concentrates based on fruit and/or vegetables produced and entirely processed by company located within the State;

• Manufacture of alcoholic beverages, except those produced in the state in areas designated as priorities owned by the executive, manufactured using inputs produced in the State;

• Manufacture of goods whose processing is directly or indirectly harmful for the environment;

• Electricity production and generation;

• Capture, treatment and distribution of drinking water via the public water system;

• Raw oil extraction and processing and production of liquid and gas fuels;

• Extraction and processing of natural gas and its derivatives;

• Generating, emitting, transmitting, retransmitting, repeating, amplifying or receiving communications of any nature, using any procedure, even if initiated or rendered abroad;

• Weapons and ammunition manufacturing;

• Manufacturing tobacco and derivatives.

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TAX INCENTIVES ON COMMERCIAL ACTIVITIES

• 6% rate of ICMS Import tax on goods acquired abroad through the Import Corridor;

• Presumed Tax Credit of 6% on the value of goods shipped to other states through the Import Corridor;

• Reduced ICMS rate of 12% on domestic shipments of goods supported by the Import Corridor;

• Reduced ICMS on domestic transactions at 7% for internal shipments of end consumer, incentivized and industrialized goods within the State, pursuant to Decree 23994/03;

• Reduced ICMS rate on internal transaction at 7% when importing goods for sale and shipping them;

• Reduced calculation base for transactions involving goods in the basic foot basket, at a net tax rate of 1% on the transaction value, however no tax credits are permitted.

1 | Eligibility Prerequisites and Conditions for Commercial Tax Incentives

• Any manufacturing phases are prohibited;

• No enjoyment of tax benefits set forth in Decree-Law 288/67;

• Specific state enrollment and specific Import Corridor tax document issued by SEFAZ;

• SEFAZ registration for ICMS reduction to 7% and good standing with regard to other state taxes;

• SEFAZ registration under the special regime to enjoy the benefits of the lower calculation bases for transactions involving goods from the basic food

basket and continued good standing with regard to other state taxes;

• Pay FTI a financial contribution equivalent to 1% of the CIF value of import documents for transactions benefitting from the lower ICMS rate of 7%.

2 | Exclusions

- Import Corridor

• Internal transactions involving alcoholic beverages, including beer and draught beer, tobacco, perfume, weapons and ammunition;

• Internal and interstate transactions involving outboard motors of up to 40 HP;

• When customs clearance is not carried out in the State upon entry of goods into Amazon state territory.

- Reduced ICMS rate of taxation

• Transactions involving soft drinks, energy drinks, including energy replacement drinks, soft drink extracts, mineral water, cement, scooters, mopeds, tricycles, quads and motorcycles;

• Goods which, based on their characteristics, quantity and quality, appear destined for industrial use as raw material or consumables;

• Liquid and gaseous fuels, lubricants of any type, raw oil or oil at any stage of refinement, weapons and ammunition, tobacco, alcoholic beverages of any type, motor vehicles, cement and wheat flour.

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S udam

TAX INCENTIVES

• 75% reduction for income tax and non-reimbursable additional items;

• Deposits for reinvestment.

1 | Eligibility Prerequisites for Tax Incentives

In order to enjoy the tax benefits, enterprises must be classified in priority sectors for regional development;

• Infrastructure: energy, telecommunications, transport, gas pipeline, gás production, water supply and sewage projects;

• Tourism: hotels, convention centers and other projects, whether or not integrated with tourist complexes, located in priority areas for regional tourism and ecotourism;

• Agriculture: associated with the production of natural textile fibers; vegetable oil; juices, conserves and soft drinks; production and processing of meat and derivatives; aquaculture and fish farming;

• Irrigated agriculture: projects located in agricultural and agribusiness centers to produce foodstuffs and agribusiness raw material;

• Mining industry (metals): Production complexes to process regional mineral resources;

• Transformation industries: a) Textiles, clothing, leather and fur, leather and plastic footwear and related components; b) Bio industry products related to the manufacture of products based on use of regional biodiversity in the pharmacological, phytotherapy, cosmetic and other biotechnology sectors; c) Production of machinery and equipment (excluding weapons, ammunition and armaments), for general use, to manufacture machine tools and other machinery and equipment for specific purposes;

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d) Non-metallic minerals, metallurgy, steel production and mechanical activities; e) Chemicals (excluding explosives) and petrochemicals, plastic materials and the production of oil and derivatives; f) Paper and cellulose, provided they are integrated into reforestation projects, except when they use recycled material; paper and cardboard folders, paper artifacts, card, pasteboard and corrugated cardboard; g) Wood, furniture and wooden artifacts; h) Food and beverages; i) Disposable material, including shaving equipment, ballpoint and hydrographic ends, marker pens, propelling pencils, resin pencils, replacement lead, pencil sharpener’s, brushes, lighters, key rings and other disposable artifacts;

• Electrical and electronic devices, mechatronic, information technology and biotechnology products, vehicles, except four-wheeled vehicles, components and car parts;

• Component manufacturers (microelectronics);

• Packaging and wrapping manufacture; and

• Manufacture of pharmaceutical products, including chemicals and medication for human use.

2 | Conditions for Continued Enjoyment of Tax Incentives

• 75% reduction in Corporation Tax (IRPJ).

