Table of Contents  



EXECUTION COPY















COMPANY SUPPORT
AGREEMENT  








OPIC CONTRACT OF
INSURANCE NO. F431 (BRAZIL)  





between  





OVERSEAS PRIVATE
INVESTMENT CORPORATION  





and  





BRASIL TELECOM S.A.  












Dated as of February
17, 2004  


























TABLE OF CONTENTS  



Page 






ARTICLE ONE

DEFINITIONS AND INTERPRETATION  



	Section 1.01.	Defined Terms	2 
	Section 1.02.	Interpretation	3 




ARTICLE TWO

REPRESENTATIONS AND WARRANTIES OF THE COMPANY 



	Section 1.03.	Existence, Power and Authority of the Company	4 
	Section 1.04.	Compliance with Law; Corrupt Practices	4 
	Section 1.05.	Environmental Matters	4 
	Section 1.06.	Transaction Document Representations	4 
	Section 1.07.	Disclosure	5 
	Section 1.08.	Foreign Governing Authority Restructuring	5 






ARTICLE THREE

            COVENANTS OF THE COMPANY 


	Section 1.09.	Conversion Diligence; Application for Compensation; Pari Passu Payment	 
	 	of U.S. Dollar Obligations; Prior Delivery Obligations	5 
	Section 1.10.	Compliance with Corrupt Practices Laws	6 
	Section 1.11.	Accounting and Financial Management	6 
	Section 1.12.	Financial Statements and Other Information	6 
	Section 1.13.	Access to Records; Inspection	6 
	Section 1.14.	Notice of Default and Other Notices to OPIC	6 
	Section 1.15.	Environmental Compliance	7 
	Section 1.16.	No Alteration of Agreements	7 
	Section 1.17.	Worker Rights	7 
	Section 1.18.	No Defeasance of Notes; Subrogation	8 
	Section 1.19.	Reimbursement	9 
	Section 1.20.	Indemnification	10 
	Section 1.21.	Service Marketed	13 




ARTICLE FOUR

(INTENTIONALLY OMITTED)  




ARTICLE FIVE

              DEFAULTS AND REMEDIES 


	Section 1.22.	Events of Default	13 
	Section 1.23.	Remedies upon Event of Default	14 





ARTICLE SIX

               MISCELLANEOUS 



	Section 1.24.	Notices	15 
	Section 1.25.	Benefits of Agreements	15 
	Section 1.26.	Termination	16 
	Section 1.27.	Governing Law	16 
	Section 1.28.	Jurisdiction and Consent to Suit	16 
	Section 1.29.	Agent for Service of Process	16 
	Section 1.30.	Jury Trial Waiver	17 
	Section 1.31.	Succession	17 
	Section 1.32.	Integration; Amendments	17 
	Section 1.33.	Severability	17 
	Section 1.34.	No Waiver	17 
	Section 1.35.	Further Assurances	18 
	Section 1.36.	Counterparts	18 






Exhibit A - Form of
Self-Monitoring Questionnaire 













COMPANY SUPPORT
AGREEMENT  



    COMPANY
SUPPORT AGREEMENT (this “Agreement”), dated as of February 17, 2004 made by and
between the Overseas Private Investment Corporation, an agency of the United States
of America (“OPIC”), and BRASIL TELECOM, S.A., a sociedade anônima organized and
existing under the laws of the Federative Republic of Brazil (the “Company”).  



W I T N E S S E T H:  



    WHEREAS,
under an Indenture dated as of the date hereof (the “Indenture”) between the Company
and The Bank of New York, not in its individual capacity but solely as trustee
thereunder (the “Trustee”), the Company intends to issue and sell up to US
$200,000,000 aggregate principal amount of 9.375% notes due 2014 (the “Notes”);  



    WHEREAS,
 in order to maximize the  interests of the holders of the Notes,  as a condition to the
 issuance of the Notes,  the Trustee is  required  to enter into a Contract  of
 Insurance  for Fixed Income Securities Against  Inconvertibility  (the “OPIC Insurance
 Contract”) with OPIC, and for the benefit of, The Bank of New York,  as trustee (the  “Insurance
 Trustee” or the “Insured”  under the OPIC  Insurance Contract),  acting on behalf of the
grantor trust (the “Insurance  Trust”) created under the Insurance Trust Agreement  dated
as of the date hereof  between the Company and the  Insurance  Trustee,  for the benefit
of the holders of the Notes as sole beneficiaries of the Insurance Trust (the “Trust
Beneficiaries”); 



    WHEREAS,
 the  Company  will use the  proceeds  of the sale of the  Notes to  finance  the Project
(as defined below); 



    WHEREAS,
 it is a condition  precedent to OPIC entering into the OPIC  Insurance  Contract that
the Company, on the terms and conditions set forth herein, enter into this Agreement; 



    WHEREAS,
 the Company  desires to induce OPIC to enter into the OPIC  Insurance  Contract, and
therefore is willing,  on the terms and conditions set forth herein,  to enter into this
 Agreement,  to provide certain indemnities, and to provide certain other agreements of
the Company as set forth herein; 



    WHEREAS,
 the Company  understands that OPIC has issued, or will issue, the OPIC Insurance
Contract  based  on  statutory  policy  requirements  (22  U.S.C.  §2191)  and  policy
 goals,  as  well  as underwriting considerations; and 



    WHEREAS,
 all  things  have  been  done by the  Company  and OPIC  that are  necessary  to
constitute this Agreement a valid contract; 



    NOW,
THEREFORE, in consideration of the premises and of the agreements contained herein, it
is hereby agreed as follows:  



ARTICLE ONE

DEFINITIONS AND INTERPRETATION  



Section 1.01. Defined Terms. 



    (a)
OPIC Insurance Contract Terms. All capitalized terms used herein and not otherwise
defined shall have their respective meanings set forth in the OPIC Insurance Contract.  



    (b)
Additional Terms. The following capitalized terms used herein shall have the
definitions specified below:  



    “Agreement” has
the meaning set forth in the preamble hereto.  



    “Application
for Insurance” means the Application for Insurance dated December 10, 2003, executed by
the Company and all supplemental information received by OPIC as of the date
hereof in connection therewith.  



    “Authorized
Officer” shall mean, with respect to the Company, the Chief Executive Officer, Chief
Financial Officer, Chief Accounting Officer, or any management employee of the
Company with significant responsibility for the discharge of the obligations of the
Company hereunder.  



    “Company” has
the meaning set forth in the preamble hereto.  



    “Controlled
Affiliate” means any affiliate of the Company that it controls or has the ability to
control, whether by ownership interest or management contract or otherwise.  



