Prepared and filed by St Ives Burrups


Exhibit 4.1






	 
	Exhibit 4.1 Management Agreement



	 
	MANAGEMENT AGREEMENT



MANAGEMENT AGREEMENT dated as of August 4, 1998, by
  and between Empresa Brasileira de Telecomunicações S.A. - EMBRATEL,
  a sociedade anonima established and existing under the laws of Brazil, registered
  with the C.G.C./M.F. under number 33.530.486/0001-29, with offices at Av. Presidente
  Vargas, 1012, CEP 20179-900, Rio de Janeiro, RJ, Brazil (“EMBRATEL”)
  and MCI Global Resources, Inc., a Delaware corporation, with offices at 2 International
  Drive, Rye Brook, NY 10573, USA (“MCI”).



	W I T N E S S E T H:



WHEREAS, Startel Participações Ltda., a limited liability company organized under the laws of Brazil (“Purchaser”), and the Union, a/k/a the Government of Brazil, have entered into a Share Purchase Agreement dated August 4, 1998 (the “Share Purchase Agreement”), pursuant to which Purchaser initially acquired 51.79% of the voting stock of Embratel Participações S.A. “Embratel Participações”);




WHEREAS, Embratel Participações owns 98.75% of the voting stock of EMBRATEL;




WHEREAS, Purchaser is an Affiliate of MCI;




WHEREAS, MCI has the management, technical and financial capability, and is committed to developing and maintaining EMBRATEL’s telecommunications system as a technologically advanced, efficient system and EMBRATEL’s services as technologically current and responsive to customer requirements for the benefit of Brazil and its citizens; and




WHEREAS, EMBRATEL desires to benefit from, and MCI desires to provide EMBRATEL with, access to management, policy, operational, marketing and other related experience of the senior management of MCI and its Affiliates for the development and maintenance of EMBRATEL’s telecommunications system and services.




NOW THEREFORE, in consideration of the foregoing, it is agreed by and between the Parties hereto as follows:



	DEFINITIONS



Capitalized terms used in this Agreement and not otherwise defined shall have the following meanings:




“Affiliate” shall mean with respect
  to any person, any other entity that, directly or indirectly, through one or
  more intermediaries, controls, is controlled by or is under common control with,
  the specified person. For purposes of this definition, the term “control”
  as applied to
  any entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management of that entity, whether through ownership of shares, voting securities, partnership or other ownership interests, agreement or otherwise. As used in this Agreement, the term “Affiliate,” as it applies to MCI, shall not include EMBRATEL or any other entities organized under the laws of Brazil and, as it applies to EMBRATEL, shall not include MCI.



 








“Agreement” means this Management
  Agreement as amended or supplemented from time to time in accordance with its
  terms.




“ANATEL” means the Brazilian Agência
  Nacional de Telecomunicações.




“Annual Revenue” means total annual
  revenue, arising out of the Services, as defined hereinbelow, net of indirect
  taxes and contributions (ICMS, PIS and COFINS).




“Brazil” means the Federative Republic
  of Brazil.




“EMBRATEL” shall mean Empresa Brasileira
  de Telecomunicações S.A. - EMBRATEL and its Affiliates, as applicable.




“Fiscal Year” shall mean a year commencing
  on 1 January and ending on 31 December of each year.




“Intellectual Property” means all
  current and future worldwide rights to any inventions, discoveries or improvements,
  whether or not patentable; copyrights; trade secrets; know-how; utility models;
  Confidential Information; tradenames, trademarks and service marks, whether
  or not registered; all other intangible proprietary rights, including all applications and registrations with respect thereto; and all tangible embodiments of any of the foregoing.




“MCI” shall mean MCI Global Resources,
  Inc. and its Affiliates, as applicable.




“Parties” shall mean both parties
  to this Agreement, each of whom is sometimes referred to herein as a “Party.”




“Services” shall mean the services
  that EMBRATEL is authorized to provide under the terms and conditions of the:




Concession Contract - National Long Distance, and




Concession Contract - International Long Distance



which were executed on June 2, 1998, between EMBRATEL and ANATEL (collectively, the “Concession Contracts”); and the


Authorization Term of Network Transport Telecommunications Service,




Term of Right of Exploitation of Brazilian Satellites,




Authorization Term of Mobile Global Service by Satellite, and




Authorization Term of Maritime Mobile Service



which were executed on July 27, 1998, between EMBRATEL and ANATEL (collectively, the “Authorization Terms”), which services are listed and detailed on Attachment 1 hereto, provided, however, in the event of any discrepancy between the list on Attachment 1 and the terms and conditions of the Concession Contracts and Authorization Terms (as drafted in the original Portuguese), the Concession Contracts and Authorization Terms shall prevail. In addition to the foregoing, the term “Services,” as used in this Agreement, shall automatically include, as of the effective date authorization is granted, any additional services that EMBRATEL is authorized to provide during the Term hereof.

