Table of Contents

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INSURANCE TRUST
AGREEMENT

BRASIL TELECOM S.A., as

Issuer

and

THE BANK OF NEW YORK, as

Insurance Trustee

for the benefit of

the holders from time
to time of

9.375% Notes due 2014
issued by the Issuer

Dated as of February
17, 2004

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|TABLE OF CONTENTS              
|-------------------------------
|                               
|                               
|Article I                      
|DEFINITIONS                    
|                               
|Section 1.01.                  
|                               
|Article II                     
|CREATION OF THE INSURANCE TRUST
|                               
|Section 2.01.                  
|Section 2.02.                  
|Section 2.03.                  
|                               
|Article III                    
|INTEREST IN THE INSURANCE TRUST
|                               
|Section 3.01.                  
|Section 3.02.                  
|Section 3.03.                  
|                               
|Article IV                     
|THE INSURANCE POLICY           
|                               
|Section 4.01.                  
|Section 4.02.                  
|Section 4.03.                  
|Section 4.04.                  
|Section 4.05.                  
|Section 4.06.                  
|                               
|Article V                      
|THE INSURANCE TRUSTEE          
|                               
|Section 5.01.                  
|Section 5.02.                  
|Section 5.03.                  
|Section 5.04.                  
|Section 5.05.                  
|Section 5.06.                  
|Section 5.07.                  
|Section 5.08.                  
|Section 5.09.                  
|Section 5.10.                  
|Section 5.11.                  
|Section 5.12.                  
|Section 5.13.                  
|Section 5.14.                  
|Section 5.15.                  
|                               
|Article VI                     
|CONCERNING THE NOTEHOLDERS     
|                               
|Section 6.01.                  
|Section 6.02.                  
|                               
|Article VII                    
|TERMINATION OF TRUST           
|                               
|Section 7.01.                  
|                               
|Article VIII                   
|MISCELLANEOUS PROVISIONS       
|                               
|Section 8.01.                  
|Section 8.02.                  
|Section 8.03.                  
|Section 8.04.                  
|Section 8.05.                  
|Section 8.06.                  
|Section 8.07.                  
|Section 8.08.                  
|Section 8.09.                  
|Section 8.10.                  
|Section 8.11.                  
|Section 8.12.                  
|Section 8.13.                  
|Section 8.14.                  
|Section 8.15.                  
|Section 8.16.                  
|Section 8.17.                  



INSURANCE TRUST AGREEMENT
(the Agreement) dated as of February 17, 2004 between Brasil Telecom S.A. (the Issuer),
a sociedade anônima organized and existing under the laws of the Federative Republic of
Brazil, and The Bank of New York, a New York banking corporation, as trustee (the Insurance
Trustee).

W I T N E S S E T H:

WHEREAS, the Issuer is
today entering into an Indenture (the Indenture) dated as of February 17, 2004 with The
Bank of New York, as indenture trustee (the Indenture Trustee), pursuant to which it is
today issuing U.S.$200,000,000 aggregate principal amount of notes (the Notes);

WHEREAS, in order to
maximize the interests of the holders of the Notes (the Noteholders), the Overseas
Private Investment Corporation (the Insurer) shall, as a condition to the issuance of
the Notes, enter into a Contract of Insurance for Fixed Income Securities Against
Inconvertibility (the Insurance Policy) with, and for the benefit of, the Insurance
Trustee acting on behalf of the grantor trust created hereunder (the Insurance Trust)
for the benefit of the Noteholders in their capacity hereunder as sole beneficiaries of
the Insurance Trust (the Trust Beneficiaries);

WHEREAS, the Issuer and
the Insurance Trustee hereby declare the creation of the Insurance Trust for the benefit
of the Noteholders, and the initial Noteholders, by their respective acceptances of the
Notes, hereby join in the creation of the Insurance Trust with the Insurance Trustee;

WHEREAS, the beneficial
interests in the Insurance Trust shall be deemed to be a right that is part and parcel of
the Notes, represented by the Notes and shall not be detachable, severable or in any way
subject to transfer separate and apart from an interest in the Notes and all Noteholders
in their capacity as Trust Beneficiaries shall have agreed to the restrictions provided
for herein on any separate transfer of any interest in the Insurance Trust; and

WHEREAS, the Insurance
Trustee on behalf of the Insurance Trust shall enter into the Insurance Policy with the
Insurer and the Noteholders shall, pursuant to the Indenture and by acceptance of their
Notes, assign their right to receive interest due under the Notes to the Insurance
Trustee in an amount equal to U.S.$18,750,000, which amount is approximately equal to the
amount of interest on the Notes in respect of two interest periods as a basis for the
Insurer issuing the Insurance Policy to the Insurance Trustee.

NOW, THEREFORE, in
consideration of the mutual agreements herein contained, and of other good and valuable
consideration the receipt and adequacy of which are hereby acknowledged, the parties
hereto agree as follows:

Article I

DEFINITIONS

Section 1.01.
Definitions. (a) Terms defined in the Indenture and not otherwise defined in this
Agreement are used in this Agreement as defined in the Indenture.

(b)     For all purposes
of this Agreement, except as otherwise expressly provided or unless the context otherwise
requires:

(1)
the terms used          herein that are defined in this Article have the meanings
assigned to them in this          Article, and include the plural as well as the
singular;

(2)
all references          in this Agreement to designated Articles, Sections and other
subdivisions are          to the designated Articles, Sections and other subdivisions of
this Agreement;          and

(3)
the words herein,          hereof and hereunder and other words of similar import
refer to this          Agreement as a whole and not to any particular Article, Section or
other          subdivision.

(c)     In addition, the
following terms shall have the following meaning:

Act has the meaning set
forth in Section 6.01.

Agreement has the
meaning set forth in the preamble to this Agreement.

Code means the Internal
Revenue Code of 1986, as amended.

Corporate Trust Office means
the principal office of the Insurance Trustee at which the corporate trust business of
the Insurance Trustee shall at any particular time be principally administered, which at
the time of the execution of this Agreement is, in each case, located at 101 Barclay
Street, New York, NY 10286.

Departing Beneficiary has
the meaning set forth in Section 3.02.

Indenture has the
meaning set forth in the preamble to this Agreement.

Insurance Policy has
the meaning set forth in the preamble to this Agreement.

Indenture Trustee has
the meaning set forth in the preamble to this Agreement.

Insurance Trust means
the trust created by this Agreement, the estate of which consists of the Insurance Trust
Property.

Insurance Trust Property means
(i) the Insurance Policy and all rights thereunder and all proceeds thereof, (ii) the
Covered Interest Period Amounts assigned to the Insurance Trust pursuant to Section 5.2
of the Indenture, subject to the rights of the Insurer under the Insurance Policy
including, without limitation, the Insurers rights of subrogation and (iii) all the
Insurance Trusts rights under the Indenture and the other Transaction Documents and all
other payments by any Person in respect thereof, and any and all assets related thereto,
proceeds therefrom, payments under or distributions in respect thereof, now existing or
at any time hereafter created, which is at any time conveyed to the Insurance Trustee
pursuant to the Indenture and the other Transaction Documents and the terms and
conditions hereof or to which the Insurance Trustee otherwise holds estate, right, title
and interest in trust for the use and benefit of the Noteholders from time to time of the
Notes in their capacity as Trust Beneficiaries, all in accordance with the terms and
provisions of this Agreement.

Insurance Trustee has
the meaning set forth in the preamble to this Agreement.

Insurer has the meaning
set forth in the preamble to this Agreement.

Issuer has the meaning
set forth in the preamble to this Agreement.

Noteholders has the
meaning set forth in the preamble to this Agreement.

Responsible Officer,
when used with respect to the Insurance Trustee, means any officer in the Corporate Trust
Office (or any successor group of the Insurance Trustee) with direct responsibility for
the administration of this Agreement, or to whom any corporate trust matter is referred
because of his knowledge and familiarity with the particular subject and who shall have
direct responsibility for the administration of this Agreement.

Trust Beneficiaries has
the meaning set forth in the preamble to this Agreement.

Article II

CREATION OF THE
INSURANCE TRUST

Section 2.01.
Declaration of Trust; Entry into Insurance Policy. (a) In order to establish the
Insurance Trust created hereby, the Issuer appoints the Insurance Trustee to act as
trustee hereunder, and the Insurance Trustee hereby accepts the Insurance Trust created
hereby and declares that it will hold all estate, right, title and interest of the
Insurance Trust in and to all Insurance Trust Property in trust for the use and benefit
of the Noteholders from time to time in their capacity as Trust Beneficiaries, all in
accordance with the terms and provisions of this Agreement.