    “Event
of Default” has the meaning set forth in Section 5.01.  



    “Event
of Termination” has the meaning set forth in Section 5.02.  



    “GAAP” means
generally accepted accounting principles.  



    “Indenture” has
the meaning set forth in the recitals hereto.  



    “Insurance
Trustee” has the meaning set forth in the recitals hereto.  



    “Offering
Memorandum” has the meaning set forth in Section 3.12.  



    “Notes” has
the meaning set forth in the recitals hereto.  



    “OPIC” has
the meaning set forth in the preamble hereto.  



    “OPIC
Insurance Contract” has the meaning set forth in the recitals hereto.  



    “Project” means
the implementation of the Company’s 2004-2005  investment  program,  which provides for
the expansion and  modernization  of the  telecommunications  network owned and operated
by the Company, as described in the Application for Insurance (the “Project”). 



    “Project
Party” means each of the Company and any Controlled Affiliate.  



    “Required
Approvals” means any consent, license, approval, registration, permit, sanction,
privilege or other authorization of any nature granted or to be granted by any
governmental authority which is necessary under any applicable law or administrative
rule to which any Project Party is subject or under any agreement, document,
contract, or instrument binding on any Project Party or any of their respective
assets or properties for (i) the making by it of the payments contemplated by the
Transaction Documents, (ii) the implementation and enforceability of any Transaction
Document and the making of any payments contemplated thereunder, (iii) the
implementation of the Project in accordance with the Transaction Documents in
all material respects, and (iv) all such other matters as may be necessary in
connection with the Project or the performance of any Project Party’s material
obligations under any Transaction Document, and shall in any event include those
obligations set forth in or referred to in this Agreement.  



    “Trustee” has
the meaning set forth in the recitals hereto.  



Section 1.02. Interpretation. 



    In
this Agreement, unless otherwise indicated or required by the context: 



    (a)
     Reference  to and the  definition  of any document  (including  this  Agreement)
 shall be deemed a reference to such document as it may be amended, supplemented,
revised, or modified from time to time; 



    (b)
     All  references to an “Article,”  “Section,”  “Schedule,” or “Exhibit” are to an
Article or Section hereof or to a Schedule or an Exhibit attached hereto; 



    (c)
     The table of contents and article and section  headings  and other  captions are for
the purpose of reference only and do not limit or affect the meaning of the terms and
provisions hereof; 



    (d)
     Defined terms in the singular  include the plural and vice versa,  and the
masculine,  feminine and neuter gender include all genders; 



    (e)
     Accounting terms not defined in Section 1.01 have the meanings given to them under
Brazilian GAAP; 



    (f)
     The words  “hereof,”  “herein” and  “hereunder” and words of similar import refer to
this Agreement as a whole and not to any particular  provision of this  Agreement.  The
words  “include,”  “includes,”  and “including”  mean  include,   includes  and
 including  “without  limitation”  and  “without  limitation  by specification”; 



    (g)
     Terms  capitalized for other than  grammatical  purposes which are defined in (i)
the  introductory paragraph  hereof,  (ii) the  recitals  hereof or (iii) the  succeeding
 Sections  hereof have the  meanings ascribed to them therein; and 



    (h)
     Phrases  such as  “satisfactory  to OPIC,”  “in such  manner  as OPIC may  determine,”  “to
 OPIC’s satisfaction,”  “at OPIC’s  election”  and phrases of similar  import  authorize
and permit OPIC to approve, disapprove, act or decline to act in its sole discretion. 



ARTICLE TWO

                                                                   REPRESENTATIONS AND
WARRANTIES OF THE COMPANY



    The
Company represents and warrants to OPIC that: 



Section 2.01. Existence, Power and Authority of the Company. 



    The
Company is a corporation duly organized,  validly existing, and in good standing under
the laws of Brazil.  The Company is duly  authorized to do business in each  jurisdiction
in which its business makes such  authorization  necessary.  The Company has the
requisite power to own and operate its  properties,  to carry on its  business  and the
 Project,  to borrow  money and  create a charge  on its  properties  and to execute,
 deliver, and perform this Agreement.  The Company’s execution,  delivery,  and
performance of this Agreement:  (i) has been duly authorized by all necessary  corporate
 action,  and (ii) will not violate any applicable  regulation or ruling of any
 governmental  authority.  The execution and delivery by the Company of this  Agreement
 will cause it to  constitute  the legal,  valid,  and binding  obligation of the Company
enforceable  against  the  Company  in  accordance  with  its  terms,  subject  to
 bankruptcy,  insolvency, fraudulent transfer,  reorganization,  moratorium,  and similar
laws of general applicability relating to or affecting  creditors’  rights and to general
equity  principles.  No consent of any other person,  including shareholders  of the
 Company,  is  required  in  connection  with  the  execution,  delivery,  performance,
validity, or enforceability of this Agreement that has not been obtained. 



Section 2.02. Compliance with Law; Corrupt Practices. 



    The
Company and its officers,  directors,  and employees have complied with all applicable
 Corrupt Practices Laws in obtaining any Required  Approval in respect of the Project,
 and are otherwise  conducting the Project in compliance with  applicable  Corrupt
 Practices Laws. To the best of the Company’s  knowledge after due inquiry,  its agents
have complied with all  applicable  Corrupt  Practices  Laws in obtaining any Required
Approval in respect of the Project,  and are otherwise  conducting the Project,  in
compliance with applicable Corrupt Practices Laws. The Company’s internal  management and
accounting  practices and controls with respect to the Project are adequate to ensure
compliance with applicable Corrupt Practices Laws. 



Section 2.03. Environmental Matters. 



    In
 connection  with the Project,  the Company has complied  with,  and its  business,
 operations, assets, equipment,  property,  leaseholds, and other facilities relating to
the Project are in compliance in all material  respects with, the provisions of all
applicable  environmental,  health and safety laws, codes and ordinances, and all rules
and regulations promulgated thereunder. 



Section 2.04. Transaction Document Representations. 



    The
 representations  made by the Company in the Transaction  Documents are true and correct
in all material  respects.  The Company’s  obligations  under the Notes will rank not
less than pari passu in terms of  priority  of  payment  and  liquidation  with  all  of
 the  Company’s  other  unsecured  unsubordinated indebtedness  and  obligations of equal
 seniority that is not preferred by provision of applicable law. The proceeds of the sale
of the Notes will be used by the  Company to finance  the Project and the Project  will
be carried out as described in the Application for Insurance. 



Section 2.05. Disclosure. 