 

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	ARTICLE I


	 
	APPOINTMENT


1.01 Appointment. EMBRATEL
  hereby appoints MCI to manage and advise and assist with respect to the operations
  and administration of its business, and in particular, the provision of the
  Services, subject to the terms and conditions hereof, the Concession Contracts,
  the
  Authorization Terms, the Share Purchase Agreement, the Certificate of Incorporation and Bylaws of EMBRATEL, and the general authority, supervision and control of EMBRATEL acting through its Board of Directors.

It is understood that the Management Services to be provided under this Agreement are limited to offering advice and assistance of MCI’s senior management based upon MCI’s experience in, and knowledge of, telecommunications. EMBRATEL shall be responsible for determining whether to act upon, and implementing, such advice and assistance and for day-to-day management and operations. No provision of this Agreement shall require MCI or its Affiliates: to dedicate, (calculated on a quarterly average basis) more than 25% (twenty-five percent) of any respective member of senior management’s work time to providing the Management Services hereunder, to second full or part-time personnel to EMBRATEL, to provide monetary contributions or loans to EMBRATEL, to transfer Intellectual Property, or to offer advice and assistance in respect to any EMBRATEL offerings other than the Services. In addition, any MCI senior management or other personnel providing Management
 Services hereunder shall have no authority to conclude or execute agreements on behalf of MCI or its Affiliates while present in Brazil, shall remain employees of MCI or its Affiliates and shall remain subject to all of MCI’s policies, and shall continue to receive all compensation and benefits directly from MCI or its Affiliates.

1.02 Acceptance. MCI
  hereby accepts its appointment hereunder and agrees to make available such skills,
  services and expertise, and to work in good faith and in close cooperation with
  EMBRATEL, with the goal of strengthening the strategic position of EMBRATEL
  in the
  telecommunications industry in Brazil and making it a more business-driven, customer-oriented and technologically advanced telecommunications operator.

	ARTICLE II


	 
	GENERAL SERVICES


2.01 Management Services.
  MCI shall make experienced representatives of the senior management of its existing
  organizational areas and those of its Affiliates reasonably available to EMBRATEL
  to provide advice and services in the following areas: General Management and
  Oversight, Finance and Financial Reporting, Business Planning, Business Strategy, Investor Relations, Regulatory, Legal, Operations, Human Resources, Marketing, Sales, Advertising, Competitive Analysis, Billing, Pricing, Customer Service and Satisfaction, New Products, Procurement, and Network Planning (the “Management Services”).

2.02 Management and Operating
  Experience. MCI will provide the Management Services by coordination
  with EMBRATEL management and by means of making MCI’s senior management
  personnel available to EMBRATEL, as more fully described in this Agreement,
  in the areas
  listed in Section 2.01 above.

 

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	ARTICLE III


	 
	MANAGEMENT


	 
	3.01 Responsibilities
        of MCI.




(a) MCI shall, as requested by Embratel, provide advice regarding the management, operations, and business of EMBRATEL as they relate to the Services, including, but not limited to, the development and implementation of general performance policies, organizational structure, annual budgets and business and strategic plans (“Strategic Plans”), as described in Section 3.02. To this end, EMBRATEL shall provide to MCI all the information requested by MCI and unrestricted access to books, records and other data that MCI deems advisable for exercising its management advisory responsibilities.




(b) MCI shall use its experience and information and theoretical and practical knowledge, in its capacity as a telecommunications provider and service operator, and those methods and procedures MCI presently knows and uses, as well as all those resulting from the future development of MCI’s knowledge and experience, with the aim of improving and enhancing the operations, business and value of EMBRATEL through the application of operating strategies and management policies and practices available.




(c) At all times EMBRATEL may consult with MCI and may request advice of MCI on any question relating to its business activities within the scope of this Agreement.




(d) MCI shall offer to EMBRATEL the tangible and intangible benefits arising from the relationship with MCI including, among other things, economies of scale in the purchase of equipment, if and to the extent available. In addition, upon mutual agreement of EMBRATEL and MCI, MCI shall assist in the negotiations for EMBRATEL and its Affiliates to obtain certain technology from outside sources other than MCI or any Affiliate thereof.