(b)     By its signature
hereof the Issuer, and by its purchase and acquisition of an interest in the Notes, each
Noteholder in its capacity as Trust Beneficiary, shall be deemed to authorize and direct
the Insurance Trustee to:  (i) enter into the Insurance Policy, the Indenture and each
other Transaction Document to which the Insurance Trustee, on behalf of the Insurance
Trust, is a party, (ii) accept the Assignment, (iii) perform its duties thereunder and
(iv) otherwise act in accordance with the terms hereof.

Section 2.02.
Acceptance by Trustee. (a) The Insurance Trustee, upon the execution and delivery
of this Agreement, (i) acknowledges its acceptance of all right, title, ownership and
interest in and to the Insurance Trust Property acquired pursuant to the terms hereof and
Section 5.2(d) of the Indenture, (ii) declares that the Insurance Trustee holds and will
hold such right, title, ownership and interest, together with all other property
constituting the Insurance Trust Property, for the benefit of all present and future
Noteholders in their capacity as Trust Beneficiaries, upon the terms herein set forth and
(iii) covenants and agrees to keep at all times proper records of the Insurance Trust
Property and of the Trust Beneficiaries interest therein.

(a)      The Issuer
confirms that on the date hereof it has delivered to the Insurance Trustee, prior to or
promptly following the establishment of the Insurance Trust, copies of the Indenture and
all other Transaction Documents.

Section 2.03.
Limitation of Powers. The Insurance Trust is constituted solely for the purpose of
(i) holding the Insurance Policy and the other Insurance Trust Property, (ii) prosecuting
claims thereunder, (iii) securing payment of claims for the benefit of the Noteholders
from time to time in their capacity as Trust Beneficiaries, causing payment of any such
claims to be paid to the Indenture Trustee, or to the extent that the Principal Paying
Agent shall remain appointed under the Indenture, the Principal Paying Agent, for deposit
to the Payment Account and payment therefrom of the Insured Portion of the Covered
Interest Period Amounts that is or are the subject of a claim paid under the Insurance
Policy in accordance with its terms, (iv) accepting the Assignment and (v) other
activities incidental thereto, and, except as set forth herein, the Insurance Trustee
shall have no power to create, assume or incur indebtedness or other liabilities other
than in the performance of its duties and obligations as contemplated in this Agreement
and is not authorized or empowered to acquire any other investments or engage in any
other activities and, in particular, the Insurance Trustee is not authorized or empowered
to do anything that would cause the Insurance Trust to fail to qualify as a grantor trust (within
the meaning of Subpart E, Part I of Subchapter J of Chapter 1, Subtitle A of the Code)
for U.S. federal income tax purposes.

Article III

INTEREST IN THE
INSURANCE TRUST

Section 3.01.
Evidence of Interests in Insurance Trust. The beneficial interests in the Insurance
Trust shall be (i) owned, legally and beneficially, by the Noteholders in their capacity
as Trust Beneficiaries in the form of an undivided interest in the Insurance Trust
Property and (ii) deemed to be a right that is part and parcel of the Notes, represented
by the Notes and shall not be detachable, severable or in any way subject to transfer
separate and apart form an interest in the Notes, and all Noteholders in their capacity
as Trust Beneficiaries by their acceptance of the Notes agree to the foregoing
restrictions on separate transfer of any interest in the Insurance Trust or Insurance
Trust Property and that, consistent with the Indenture, any attempt by a Noteholder (or
an interest therein) to do so shall be null and void. Each Noteholder in its capacity as
Trust Beneficiary shall have an interest in such portion of the Insurance Trust Property,
including the Covered Interest Period Amounts, as the principal amount of the Notes owned
by that Noteholder bears to the total principal amount of the Notes.

Section 3.02.
Withdrawal from Insurance Trust. Each Trust Beneficiary shall at all times have the
right to cease to be a beneficiary of the Insurance Trust (a Departing Beneficiary) by
providing not less than thirty days prior written notice to both the Insurance Trustee
and the Indenture Trustee, and at the effectiveness of any such request, the Insurance
Trustee shall reassign to such Departing Beneficiary, without recourse, a pro rata
interest in the Covered Interest Period Amounts on the understanding and agreement by the
Departing Beneficiary (in its capacity as Noteholder or otherwise) that by ceasing to be
a beneficiary of the Insurance Trust such Departing Beneficiary shall, under current
applicable law and the current arrangements under which the Insurance Policy is issued,
surrender its direct or indirect interest in the Insurance Policy.

Section 3.03. Rights
of Enforcement. Subject to the rights of the Insurer under the Insurance Policy, each
Trust Beneficiary, in its capacity as a Noteholder, shall, individually and without the
need to act in concert with any other Trust Beneficiary or the Insurance Trustee, be
entitled to exercise the rights and remedies assigned to the Insurance Trust in respect
of the Covered Interest Period Amounts, including all rights under Section 7.9 of the
Indenture applicable thereto.

Article IV

THE INSURANCE POLICY

Section 4.01. Payment
of Premium. The Issuer hereby confirms that the total premium due in respect of the
Insurance Policy has been paid by the Issuer to the Indenture Trustee on behalf of the
Insurance Trust for further credit to the Insurer on or prior to the Closing Date.

Section 4.02. Payment
Instructions for Covered Interest Period Amounts. The Noteholders in their capacity as
Trust Beneficiaries, by acceptance of their Notes, hereby acknowledge and agree that:

(a)      Unless otherwise
instructed hereunder, all payments to the Noteholders (in their capacity as Trust
Beneficiaries hereunder) shall be made to the Indenture Trustee, or to the extent that
the Principal Paying Agent shall remain appointed under the Indenture, to the Principal
Paying Agent, by depositing all such amounts in the Payment Account to be paid over to
the Noteholders in their capacity as Trust Beneficiaries.

(b)      The Insurer
shall have the rights set forth in the Insurance Policy and described in Section 4.03(c)
hereof with respect to the Covered Interest Period Amounts.

(c)      If,
notwithstanding the Assignment, no claim is ever made under the Insurance Policy, then,
unless otherwise instructed pursuant hereto, the Issuer shall pay to the Indenture
Trustee, or to the extent that the Principal Paying Agent shall remain appointed under
the Indenture, to the Principal Paying Agent, all such amounts as would otherwise be
payable to the Insurance Trust in respect of the Covered Interest Periods by depositing
all such amounts in the Payment Account to be paid over to the Trust Beneficiaries in
their capacity as such consistent with their rights to receive principal, interest and
other amounts due from time to time under the Notes and the Indenture.

(d)      If
notwithstanding any other provision of this Agreement the Insurance Trustee shall receive
any payment in respect of the Covered Period Interest Amounts, unless otherwise
instructed pursuant hereto, all such amounts as are received by the Insurance Trustee
shall be promptly paid over to the Indenture Trustee, or to the extent that the Principal
Paying Agent shall remain appointed under the Indenture, to the Principal Paying Agent on
behalf of the Trust Beneficiaries by depositing all such amounts in the Payment Account
and neither the Insurance Trust nor the Insurer nor any other Person shall be entitled to
retain or receive any such Covered Interest Period Amount (or any portion or proceeds
thereof).

(e)      Any payments
received by the Noteholders pursuant to Section 3.2(c) and 5.1(a)(i)(C) of the Indenture
in respect of the amounts set forth in clause (iv) of the definition of Required Amount
in the Indenture shall be deemed to be a payment to the Noteholders in their capacity as
Trust Beneficiaries in respect of the portion of the Covered Interest Period Amounts not
covered by the Insurance Policy.

Section 4.03. Claims
on the Insurance Policy. (a) The Insurance Trustee agrees to file with the Insurer such
claim applications as are required under the Insurance Policy upon the occurrence of any
Currency Inconvertibility Event. In connection with the filing of a claim with the
Insurer of amounts payable under the Insurance Policy, the Insurance Trustee shall direct
the Insurer to make any payment under the Insurance Policy to the Indenture Trustee, or
to the extent that the Principal Paying Agent shall remain appointed under the Indenture,
to the Principal Paying Agent, by depositing all such amounts to the Payment Account to
be paid over to the Trust Beneficiaries in their capacity as such.

(b)      The Insurance
Trustee shall give all notices, make all filings and take all actions required of it
pursuant to the terms of the Insurance Policy, including, without limitation, the filing
of a claim with the procedures and subject to the time limitations set forth in Article
IV of the Insurance Policy.  In connection with its satisfaction of its obligations
hereunder and under the Insurance Policy, the Issuer hereby agrees to provide all such
information and take all such actions as are required hereunder or thereunder, including,
without limitation, ensuring the continued enforceability of the Insurance Policy in
connection with the submission of any claim thereunder and the satisfaction of any
requirement provided therein.