    All
documents,  reports or other written  information  pertaining to the Project (including
without limitation,  the Application for Insurance,  this Agreement,  and the other
Transaction Documents) that have been furnished by or on behalf of the Company,  directly
or indirectly,  to OPIC are true and correct in all material  respects and do not contain
any material  misstatement of fact or omit to state a material fact or any fact necessary
to make the statements  contained herein or therein,  in light of the circumstances under
which they were made, not materially misleading. 



Section 2.06 Foreign Governing Authority Restructuring. 



    The
Notes are not being issued and sold in connection  with any agreement of the Foreign
 Governing Authority  relating  to the  restructuring  and/or  rescheduling  of  its
 external  indebtedness  or of the external indebtedness of the private sector in the
Host Country. 



ARTICLE THREE


COVENANTS OF THE COMPANY  



    The
Company covenants and agrees as follows: 



Section
3.01. Conversion Diligence; Application for Compensation; Pari Passu Payment of U.S.
Dollar Obligations; Prior Delivery Obligations. 



    (a)
     In connection with any application by the Insured for  compensation  pursuant to the
OPIC Insurance Contract  in respect  of  currency  inconvertibility  or
 non-transferability,  the  Company  shall make all reasonable  efforts to convert Local
 Currency into U.S.  dollars or to transfer such U.S.  dollars  through all customary
legal channels for  transactions of the type  contemplated in the Transaction  Documents
until compensation  is paid by OPIC,  and the  Company  shall  assist the  Insured  with
the  preparation  of such application for compensation. 



    (b)
     After the  Triggering  Scheduled  Payment  that is the basis of a claim made to
OPIC,  the  Company shall apply U.S.  dollars  available to it to the payment of the
Notes in the same  percentage as the amount of any  applicable  Covered  Scheduled
 Payment  bears to the  aggregate of all amounts then payable on U.S. dollar-denominated
indebtedness of the Company, including the amount of such Covered Scheduled Payment. 



    (c)
     The  Company  shall take all actions  required  by the  Insured to comply  with the
Prior  Delivery Obligations set forth in Section 3.01.1(a) of the OPIC Insurance
 Contract,  subject to the restrictions set forth therein and to any legal  restrictions
 in accordance with the procedures set forth in Section 4.02 of the OPIC Insurance
Contract. 



Section 3.02. Compliance with Corrupt Practices Laws. 



    The
Company  shall  ensure that the Project is  established  and  operated in  compliance
 with all applicable Corrupt Practices Laws. 



Section 3.03. Accounting and Financial Management. 



    The
Company shall (i) maintain  adequate  management  information  and cost control  systems,
 (ii) maintain a system of accounting,  (iii) prepare its financial  statements in
accordance with Brazilian GAAP, (iv) engage the Brazilian affiliates of KPMG, or other
independent  internationally  recognized accountants, as its  independent  accountants
 and (v) upon  OPIC’s  reasonable  request to the  Company,  instruct  such accountants
to communicate  directly with OPIC regarding the Company’s  accounts and operations
 relating to the Project and the Transaction  Documents.  Without limiting the foregoing,
 the Company shall maintain the systems  described  in clauses  (i) and (ii) and  related
 management  and  accounting  policies in a manner adequate to ensure compliance with
applicable Corrupt Practices Laws. 



Section 3.04. Financial Statements and Other Information. 



    (a)
     As OPIC may  reasonably  request from time to time in order to perform its
 statutory  duties,  the Company shall,  at its cost,  furnish to OPIC copies of all
annual  reports  submitted to the Company by its independent  accountants and other
information and data (which is within the Company’s  practical ability to provide)
 relating to the Project and,  solely to the extent  necessary to demonstrate  compliance
with this Agreement,  the operation of the Project.  The Company shall  complete and
deliver to OPIC on or before each anniversary of the OPIC Insurance Contract a completed
Self-Monitoring  Questionnaire,  the form of which is attached to this Agreement as
Exhibit A. 



    (b)
     In connection with any application for  compensation by the Insured  pursuant to the
OPIC Insurance Contract,  the Company shall promptly  deliver to OPIC a Response to each
Information  Request  delivered to it by OPIC from time to time,  but in any event not
later than (i) during the Initial  Period,  10 days from the date of receipt of such
 Information  Request and (ii) during the  Additional  Period,  not later than 7 days
from the date of receipt of such Information Request. 



Section 3.05. Access to Records; Inspection. 



    Upon
the  reasonable  request  of OPIC,  the  Company  shall  give,  or cause to be  given,
 to any representatives  of OPIC  access  during  normal  business  hours to its
 personnel,  and shall  permit such representatives  to inspect the sites  relevant to
the Project and to examine,  copy and make extracts from, any and all  records,  books
 of  account,  and  financial  statements  relating  to the  Project,  the OPIC Insurance
Contract, and the other Transaction Documents. 



Section 3.06. Notice of Default and Other Notices to OPIC. 



    (a)
     The Company shall ensure that its  Authorized  Officers are  reasonably  familiar
with the terms of the Company’s  obligations  hereunder and the terms of OPIC’s
obligations under the OPIC Insurance Contract. The Company shall  immediately  notify
OPIC of (i) the occurrence of each Event of Default and of each event or  condition
 known to any of its  Authorized  Officers  that  with the  passage  of time or the
 giving of notice,  or both,  would  constitute  an  Event of  Default,  and (ii) any
 circumstances  known to any such Authorized  Officer  which may render OPIC  liable
 under the OPIC  Insurance  Contract,  including  if such officer  has reason to believe
it will not be able to convert  and/or  transfer  Local  Currency or transfer U.S.
dollars. 



    (b)
     In addition,  the Company shall provide to OPIC copies of all notices required to be
provided by it to the  Insurance  Trustee or the Trustee  under the  Transaction
 Documents at the time such notices are so provided. 



Section 3.07. Environmental Compliance.  



    The
Company shall comply with (i) the International  Finance  Corporation’s  Environmental,
 Health and  Safety  Guidelines  for  Telecommunications,  dated  July  1,  1998;  (ii)
 the  International  Finance Corporation’s  Environmental  and Social Guidelines for
Occupational  Health & Safety,  dated June 24, 2003; and (iii) the  provisions of all
applicable  environmental,  health and safety laws,  codes and  ordinances, and all rules
and regulations promulgated thereunder in Brazil, with respect to the Project. 



Section 3.08. No Alteration of Agreements. 