Calculated on operating profits, this is a production incentive offered by the federal government benefiting companies with deployment, diversification, expansion and modernize Asian projects in economic

sectors which are considered a priority for regional development and located within the jurisdiction of the former SUDAM. Among other items, they must comply with the following conditions:

• Commence operations exceeding 20% of forecast output;

• Submit a Technical and Economic Project for deployment, diversification, expansion or modernization;

• Obtain a confirmation report for the products approved in the Technical and Economic Project;

• Obtain acceptance of the confirmation report from the IRS;

• Invest the value of IRPJ saved in activities directly associated with production or operation of the beneficiary company within the jurisdiction of the former SUDAM;

• Use the amount of tax not paid pursuant to the tax benefit only to absorb losses or increase corporate stock;

• Enjoy the tax benefit from the calendar year following the year that the company starts up operations, as per the confirmation report issued by the last day of the last month of March in the year following startup;

• Enjoy the tax benefit from the calendar year that the report is issued, if issued after the deadline in the foregoing item;

• Install a sign in a visible location on company premises listing SUDAM tax incentives, in

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accordance with the approved model;

- Deposits for reinvestment.

• Reinvest 30% of income tax payable, and an additional 50% in proprietary funds, to be deposited in a specific account at Banco da Amazônia;

• Submit a Technical and Economic Project for equipment modernization or expansion;

• Invest the funds within the jurisdiction of the former SUDAM and exclusively in new machinery and equipment;

• Select the reinvestment incentives on the Income Statement;

• Incorporate the funds as capital stock within 180 days, from the date that the funding is released by Sudam.

3 | Duration

• Fixed 75% IRPJ Reduction: projects submitted and approved by December 21, 2023 will be entitled to enjoy the benefit for a period of 10 years, from the calendar year they commence;

• Deposit for Reinvestment: Up to December 31, 2023.

4 | Other Sudam incentives

• AFRMM (Additional Shipping Charge for Renewal of the Merchant Navy) exemption;

• Exemption from Tax on Financial Transactions (IOF) on foreign Exchange transactions for the

payment of imported goods.

TYPES OF FINANCIAL INCENTIVE

1 | Amazon Development Fund – ADF

The fund’s objective is to guarantee funding for private investment in Amazonia. ADF funding is used to implement, expand, modernize and diversify enterprises located within the Legal Amazon, pursuant to the guidelines and priorities published by the Ministry of National Integration, limited to 60% of total investment of 80% of fixed investment in the project.

- Methodology

• The ADF takes part in the enterprise by subscribing to and paying up convertible debentures that can be converted into voting stock, limited to 15% of the stock and only permitted for publicly traded companies;

• The debentures will provide a real guarantee of at least 1.25 the subscribed value;

• Maturity is 12 years, including the grace period;

• The ADF depends on investmentof proprietary funding equivalent to at least 20% of total investment, in Brazilian currency.

- Financial costs

• After being issued, the debentures Will be restated in line with the TJLP (from the date released to the settlement date);• After the date forecast for Project startup, any

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investment will be subject to additional 3% annual interest (at SUDAM’s discretion);

• Del credere charges of up to 0.15%.

- Risk of Operations

• The ADF will take on the risk for up to 97.5% of its stake in each project;

• The Operating Agent will take on the remaining 2.5% risk.

2 | Northern Financing Fund (NFF)

- Basic Requirements

Interested companies should register with the Banco da Amazônia (BASA) and draw up a Technical Project.

- Types of Finance

Finance for deploying, extending, modernizing, refurbishing and relocating enterprises, based on fixed or mixed (fixed and working capital) investment.

- Activities Financed

a) agribusiness; b) industry; c) tourism; d) nongovernmental economicinfrastructure; e) economic infrastructure of public companies that do not depend on government cash transfers, whose enterprises being financed are considered a priority for the economy, according to the SUDAM Deliberative Body; f) trade; g) provision of services.

- Size

Enterprises are classified by annual gross operating revenues, according to the following table:

Size Gross Annual Operating Revenue

Mini Up to 240.000

Small From 240.000 to 2.400.000

Mid-size From 2.400.000 to 35.000.000

Large Over 35.000.000

When financing production of manufactured and semi manufactured goods solely for export, the beneficiary would be classified in accordance with gross annual operating revenues reviewed when the enterprise is stabilized, based on the following table:

Size Gross Annual Operating Revenue

Mini Up to 720.440

Small From 720.440 to 6.303.850

Mid-size From 6.303.850 to 35.000.000

Large Overt de 35.000.000

If the beneficiary belongs to an economic group, it will be classified in accordance with the group’s consolidated annual gross operating revenues.

- Finance Value

Total financing: Up to the beneficiary’s payment capabilities, up to 70% of its available cash, at most.Mixed investment: The portion equivalent to costs and/or sales is limited to 35% of total financing,which may be increased to 50% when justified by technical support, subject to bank approval.- Financial Charges

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Size Effective Annual Interest Rate

Mini 6,75%

Small 8,25%

Mid-size 9,50%

Large 10%

Note 1: For analysis of the technical Project, BASA charges a Service Fee of 1% of the finance value, 30% payable at filing and 70% when contracting the finance.

Note 2: Borrowers paying their installments by the maturity date will enjoy a 15% discount on financial charges.

Note 3: Regarding finance for production of manufactured and semi manufactured goods solely for export: a) basic charges - exchange rate variation for the US dollar, published by the Brazilian central bank; b) additional charges - unified feed comprising: I) LIBOR; and II) del credere at 3% p.a.

- Repayment

Repayments will be scaled according to the beneficiary’s payment capacity, subject to the following criteria:

• Grace Period: up to six months after the forecast commercial start date for the enterprise financed, not exceeding four years.

• Total: - Mixed or fixed investment: Up to 12 years, including the grace period. When finances offered to infrastructure projects, the total period may be extended up to a total of 20 years, including a four year grace period.

- Purchase of raw materials, consumables, goods and products: up to 24 months, including a six-month grace period.

- Guarantees

• Mortgage, lien, chattel mortgage and surety.