(c)      If a claim is
made under the Insurance Policy:

(i)
In accordance with Section 3.01.1(a) of the Insurance Policy, the Insurance Trustee shall
(or          shall require the Issuer to, and the Issuer shall), at the election of the
Insurer, prior to          payment of a claim by the Insurer, either:

(1)   deliver
or cause to be delivered to the Insurer (A) inconvertible reais, in an amount
equal to the Insured Portion of the Covered Interest Period Amounts relating to such
claim at the rate of exchange specified in the Insurance Policy, or (B) non-transferable
U.S. dollars, in an amount equal to the Insured Portion of the Covered Interest Period
Amounts relating to such claim (in either case in the form of (x) funds immediately
available to the Insurer in Brazil or, (y) at the Insurers option, in cash); or

(2)
assign to the Insurer, or, at the Insurers option, grant to the Insurer a participation
in, the                   Insurance Trustees right to receive the Insured Portion of the
Covered Interest Period                   Amounts relating to such claim; or

(3)
(A) assign to the Insurer, or, at the Insurers option, grant to the Insurer a
participation in, the Insured Portion of the Covered Interest Period Amounts relating to
such claim in the applicable deposit account in which such reaisor
non-transferable U.S. dollars are, held by, or for, or at the direction of, the Issuer,
and (B) assign to the Insurer, or, at the Insurers option, grant to the Insurer a
participation in, all rights of such Person with respect to the Insured Portion of the
Covered Interest Period Amounts relating to such claim thereof and all claims with
respect thereto arising out of the Currency Inconvertibility Event, including, without
limitation, claims against the Brazilian government.

(ii)   To
the extent provided in the Insurance Policy, the Insurer shall be subrogated to the
rights of          the Noteholders (and, as a result of the Assignment of the Covered
Interest Period Amounts under          Section 5.2(d) of the Indenture, of the Insurance
Trust) with respect to any payment of interest          on the Notes with funds provided
by the Insurer under the Insurance Policy (except to the extent          that the Insurer
has requested and received reais or non-transferable U.S. dollars as described in
         Section 4.03(c)(i)(1)).

(iii)
The Insurance Trustee is not to release the Issuer from its obligation to make scheduled
payments of interest on the Notes with respect to the Insured Portion of the Covered
Interest Period Amounts (or any part thereof) for which the Insurance Trustee has
received reaisor non-transferable U.S. dollars until the Insurer has (as
described in Section 4.03(c)(i)(1)) agreed to accept delivery of such reaisor
non-transferable U.S. dollars in discharge of the obligation of the Issuer to make
scheduled payments of interest on the Notes with respect to the Insured Portion of the
Covered Interest Period Amounts, the Insurer has received such amounts, and the Insurance
Trustee has received compensation under the Insurance Policy. Further, the Insurance
Trustee and, in accordance with the Indenture, the Indenture Trustee are not to release
the Issuer from its obligation to make scheduled payments of interest on the Notes with
respect to the Insured Portion of the Covered Interest Period Amounts (or any part
thereof) if the Insurer agrees (as described in Section 4.03(c)(i)(2) or (3)) to accept
an assignment of, or participation in, the rights of the Insurance Trustee or the Issuer,
as the case may be, in the applicable deposit account or to receive scheduled payments of
interest on the Notes with respect to the Insured Portion of the Covered Interest Period
Amounts (or any part thereof) in lieu of receiving reais or non-transferable U.S. dollars
in exchange for payment by the Insurer of compensation under the Insurance Policy unless
the Insurer notifies the Insurance Trustee and the Indenture Trustee in writing that it
has received payments from the Issuer under the Company Support Agreement representing
such previously compensated amounts and then only to the extent of such payments by the
Issuer to the Insurer.

(d)
     The Issuer shall at all times use its best efforts to assist the Insurance Trustee
in seeking compensation pursuant to the Insurance Policy.

Section 4.04.
Undertakings Required by the Insurance Policy. (a) Only the Insurance Trustee may
exercise its rights and obligations under the Insurance Policy. No individual Trust
Beneficiary shall be permitted to exercise any right under the Insurance Policy or
perform any obligations in lieu of the Insurance Trustee under the Insurance Policy. By
accepting the Notes, the Noteholders in their capacity as Trust Beneficiaries acknowledge
that the independent rights of salvage of the Insurer contained in the Insurance Policy
will not be subject to any pari passusharing arrangements of the nature referred to in
Section 4.04 of the Insurance Policy.

(b)      By accepting the
Notes, the Noteholders in their capacity as Trust Beneficiaries acknowledge, as
contemplated by Section 4.10 of the Insurance Policy, that they will be bound by the
actions and omissions of the Insurance Trustee under the Insurance Policy, including,
without limitation, the grant of assignments or participations under Section 3.01.1 of
the Insurance Policy and described in Section 4.03(c)(i) or the submission of a Final
Application (as defined in the Insurance Policy) with respect to the Insurance Policy.

(c)      By accepting the
Notes, the Noteholders in their capacity as Trust Beneficiaries acknowledge, as
contemplated by Section 4.11 of the Insurance Policy, that no description, summary or
characterization of the terms of the Insurance Policy contained in the offering materials
with respect to the Notes shall (i) be treated as an amendment, interpretation or
construction of the Insurance Policy which would be binding on the Insurer, or (ii)
introduced in any proceeding for any such purpose.  With respect to the interpretation of
any provision of the Insurance Policy, in the event of any inconsistency between the
terms of the description, summary or characterization of the terms of the Insurance
Policy in the offering materials with respect to the Notes, and the terms of the
Insurance Policy, the terms of the Insurance Policy shall govern, it being agreed that
the Insurer takes no responsibility for any description, summary or other
characterization of the terms of the Insurance Policy contained in the offering materials
with respect to the Notes, regardless of whether the Insurer has knowledge thereof.

(d)      By accepting the
Notes, the Noteholders in their capacity as Trust Beneficiaries acknowledge, as
contemplated by Section 5.02(b) of the Insurance Policy, that to the extent that the
Insurer has already paid in full any compensation which should have been reduced pursuant
to Section 5.02(b) of the Insurance Policy (with respect to the Holder Representations
set forth in Section 5.2(f)(i)(1) of the Indenture), OPIC may directly recover the amount
of the reduction from any Noteholder (in its capacity as Trust Beneficiary) whose
compensation should have been reduced pursuant to Section 5.02(b) of the Insurance Policy.

Section 4.05.
Termination of Insurance Policy. (a) At any time on or after the third or any
subsequent anniversary of the Closing Date and so long as, to the knowledge of the
Insurance Trustee (after consultation with the Indenture Trustee), no Default or Event of
Default has occurred and is continuing, the Insurance Trustee, at the written direction
of the Issuer, may cancel the Insurance Policy in accordance with the terms of the
Insurance Policy, upon receipt of 90-calendar-days prior written confirmation from Moodys
and Fitch that its then current rating of the Notes is at least Baa3 and BBB-,
respectively, and that such ratings will not be lowered or withdrawn as a result of such
cancellation. Any refund of the premium originally paid by the Issuer on behalf of the
Insurance Trustee at Closing shall not be part of the Insurance Trust Property and shall
be paid to the Issuer.

(b)     Except as
provided in Section 4.05(a), the Insurance Trustee shall not have authority to terminate
the Insurance Policy unless it is instructed to do so by the all Noteholders.

Section 4.06.
Covenants of Issuer. The Issuer hereby covenants and agrees with the Insurance Trust
that in connection with any application by the Insurance Trustee for compensation
pursuant to the Insurance Policy in respect of Currency Inconvertibility Event, the
Issuer shall (i) make all reasonable efforts to convert reais 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 the Insurer,
(ii) assist the Insurance Trustee with the preparation of such application for
compensation and (iii) perform, at the request of the Insurance Trustee, the obligations
set forth in Section 3.01.1(a)(i) or (iii) of the Insurance Policy.

Article V

THE INSURANCE TRUSTEE

Section 5.01. Certain
Rights and Duties of Insurance Trustee. (a) The Insurance Trustee undertakes to perform
only such duties as are specifically set forth in this Agreement, the Insurance Policy
and each other Transaction Document to which the Insurance Trustee is a party, and no
implied covenants or obligations shall be read into this Agreement against the Insurance
Trustee. The Insurance Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of his or her
own affairs.