    The
Company shall not consent to any modification, waiver or amendment of any provision
of the Notes or any of the other Transaction Documents to which it is a party
without OPIC’s prior written consent, which consent shall not be withheld
unreasonably; provided, however, that the consent of OPIC shall not be required if
such modification, waiver or amendment (i) does not relate to a Scheduled Payment,
(ii) with respect to the Notes, does not require the consent of each of the Noteholders
under the terms of the Indenture, (iii) does not present a material possibility of
adversely affecting the rights, benefits or obligations of OPIC under the OPIC
Insurance Contract and (iv) does not present a material possibility of adversely
affecting the enforcement of any rights under the Transaction Documents that are
material to the rights, benefits or obligations of the Noteholders or OPIC, as subrogee
or otherwise.  



Section 3.09. Worker Rights. 



    (a)
     The Company  agrees not to take any  action,  and to use all  reasonable  efforts to
ensure that no action will be taken by any contractor (or any  subcontractor)  of the
Company  performing EPC (engineering, procurement and  construction)  services
 contracted for after the date of this Agreement,  or providing O&M(operating  and
 management)  services  contracted  for after the date of this  Agreement,  for the
 Project (each, a “contractor” and,  collectively,  the  “contractors”) to prevent
employees of the Company or of any such  contractor  performing  such services for the
Project in Brazil from lawfully under the laws of Brazil exercising  their right of
association and their right to organize and bargain  collectively.  In connection with
the Project,  the Company agrees to observe,  and to cause each contractor to observe,
 with respect to its  respective  employees,  applicable  laws  relating to  acceptable
 conditions  of work with  respect to minimum age, minimum wages, hours of work, and
occupational  health and safety.  Furthermore,  in connection with the Project,  the
Company agrees,  and agrees to use all reasonable  efforts to cause each  contractor, not
to use forced labor and not to take any action on the basis of the right of  association
 or  collective bargaining  activities or membership that may result in the termination,
 suspension,  demotion, or transfer of any  employee  by the  Company  or any
 contractor,  or by any of their  respective  officers,  agents or representatives.  In
addition,  the Company agrees,  and agrees to use all reasonable  efforts to cause each
contractor,  not to employ  persons  under the age of 15 years in  connection  with the
 Project for general work, and not to employ  employees  under the age of 18 years for
any hazardous  activity in connection with the Project (pursuant to the International
Labor Organization’s  Convention 182).  Furthermore,  the Company agrees to, and to use
all  reasonable  efforts to cause each such  contractor  to agree to,  ensure that all
employees  have the  right to  remove  themselves  from  hazardous  situations  without
 jeopardizing  their continued  employment.  The  Company  further  agrees  to apply  the
 preceding  provisions,  and to use all reasonable  efforts,  to cause each contractor to
apply the preceding  provisions,  to all of its employees, including employees hired by
the Company or the contractor on a contractual basis. 



    (b)
     In the event that  non-compliance  or potential  non-compliance  with the above
 requirements  with respect to the employees of the Company or any  contractor  comes to
the attention of one of the  Authorized Officers of the Company,  the Company shall give
prompt notice thereof to OPIC and, if  applicable,  to such contractor.  The Company (i)
shall (a) cure such  non-compliance  or (b) cause such  contractor to cure such
non-compliance,  in either case to the  satisfaction  of OPIC,  and (ii) shall  terminate
 the contract with such contractor (the “contract”)  unless such  non-compliance is cured
to the satisfaction of OPIC within 90 days of such notice, or notice thereof from OPIC to
the Company, whichever first occurs. 



    (c)
     The failure of the Company (x) promptly to notify OPIC and, if  applicable,  the
contractor of such non-compliance;   or  (y)  (i)  to  cure  such   non-compliance  or
 cause  such  contractor  to  cure  such non-compliance,  in either case to the
 satisfaction  of OPIC,  or (ii) to  terminate  the  contract,  shall constitute a
default under this Agreement.  Notwithstanding the foregoing,  the Company and such
contractors are not responsible under this Section 3.09 for the actions of the Foreign
Governing Authority. 



Section 3.10. No Defeasance of Notes; Subrogation. 



    (a)
     The Company  acknowledges  and agrees  that,  except to the extent OPIC (1)
 requests  and receives delivery of (x) Local Currency or  non-transferable  U.S.
 dollars under Sections  3.01.1(a)(i)  and 4.02 of the OPIC  Insurance  Contract or (y)
any  additional  amounts of Local  Currency  required to be paid by the Company  pursuant
to Section  3.11 (a) hereof or (2) receives  payments of amounts  owed OPIC under
 Section 3.11 (b)(i)  hereof,  neither the  Indenture  nor the Notes shall be
 discharged,  satisfied,  or  otherwise terminated by reason of OPIC’s payment of
compensation  to the Insured under the OPIC Insurance  Contract in respect of any Covered
Scheduled Payment,  whether for principal,  interest,  or otherwise,  and the Company
shall ensure that the Transaction Documents so provide. 



    (b)
     The Company  acknowledges and agrees that, except to the extent that OPIC (1)
requests and receives delivery of (x) Local Currency or  non-transferable  U.S.  dollars
under Sections  3.01.1(a)(i)  and 4.02 of the OPIC  Insurance  Contract or (y) any
 additional  amounts of Local  Currency  required to be paid by the Company  pursuant to
Section  3.11 (a) hereof or (2) receives  payments of amounts  owed OPIC under  Section
3.11(b)(i)  hereof,  OPIC shall be subrogated to all the rights of the Noteholders,
 under the Indenture and at law to the extent of all payments  made by OPIC to the
Insured for the benefit of such  Noteholders.  The Company  shall ensure that the Trustee
is required  under the  Indenture to record OPIC’s rights as subrogee or assignee,  as
the case may be, in the Trustee’s  records with respect to the Notes,  upon payment by
OPIC of any amounts  payable  pursuant to the OPIC Insurance  Contract.  The Company
hereby waives and agrees not to assert with respect to OPIC,  as subrogee or assignee,
 as the case may be, in respect of the Notes,  any claims, defenses,  counterclaims,
 rights of set-off or other excuses for non-payment which it may have with respect to (i)
the Notes, (ii) any Noteholder, or (iii) any Scheduled Payment due under the Notes. 



    (c)
     Prior to an  assignment  of rights or  interests  elected  by OPIC under  Section
 4.02 of the OPIC Insurance  Contract,  to the extent so requested by OPIC and in
 consultation  with OPIC,  the Company shall cooperate with OPIC and the Insured and take
all reasonable  measures  requested by OPIC in connection  with the pursuit of available
 administrative  and judicial  remedies and negotiation with the Foreign  Governing
Authority and other potential  sources of  compensation.  After a transfer of rights or
beneficial  interest to OPIC (by subrogation or otherwise),  the Company shall take all
actions  reasonably  requested by OPIC to assist OPIC or the Trustee in preserving  any
property,  interests and rights  transferred to OPIC following payment by OPIC under the
OPIC Insurance  Contract and in prosecuting  related  claims  consistent  with the terms
of the Indenture. 