	3.02 Strategic Plans.




(a) Within one hundred twenty (120) days of the date of this Agreement and, for each subsequent year, at least thirty (but not more than ninety) days prior to the beginning of EMBRATEL’s fiscal year, MCI shall use its management expertise and experience to assist EMBRATEL in the development of a Strategic Plan for EMBRATEL and for the approval of EMBRATEL’s Board of Directors. MCI shall provide Management Services to assist EMBRATEL in implementing such Strategic Plan as requested. Such strategic Plan shall address:



	 	(i)	 Business strategies; planning (including
      technical, commercial, acquisitions, information systems and real property)
      and short, medium and long term timetables for the fulfillment of the plans;
	 	 	 
	 	(ii)	Financial aspects, with particular emphasis
      on the analysis of the financial performance which may include the financing
      needs and the utilization of the most suitable financing sources; improving
      EMBRATEL’s return on capital invested; and assistance regarding the
      relationship with financial institutions and entities in order to obtain
      improved financing terms; and
	 	 	 
	 	(iii)	Administration and human resources with particular
      reference to the adoption of the most advisable administrative, accounting,
      tax, budgetary and fiscal practices, methods and controls.


 

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(b) Each Strategic Plan
  shall be developed by Embratel with MCI’s assistance and presented to the
  Board of Directors of EMBRATEL (the “Board”) for its approval.



	3.03 Organizational
        Structure and Designation of Personnel.




(a) MCI shall advise EMBRATEL on any restructuring of, or modifications to, the organizational structure of EMBRATEL (the “Organizational Structure”) which MCI may deem advisable and propose to EMBRATEL, from time to time, the personnel to occupy positions within EMBRATEL and its Affiliates. MCI shall endeavor that any such proposal comply with all pertinent labor laws, regulations, and agreements (including the Share Purchase Agreement). Any action shall be taken only at the direction of Embratel management and shall strictly comply with all pertinent labor laws, regulations, and agreements (including the Share Purchase Agreement). The designation and/or ratification of senior management and changes in the Organizational Structure shall be subject, where appropriate, to the approval of the Board in accordance with EMBRATEL’s By-laws.




(b) The officers and senior management employees proposed by MCI shall, to the knowledge of MCI, have the professional and technical qualifications to perform the functions that in each case are assigned to them. MCI shall assess such qualifications on the basis of objective evaluation methods. Such persons may come from MCI and its Affiliates, from EMBRATEL through internal promotion or from unaffiliated third parties.



	ARTICLE IV
	 
	PAYMENTS


4.01 Management Fee.
  EMBRATEL shall pay MCI as compensation for the Management Services a management
  fee (the “Fee”) which shall be the amount resulting from the application
  of the percentage stipulated below on EMBRATEL’s Annual Revenue derived
  from the Services.

The percentage to be applied shall be 1% per annum through December 31, 2000; 0.5% per annum from January 1, 2001, through December 31, 2002; and 0.2% per annum as of January 1, 2003.

Embratel agrees to provide MCI with appropriate office space, computer equipment and software, telephones, copiers, and local transportation, at its own expense.

	4.02 Payment Terms.




(a) The Fee shall be payable in advance in quarterly installments
    payable no later than the first day of the corresponding calendar quarter
    and shall be calculated by applying the formula set forth in Section 4.01
    of this Agreement to the applicable portion of EMBRATEL’s
    revenue for that quarter as set forth in the current business plan approved
    by the Board (“Advance Fee”). In order to reconcile discrepancies
    between the Advance Fee, based on forecasted revenue, and actual revenue earned
    by EMBRATEL during the same quarter, at the end of each
    calendar quarter EMBRATEL will calculate all revenue of said quarter arising
    out of the Services, including revenues due but not yet paid (“EMBRATEL’s
    Quarterly Revenue”). The percentages set forth in Section 4.01 of this
    Agreement will then be calculated over EMBRATEL’s Quarterly Revenue.
    The Fee payment at the end of each quarter (in addition to the Advance Fee,
    if applicable) shall be calculated by multiplying the final full quarterly
    portion of Annual Revenue, based upon the applicable financial statements
    of EMBRATEL, by the applicable percentage referred to in Section 4.01, and
    subtracting therefrom the Advance Fee payment made with respect to such quarter
    (“Adjusted Fee”). Any excess Advance Fee payments shall be deducted
    from subsequent installments due, or at EMBRATEL’s option, shall be promptly
    refunded by MCI. As the Services are invoiced by EMBRATEL in Brazilian current
    currency, but the Fees are to be paid in U.S. dollars, the calculation of
    both the Advance Fee and the Adjusted Fee shall use the average U.S. dollar
    sales rate, employed by major commercial banks operating with the floating
    exchange rate (commercial rate) in the City of Rio de Janeiro, Rio de Janeiro,
    Brazil, for the first day of the calendar quarter for which such Advance Fee
    or Adjusted Fee is calculated. Once said conversion to U.S. dollars has been
    made, the corresponding Fee shall henceforth for all legal purposes be referred
    to in U.S. dollars. EMBRATEL shall send to MCI every quarter, within 30 (thirty)
    days following the end of said period, a written report of all invoicing and
    the calculation of the Fees during said period. In addition, the Fee payment
    at the end of each Fiscal Year shall be calculated by multiplying the final
    full year Annual Revenue based upon the audited financial statements of EMBRATEL
    by the applicable percentage referred to in Section 4.01, and subtracting
    therefrom all prior Fee installment payments made with respect to such Fiscal
    Year. Any excess payments shall be deducted from subsequent installments due,
    or at EMBRATEL’s option, shall be promptly refunded by MCI.



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 Any late payments made by EMBRATEL will be subject to a fine
  of 5% (five percent) and a late payment interest rate of 1% (one percent), calculated
  pro rata monthly, over the amounts due in US dollars, provided that the percentage
  limitations set forth in Section 4.01 are not exceeded.



(b) If Embratel is required under Brazilian law to
  make any deduction or withholding of income taxes or social contributions taxes
  in relation to any payment of Fees to MCI, Embratel shall promptly remit such
  withheld tax to the appropriate governmental taxing authority, and shall provide
  MCI with official tax receipts for such remittances within a commercially reasonable
  period but in no event more than 90 days after the closing of Embratel’s
  Fiscal Year.





(c) All payments to MCI pursuant to this Agreement
  shall be made in U.S. dollars by wire transfer to a bank account designated
  by MCI.



	ARTICLE V
	 
	ADDITIONAL AGREEMENTS/INTELLECTUAL
      PROPERTY


5.01 Additional Agreements. The Parties agree to
  negotiate in good faith and enter into a separate agreements as necessary, in
  forms substantially similar to those to be provided by MCI or its Affiliates,
  which shall govern the specific terms and conditions including but not limited
  to MCI’s compensation other than the Fees, under which MCI and/or its Affiliates
  shall provide additional management services related to EMBRATEL products or
  services other than the Services.

5.02 Intellectual Property. EMBRATEL acknowledges
  that MCI and its Affiliates are the owners of various Intellectual Property
  rights. This Agreement is not to be construed in any respect that any license
  or other right is granted to EMBRATEL for such Intellectual Property, other
  than the rights granted in accordance with Section 5.03. EMBRATEL shall not
  dispute the validity of such Intellectual Property rights, nor oppose the registration
  of such Intellectual Property rights within any jurisdiction in the world.

5.03 License Agreements. At the sole option of MCI
  or its Affiliates, if applicable, Intellectual Property of MCI or its Affiliates
  may be made available to EMBRATEL on a case-by-case basis pursuant to a separate
  license agreement. Such license agreement will specify the terms under which
  the Intellectual Property is to be made available, the limitations on its use,
  the forms of compensation, other than the Fees, and the effect on the licenses
  of the Intellectual Property of various termination events.

	ARTICLE VI


	 
	DISCLAIMER OF WARRANTIES


6.01 DISCLAIMER OF WARRANTIES. IT IS EXPRESSLY UNDERSTOOD
  THAT MCI MAKES NO WARRANTY TO EMBRATEL OR ITS AFFILIATES WITH RESPECT TO THE
  PERFORMANCE OR FITNESS FOR ANY PURPOSE OF THE PRODUCTS OR SERVICES CONTEMPLATED
  BY THIS AGREEMENT. MCI EXPRESSLY DISCLAIMS ALL WARRANTIES INCLUDING, WITHOUT
  LIMITATION, THE IMPLIED WARRANTIES OF TITLE, MERCHANTABILITY AND FITNESS FOR
  A PARTICULAR PURPOSE.

	ARTICLE VII


	 
	DURATION


7.01 Initial Term. This Agreement shall become effective
  as of August 4, 1998, and shall continue through December 31, 2003.

 

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	ARTICLE VIII


	 
	TERMINATION


8.01 Termination by EMBRATEL. EMBRATEL may terminate
  this Agreement in the event MCI relevantly fails to perform its obligations
  and responsibilities under this Agreement and does not cure such failure within
  three months after receipt of a written notice of such failure setting forth
  in reasonable detail the nature of the alleged failure or, if such failure or
  breach is not capable of being cured within such three-month period and MCI
  diligently pursues a cure, such longer period of time as may be reasonable under
  the circumstances; provided, however, that EMBRATEL may not exercise the right
  of termination set forth in this Section 8.01 if MCI has previously notified
  EMBRATEL of its intention to terminate this Agreement pursuant to the provisions
  of Section 8.02.

8.02 Termination by MCI. MCI may terminate this
  Agreement in the event of any of the following:



(a) EMBRATEL fails to pay any amounts owed under this
  Agreement for more than 90 days;





(b) EMBRATEL materially impedes the ability of MCI
  to perform its obligations under this Agreement or is otherwise in material
  breach of this Agreement;





(c) EMBRATEL shall at any time fail to comply with
  or breach any of its representations, warranties, indemnities or other obligations
  under this Agreement and does not cure such breach within thirty days after
  receipt of a written notice of such failure setting for in reasonable detail
  the nature of the alleged failure;





(d) EMBRATEL is at any time the subject of an action
  under any winding up, liquidation, dissolution, insolvency or bankruptcy law
  or proceeding;





(e) MCI is no longer able to fulfill its obligations
  under this Agreement due to a Force Majeure Event that continues for more than
  60 days; or





(f) Failure to receive any necessary approvals of
  this Agreement as written within 90 days of the date of this Agreement by any
  government entities, including, but not limited to (as may be applicable), ANATEL,
  the Comissão de Valores Mobiliários, the Banco Central do Brasil,
  or the Instituto Nacional de Propriedade Industrial, provided, however, that
  MCI may agree with, in its sole discretion, with any government mandated modifications
  to this Agreement which MCI deems acceptable.





(g) Failure to receive any necessary corporate approvals
  of this Agreement by EMBRATEL or its Affiliates, as applicable.



8.03 MCI Operations after Termination. After receipt
  of written notice of termination of this Agreement, but prior to the effective
  date of such termination, MCI shall continue to perform under this Agreement
  unless specifically instructed to discontinue such performance. In any event,
  even if so instructed, MCI will nonetheless be entitled to reimbursement of
  reimbursable expenses incurred and payment of the Fees earned for the period
  ending on the effective date of termination. Such amounts shall be due and payable
  within 30 days of the effective date of the termination.

8.04 LIMITATION OF LIABILITY. THE TERMINATION OF
  THIS AGREEMENT PURSUANT TO THIS ARTICLE VIII SHALL NOT AFFECT THE RIGHTS OF
  ANY PARTY IN RESPECT OF ANY DAMAGES THEY MAY HAVE SUFFERED AS A RESULT OF ANY
  BREACH OF THIS AGREEMENT, NOR SHALL IT AFFECT THE RIGHTS OF ANY PARTY WITH RESPECT
  TO ANY LIABILITIES OR CLAIMS ACCRUING, OR BASED UPON EVENTS OCCURRING, PRIOR
  TO THE EFFECTIVE DATE OF TERMINATION. NOTWITHSTANDING THE FOREGOING, THE TYPES
  OF DAMAGES RECOVERABLE UNDER THIS AGREEMENT SHALL NOT INCLUDE LOSS OF PROFITS,
  LOSS OF BUSINESS OPPORTUNITY OR INCIDENTAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES,
  AND BY EXECUTING THIS AGREEMENT THE PARTIES WAIVE FOR ALL PURPOSES AND UNDER
  ALL CIRCUMSTANCES THE RIGHT TO CLAIM ANY OF THE SAME. IN ADDITION, THE PARTIES
  ACKNOWLEDGE AND AGREE THAT DAMAGES PAYABLE BY MCI TO ANY OTHER PARTIES UNDER
  THIS AGREEMENT SHALL BE LIMITED TO THOSE ACTS CONSTITUTING WILLFUL MISCONDUCT
  ON THE PART OF MCI.

 

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	ARTICLE IX


	 
	GENERAL PROVISIONS


9.01 Governing Law. This Agreement and the rights
  of the Parties shall be construed and interpreted in accordance with the laws
  of the State of New York and the United States of America, as applicable, in
  all respects, including matters of construction, enforcement and performance
  without giving effect to the principles of choice of laws thereof.

9.02 Arbitration. If the Parties are unable to resolve
  any dispute by amicable settlement, such dispute shall be settled by binding
  arbitration under in accordance with the Arbitration Rules of the United Nations
  Commission on International Trade Law (“UNCITRAL Rules”) as in force
  on the date of commencement of arbitration, and as modified by this Section
  9.02. Claims alleging violations of the telecommunications laws of the United
  States of America, however, shall be brought solely before the United States
  Federal Communications Commission. ADR Associates, of Washington, D.C., U.S.A.,
  shall serve as both the appointing authority and the administering body under
  the UNCITRAL Rules. ADR Associates shall appoint a single arbitrator of a nationality
  other than the nationalities of the Parties. All arbitration proceedings shall
  be conducted in English. The place of arbitration shall be Bermuda. Neither
  the Parties, nor the arbitrator, nor ADR Associates shall disclose the existence,
  content or results of any arbitration except with the prior written consent
  of all Parties to the arbitration. The law governing the arbitration proceedings
  shall be the Bermuda International Arbitration Act of 1993. The arbitrator shall
  abide by the rules of Ethics for International Arbitrators established by the
  International Bar Association. The arbitrator’s authority to grant relief
  is subject to the terms of this Section 9.02, the terms of this Agreement and
  the law governing the Agreement. The arbitrator shall have no authority to award
  punitive or treble damages. Each Party shall pay an equal share of the costs
  of the arbitration (as defined in Article 28 of the UNCITRAL Rules), except
  that each Party shall pay the expenses it incurs for its own legal representation
  and assistance. Judgment on the award may be entered in any court of competent
  jurisdiction. The post-award proceedings shall be governed by the Inter-American
  Convention on International Commercial Arbitration of 1975 (the Panama Convention).
  The validity and construction of this Section 9.02 shall be governed by the
  law of the State of New York, U.S.A., without regard to its conflict of laws
  rules.