(b)      Except as
otherwise provided in Section 315 of the Trust Indenture Act:

(i)
the Insurance Trustee may conclusively rely and shall be fully protected in acting, or
refraining          from acting, upon any resolution, certificate, statement, instrument,
opinion, report, notice,          request, consent, order, note, debenture or other paper
or document reasonably believed by it in          good faith to be genuine and to have
been signed or presented by the proper party or parties;

(ii)
any request, direction, order or demand of the Issuer mentioned herein shall be
sufficiently          evidenced by an Officers Certificate (unless other evidence in
respect thereof be herein          specifically prescribed), and any resolution of the
Board of Directors shall be evidenced to the          Insurance Trustee by a copy thereof
certified by the secretary or an assistant secretary of the          Issuer;

(iii)
the Insurance Trustee shall be under no obligation to exercise any of the trusts or
powers vested          in it by this Agreement, and may refuse to perform any duty or
exercise any such rights or powers          unless it shall have been offered reasonable
security or indemnity to its reasonable satisfaction          against the costs, expenses
and liabilities which may reasonably be incurred therein or thereby;

(iv)
the Insurance Trustee shall not be liable for any action taken, suffered or omitted by it
in good          faith and in good faith believed by it to be authorized or within the
rights or powers conferred          upon it by this Agreement (provided that the
Insurance Trustees conduct does not constitute          negligence or willful
misconduct) or with respect to any action it takes or omits to take in good
         faith in accordance with a direction received by it from Noteholders holding a
sufficient          percentage of Notes to give such direction as permitted by the
Indenture and this Agreement;

(v)
subject to Section 5.01(a), the Insurance Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, appraisal, note,
debenture or other paper or document with respect to the Notes unless requested in
writing so to do by the Majority Noteholders, providedthat if the payment within
a reasonable time to the Insurance Trustee of the reasonable costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is, in the
opinion of the Insurance Trustee, not reasonably assured to the Insurance Trustee by the
security afforded to it by the terms of this Agreement, the Insurance Trustee may require
indemnity reasonably satisfactory to it against such expenses or liabilities as a
condition to such proceeding. The reasonable expense of every such investigation shall be
paid by the Issuer or, if paid by the Insurance Trustee, shall be repaid by the Issuer
upon demand;

(vi)
the Insurance Trustee may execute any of the trusts or powers hereunder or perform any
duties          hereunder either directly or by or through agents, attorneys, custodians
or nominees and the          Insurance Trustee shall not be responsible for any
misconduct or negligence on the part of any          agent, attorney custodian or nominee
appointed with due care by it hereunder;

(vii)
the Insurance Trustee shall not be liable for any error of judgment made in good faith by
a          Responsible Officer of the Insurance Trustee unless it shall be proved that
the Insurance Trustee          was negligent in ascertaining the pertinent facts or the
action or failure to act by such          Responsible Officer was unreasonable;

(viii)
the Insurance Trustee shall not be liable with respect to any action taken or omitted to
be taken          by it in good faith in accordance with any direction of the Issuer or
the Noteholders given under          this Agreement, provided that the Insurance Trustees
conduct does not constitute negligence or          willful misconduct;

(ix)
the Insurance Trustee shall not be bound to make any investigation into the facts or
matters          stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request,          consent, entitlement order, approval or other paper or
document;

(x)
the Insurance Trustee shall not be deemed to have notice of any Default or Event of
Default under          the Indenture unless a Responsible Officer of the Insurance
Trustee has actual knowledge thereof          or unless written notice of any event which
is in fact such a default is received by the Insurance          Trustee at the Corporate
Trust Office of the Insurance Trustee, and such notice references the          Notes and
the Indenture;

(xi)
the rights, privileges, protections, immunities and benefits given to the Insurance
Trustee,          including, without limitation, its right to be indemnified, are
extended to, and shall be          enforceable by, the Insurance Trustee and each agent,
custodian and other Person employed to act          hereunder; and

(xii)
the Insurance Trustee may request that the Issuer deliver an Officers Certificate
setting forth          the names of individuals and/or titles of officers authorized at
such time to take specified          actions pursuant to this Agreement, which Officers
Certificate may be signed by any person          authorized to sign an Officers
Certificate, including any person specified as so authorized in          any such
certificate previously delivered and not superseded.

(c)      None of the
provisions contained in this Agreement shall require the Insurance Trustee to expend or
risk its own funds or otherwise incur personal financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers, if there shall be a
reasonable ground for believing that the repayment of such funds or indemnity
satisfactory to it against such liability is not reasonably assured to it.

(d)      The Insurance
Trustee may reasonably request information, including an Officers Certificate, from time
to time, as necessary or appropriate in order to ascertain compliance with the
requirements of this Agreement and may consult with counsel and the written advice or
opinion of counsel shall be full and complete authorization and protection in respect of
any action taken or omitted by it hereunder in good faith and in accordance with such
advice or opinion of counsel.

(e)      If the Insurance
Trustee has or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Insurance Trustee shall either eliminate such interest or resign, to
the extent and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Agreement.

(f)      The Insurance
Trustee shall (i) notify the Trust Beneficiaries in the event there is a default in the
payment of Covered Interest Period Amounts and (ii) forward to the Trust Beneficiaries
any reports and other communications received from the Issuer or from the Insurer which
are received by the Insurance Trustee in its capacity as such, unless such reports or
communications have been directly forwarded to the Trust Beneficiaries, in their capacity
as Noteholders, by the Issuer or the Insurer.

Section 5.02.
Insurance Trustee Not Responsible for Recitals, etc. The recitals contained herein,
shall be taken as the statements of the Issuer, and the Insurance Trustee assumes no
responsibility for the correctness of the same. The Insurance Trustee shall not be
accountable for the use or application by the Issuer of any of the Notes or of the
proceeds of such Notes. The Insurance Trustee assumes no liability with respect to the
validity or worth of the Insurance Policy or the Covered Interest Period Amounts.

Section 5.03.
Insurance Trustee and Others May Hold Notes. (a) The Insurance Trustee, or any
Affiliate thereof, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with the Issuer, or any other obligor on the
Notes with the same rights it would have if it were not Insurance Trustee.

(b)     The Insurance
Trustee is subject to Section 311(a) of the Trust Indenture Act, excluding any creditor
relationship listed in Section 311(b) of the Trust Indenture Act.  If the Insurance
Trustee resigns or is removed, such Insurance Trustee shall be subject to Section 311(a)
of the Trust Indenture Act to the extent indicated therein.

Section 5.04.
Compensation of the Insurance Trustee. (a) The Issuer covenants and agrees to pay
to the Insurance Trustee from time to time, and the Insurance Trustee shall be entitled to, reasonable
compensation for all services rendered by it hereunder (which shall be agreed to from
time to time by the Issuer and the Insurance Trustee and which shall not be limited by
any provision of law in regard to the compensation of an Insurance Trustee of a grantor
trust), and, except as herein otherwise expressly provided, the Issuer will pay or
reimburse the Insurance Trustee upon its respective request for all duly documented
reasonable expenses and disbursements incurred or made by the Insurance Trustee in
accordance with any of the provisions of this Agreement (including the reasonable
compensation and the reasonable expenses, advances and disbursements of its counsel and
of all persons not regularly in its employ, in each case duly documented) except any such
expense or disbursement as may arise from its gross negligence or bad faith.  The Issuer
also covenants and agrees to indemnify the Insurance Trustee for, and to defend and hold
harmless the Insurance Trustee and its officers, directors, employees, representatives
and agents from and against, any loss, liability, claim, damage or expense, including,
without limitation, the fees and expenses of its legal counsel, incurred without gross
negligence or bad faith on the part of the Insurance Trustee or any of their employees,
officers or agents, arising out of or in connection with the acceptance or administration
of the trust or trusts hereunder, the performance of its duties and-or the exercise of
its rights, including liability which the Insurance Trustee may incur as a result of
failure to withhold, pay or report Taxes and including the costs and expenses of
defending itself against any claim or liability in the premises and including, without
limitation, any loss, liability, claim, damage or expense relating to or arising out of
any Environmental Law.  In no event shall the Insurance Trustee be liable for special,
indirect or consequential loss or damages whatsoever (including, but not limited to, lost
profits), even if the Insurance Trustee has been advised of the likelihood of such damage
and regardless of the form of action taken.

(b)     The obligations
of the Issuer under this Section 5.04 shall survive payment in full of the Notes and any
claim and payment under the Insurance Policy, the resignation or removal of the Insurance
Trustee and the termination of the Insurance Trust and this Agreement.

(c)     When the
Insurance Trustee incurs expenses or renders services in connection with the performance
of its obligations hereunder after an Event of Default under the Indenture occurs, the
expenses and compensation for such services are intended to constitute expenses of
administration under applicable bankruptcy, insolvency or other similar United States
federal or state law to the extent provided in Section 503(b)(5) of the Federal
Bankruptcy Code.

Section 5.05. Right
of Insurance Trustee to Rely on Officers Certificates and Opinions of Counsel. Before
the Insurance Trustee acts or refrains from acting with respect to any matter
contemplated by this Agreement, it may require an Officers Certificate of the Issuer or
an Opinion of Counsel, which shall conform to the provisions of Section 14.1 of the
Indenture. The Insurance Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on such certificate or opinion as set forth in Section
5.01(b)(v).