    (d)
     The Company  shall ensure  through the  Transaction  Documents  or otherwise as
necessary  that the Notes shall rank not less than pari passu in terms of priority  of
payment and  liquidation  with all of the Company’s  other  unsecured,  unsubordinated
 indebtedness  and  obligations of equal seniority that are not preferred by provision of
applicable  law.  Nothing  herein,  and the Company shall also ensure that nothing in the
 Transaction  Documents or  otherwise,  shall in any way affect  OPIC’s  independent
 right to effect salvage or other  recovery  in respect  of  compensation  paid  under
the OPIC  Insurance  Contract  through agreements  between the  Government  of the United
States and the Foreign  Governing  Authority or under any other agreements or procedures,
without any obligation to share the proceeds thereof. 



Section 3.11. Reimbursement. 



    (a)
     In the event that OPIC has  requested  and  received  Local  Currency in  accordance
 with  Section 3.01.1(a)(i)  and Section  4.02 of the OPIC  Insurance  Contract,  the
 Company  agrees to pay OPIC in Local Currency any  additional  amounts of Local Currency
as may be required in order to deliver to OPIC the Local Currency  equivalent of the
Subsequent  Scheduled  Payment at the exchange rate (set forth in Section 3.01.3 of the
OPIC Insurance  Contract) in effect on the day five (5) Business Days before the relevant
 Subsequent Scheduled Payment Date. 



    (b)
     The Company agrees to pay OPIC in U.S. dollars the following amounts, as and when
incurred,  except as hereinafter provided: 



    (i)
     a sum equal to the total of all amounts paid by OPIC under the OPIC Insurance
 Contract (other than Default Interest paid under Section 3.01.2(c) of the OPIC Insurance
Contract);  provided,  however, that (x) no such  payment  shall be due from the Company
to the extent that OPIC has  requested  and  received  Local Currency or
 non-transferable  U.S. dollars in accordance with Section  3.01.1(a)(i) and Section 4.02
of the OPIC Insurance  Contract,  together with any additional amounts of Local Currency
required to be paid by the Company  pursuant to the  preceding  paragraph  (a), and (y)
for the  avoidance of doubt,  the amount of any such required payment by the Company
shall be reduced by the amount actually  received or actually  realized by OPIC in U.S.
 dollars as a result of (A) the exercise of its subrogation  rights or any salvage
 recovery with  respect to such  payment,  or (B) any Local  Currency or
 non-transferable  U.S.  dollars  that may be delivered to OPIC as a result of its
acceptance of an assignment of, or participation in a Deposit Account; 



    (ii)
    within 30 days after OPIC’s request therefor,  any and all reasonable  out-of-pocket
charges, fees, costs and expenses which OPIC may reasonably  pay or incur in connection
 with the OPIC Insurance  Contract, including  Section  4.02  thereof,  or the  exercise
of its rights  thereunder  or its  subrogation  rights, including fees and expenses of
the Insurance Trustee, and reasonable attorneys’ fees and expenses; and 



    (iii)
   interest on any and all amounts  described  in this  Section  3.11 at the default
 rate of interest payable on the Notes from the date due until paid in full. 



Section 3.12. Indemnification. 



    (a)
     In addition to, and without  limitation of, any and all rights of  reimbursement,
 indemnification, subrogation  and  any  other  rights  OPIC  has  pursuant  to the
 Transaction  Documents  (including  other provisions of this  Agreement) or under law or
in equity,  the Company agrees to defend,  indemnify and hold harmless  OPIC,  each of
its  directors,  officers,  employees  and agents,  and each  person,  if any,  who
controls  OPIC  within the meaning of Section 15 of the  Securities  Act or Section 20 of
the  Exchange  Act (each, an “OPIC Indemnified Party”) as follows: 



    (i)
against any and all loss, liability, claim, damage and expense whatsoever, joint
or several, as incurred, arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in the Offering Memorandum, Brasil
Telecom S.A., U.S. $200,000,000 9.375% Notes due 2014, dated February 9, 2004, (the “Offering
Memorandum”) or any other offering materials approved by the Company, or the omission
or alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not
materially misleading;  



    (ii)
    against any and all loss, liability,  claim, damage and expense whatsoever, as
incurred, related to any  litigation,  or any  investigation  or  proceeding  by any
 governmental  agency or body,  commenced or threatened,  or of any claim  whatsoever
 based upon any such  untrue  statement  or  omission,  or any such alleged untrue
statement or omission; and 



    (iii)
   against any and all expense  whatsoever  (including the fees and disbursements of
counsel chosen by OPIC), as incurred,  reasonably  incurred in  investigating,  preparing
or defending against any litigation, or any  investigation  or proceeding by any
 governmental  agency or body,  commenced or threatened,  or any claim whatsoever  based
upon any such untrue statement or omission,  or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii) above; 



provided, however,
that this indemnity agreement shall not apply to any loss, liability, claim, damage or
expense to the extent arising out of any such untrue statement or omission, or alleged
untrue statement or omission, made in reliance upon and in strict conformity with
written information furnished to the Company by OPIC expressly for use in the
Offering Memorandum. The Company and OPIC agree that the information referred to in
the preceding sentence consists solely of the information included under the
headings “Overseas Private Investment Corporation, Background, and Claim Paying History” in
the Offering Memorandum (preliminary or final).  



    (b)
Conduct of Actions or Proceedings. Each OPIC Indemnified Party shall give notice as
promptly as is reasonably practicable to the Company of any action commenced against it
in respect of which indemnity may be sought hereunder, but failure to so notify the
Company shall not relieve the Company from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this Agreement. In
addition, each OPIC Indemnified Party shall give the Company such information and
co-operation regarding any such action as it may reasonably require. In the event
that the Company shall be obligated under this Agreement to indemnify any OPIC
Indemnified Party, the Company shall be entitled to assume the defense of any action or
proceeding, with counsel approved by the OPIC Indemnified Party, which
approval shall not be unreasonably withheld, upon delivery of written notice of
its election to do so. After delivery of such notice, approval of such counsel by
the OPIC Indemnified Party and retention of such counsel by the Company, the
Company shall not be liable for any fees of other counsel subsequently retained by the
OPIC Indemnified Party with respect to any action or proceeding, provided, however,
that the OPIC Indemnified Party shall have the right to employ its own counsel in
any such action or proceeding (i) at the OPIC Indemnified Party’s expense, or (ii)
at the Company’s expense, if (A) the retention of counsel by the OPIC Indemnified Party
has been previously authorized by the Company in writing (such consent not to be
unreasonably withheld), (B) the OPIC Indemnified Party shall have reasonably concluded
that there may be a conflict of interest between the Company and the OPIC
Indemnified Party in such defense, or (C) the Company shall not, in fact, have
employed counsel to assume the defense of such action or proceeding. Except as
specifically provided herein, in no event shall the Company be liable for fees and
expenses of more than one counsel (in addition to any local counsel selected by OPIC)
separate from its own counsel for all OPIC Indemnified Parties in connection with
any one action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. The Company shall not,
without the prior written consent of the OPIC Indemnified Parties, settle or
compromise, or consent to the entry of any judgment with respect to, any litigation,
or any investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under Section 3.12(a) or Section 3.12(c) hereof (whether
or not the OPIC Indemnified Parties are actual or potential parties thereto),
unless such settlement, compromise or consent (i) includes an unconditional
release of each OPIC Indemnified Party from all liability arising out of such
litigation, investigation, proceeding or claim and (ii) does not include an admission
of fault, culpability or a failure to act by or on behalf of any OPIC Indemnified Party.  



    If
at any time an OPIC  Indemnified  Party shall have  requested the Company to reimburse
such OPIC Indemnified Party for fees and expenses  reimbursable by the Company
 hereunder,  the Company agrees that it shall be liable for any settlement of the nature
 contemplated by this Section 3.12(b)  effected without its written  consent if (i) such
 settlement  is entered into more than 45 days after  receipt by the Company of the
 aforesaid  request,  (ii) the Company  shall have  received  notice of the terms of such
 settlement at least 30 days prior to such  settlement  being entered into and (iii) the
Company shall not have  reimbursed such OPIC Indemnified Party in accordance with such
request prior to the date of such settlement. 



    (c)
Contribution. If the indemnification provided for in Section 3.12(a) hereof is
for any reason unavailable to or insufficient to hold harmless an OPIC Indemnified
Party in respect of any losses, liabilities, claims, damages or expenses referred
to therein, then the Company shall contribute to the reimbursement of the aggregate
amount of such losses, liabilities, claims, damages and expenses incurred by such
OPIC Indemnified Party, as incurred, in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and of OPIC on the other hand in
connection with the statements or omissions that resulted in such losses,
liabilities, claims, damages or expenses.  



    The
 relative  fault of the Company on the one hand and OPIC on the other hand shall be
 determined by reference to, among other things,  (i) whether any such untrue or alleged
untrue  statement of a material fact or  omission  or alleged  omission  to state a
material  fact  relates to  information  supplied by the Company  (including  the
 Insurance  Trust) or by OPIC  (solely to the extent that such  information  is the
information  described  in the  proviso in  Section  3.12(a))  and (ii) the  Company’s
 and OPIC’s  relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. 



    The
 Company  agrees  that it would not be just and  equitable  if  contribution  pursuant
 to this Section 3.12(c) were  determined by pro rata allocation or by any other method
of allocation  which does not take account of the  equitable  considerations  referred to
above in this  Section  3.12(c).  The  aggregate amount of losses,  liabilities,  claims,
 damages and  expenses  incurred by an OPIC  Indemnified  Party and referred  to  above
 in this  Section  3.12(c)  shall be  deemed  to  include  any  legal or other  expenses
reasonably  incurred by such OPIC Indemnified  Party in  investigating,  preparing or
defending  against any litigation,  or  any  investigation  or  proceeding  by  any
 governmental  agency  or  body,  commenced  or threatened,  or any claim  whatsoever
 based upon any such untrue or alleged untrue statement or omission or alleged omission. 



    No
person  guilty of  fraudulent  misrepresentation  (within  the  meaning of Section 11 (f)
of the Securities  Act) shall be entitled to  contribution  from any person that was not
guilty of such  fraudulent misrepresentation. 



    For
purposes of this Section 3.12(c),  each person, if any, who controls OPIC within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and each of
OPIC’s  directors,  officers, employees and agents shall have the same rights to
contribution as OPIC. 



    (d)
Payment Procedures. All payments to be made by the Company under this Section
3.12 shall be made in the United States of America in U.S. dollars, without reduction
for any transmission or other fees and expenses, in immediately available funds to the
account designated by the party receiving such payments prior to 12:00 noon (New
York City time) on the date when due or as such party otherwise directs by written
notice to the Company.  



    If
under any  applicable law and whether  pursuant to a judgment  being made or registered
 against the Company or in the liquidation,  insolvency or analogous process of the
Company or any other reason,  any payment  under or in  connection  with this Section
 3.12 is made or fails to be satisfied in U.S.  dollars, then, to the extent that the
payment (when  converted into U.S.  dollars at the rate of exchange on the date of
payment or, if it is not  practicable  for the party  receiving such payment to purchase
U.S.  dollars on the date of payment,  at the rate of exchange as soon  thereafter as it
is  practicable  for it to do so or, in the case of a liquidation,  insolvency or
analogous  process,  at the rate of exchange on the latest date permitted by  applicable
 law for the  determination  of  liabilities  in such  liquidation,  insolvency  or
analogous  process)  actually  received by the party  receiving  such payment  falls
short of the amount due under the terms of this  Agreement,  the Company  undertakes
 that it shall,  as a separate and  independent obligation,  indemnify  and hold
 harmless  the party  receiving  such  payment  against  the amount of such shortfall.
 For the purpose of this clause  “rate of exchange”  means the rate at which the party
 receiving such payment is able on the foreign  exchange market on the relevant date to
purchase U.S.  dollars with the other currency and shall take into account any premium
and other reasonable costs of exchange. 



Section 3.13.
    Service Marketed.



    The
Company will not market any services as containing sexually explicit adult content. 



ARTICLE FOUR


(INTENTIONALLY OMITTED)  



ARTICLE FIVE
 DEFAULTS AND REMEDIES  



Section 5.01. Events of Default. 



    The
occurrence and continuation of any of the following  events or  circumstances  shall
constitute an “Event of Default” hereunder: 



    (a)
     Any  representation  or  warranty  made by or on behalf of the  Company  in this
 Agreement  or the Application  for  Insurance,  or in any  supplemental  materials  or
notices  delivered  pursuant  hereto or thereto, proves to have been incorrect in any
material respect when made; or 



    (b)
     The Company  fails to comply with any covenant or provision  set forth in Article
Three (other than those  referred to in Sections 3.02,  3.07, and 3.09) or Section 6.06,
and such failure  continues for sixty (60) days after  notice  thereof  from OPIC to the
 Company,  or from the Company to OPIC,  whichever  first occurs; or 



    (c)
     The Company  fails to comply with its covenant  set forth in Section 3.02 and such
failure  leads a court of competent jurisdiction to enter a final judgment for a
violation of Corrupt Practices Laws; or 



    (d)
     The Company  fails to comply with its covenant set forth in Section  3.07 and,
 after  consultation with the Company,  OPIC determines that such failure causes an
unreasonable or major environmental,  health, or safety hazard which is not remediable; or 



    (e)
     The  Company  fails to  comply  with its  covenants  set  forth in  Section  3.09
and such  failure continues  for 90 days  after  notice  thereof  from  OPIC to the
 Company,  or from  the  Company  to OPIC, whichever  first  occurs,  such 90 -day
 period  to run  concurrently  with the  90-day  period  for cure of contractor
non-compliance, if applicable, in Section 3.09; or 



    (f)
     The  Company  fails to comply  with any  covenant or  provision  set forth in
Section  3.07 and, if Section 5.01(d) does not apply, such failure  continues  unremedied
for a period of 45 days (or such shorter period in which such failure  must be remedied
in order for Section  5.01(d) not to apply) after the earlier of (i) the date on which
 such  failure  shall  have  first  become  known to an  Authorized  Officer of the
Company  and (ii) the date on which  notice  thereof  shall have been  received  by the
 Company  from OPIC; provided,  however,  that if (A) such failure is reasonably
 susceptible of cure (as determined by OPIC) but cannot be cured  within  such  45-day
 period (as  determined  by OPIC),  (B) no other  Event of Default has occurred and is
continuing,  (C) the Company or another  Project Party is proceeding with diligence and
good faith to cure such failure (as  determined by OPIC),  and (D) OPIC shall have
received a certificate  signed by an  Authorized  Officer of the  Company to the effect
of clauses  (A),  (B) and (C) above and stating the actions,  which actions  shall be
 acceptable to OPIC,  the Company or such other Project Party is taking to cure such
failure,  then such 45 -day period shall be extended for an additional  period of up to
45 days to enable the Company or such other Project Party to cure such failure; or 



Section 5.02. Remedies upon Event of Default. 



    If
any Event of Default  hereunder has occurred and is  continuing,  OPIC may at any time do
one or more of the following:  (a) refuse to pay  compensation  under the OPIC  Insurance
 Contract with respect to any application for  compensation  arising out of events
 occurring after the date of the occurrence of such Event of Default;  (b)  terminate
 the OPIC  Insurance  Contract;  or (c) proceed to protect and enforce its rights and
remedies by appropriate proceedings;  provided,  however, that OPIC’s sole remedy with
respect to an Event of Default caused by the Company’s  failure to comply with Sections
 3.10,  3.11, and 3.12 shall be under clause (c) of this  Section 5.02 and OPIC’s sole
remedy with respect to an Event of Default  caused by the  Company’s  failure to comply
with  Section 3.01 shall be to refuse to pay  compensation  under the OPIC Insurance
 Contract with respect to any application for  compensation  arising out of events
related to such Event of  Default.  OPIC may permit the  Company to cure an Event of
Default  specified  in Section  5.01 if such Event of Default is  susceptible  of cure or
 correction,  but shall have no  obligation  to do so. Any Event of Default  which
 permits OPIC to terminate  the OPIC  Insurance  Contract is defined as an “Event of
Termination”.  The  Company  acknowledges  that in this  transaction  OPIC’s  right  to
 terminate  the OPIC Insurance  Contract upon the occurrence of an Event of Termination
is of the essence,  and no other remedies available to OPIC hereunder,  under the OPIC
Insurance  Contract,  or under applicable law shall be adequate in substitution therefor. 



ARTICLE SIX

 MISCELLANEOUS  



Section 6.01. Notices. 



    Each
notice,  demand,  report,  communication,  or request  relating to this Agreement  shall
be in writing in the English language,  shall be hand-delivered  or sent by mail (postage
 prepaid),  or facsimile transmission  (with a copy by mail to  follow,  receipt  of
which  copy  shall  not be  required  to  effect notice),  and shall be deemed duly given
when sent to the following  addresses,  or to such other address or number as each party
shall have last specified by notice to the other parties. 



If to the Company: 



         Brasil Telecom S.A

         SIA/Sul - ASP- Lote D- Bloco B

         Brasilia, DF 71215-000

         Brasil

         Attn: Chief Financial Officer

         FAX: 55 61 415 1870



If to OPIC: 



         Overseas Private Investment Corporation

         1100 New York Avenue, N.W.

         Washington, D.C. 20527

         United States of America

         Attn:    Vice President for Insurance

         FAX:     (202) 408-5142

         Re:      OPIC Insurance Contract No. F431 (Brazil)



Section 6.02. Benefits of Agreements. 



    (a)
     Nothing in this Agreement,  express or implied,  shall give to any person
 (including the Insured), other than the parties  hereto and their  successors  and
 permitted  assigns  hereunder  any benefit or any legal or equitable right or remedy
under this Agreement. 



    (b)
     The Company hereby agrees that nothing in the OPIC Insurance  Contract,  express or
implied,  shall give to the  Company or any other  person,  other than the  Insured  any
 benefit or any legal or  equitable right or remedy under the OPIC Insurance Contract. 



Section 6.03. Termination. 



    Except
 for  Sections  3.10,  3.11,  and 3.12 and as  otherwise  expressly  set forth  herein,
 the Company’s  obligations hereunder shall terminate on the date on which the OPIC
Insurance Contract and all of OPIC’s  obligations with respect thereto have expired,
 terminated or been fulfilled and OPIC has no further obligation thereunder. 



Section 6.04. Governing Law. 



    THIS
 AGREEMENT  SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE  WITH THE LAW OF THE STATE
OF NEW YORK, UNITED STATES OF AMERICA, APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
THEREIN. 



Section 6.05. Jurisdiction and Consent to Suit. 



    WITHOUT
 PREJUDICE  TO THE  RIGHTS OF OPIC TO BRING  SUIT IN ANY  APPROPRIATE  DOMESTIC  OR
FOREIGN JURISDICTION,  ANY PROCEEDING TO ENFORCE THIS AGREEMENT OR ANY OTHER TRANSACTION
 DOCUMENT MAY BE BROUGHT BY OPIC IN ANY STATE OR FEDERAL  COURT OF  COMPETENT
 JURISDICTION  IN THE STATE OF NEW YORK OR IN THE DISTRICT OF COLUMBIA  OF THE UNITED
 STATES OF AMERICA OR IN ANY OTHER  JURISDICTION  WHERE THE COMPANY OR ANY OF ITS
PROPERTY MAY BE FOUND.  THE COMPANY HEREBY  IRREVOCABLY  WAIVES ANY PRESENT OR FUTURE
 OBJECTION TO ANY SUCH VENUE, AND IRREVOCABLY  CONSENTS AND SUBMITS  UNCONDITIONALLY  TO
THE NON-EXCLUSIVE  JURISDICTION FOR ITSELF AND IN RESPECT OF ANY OF ITS PROPERTY OF ANY
SUCH COURT. THE COMPANY HEREBY FURTHER  IRREVOCABLY  WAIVES ANY CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION,  SUIT,  OR PROCEEDING  BROUGHT  THEREIN HAS BEEN BROUGHT IN AN
INCONVENIENT  FORUM.  THE  COMPANY  FURTHER  AGREES  THAT FINAL  JUDGMENT  AGAINST IT IN
ANY SUCH  ACTION OR PROCEEDING  ARISING  OUT OF OR  RELATING  TO THIS  AGREEMENT  OR ANY
 OTHER  TRANSACTION  DOCUMENT  SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER
 JURISDICTION  WITHIN OR OUTSIDE THE UNITED STATES OF AMERICA BY SUIT ON THE JUDGMENT,  A
CERTIFIED OR  EXEMPLIFIED  COPY OF WHICH SHALL BE  CONCLUSIVE  EVIDENCE OF THE FACT AND
OF THE AMOUNT OF ITS OBLIGATION. 



Section 6.06. Agent for Service of Process. 



    Simultaneously
 with execution hereof,  the Company shall (i) irrevocably  designate and appoint an
agent  satisfactory  to OPIC for service of process in the State of New York or the
 District of Columbia as its  authorized  agent to  receive,  accept,  and  acknowledge
 on its  behalf  service  of  process  in any proceeding  against the Company in
connection  with this Agreement or any other  Transaction  Document,  and shall  provide
OPIC with  evidence of the  prepayment  in full of the fees of such agent for the term of
the OPIC Insurance  Contract:  and (ii) take all other action required under  applicable
law to submit itself to the personal  jurisdiction  of the courts  referred to in Section
6.05.  The Company  agrees that service of process  upon said agent shall be deemed and
held in every  respect to be  effective  personal  service upon it. The Company shall
maintain such appointment (or that of a successor  satisfactory to OPIC)  continuously in
effect at all times while OPIC is  obligated  under the OPIC  Insurance  Contract.
 Nothing  herein shall affect OPIC’s right to serve process in any other manner permitted
by applicable law. 



Section 6.07. Jury Trial Waiver. 



    THE
COMPANY AND OPIC EACH  HEREBY  WAIVES ANY RIGHT TO HAVE A JURY  PARTICIPATE  IN
 RESOLVING  ANY DISPUTE  ARISING OUT OF, IN  CONNECTION  WITH,  RELATED TO, OR INCIDENTAL
 TO THE  RELATIONSHIP  ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT,  ANY
OTHER  TRANSACTION  DOCUMENT,  OR ANY OTHER INSTRUMENT, DOCUMENT,  OR  AGREEMENT
 EXECUTED OR  DELIVERED IN  CONNECTION  HEREWITH OR  THEREWITH OR THE  TRANSACTIONS
RELATED THERETO. 



Section 6.08. Succession. 



    This
Agreement shall inure to the benefit of and be binding upon the successors and assigns
of the parties hereto; provided, however, that the Company shall not, without the
prior written consent of OPIC and the Insured, assign or delegate all or any part of its
interest herein or obligations hereunder.  



Section 6.09. Integration; Amendments. 



    This
 Agreement  embodies the entire  understanding  of the parties hereto and supersedes all
prior negotiations,  understandings  and agreements  between them with respect to the
subject  matter hereof.  The provisions  of this  Agreement  may be waived,  supplemented
 or amended  only by an  instrument  in writing signed by authorized officers of the
Company, and OPIC. 



Section 6.10. Severability. 



    If
any provision of this  Agreement is prohibited or held to be invalid,  illegal or
 unenforceable in any  jurisdiction,  the  parties  hereto  agree  to the  fullest
 extent  permitted  by law  that (i) the validity,  legality and  enforceability of the
other provisions in such  jurisdiction  shall not be affected or impaired thereby,  and
(ii) any such prohibition,  invalidity,  illegality or unenforceability  shall not render
such provision prohibited, invalid, illegal, or unenforceable in any other jurisdiction. 



Section 6.11. No Waiver. 



    (a)
     No failure or delay by OPIC in  exercising  any right,  power or remedy  shall
 operate as a waiver thereof or  otherwise  impair any of its rights,  powers or
remedies.  No single or partial  exercise of any such right shall  preclude any other or
further  exercise  thereof or the exercise of any other legal right. No waiver of any
such right shall be effective unless given in writing. 



    (b)
     The  remedies  provided  for herein are  cumulative  and are not  exclusive  of any
other  remedies provided by law. The  employment of any remedy  hereunder,  or otherwise,
 shall not prevent the  concurrent assertion of any other appropriate remedy. 



Section 6.12. Further Assurances. 



    From
time to time, the Company shall execute and deliver to OPIC such additional  documents as
OPIC reasonably  may  request to carry out the  purposes of this  Agreement  or to
 preserve  and protect  OPIC’s rights as contemplated herein. 



Section 6.13. Counterparts. 



    This
Agreement may be executed in counterparts,  each of which when so executed and delivered
shall be deemed an original and all of which together shall constitute one and the same
instrument. 










    IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed and delivered on its behalf by its authorized representative as of the date
first above written.  



	 	BRASIL TELECOM S.A. 
	 
	 	By: ________________________________________________
	 	 
	 	Its: ________________________________________________
	 
	 
	 
	 	By: ________________________________________________
	 
	 	Its: ________________________________________________
	 
	 
	 
	 	OVERSEAS PRIVATE INVESTMENT 
	  	CORPORATION 
	 
	 	By:________________________________________________ 
	 
	 	Its:_______________________________________________











    IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed and delivered on its behalf by its authorized representative as of the date
first above written.  


 	 	BRASIL TELECOM S.A. 
	 
	 	By: ________________________________________________
	 	 
	 	Its: ________________________________________________
	 
	 
	 
	 	By: ________________________________________________
	 
	 	Its: ________________________________________________
	 
	 
	 
	 	OVERSEAS PRIVATE INVESTMENT 
	  	CORPORATION 
	 
	 	By:________________________________________________ 
	 
	 	Its:_______________________________________________

















Exhibit A  





Form of Self Monitoring
Questionnaire 





[Attached]