9.03 Waiver. None of the terms of this Agreement
  shall be deemed to have been waived by any Party, unless such waiver is in writing
  and signed by that Party. The waiver by any Party of a breach of any provision
  of this Agreement shall not operate or be construed as a waiver of any other
  provision of this Agreement or of any further breach of the provision so waived.
  No extension of time for the performance of any obligation or act hereunder
  shall be deemed to be an extension of time for the performance of any other
  obligation or act.

 

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9.04 Notice. All notices and other communications
  that are required or permitted to be given under this Agreement shall be in
  writing in Portuguese and English and shall be deemed to have been duly given
  if delivered personally or by registered mail (return receipt requested) or
  courier service (documented by receipt) or telefaxed and addressed as follows:

	 	if to EMBRATEL:



	 	 	 
	 	 	Luigi Massimo Giavina Bianchi



	 	 	Finance Director



	 	 	EMBRATEL



	 	 	Av. Presidente Vargas, 1012
        - 15 andar



	 	 	CEP 20179-900 Rio de Janeiro,
        RJ



	 	 	Brazil



	 	 	 
	 	 	fax +55-21-233-7798



	 	 
	 	if to MCI:



	 	 	 
	 	 	Walter Schonfeld



	 	 	Vice President, Corporate
        Development



	 	 	MCI WorldCom, Inc.



	 	 	1801 Pennsylvania Ave. NW



	 	 	Washington, DC 20006



	 	 	USA



	 	 	 
	 	 	fax (202) 887-2443



	 	 
	 	with a copy to:



	 	 	 
	 	 	Ann LaFrance



	 	 	Chief Counsel, International
        Affairs



	 	 	MCI WorldCom, Inc.



	 	 	1717 Pennsylvania Ave. NW,
        8th Floor



	 	 	Washington, DC 20006



	 	 	 
	 	 	fax (202) 721-2790



and/or such other addressee and/or address as either of the above
  shall have specified by notice delivered in accordance with this Section 9.01.
  Each notice or other communication, which shall be delivered personally, mailed,
  telexed or telefaxed in the manner described above, shall be deemed sufficiently
  given, served, sent, received or delivered for all purposes on the first business
  day following the date that it is delivered to the addressee (with the return
  receipt, the delivery receipt, the affidavit or messenger or, with respect to
  a telex or telefax, the answer back being deemed conclusive, but not exclusive,
  evidence of such delivery) or at such time as delivery is refused by the addressee
  upon presentation.

 

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9.05 Entire Agreement. This Agreement contains the
  entire agreement, and supersedes all prior agreements and understandings and
  arrangements, oral or written, between the Parties with respect to the subject
  matter hereof.

9.06 Amendment. This Agreement may not be modified,
  amended or changed in any respect except in writing duly signed by the Party
  against whom enforcement of such modification, amendment or change is sought.

9.07 Successors and Assigns. All of the terms and
  provisions of this Agreement shall be binding upon and shall inure to the benefit
  of the Parties and their respective successors and permitted assigns.

9.08 Assignment. Except as provided in Section 9.09,
  no Party shall assign this Agreement, in whole or in part, without the prior
  written consent of the other Party, and any such assignment contrary to the
  terms hereof shall be null and void and of no force or effect. No permitted
  or purported assignment of all or any portion of this Agreement shall effect
  a release of the transferor of its obligations under this Agreement without
  an express written release from such obligations by the other Party.

9.09 Assignment by MCI. Notwithstanding Section
  9.08, MCI may assign or transfer its rights and obligations under this Agreement
  to any Affiliate of MCI, including entities organized under the laws of Brazil,
  without the consent of EMBRATEL.

9.10 Interpretation. Whenever possible, each provision
  of this Agreement shall be interpreted in such manner as to be effective and
  valid under applicable law, but if any provision of this Agreement shall be
  unenforceable or invalid under applicable law, such provision shall be ineffective
  only to the extent of such unenforceability or invalidity, and the remaining
  provisions of this Agreement shall continue to be binding and in full force
  and effect. In the event of such unenforceability or invalidity the Parties
  shall negotiate in good faith to agree on changes or amendments to this Agreement
  which are required to carry out the intent of this Agreement in light of such
  unenforceability or invalidity.

9.11 Counterparts. This Agreement may be executed
  in counterparts, each of which shall be deemed to be an original, and all such
  counterparts together shall constitute one and the same legal document.

9.12 Language. This Agreement and any amendments
  or other modifications hereof shall be executed in the English language and
  translated into Portuguese for convenience. In the event of a conflict between
  the English language and the Portuguese language versions of this Agreement,
  the English language version shall prevail.

9.13 Headings. The Article and other headings contained
  in this Agreement are for convenience only and shall not be deemed to limit,
  characterize or interpret any provision of this Agreement.

9.14 Force Majeure. Any failure by a Party to perform
  obligations and responsibilities under this Agreement (other than payment obligations)
  shall not be considered a breach of this Agreement if and to the extent such
  failure to perform is caused by one or more occurrences beyond the reasonable
  control of the Party affected, including without limitation acts of God, earthquakes,
  volcanic eruptions, hurricanes or other natural disasters, embargoes, acts of
  government in exercising its sovereign capacity, governmental restrictions,
  strikes, labor unrest, riots, wars or other military action, civil disorders,
  rebellion, acts of terrorism, sabotage, or political or economic crisis or instability
  (each a “Force Majeure Event”). The Party suffering the Force Majeure
  Event shall promptly notify the other Party in writing of the details of such
  Force Majeure Event and thereupon the obligations of the Party giving such notice
  shall be suspended during, but not longer than, the continuance of the Force
  Majeure Event. The affected Party shall use all reasonable diligence to remove
  the Force Majeure Event as quickly as possible, provided that this requirement
  shall not require the settlement of strikes, lockouts or other labor difficulty
  by the Party involved, contrary to its wishes, and how all such difficulties
  shall be handled shall be entirely within the discretion of the Party involved.

 

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	9.15 Confidentiality.





(a) Confidential Information. By virtue of this Agreement,
  the Parties may have access to, or exchange, information that is confidential
  to one another. As used in this Agreement, the term “Confidential Information”
  shall mean only such information of the other Party that may be reasonably understood
  from legends, the nature of such information itself and/or the circumstances
  of such information’s disclosure, to be confidential and/or proprietary
  to the other Party or to third parties to which the other Party owes a duty
  of non-disclosure.





(b) Obligations. Each of the Parties agrees that as
  to any Confidential Information disclosed by one Party (“Discloser”)
  to the other Party (“Recipient”) hereunder:



	 	(i)	to use such Confidential Information only
      in the performance of this Agreement, during its term, or as otherwise expressly
      permitted by this Agreement or by the prior written consent of the Discloser;
	 	 	 
	 	(ii)	not to make copies of any such Confidential
      Information or any part thereof except to the extent expressly permitted
      by this Agreement or by the Discloser;
	 	 	 
	 	(iii)	not to disclose any such Confidential Information
      to any third party, using the same degree of care used to protect Recipient’s
      own confidential or proprietary information of like importance, but in any
      case using no less than a reasonable degree of care; provided, however,
      that Recipient may disclose Confidential Information received hereunder
      to (aa) its Affiliates who are bound to protect the received Confidential
      Information from unauthorized use and disclosure under the terms of a written
      agreement (including without limitation a pre-existing written agreement),
      and (bb) to its employees, consultants and agents, and its Affiliates’
      employees, consultants and agents, who have a need to know to perform or
      exercise rights under this Agreement, and who are bound to protect the received
      Confidential Information from unauthorized use and disclosure under the
      terms of a written agreement (including without limitation a pre-existing
      written agreement).




(c) Exceptions. The restrictions set forth in this
  Section 9.15 on the use and disclosure of Confidential Information shall not
  apply to information that:



	 	(i)	was publicly known at the time of Discloser’s
      communication thereof to Recipient;
	 	 	 
	 	(ii)	becomes publicly known through no fault of
      Recipient subsequent to the time of Discloser’s communication thereof
      to Recipient;
	 	 	 
	 	(iii)	is in Recipient’s possession free of
      any obligation of confidence at the time of Discloser’s communication
      thereof to Recipient;
	 	 	 
	 	(iv)	is developed by Recipient independently of
      and without use of any of Discloser’s Confidential Information or other
      information that Discloser disclosed in confidence to any third party;
	 	 	 
	 	(v)	is rightfully obtained by Recipient without
      restriction from third parties authorized to make such disclosure; or
	 	 	 
	 	(vi)	is identified by Discloser in writing as no
      longer proprietary or confidential.


 

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(d) Disclosure Pursuant to Legal Requirement. In the
  event Recipient is required by law, regulation or court order to disclose any
  of Discloser’s Confidential Information, Recipient will promptly notify
  Discloser in writing prior to making any such disclosure in order to facilitate
  Discloser seeking a protective order or other appropriate remedy from the proper
  authority. Recipient agrees to cooperate with Discloser in seeking such order
  or other remedy. Recipient further agrees that if Discloser is not successful
  in precluding the requesting legal body from requiring the disclosure of the
  Confidential Information, it will furnish only that portion of the Confidential
  Information which is legally required and will exercise all reasonable efforts
  to obtain reliable assurances that confidential treatment will be accorded the
  Confidential Information.



9.16 No Authority to Bind. MCI shall have no authority
  to enter into contracts or otherwise incur obligations on behalf of or bind
  EMBRATEL, except as otherwise expressly approved by the Board.



IN WITNESS WHEREOF, the Parties hereto have
  executed this Agreement as of the day and year first above written.



	Empresa Brasileira de Telecomunicações
      S.A.	 	 MCI
      Global Resources, Inc.	 
	-
        EMBRATEL
	 	  	 
	
        

      
	 	
	 
	Dilio
        Sergio Penedo
	 	 Jorge
      L. Rodriguez	 
	President
	 	 Vice
      President	 
	 	 	 	 
	
        

      
	 	
	 
	Witness
	 	 Witness	 
	 	 	 	 
	
        

      
	 	
	 
	Print
        Name
	 	 Print
      Name	 
	 	 	 	 
	
        

      
	 	
	 
	ID
        Number
	 	 ID
      Number	 


 

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ATTACHMENT 1


The Services

	 CONCESSION
        AUTHORIZATION 
	 	SERVICES DESCRIPTION	 	SERVICES	 
	 
  	
	
	
	
	 
	 CONCESSION
        CONTRACT – NATIONAL LONG DISTANCE
	 	Switched Fixed Telephone Service
      is the telecommunications service which, by means of the transmission of
      voice and other signals, is used for communication between fixed and specific
      points, utilizing telephony processes.	 	Inter-City, Inter-State, and Inter-Region
      Switched Fixed Telephone Service within Brazil.	 
	 
  	
	
	
	
	 
	 CONCESSION
        CONTRACT – INTERNATIONAL LONG DISTANCE
	 	Switched Fixed Telephone Service is
      the telecommunications service which, by means of the transmission of voice
      and other signals, is used for communication between fixed and specific
      points, utilizing telephony processes.	 	International Switched Fixed Telephone Service	 
	 
  	
	
	
	
	 
	 AUTHORIZATION
        TERM OF NETWORK TRANSPORT TELECOMMUNICATIONS SERVICE (NATIONAL AND INTERNATIONAL)

                  	 	Network Transportation Service
      is the service designed for transporting voice, telegraphic, data or
      any other kind of telecommunications signals between fixed points.            	 	Special repetition of TV and video signal
      service	 
	 	 	Special repetition of audio signal service	 
	 	 	Dedicated line service (SLD)	 
	 	 	Analogic signals dedicated line service (SLDA)	 
	 	 	Digital signals dedicated line service (SLDD)	 
	 	 	Dedicated line service for telegraphy (SLDT)	 
	 	 	International dedicated line service (SLDI)	 
	 	 	International dedicated line service for analogic
      signals (SLDIA)	 
	 	 	International dedicated line service for digital
      signals (SLDID)	 
	 	 	International dedicated line service for telegraphy
      (SLDIT)	 
	 	 	Packet switched network service	 
	 	 	Circuit switched network service	 
	 	 	Text communications service – telex	 
	 
  	
	
	
	
	 
	 TERM
        OF RIGHT OF EXPLOITATION OF BRAZILIAN SATELLITES

       	 	  	 	Transport of telecommunications signals	 
	 	 	Provision of Space Capacity	 
	 
  	
	
	
	
	 
	 AUTHORIZATION
        TERM OF MOBILE GLOBAL SERVICE BY SATELLITE
	 	Global Mobile Satellite Service is
      the telecommunications service which uses a set of satellites to provide
      direct communication between a mobile earth station and another telecommunication
      station.	 	 	 
	 
  	
	
	
	
	 
	 AUTHORIZATION
        TERM OF MARITIME MOBILE SERVICE
	 	Mobile Maritime Services is the service
      designed to provide communication between onshore coastal stations and ship
      stations and between coastal earth stations and earth stations installed
      on board ships, vessels or rescue crafts.	 	 	 


 

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