Section 5.06. Persons
Eligible for Appointment as Insurance Trustee. There shall at all times be a Insurance
Trustee hereunder which shall at all times (i) be a bank which complies with the
eligibility requirements of the Trust Indenture Act, having a combined capital and
surplus of at least U.S.$100,000,000 and have a long-term unsecured debt rating of at
least A2 by Moodys and (ii) meet the requirements of Section 5.01.2(a) of the
Insurance Policy. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of a supervising or examining authority referred
to in Section 310(a) of the Trust Indenture Act, then, for the purposes of this Section
5.06, the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Insurance Trustee shall cease to be eligible in
accordance with this Section 5.06, the Insurance Trustee shall resign immediately in the
manner and with the effect specified in Section 5.07.

Section 5.07.
Resignation and Removal of Insurance Trustee; Appointment of Successor. (a) The
Insurance Trustee, or any Insurance Trustee or Insurance Trustees hereafter appointed,
may at any time resign by giving written notice to the Issuer and by giving notice of
such resignation to the Noteholders (in their capacity as Trust Beneficiaries) in the
manner provided in Section 14.4 of the Indenture.

(b)      In case at any
time any of the following shall occur with respect to anyNotes:

(i)      the Insurance
Trustee shall fail to comply with the provisions of Section 310(b) of the Trust Indenture
         Act, after written request by the Issuer or by any Noteholder (in its capacity
as Trust Beneficiary) who          has been a bona fide Noteholder for at least six
months,

(ii)     the Insurance
Trustee shall cease to be eligible under Section 5.06 and shall fail to resign after
         written request therefor by the Issuer or by any Noteholder (in its capacity as
Trust Beneficiary), or

(iii)    the Insurance
Trustee shall become incapable of acting, or shall be adjudged bankrupt or insolvent, or
a          receiver of the Insurance Trustee or of its property shall be appointed, or
any public officer shall          take charge or control of the Insurance Trustee or of
its property or affairs for the purpose of          rehabilitation, conservation or
liquidation;

then, in any such case,
(A) the Issuer may remove the Insurance Trustee, and appoint a successor Insurance
Trustee by written instrument, in duplicate, executed by order of the Board of Directors
of the Issuer, or (B) subject to the requirements of Section 315(e) of the Trust
Indenture Act, any Noteholder (in its capacity as Trust Beneficiary) who has been a bona
fide Noteholder for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the removal of the
Insurance Trustee and the appointment of a successor Insurance Trustee.  Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe, remove the
Insurance Trustee and appoint a successor Insurance Trustee.

(c) The Majority
Noteholders (in their capacity as Trust Beneficiaries) may at any time remove the
Insurance Trustee and appoint a successor
Insurance Trustee by delivering to the
Insurance Trustee so removed, to the successor Insurance Trustee
so appointed and to the Issuer the evidence
provided for in Section 6.01 of the action
taken by the Noteholders (in their capacity as
Trust Beneficiaries), provided that unless a
Default or Event of Default under the
Indenture shall have occurred and be continuing,
the Issuer shall consent (such consent not to
be unreasonably withheld).

(d) If the Insurance
Trustee shall resign, be removed, or become incapable of acting or if a vacancy shall
occur in the office of Insurance Trustee with
respect to this Agreement for any cause, the
Issuer shall promptly appoint a successor
Insurance Trustee or Insurance Trustees by written
instrument, in duplicate, executed by order
of the Board of Directors of the Issuer, one
copy of which instrument shall be delivered to the
former Insurance Trustee and one copy to the
successor Insurance Trustee. If no successor
Insurance Trustee shall have been so
appointed and have accepted such appointment
pursuant to Section 5.08 within 30 calendar
days after the mailing of such notice of
resignation or removal, the former Insurance
Trustee may, at the Issuers expense,
petition any court of competent jurisdiction for
the appointment of a successor Insurance
Trustee, or any Noteholder (in its capacity
as Trust Beneficiary) who has been a bona fide
Noteholder for at least six months may,
subject to the requirements of Section 315(e)
of the Trust Indenture Act, on behalf of itself and
all others similarly situated, petition any
such court for the appointment of a successor
Insurance Trustee. Such court may thereupon
after such notice, if any, as it may deem proper and
prescribe, appoint a successor Insurance
Trustee.

(e) Any resignation
or removal of the Insurance Trustee and any appointment of a successor Insurance Trustee
pursuant to this Section shall become
effective only upon acceptance of appointment
by the successor Insurance Trustee as provided in
Section 5.08.

Section 5.08.
Acceptance of Appointment by Successor Insurance Trustee. (a) Any successor
Insurance Trustee appointed under Section 5.07 shall execute, acknowledge and deliver to
the Issuer and to its predecessor Insurance Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the predecessor
Insurance Trustee shall become effective and such successor Insurance Trustee, without
any further act, deed or conveyance, shall become vested with all the rights, powers,
trusts, duties and obligations of its predecessor Insurance Trustee hereunder, with like
effect as if originally named as Insurance Trustee herein; but, nevertheless, on the
written request of the Issuer or of the successor Insurance Trustee, the Insurance
Trustee ceasing to act shall, upon payment of any such amounts then due it pursuant to
the provisions of Section 5.04, execute and deliver an instrument transferring to such
successor Insurance Trustee all the rights, powers and trusts of the Insurance Trustee so
ceasing to act, and shall assign, transfer and deliver to such successor Insurance
Trustee all property and money as may be held by such Insurance Trustee ceasing to act.
Upon request of any such successor Insurance Trustee, the Issuer shall execute any and
all instruments in writing for more fully and certainly vesting in and confirming to such
successor Insurance Trustee all such rights and powers. Any Insurance Trustee ceasing to
act shall, nevertheless, retain a lien upon all property or funds held or collected by
such Insurance Trustee to secure any amounts then due it pursuant to Section 5.04.

(b)     No successor
Insurance Trustee shall accept appointment as provided in this Section 5.08 unless at the
time of such acceptance such successor Insurance Trustee shall be eligible under Section
5.06.

(c)     Upon acceptance
of appointment by a successor Insurance Trustee, the Issuer shall give notice of the
succession of such Insurance Trustee hereunder to the Noteholders in their capacity as
Trust Beneficiaries in the manner provided in Section 14.4 of the Indenture.  If the
Issuer fails to give such notice within 10 calendar days after acceptance of appointment
by the successor Insurance Trustee, the successor Insurance Trustee shall cause such
notice to be given at the expense of the Issuer.

Section 5.09. Merger,
Conversion or Consolidation of Insurance Trustee. Any Person into which the Insurance
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the Insurance
Trustee shall be a party, or any Person succeeding to all or substantially all the
corporate trust business of the Insurance Trustee, shall be the successor of the
Insurance Trustee hereunder without the execution or filing of any paper or any further
act on the part of any of the parties hereto; providedthat such successor Insurance
Trustee shall be qualified under the Trust Indenture Act and eligible under the
provisions of Section 5.06 hereof and Section 310(a) of the Trust Indenture Act.

Section 5.10. Reports
by Insurance Trustee.On or before July 15 in every year, so long as any Notes are
Outstanding, the Insurance Trustee shall transmit to the Noteholders (in their capacity
as Trust Beneficiaries) specified in Section 313(a) of the Trust Indenture Act a brief
report, dated as of the preceding May 15, to the extent required by Section 313 of the
Trust Indenture Act in accordance with the procedures set forth in said Section. A copy
of such report at the time of its mailing to Noteholders shall be filed with the SEC and
each stock exchange, if any, on which the Notes are listed. The Issuer shall promptly
notify the Insurance Trustee if the Notes become listed on any stock exchange or any
de-listing thereof, and the Insurance Trustee shall comply with Section 313(d) of the
Trust Indenture Act.

Section 5.11.
Insurance Trustee Risk. None of the provisions contained in this Agreement shall
require the Insurance Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if it shall have reasonable ground for believing that the repayment
of such funds or liability is not reasonably assured to it. Whether or not expressly
provided herein, every provision of this Agreement relating to the conduct or affecting
the liability of or affording protection to the Insurance Trustee shall be subject to
Section 5.01 and the requirements of the Trust Indenture Act.

Section 5.12.
Appointment of Co-Insurance Trustee.(a) It is the purpose of this Agreement that
there shall be no violation of any law of any jurisdiction denying or restricting the
right of banking corporations or associations to transact business as Insurance Trustee
in such jurisdiction. It is recognized that in case of litigation under this Agreement
or any Transaction Document, and in particular in case of the enforcement of any such
document on default, or in case the Insurance Trustee deems that by reason of any present
or future law of any jurisdiction it may not exercise any of the powers, rights or
remedies herein granted to the Insurance Trustee or hold title to the properties, in
trust, as herein granted, or take any other action which may be desirable or necessary in
connection therewith, it may be necessary that the Insurance Trustee appoint an
additional individual or institution as a separate or co-Insurance Trustee. The
following provisions of this Section 5.12 are adopted to these ends.

(b)     In the event that
the Insurance Trustee appoints an additional individual or institution as a separate or
co-Insurance Trustee, each and every remedy, power, right, claim, demand, cause of
action, immunity, estate, title, interest and lien expressed or intended by this
Agreement to be exercised by or vested in or conveyed to the Insurance Trustee with
respect thereto shall be exercisable by and vested in such separate or co-Insurance
Trustee but only to the extent necessary to enable such separate or co-Insurance Trustee
to exercise such powers, rights and remedies, and every covenant and obligation necessary
to the exercise thereof by such separate or co-Insurance Trustee shall run to and be
enforceable by either of them.

(c)     Should any
instrument in writing be required by the separate Insurance Trustee or co-Insurance
Trustee so appointed by the Insurance Trustee for more fully and certainly vesting in and
confirming to him or it such properties, rights, powers, trusts, duties and obligations,
any and all such instruments in writing shall, on request, be executed, acknowledged and
delivered by the Issuer.  In case any separate Insurance Trustee or co-Insurance Trustee,
or a successor to either, shall die, become incapable of acting, resign or be removed,
all the estates, properties, rights, powers, trusts, duties and obligations of such
separate Insurance Trustee or co-Insurance Trustee, so far as permitted by law, shall
vest in and be exercised by the Insurance Trustee until the appointment of a new
Insurance Trustee or successor to such separate Insurance Trustee or co-Insurance Trustee.

(d)     Every separate
Insurance Trustee and co-Insurance Trustee shall, to the extent permitted by law, be
appointed and act subject to the following provisions and conditions:

(i)      all rights,
powers, duties and obligations conferred or imposed upon the Insurance Trustee shall be
         conferred or imposed upon and exercised or performed by the Insurance Trustee
and such separate          Insurance Trustee or co-Insurance Trustee jointly (it being
understood that such separate Insurance          Trustee or co-Insurance Trustee is not
authorized to act separately without the Insurance Trustee          joining in such act),
except to the extent that under any law of any jurisdiction in which any
         particular act or acts are to be performed the Insurance Trustee shall be
incompetent or unqualified to          perform such act or acts, in which event such
rights, powers, duties and obligations (including the          holding of title to any
property or any portion thereof in any such jurisdiction) shall be exercised and
         performed singly by such separate Insurance Trustee or co-Insurance Trustee, but
solely at the direction          of the Insurance Trustee;

(ii)     no Insurance
Trustee hereunder shall be personally liable by reason of any act or omission of any
other          Insurance Trustee hereunder;

(iii)    the Insurance
Trustee may at any time accept the resignation of or remove any separate Insurance
Trustee          or co-Insurance Trustee; and

(iv)     each
co-Insurance Trustee appointed hereunder shall at all times be a bank that complies with
the          eligibility requirements set forth in Section 310(a) of the Trust Insurance
Act, have a combined capital          and surplus of U.S.$100,000,000, have its corporate
trust office in the Borough of Manhattan, The City          of New York and have a
long-term unsecured debt rating of at least A2 by Moodys.  If such bank
         publishes reports of condition at least annually, pursuant to law or to the
requirements of a          supervising or examining authority referred to in Section
301(a) of the Trust Insurance Act, then for          the purposes of this subsection, the
combined capital and surplus of such bank shall be deemed to be its          combined
capital and surplus as set forth in its most recent report of condition so published.

Section 5.13.
Representations and Warranties of Trustee. The Insurance Trustee represents and
warrants that, at all times, such of the following is true and will be true:

(i)      it is a banking
corporation duly organized, validly existing, and in good standing under the laws of the
         State of New York more than 50% of which is beneficially owned by citizens of
the United States or          corporations or associations incorporated under United
States law, its principal office and place of          business is located at its
Corporate Trust Office and, in its capacity as Insurance Trustee, has all
         requisite power and authority to execute, deliver and perform this Agreement,
the Insurance Policy, the          Company Support Agreement and each of the other
Transaction Documents to which the Insurance Trustee is          a party, including the
power and authority to accept the Insurance Trust created thereunder and
         hereunder;

(ii)     the Insurance
Trustee has full corporate power, authority and legal right under the laws of the State
of          Delaware and the laws of the United States pertaining to its banking and
trust powers to execute,          deliver, and perform this Agreement and each of the
other Transaction Documents to which the Insurance          Trustee is a party and has
taken all necessary action to authorize the execution, delivery, and          performance
by it of this Agreement and each of the other Transaction Documents to which the
Insurance          Trustee is a party;

(iii)    the Insurance
Trustee meets the eligibility requirements set forth in Section 5.06.

(iv)     the execution,
delivery and performance by the Insurance Trustee of this Agreement and each of the other
         Transaction Documents to which the Insurance Trustee is a party will not
contravene any law, rule or          regulation of the State of New York or any United
States governmental authority or agency regulating the          Insurance Trustees
banking or trust powers or any judgment or order applicable to or binding on the
         Insurance Trustee and will not contravene or result in any breach of, or
constitute a default under, the          Insurance Trustees charter or by-laws or the
provision of any indenture, mortgage, contract or other          agreement to which it is
a party or by which it or any of its properties is bound;

(v)      the execution,
delivery and performance by the Insurance Trustee of this Agreement and each of the other
         Transaction Documents to which the Insurance Trustee is a party will not require
the authorization,          consent, or approval of, the giving of notice to, the filing
or registration with, or the taking of any          other action in respect of, any
United States or Delaware governmental authority or agency regulating          the
banking and trust activities of the Insurance Trustee;

(vi)     this Agreement
and each of the other Transaction Documents to which the Insurance Trustee is a party
         have been duly executed and delivered by it and, assuming that this Agreement
and each of the other          Transaction Documents to which the Insurance Trustee is a
party is the legal, valid and binding          obligation of the relevant parties thereto
(other than the Insurance Trustee), this Agreement and each          of the other
Transaction Documents to which the Insurance Trustee is a party are the legal, valid and
         binding obligations of the Insurance Trustee, enforceable against the Insurance
Trustee in accordance          with their terms except as limited by bankruptcy,
insolvency, moratorium, reorganization, receivership,          fraudulent conveyance or
similar laws or equitable principles of general application to or affecting the
         enforcement of creditors rights and remedies generally from time to time in
effect, regardless of          whether such enforceability is considered in a proceeding
in equity or at law;

(vii) on the date
hereof, the Insurance Trustee is not aware of any limitation on its ability, or any
general limitation on the ability, to convert reaisinto U.S. dollars or to
transfer such converted currency to the United States; and

(viii)   each of the
representations and warranties of the Insurance Trustee contained in Section 5.01.1 of
the          Insurance Policy is true and correct.

Section 5.14.
Compliance with the Insurance Policy. The Insurance Trustee will comply with each of
its covenants and agreements contained in the Insurance Policy. The Insurance Trustee
will, upon the reasonable request of any Noteholder (in its capacity as Trust
Beneficiary), provide such Noteholder (in its capacity as Trust Beneficiary) with such
information in its possession, and take such other actions, as may be required in order
to enable the Insurance Trustee or such Noteholder (in its capacity as Trust Beneficiary)
to comply with the terms and conditions of the Insurance Policy. Without limiting the
foregoing, the Insurance Trustee will (i) take the steps specified in Article IV of the
Insurance Policy at the times and in the manner therein specified, (ii) promptly notify
the Insured and the Indenture Trustee upon obtaining Actual Knowledge (as defined in the
Insurance Policy) that it no longer meets the requirements set forth in Section 5.01.2(a)
of the Insurance Policy, in the manner therein specified, (iii) as promptly as reasonably
practicable, notify the Insurer of any circumstance of which the Insurance Trustee has
Actual Knowledge of any event that may render the Insurer liable under the Insurance
Policy, and of any Default or other defaults of which the Insurance Trustee has Actual
Knowledge as specified in Section 5.01.6 of the Insurance Policy, (iv) give prompt notice
to the Insurer in the event it obtains Actual Knowledge regarding a breach or potential
breach of the representations made by the Noteholders pursuant to Section 5.2(f) of the
Indenture in the manner set forth in Section 5.01.10. of the Insurance Policy and (v)
promptly note in the Insurance Trustees records the Insurers rights as subrogee and
assignee in respect of the Notes.

Section 5.15. Trustees
Liens.The Insurance Trustee, in its individual capacity, agrees that it will at its own
cost and expense promptly take any action as may be necessary to duly discharge and
satisfy in full any mortgage, pledge, lien, charge, encumbrance, security interest or
claim on or with respect to the Insurance Trust Property which is either (i) attributable
to the Insurance Trustee in its individual capacity and which is unrelated to the
transactions contemplated by this Agreement or the other Transaction Documents, or (ii)
which is attributable to the Insurance Trustee as trustee hereunder or in its individual
capacity and which arise out of acts or omissions which are prohibited by this Agreement.
The Insurance Trustee, in its individual capacity, further agrees and acknowledges that
the Insurance Trust Property shall not be considered assets of the Insurance Trustee and,
therefore, the Insurance Trust Property is not subject to any third-party claims against
the Insurance Trustee in its individual capacity.

ARTICLE VICONCERNING THE NOTEHOLDERS

Section 6.01. Acts of
Noteholders. (a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by Noteholders in their
capacity as Trust Beneficiaries or otherwise (collectively, an Act of such Noteholders,
which term shall also refer to the instruments or record evidencing or embodying the
same) may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Noteholders in person or by an agent duly appointed in
writing or, alternatively, may be embodied in and evidenced by the record of Noteholders
voting in favor thereof, either in person or by proxies duly appointed in writing, at any
meeting of Noteholders duly called and held in accordance with the provisions of Article
X of the Indenture, or a combination of such instruments and any such record. Except as
herein otherwise expressly provided, such action shall become effective when such
instrument or instruments or record, or both, are delivered to the Insurance Trustee.
Proof of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Agreement and (subject to Section 5.01)
conclusive in favor of the Insurance Trustee and the Issuer, if made in the manner
provided in this Section 6.01. The record of any meeting of Noteholders shall be proved
in the manner provided in the Indenture.

(b)     The fact and date
of the execution by any Person of any such instrument or writing may be proved by the
certificate of any public or other officer of any jurisdiction authorized to take
acknowledgments of deeds or administer oaths that the Person executing such instrument
acknowledged to such officer the execution thereof, or by an affidavit of a witness to
such execution sworn to before any such notary or other such officer, and where such
execution is by an officer of a corporation or association or of the Issuer, on behalf of
such corporation, association or the Issuer, such certificate or affidavit shall also
constitute sufficient proof of such Persons authority.  The fact and date of the
execution of any such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Insurance Trustee deems sufficient.

(c)     The ownership of
the Notes, the principal amount and serial numbers of Notes held by any Person and the
date or dates of holding the same shall be proved by the Note Register in accordance with
the Indenture and the Insurance Trustee shall not be affected by notice to the contrary.

(d)     Any act of any
Noteholder (i) shall bind the holder of such Note and every future Noteholder of the same
Note and the Noteholder of every Note issued upon the transfer thereof or the exchange
therefor or in lieu thereof, whether or not notation of such action is made upon such
Note and whether or not such Noteholder has given its consent (unless required under this
Insurance) to such Act or was present at any duly held meeting, and (ii) shall be valid
notwithstanding that such Act is taken in connection with the transfer of such Note to
any other Person, including the Issuer or any Affiliate thereof.

(e)     Until such time
as written instruments shall have been delivered with respect to the requisite percentage
of principal amount of Notes for the Act contemplated by such instruments, any such
instrument executed and delivered by or on behalf of a Noteholder may be revoked with
respect to any or all of such Notes by written notice by such Noteholder (or its duly
appointed agent) or any subsequent Noteholder (or its duly appointed agent), proven in
the manner in which such instrument was proven unless such instrument is by its terms
expressly irrevocable.

(f)     For purposes of
this Agreement, Noteholder meetings shall be conducted in accordance with Article X and
other provisions of the Indenture including, without limitation, the determination of
whether the Noteholders requisite aggregate principal amount of Notes concurring for any
request, demand, authorization, direction, notice, consent and waiver or other act under
this Agreement.

(g)     Subject to the
rights of the Insurer, if, under the terms of the Indenture, there is to be any vote of,
or consent or approval sought from, the holders of Covered Interest Period Amounts, the
Insurance Trustee will seek instruction from the Trust Beneficiaries in respect of such
vote, consent or approval and will only provide such vote, consent or approval as
instructed by the Trust Beneficiaries.

Section 6.02.
Noteholder Lists. In accordance with Section 2.21 of the Indenture, the Indenture
Trustee shall preserve in as current form as is reasonably practicable the most recent
list available to it of the names and addresses of Noteholders and shall otherwise comply
with Section 312(a) of the Trust Indenture Act. If the Indenture Trustee is not the Note
Registrar, or to the extent otherwise required under the Trust Indenture Act, the Issuer
shall furnish to the Indenture Trustee, in writing at least seven Business Days before
each Interest Payment Date and at such other times as the Indenture Trustee may request
in writing, a list in such form and as of such date as the Indenture Trustee may
reasonably require of the names and addresses of the Noteholders, and the Issuer shall
otherwise comply with Section 312(a) of the Trust Indenture Act. The Indenture Trustee
shall, upon request by the Insurance Trustee, furnish a copy of such lists to the
Insurance Trustee pursuant to Section 2.21 of the Indenture; on the basis of the
information received from the Indenture Trustee, the Insurance Trustee shall maintain a
record of the record owners of interests in the Insurance Trust Property.

ARTICLE VIITERMINATION OF TRUST

Section 7.01.
Termination of the Trust.(a) The respective obligations and responsibilities of
the Issuer and the Insurance Trustee created hereby and the Insurance Trust created
hereby shall terminate upon the earliest of (i) repayment in full of the Notes in
accordance with the Indenture or (ii) upon cancellation of the Insurance Policy;
provided, however, that in no event shall the Insurance Trust created hereby continue
beyond the expiration of 21 years from the death of the last survivor of the descendants
of George Herbert Walker Bush, former President of the United States, living on the date
of this Agreement.

(b)     So long as no
claims were made under the Insurance Policy and the Insurer has no right in or with
respect to the Covered Interest Period Amounts at such time, upon termination of the
Insurance Trust, the Insurance Trustee on behalf of the Insurance Trust shall be deemed,
without the need of any further action, to have reassigned the Covered Interest Period
Amounts to the Noteholders.

ARTICLE VIIIMISCELLANEOUS PROVISIONS

Section 8.01.
Limitation on Rights of Noteholders. The death or incapacity of any Noteholder shall
not operate to terminate this Agreement or the Insurance Trust, nor entitle such
Noteholders legal representatives or heirs to claim an accounting or to take any action
or commence any proceeding in any court for a partition or winding up of the Insurance
Trust, nor otherwise affect the rights, obligations, and liabilities of the parties
hereto or any of them.

Section 8.02.
Amendment or Waiver. (a) This Agreement may be amended from time to time by the
Insurance Trustee and the Issuer without the consent of any of the Noteholders solely to
cure any ambiguity or to correct any provision hereof (provided that such action shall
not, materially adversely affect the rights of any Noteholder) and as set forth in this
Agreement.

(b)     Except as set
forth in Section 8.02(a) and for the cases in which the consent of all Noteholders is
required under the Indenture, this Agreement may be amended from time to time by the
Trustee, the Issuer and the Majority Noteholders, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of this
Agreement, or of modifying in any manner the rights of the Noteholders, and any rights
granted to the Noteholders hereunder may be waived in writing by the Majority Noteholders
entitled to direct the exercise of such rights.

(c)     Promptly after
the execution by all required parties of any such amendment to, or waiver of, this
Agreement hereto, the Issuer shall furnish a copy of any such amendment to, or waiver of
this Agreement to the Insurance Trustee and each Rating Agency.

(d)     The Insurance
Trustee may, but shall not be obligated to, enter into any amendment or waiver with
respect to this Agreement which affects the Insurance Trustees own rights, duties or
immunities under this Agreement or otherwise.  Prior to executing any amendment, the
Insurance Trustee shall be entitled to receive an Opinion of Counsel stating that such
amendment is permitted by this Agreement.

(e)     Notwithstanding
anything to the contrary in the foregoing, the Insurance Trustee shall not enter into any
amendment with respect to this Agreement if, as a result thereof, the rating of the Notes
would be reduced or withdrawn.  The Issuer shall provide to the Rating Agencies, a copy
of any proposed amendment (except for any amendment agreed from time to time by the
Trustee and the Issuer pursuant to Section 8.02(a) hereof) at least 10 days prior to the
execution thereof by the Issuer, and request written confirmation that each Rating Agency
will not, as a result of such amendment, cause the rating of the Notes to be reduced or
withdrawn, and, as soon as practicable after the execution thereof of any such amendment,
provide to each Rating Agency an executed copy thereof.

(f) Notwithstanding
the provisions of this Section 8.02, no provision of this Agreement or any other
Transaction Document shall be modified, waived or amended without the Insurers prior
written consent, which consent shall not be withheld unreasonably; provided, however,
that no such consent will be required if such modification, waiver or amendment (i) does
not relate to a Scheduled Payment (as defined in the Insurance Policy), (ii) does not
require the consent of each of the Holders under the terms of this Agreement and the
Indenture, (iii) does not present a material possibility of adversely affecting the
rights, benefits or obligations of the Insurer under the Insurance Policy 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 Insurance Trustee (as the Insured or otherwise) or the Insurer, as subrogee or
otherwise; provided, further, that in no event may the Insurance Trustee consent to any
rescheduling or restructuring of the Scheduled Payments without the Insurers prior
written consent

Section 8.03.
Notices. All demands, notices, and communications hereunder shall be given as set
forth in Section 14.3 of the Indenture. The contact information of the Insurance Trustee
for all purposes hereof is:

| | The Bank of New York                 
| | -------------------------------------
| | 101 Barclay Street 21W               
| | 10286 New York, NY                   
| | USA                                  
| | Attention: Corporate Trust Department
| | Telecopier No.: (212) 815-5206       
| | Telephone No.: (212) 815-5802/03     

Section 8.04. Tax
Treatment. For United States federal income tax purposes, the Notes (including the
Covered Interest Period Amounts) shall be treated as debt obligations, and interest and
other income arising thereunder shall be treated as from sources without the United
States in accordance with United States federal income tax principles and the Insurance
Trust shall be treated as a grantor trust (within the meaning of Subpart E, Part I, of
Subchapter J Chapter 1, Subtitle A of the Code) so that each Noteholder will be treated
as owning a pro rata undivided interest in the Insurance Trust Property.

Section 8.05. No
Partnership. All parties to this Agreement and Noteholders (in their capacity as Trust
Beneficiaries), by their acceptance of the Notes, specifically disavow any intent to form
a partnership or joint venture for U.S. federal income tax purposes or otherwise, and
agree not to make any filings or take any positions inconsistent with such intent.

Section 8.06.
Conflict with Trust Indenture Act. This Agreement is subject to the provisions of
the Trust Indenture Act that are required to be part of this Agreement and shall, to the
extent applicable, be governed by such provisions, which are incorporated by reference in
and made a part of this Agreement. If any provision hereof limits, qualifies or
conflicts with a provision of the Trust Indenture Act that is required under the Trust
Indenture Act to be a part of and govern this Agreement, the latter provision shall
control. If any provision of this Agreement modifies or excludes any provision of the
Trust Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Agreement as so modified or to be excluded, as the case may be.

As used within the Trust
Indenture Act, the following terms have the following meanings:

indenture securities means
the Notes,

indenture security holder means
a Noteholder,

indenture to be qualified means
this Agreement,

Indenture Trustee or institutional
Indenture Trustee means the Insurance Trustee, and

obligor on the
indenture securities means the Issuer.

All other Trust Indenture
Act terms used in this Agreement that are defined by the Trust Indenture Act, by Trust
Indenture Act reference to another statute or by SEC rule under the Trust Indenture Act
have the meanings assigned to them by such definitions.

Section 8.07. Effect
of Headings and Table of Contents. The Article and Section headings herein and the Table
of Contents are for convenience only and shall not affect the construction hereof.

Section 8.08.
Successors and Assigns. All covenants, agreements, representations and warranties in
this Agreement by the Insurance Trustee and the Issuer shall bind and, to the extent
permitted hereby, shall inure to the benefit of and be enforceable by their respective
successors and assigns, whether so expressed or not.

Section 8.09.
Severability Clause.In case any provision in this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

Section 8.10.
Benefits of the Agreement. Each of the Insurer and the Noteholders shall be a third
party beneficiary of this Agreement and shall be entitled to rely upon and to enforce the
provisions of this Agreement. Nothing in this Agreement, expressed or implied, shall
give to any Person, other than the parties hereto and their successors hereunder and the
Noteholders and the Insurer, any benefit or any legal or equitable right, remedy or claim
under this Agreement.

Section 8.11.
Communication by Noteholders with Other Noteholders.Noteholders may communicate
pursuant to Section 312(b) of the Trust Indenture Act with other Noteholders with respect
to their rights under this Agreement. The Issuer, the Insurance Trustee, the Indenture
Trustee, the Note Registrar and anyone else shall have the protection of Section 312(c)
of the Trust Indenture Act.

Section 8.12.
Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York.

Section 8.13. Waiver
of Jury Trial. THE ISSUER AND THE INSURANCE TRUSTEE HEREBY IRREVOCABLY WAIVE ALL RIGHTS
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF THE
INSURANCE TRUSTEE IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF
OR THEREOF.

Section 8.14. Waiver
of Immunity. This Agreement and any other documents delivered pursuant hereto, and any
actions taken hereunder, constitute commercial acts by the Issuer. The Issuer
irrevocably and unconditionally and to the fullest extent permitted by law, waives, and
agrees not to plead or claim, any immunity from jurisdiction of any court or from any
legal process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) for itself of any of its
property, assets or revenues wherever located with respect to its obligations,
liabilities or any other matter under or arising out of or in connection with this
Agreement or any document delivered pursuant hereto, in each case for the benefit of each
assigns, it being intended that the foregoing waiver and agreement will be effective,
irrevocable and not subject to withdrawal in any and all jurisdiction, and, without
limiting the generality of the foregoing, agrees that the waivers set forth in this
Section 8.14 shall have the fullest scope permitted under the United States Foreign
Sovereign Immunities Act of 1976 and are intended to be irrevocable for the purposes of
such act.

Section 8.15.
Submission to Jurisdiction, etc.(a) The Issuer and the Insurance Trustee
irrevocably submit to the non-exclusive jurisdiction of any court of the State of New
York or any United States federal court sitting in the City of New York, New York, United
States, and any appellate court from any thereof, in any suit, action or proceeding
arising out of this Agreement or any of the other Transaction Documents (other than the
Insurance Policy and the Company Support Agreement), to which each is or is to be a
party, or for recognition or enforcement of any judgment, and the Issuer and the
Insurance Trustee hereby irrevocably and unconditionally agree that all claims in respect
of such action or proceeding may be heard and determined in any such court of the State
of New York or, to the extent permitted by law, in such federal court. The Issuer and
the Insurance Trustee irrevocably waive, to the fullest extent permitted by law, any
objection to any suit, action, or proceeding that may be brought in connection with this
Agreement in such courts whether on the grounds of venue, residence or domicile or on the
ground that any such suit, action or proceeding has been brought in an inconvenient
forum. The Issuer and the Insurance Trustee agree that final judgment in any such suit,
action or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this Agreement
or any other Transaction Documents shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Agreement or any other
Transaction Documents in the courts of any jurisdiction.

(b) The Issuer
hereby irrevocably appoints and empowers CT Corporation System, located at 111 Eighth
Avenue, New York, NY 10011 as its authorized agent (the Process Agent) to accept and
acknowledge for and on its behalf and on behalf of its property service of any and all
legal process, summons, notices and documents which may be served in any such suit,
action or proceeding in any New York state court or United States federal court sitting
in The City of New York, New York, United States and any appellate court from any
thereof, which service may be made on such designee, appointee and agent in accordance
with legal procedures prescribed for such courts. The Issuer will take any and all
action necessary to continue such designation in full force and effect and to advise the
Insurance Trustee of any change of address of such Process Agent; should such Process
Agent become unavailable for this purpose for any reason, the Issuer will promptly and
irrevocably designate a new Process Agent within New York, New York, which will agree to
act as such, with the powers and for the purposes specified in this subsection (b). The
Issuer irrevocably consents and agrees to the service and any and all legal process,
summons, notices and documents out of any of the aforesaid courts in any such action,
suit or proceeding by hand delivery, to it at its address set forth in Section 14.3 of
the Indenture or to any other address of which it shall have given notice pursuant to
Section 14.3 of the Indenture or to its Process Agent. Service upon the Issuer or the
Process Agent as provided for herein will, to the fullest extent permitted by law,
constitute valid and effective personal service upon it and the failure of the Process
Agent to give any notice of such service to the Issuer shall not impair or affect in any
way the validity of such service or any judgment rendered in any action or proceeding
based thereon.

Section 8.16.
Execution in Counterparts. This Agreement and each amendment, waiver and consent
with respect hereto may be executed in any number of counterparts and by different
parties thereto in separate counterparts, each of which when so executed shall be deemed
to be an original, and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of an original executed counterpart of this
Agreement.

Section 8.17. Entire
Agreement. This Agreement, together with the Indenture, the Notes, the Insurance Policy,
the Registration Rights Agreement, and the Company Support Agreement, sets forth the
entire agreement of the parties hereto with respect to the subject matter hereof.



IN WITNESS WHEREOF, the
Company and the Insurance Trustee have caused this Agreement to be duly executed by their
respective officers, all as of the day and year first above written.

| | BRASIL TELECOM S.A.,                       
| | -------------------------------------------
| | Issuer                                     
|
| | By:  ____________________________________  
| | Name:                                      
| | Title:                                     
|
|
|
| | By:  ____________________________________  
| | Name:                                      
| | Title:                                     
|
| | Place and Date: Brasília, February 17, 2004



| | THE BANK OF NEW YORK,                    
| | -----------------------------------------
| | Insurance Trustee                        
|
| | By:  ____________________________________
| | Name:                                    
| | Title: