Provided by MZ Data Products




Exhibits 4.19 










                                    SUPPLY CONTRACT FOR GOODS AND SERVICES
                 IN RELATION TO THE IMPLEMENTATION OF THE GSM MOBILE TELEPHONE SERVICES SYSTEM
                                                    BETWEEN





                                                      TIM



                                                      AND



                                                    SIEMENS





* represents omitted
information, which is the subject of a request for confidential treatment with the SEC 










SUPPLY CONTRACT



TABLE OF CONTENTS





	1. 	DEFINITIONS AND ATTACHMENTS 	5  
	2. 	OBJECT 	12  
	3. 	PRODUCTION 	14  
	4. 	PRICES 	15  
	5. 	UP-DATE OF UNIT PRICES 	15  
	6. 	PAYMENT TERMS AND CONDITIONS 	16  
	7. 	INVOICING 	17  
	8. 	AQUIESCENCE BY BNDES 	20  
	9. 	DEDUCTIONS AND RETENTIONS 	21  
	10. 	PAYMENT PROCEDURES 	22  
	11. 	TERM 	22  
	12. 	DUTIES AND OBLIGATIONS OF THE PARTIES 	23  
	13. 	RESPONSIBILITIES 	26  
	14. 	CONTRACT MANAGEMENT AND EXECUTION 	27  
	15. 	EVENTS (MILESTONES) 	28  
	16. 	PROGRESS, INSPECTION AND TEST REPORTS 	28  
	17. 	TRANSFER OF OWNERSHIP AND RISKS 	29  
	18. 	SOFTWARE LICENSES AND INTELLECTUAL PROPERTY RIGHTS 	29  
	19. 	TECHNICAL WARANTIES 	31  
	20. 	PERFORMANCE BOND 	35  
	21. 	IMPORTATION OF GOODS 	36  
	22. 	INSURANCE 	37  
	23. 	TAXES 	38  
	24. 	PENALTIES 	38  
	25. 	RESCISION 	41  
	26. 	FORCE MAJEUR 	42  
	27. 	CONFIDENTIALITY 	42  
	28. 	ARBITRATION 	43  
	29. 	JOINT RESPONSIBILITY 	44  
	30. 	GENERAL DISPOSITIONS 	44  







Throuh this contract
for supply of GOODS and SERVICES, on one side, 



TIM SUL S.A. (new
company name for TELEPAR CELULAR S.A., incorporator for TELESC CELULAR S.A. and CTMR
CELULAR S.A.), company in private law, with head offices at Rua Comendador Araújo, no 299,
Centro, in the City of Curitiba, State of Paraná, registered in the CNPJ sob no 02.332.397/0001-44,
henceforth individually called “TIM SUL”; and  




TIM CELULAR S.A. (new
company name for PORTALE SÃO PAULO S.A. and incorporator for PORTALE RIO NORTE S.A. and
TIM CELULAR CENTRO SUL S.A.), company in private law, with head offices at Av. Giovanni
Gronchi, no 7143, Vila Andrade, in the City of São Paulo, State of São Paulo, registered
in the CNPJ under no. 04.206.050/0001-80, henceforth called “TIM CELULAR”;  




In this act
represented in the form defined in their By-Laws, henceforth called, jointly, “TIM”; only
for reference purposes, with no loss to being considered per se autonomous and
independent contracting parties; 




and, on the other side, 




SIEMENS LTDA., with
head offices at Avenida Mutinga no. 3800, City of São Paulo, State of São Paulo – CEP:
05110-901, registered in the CNPJ/MF under number 44.013.159/0001-16, in this act
represented in the form defined in their By-Laws, henceforth called “SSP”;  



DFV TELECOMUNICAÇÕES E
INFORMÁTICA S.A., with head offices at Avenida Mutinga no. 3800, 3o andar, parte, City of
São Paulo, State of São Paulo – CEP: 05110-901, registered in the CNPJ/MF under number
67.071.001/0001-06, in this act represented in the form defined in their By-Laws,
henceforth called “DFV”;  



SIEMENS MOBILE
COMMUNICATIONS S.p.A., duly constituted company under the terms of Italian laws, with
head offices at Viale Piero e Alberto Pirelli, 10 20126 Milan, Italy, in this act
represented in the form defined in their By-Laws, henceforth called “SITA”; and  



SIEMENS ENGENHARIA E
SERVICE LTDA., with head offices at Avenida Eduardo R. Daher, no 1135, Centro,
Municipality of Itapecerica da Serra, State of São Paulo, registered in the CNPJ/MF under
number 01.607.349/0001-59, in this act represented in the form defined in their By-Laws,
henceforth called “SES”.  



With SSP, DFV, SITA e
SES, henceforth being collectively called “SIEMENS”, 



With TIM and SIEMENS
also being individually called “PARTY” and together called “PARTIES”. 




CONSIDERING THAT TIM
and SIEMENS have negotiated the terms and conditions for the supply of GOODS and SERVICES
TO TIM’S GSM network; 




CONSIDERING THAT TIM
tendered SIEMENS a price quote request (“RFQ”) for the supply of GOODS and SERVICES for
the GSM network in Brazil, Ref. RFQ-NW-089/02 on November 04th 2002; 




CONSIDERING THAT, in
answer to RFQ, SIEMENS delivered to TIM the Commercial Proposition dated December 03rd
2002, in relation to the supply GOODS and SERVICES for the GSM network in Brazil (the “Commercial
Proposition”), according to the description supplied in RFQ; 




They decide to sign
this contract for supply of GOODS and SERVICES (“CONTRACT”), in the terms of the
following clauses and conditions: 




1.
            DEFINITIONS AND ATTACHMENTS 





1.1
            Definitions 



1.1.1             The
terms and expressions listed following shall be interpreted in accordance with the
following definitions, when used in this CONTRACT, including in its ATTACHMENTS: 




ACCEPTANCE: means INITIAL
and/or FINAL ACCEPTANCE. 




ORDER ACCEPTANCE: means
agreement in writing on SIEMENS’s part, of the terms and conditions stated in any
PURCHASE ORDER issued by TIM in accordance with ATTACHMENT 3. 




FINAL ACCEPTANCE: means
for each SITE, (i) the end of the TEMPORARY OPERATION PERIOD; and (ii) release of all
items in the PUNCHLIST in accordance with the conditions defined in ATTACHMENT 5. 




INITIAL ACCEPTANCE or
TEMPORARY ACCEPTANCE: means for each SITE: (i) satisfactory verification and/or test of
every ITEM supplied, in order to verify whether they are in compliance with the TECHNICAL
SPECIFICATIONS; AND (ii) issuance of the PUNCHLIST, where applicable according to the
conditions defined in ATTACHMENT 5. 




AFFILIATED: means any
society or company that under the terms of Law no. 6,404/76, controls or is controlled
by, directly or indirectly, one of the PARTIES. 




ANATEL: means National
Telecommunications Agency (Agência Nacional de Telecomunicações) in Brazil. 




ATTACHMENT(S): means
any and all attachments to this CONTRACT. 




COMMERCIAL ACTIVATION
OF THE SITE: means activation of the SITE for commercial use. 




GOODS: means, together
or in isolation, according to the context, HARDWARE, SPARE PARTS, DOCUMENTATION AND
SOFTWARE to be supplied by SIEMENS under the terms and conditions of this CONTRACT. 




GOODS WITH IMPORTED
COMPONENTS: Means LOCAL GOODS with imported inputs. 




IMPORTED GOODS: means
GOODS imported by TIM from SITA, in compliance with this CONTRACT. 




LOCAL GOODS: means
GOODS produced in Brazil or nationalized. 




TEST BOOK: means the
set of test protocols for the SYSTEM or for parts of the SYSTEM according to what has
been agreed by the PARTIES. 




RATIFICATION
CERTIFICATE: means a formal document issued by ANATEL, based on existing  regulations,
attesting to the approval of the technical characteristics of the HARDWARE. 




COMMERCIAL LAUNCH:
means onset of commercial operation. COMMERCIAL LAUNCH is not characterized by use of the
SYSTEM in addressing USERS IN TEST. 



CONTRACT: means this
contract for supply of GOODS and SERVICES, between TIM and SIEMENS, as well as all its
ATTACHMENTS. 




SCHEDULE: means the
period agreed by the PARTIES, in each PURCHASE ORDER or in other related documents
drafted by the PARTIES for this purpose, within which SIEMENS shall deliver and/or render
the GOODS and SERVICES (as the case may be), in accordance with the LEAD TIMES. 




BASE DATE: means
December 01st 2002. 




DOCUMENTATION: means
any and all explanatory or informative material and presentations relative to the
SOFTWARE, HARDWARE, SPARE PARTS and SERVICES, in printed or electronic media, which shall
be supplied by SIEMENS in compliance with this CONTRACT, including manuals, descriptions,
specifications, user and/or installation instructions, diagrams, printed material, lists
and flowcharts. 




SITE DOCUMENTATION:
means all the documentation relative to a SITE, to be supplied by  SIEMENS to TIM, as
described in ATTACHMENT 4. 




DOCUMENTATION READY
FOR FIRE UP: means documentation composed of the TEST BOOK and by READY FOR FIRE UP
(RFFU) statement, issued by SIEMENS. 




FINAL ACCEPTANCE
NOTICE DOCUMENT (FAD): means the Final Acceptance Notice Document issued by SIEMENS to
inform TIM that the SITE has been accepted, in conditions equivalent to the FAT. Said
document will have the same value as a FAT, according to the provisions of ATTACHMENT 5. 




COLLECTION
DOCUMENT(S): means any and all legally valid collection document(s) used in collecting
values for the GOODS and SERVICES supplied by SIEMENS, such as invoices, duly accompanied
of any correction letters, when needed; service invoices; debit notes; duplicate notes;
list of supply invoices or collection receipts. 




NETWORK ELEMENT: means
any GOOD that is supplied and/or installed and/or tested as an autonomous part performing
a specific functionality within the scope of the SYSTEM, such as, but not limited to: BSC
– Base Station Controller, BTS – Base Transceptor Station, OMC – Operation and
Maintenance Center and Microwave Backbone (High frequency, broad band link). 




TECHNICAL
SPECIFICATIONS: means the SYSTEM’s technical and functional specifications, specified in
ATTACHMENT 4 of this CONTRACT. 



CRITICAL FUNCTIONAL
FAILURE: means any and all failures that impair, totally or partially, delivery of SMP
and/or added value services to the final user, traffic and/or billing, as long as not
stemming from use not in compliance with the function and design TECHNICAL
SPECIFICATIONS, as well as lack of preventive or corrective maintenance on TIM’s part
and/or VANDALISM actions. 




SYSTEMATIC FAILURE:
means any and all failures that occur more than three times in the SYSTEM, during the
ACCEPTANCE period, due to problems in one or more functions, or in one or more NETWORK
ELEMENTS, as long as not resulting from use not in compliance with the function and
design TECHNICAL SPECIFICATIONS, as well as lack of preventive or corrective maintenance
on TIM’s part and/or VANDALISM actions. 




SYSTEMIC FAILURE(S):
means failure related to the capacity for interconnected operation of the object of
ACCEPTANCE with other NETWORK ELEMENTS that impact on its operation, as long as not
caused by failure or lack of preventive or corrective maintenance on TIM’s part and/or
VANDALISM actions. 




PROJECT MANAGER: means
the person appointed by TIM and the person appointed by SIEMENS, responsible for managing
the implementation of the SYSTEM and for inspecting, installing and operating the GOODS
and SERVICES, in compliance with the provisions contained in this CONTRACT. 




GSM (Global System for
Mobile Communication): means the Global System for Mobile Communication. 




HARDWARE: means the
hardware, as specified in ATTACHMENT 4 of this CONTRACT, that will be supplied by SIEMENS
to TIM.
 OEM HARDWARE: means the imported HARDWARE, manufactured by third parties and
supplied by SIEMENS under the terms of this CONTRACT. 




I&C (INSTALLATION & COMMISSIONING):
means the activities related to installation and functional and system tests, for the
purpose of placing the GOODS in operation, so that the SITE will be ready for
acceptance/integration. Includes drafting of the preliminary installation project and the
effetive placement of the equipment and the drafting of the definitive installation
project. INSTALLATION SERVICES do not include any form of reconfiguration or optimization
activity nor the actual physical assembly of the equipment. 




CONFIDENTIAL
INFORMATION: means the SOFTWARE and any respective DOCUMENTATION, in any medium, and any
UPDATES or UPGRADES; (b) the terms of ATTACHMENTS 1 and 4 to this CONTRACT; and (c)
technical, commercial, financial, marketing or other written information relative to
inventions or products, serviCEs, research and development, production, manufacture or
engineering processes, costs, information about profits or margins, employee and client
qualification, whether belonging to TIM or SIEMENS, as well as present or future business
plans of both PARTIES in relation to the object of this CONTRACT. 




IN SERVICE
CERTIFICATE: means the document issued by SIEMENS to inform TIM that the SITE hás been
initially accepted in conditions equivalent to IAT. Said document will have the same
value as IAT, as defined in ATTACHMENT 5. 




ITEM(S): means any and
all HARDWARE, SOFTWARE, SPARE PARTS, SERVICES and DOCUMENTATION. 




LEAD TIME: according
to the case, this means the period between ACCEPTANCE OF THE ORDER for GOODS to be
supplied and SERVICES to be performed and the date of RFFU  or the period between RFI and
RFFU, as specified in ATTACHMENT 5. 




PRICE LIST: means the
list of UNIT PRICES specifying the prices for LOCAL GOODS and SERVICES and GOODS WITH
IMPORTED COMPONENTS IN Reals and for IMPORTED GOODS in North-American Dollars, valid for
this CONTRACT, and relative to each GOOD or SERVICE as provided for in ATTACHMENT 1. 




RESPONSiBILITY MATRIX:
means the list of duties and obligations established in  ATTACHMENT 2. 




CIVIL WORKS: means the
activities to be provided for demolition, construction and refurbishing (for example,
ventilation and air-conditioning, roads, leveling work, fences, structural improvements,
lighting, cabling, etc.) on a SITE for the purpose of ensuring the SITE will be ready and
suited for installing the GOODS. 




ON AIR: means the
state wherein the SITE is installed and tested, in operating conditions, in accordance
with SIEMENS’s supply scope, not being in the state of commercial operation. 




SPARE PARTS: means a
replacement ITEM for HARDWARE or SOFTWARE to be used in maintenance operations. 




PURCHASE ORDERS:
mean(s) the document(s) issued by TIM to SIEMENS, through which TIM request from SIEMENS
supply of GOODS and/or SERVICES related to this CONTRACT, and must include, among other
data, a description of the GOODS and/or SERVICES, the respective quantities and the
corresponding SCHEDULE, which will become part of this CONTRACT once accepted by SIEMENS,
or considered accepted in compliance with ATTACHMENT 3. 



ACCEPTED PURCHASE
ORDER(S): means the PURCHASE ORDER(S) issued by TIM and accepted by SIEMENS or considered
accepted in compliance with ATTACHMENT 3. 



PENDING: means ITEMS
missing, not working, working inadequately or in conditions affecting the safety or
people and/or objects. 



TEMPORARY OPERATION
PERIOD (TOP): means the period defined in ATTACHMENT 5 to this Contract. 



PERFORMANCE BOND:
means the bond letter to be granted to TIM, in accordance with Clause 20 of this CONTRACT. 



SALES SPREADSHEET (“SS”):
means the document that consolidates the ITEMS, their  quantities in accordance with the
conditions and the prices defined for each SITE in compliance with the PRICE LIST after
reception of the respective PURCHASE ORDER, addressing the provisions contained in
ATTACHMENT 3. 



UNIT PRICES: means the
prices listed for each ITEM to be supplied in compliance with the  conditions established
in ATTACHMENT 1. 



PUNCHLIST: means the
PENDING list signed by the PARTIES at the end of an inspection and performing the
ACCEPTANCE TESTS on the READY FOR FIRE UP (RFFU) date; 



READY FOR FIRE UP
(RFFU): means the document issued by SIEMENS to TIM according to ATTACHMENT 5. 



READY FOR INSTALLATION
(RFI): means the document issued by TIM to SIEMENS according to ATTACHMENT 5. 



SERVICES: means any
and all services to be delivered by SIEMENS under this CONTRACT. 



ADDITIONAL SERVICES:
means additional services that are not part of the object of this  CONTRACT, and that
will be delivered by SIEMENS after specific agreement with TIM, in writing. 



SYSTEM: means the set
of GOODS and SERVICES to be supplied by SIEMENS to TIM, in accordance with this CONTRACT. 



SITE(S): means the
physical premises where the GOODS will be installed and/or the  SERVICES delivered. 



SMP: means Personal
Mobile Service. 



SOFTWARE: means the
computer software to be supplied by SIEMENS to TIM under this CONTRACT, including
applicative, database and any interfaces. 



BASIC SOFTWARE: means
the SOFTWARE not bound to the quantitative aspect for the NETWORK ELEMENTS, subscribers
and/or data capacity transmission. 



SOFTWARE
PAY-AS-IT-GROWS: means SOFTWARE linked to the quantitative aspect for the NETWORK
ELEMENTS, subscribers and/or data capacity transmission. 



SUSPENSION: means the
period of time of the temporary suspension of the execution of the object of one or more
PURCHASE ORDER(S), wholly or in part, in accordance with  ATTACHMENT 3. 



EXCHANGE RATE: means
the official Real / North-American Dollar exchange rate published by Banco Central do
Brasil through the SISBACEN Data System, PTAX 800 transaction– Sales Option 5 (closing
quote), for each day. 



INITIAL ACCEPTANCE
TERM (IAT): means the document issued by TIM, certifying that all INITIAL ACCEPTANCE
conditions have been fulfilled. 



FINAL ACCEPTANCE TERM
(FAT): means the document issued by TIM, certifying that all FINAL ACCEPTANCE conditions
have been fulfilled. 



ACCEPTANCE TEST(S):
means the tests agreed in ATTACHMENT 5 for the purpose of performing acceptance as
specified in this ATTACHMENT. 



UPDATE: means SOFTWARE
update, placed by SIEMENS at TIM’s disposal, containing the correction of flaws and/or
enhancements or improvements, without containing new additional resources or applications. 



UPGRADE: means
SOFTWARE update, placed by SIEMENS at TIM’s disposal, containing new resources or
applications. 



USERS IN TEST: means
the limited number of users selected by TIM to use the SYSTEM or parts thereof for the
purpose of allowing TIM to test the SYSTEM and/or train its own staff in its operation
and maintenance. 



VANDALISM: actions by
third parties (not from SIEMENS, TIM  or sub-contrators from either  PARTY), performed in
unauthorized access to the SITE character, resulting in damagers and/or losses of any
nature to the GOODS and SERVICES therein found or with installation/performance underway. 





1.2
           ATTACHMENTS 



1.2.1. The ATTACHMENTS
listed below are part of this CONTRACT: 


	ATTACHMENT 1:	LIST OF PRICES, DISCOUNTS AND VOUCHERS
	ATTACHMENT 2:	RESPONSIBILITY MATRIX
	ATTACHMENT 3:	PROCEDURE FOR PURCHASE ORDER
	ATTACHMENT 4:	TECHNICAL SPECIFICATIONS
	ATTACHMENT 5:	TEST AND ACCEPTANCE PROCEDURES
	ATTACHMENT 6:	PERFORMANCE BOND
	ATTACHMENT 7:	SOFTWARE LICENSE FOR IMPORTED GOODS
	ATTACHMENT 8:	DEMAND PLANNING




1.2.2. In case of
doubt and/or contradiction between the CONTRACT and its ATTACHMENTS, the provisions
contained in the CONTRACT shall prevail over those contained in the ATTACHMENTS, except
in relation to technical nature issues clearly defined in the ATTACHMENTS. 



1.2.3. In case of
doubts in relation to provisions in different ATTACHMENTS, these should be settled in
such a way as to address the necessary specifications for the adequate execution of the
object of the CONTRACT. 





2.             OBJECT 



2.1. The object of
this CONTRACT consists in the supply and installation of the SYSTEM by SIEMENS to TIM,
according to the ACCEPTED PURCHASE ORDERS, in the regions below: 


	 	a) 	The States of Paraná and Santa Catarina and the City of Pelotas;
	 	b) 	The States of Rio de Janeiro and Espírito Santo and the remaining cities in the State of Rio Grande do Sul.




2.2               The
object of this CONTRACT is: 


	 
 	(a) Supply by SIEMENS
to TIM, in compliance with the PURCHASE ORDERS ACCEPTED, of HARDWARE, SOFTWARE,
DOCUMENTATION, SPARE PARTS, as well as (b) rendering of SERVICES, in compliance with the
PURCHASE ORDERS ACCEPTED, needed for the implementation of the SYSTEM in accordance with
the TECHNICAL SPECIFICATIONS established in this CONTRACT.
 

	 
 	(b) Supply and
rendering of SERVICES object of this CONTRACT will de distributed among the SSP, SES, DFV
and SITA companies, as follows:




		(i) SSP:
supply of HARDWARE for GOODS and SPARE PARTS, DOCUMENTATION e installation materials;
 







		(ii) SES:
I&C, project management and training of professionals appointed by TIM;
 







		(iii) DFV:
supply of SOFTWARE and of LOCAL GOODS, according to the PRICE LIST;
 







	 	(iv) SITA:
supply HARDWARE and SOFTWARE for IMPORTED GOODS, according to the PRICE LIST.
 







		2.2.1  Each
SIEMENS company shall invoice against TIM their respective supply operations, as well as
any rendering of SERVICES within their scope.






2.3. This CONTRACT
foresees SIEMENS’s duty to supply TIM with the GOODS and SERVICES in accordance with the
PURCHASE ORDERS ACCEPTED. TIM will only commit to the GOODS and SERVICES object of the
PURCHASE ORDERS it duly issues, at its sole discretion, and accepted by SIEMENS, with TIM
having to address the minimum quantities and conditions foreseen in Schedule A of
ATTACHMENT 1 to this CONTRACT. 



2.3.1. Delivery of
GOODS and rendering of SERVICES can only be initiated by SIEMENS by way of issuance of
the respective PURCHASE ORDERS by TIM and their acceptance by SIEMENS. 



2.3.2. The PARTIES
agree that there is no commitment by TIM to reimburse eventual expenses that might be
incurred by SIEMENS stemming from the execution of this CONTRACT. 




2.3.3. Should TIM come
to acquire any GOODS or SERVICES needed for the GSM networks relative to the regions
mentioned in clause 2.1(a) and (b) above, such purchase must, mandatorily, be made from
SIEMENS, limiting this mandatory nature of the pruchase to the conditions defined in
ATTACHMENT 1 to this CONTRACT and to the term defined for this CONTRACT. 



2.3.4. SIEMENS shall,
according to the respective PURCHASE ORDER ACCEPTED and other conditions defined in this
CONTRACT, supply, install, commission and test the SYSTEM, including the HARDWARE,
SOFTWARE, DOCUMENTATION, SPARE PARTS and SERVICES. 



2.4.              Any
and all request for changes in the GOODS and/or SERVICES made by the  PARTIES shall
agreed in writing, based on the terms and conditions established in this CONTRACT. 



2.5.              TIM
will be able to suspend temporarily the execution of the activities whose PURCHASE ORDERS
have already been issued and accepted by SIEMENS, addressing the procedures established
in ATTACHMENT 3. 



2.6.              The
GOODS and SERVICES to be supplied/rendered in the terms of this CONTRACT  can be found
listed in ATTACHMENT 1 and the responsIbiliTY MATRIX is defined in ATTACHMENT 2. 



2.7.
             SIEMENS ensures that the GOODS and SERVICES must address the TECHNICAL
SPECIFICATIONS established in ATTACHMENT 4. The TECHNICAL SPECIFICATIONS may be updated
or modified, as long as there is prior agreement in writing by the PARTIES. 



2.8.
             SIEMENS will take on all the necessary expenses for the execution of the
object of this CONTRACT, including, without limitation, accommodation, meals and
transportation for its employees, legal representatives or their substitutes. TIM shall
not, in any way, be mandated to reimburse any said expense. 



3. PRODUCTION



3.1               The
GOODS listed in ATTACHMENT 1, as being of local manufacture, will be produced in Brazil,
except where otherwise agreed in writing by the PARTIES. 



3.2               TIM
is authorized to inspect SSP’s Brazilian plants, having free access to these, as long as
SSP is notified in writing with a minimum advance notice of 5 (five) working days. 



3.3
              Should the declared country(ies) of origin for the GOODS be considered
incorrect by any competent Brazilian authority, TIM will notify SIEMENS of the fact,
specifying the reason for the irregularity. It is agreed between the PARTIES that, in the
event this shall pass, TIM will be entitled to retaining the payments foreseen in this
CONTRACT and owed to SIEMENS. 




3.4
              Should SIEMENS intend to subcontract out part of its obligations under this
CONTRACT to third parties, it shall, by way of written notice, inform TIM in relation to
the subcontractors. TIM will be entitled to reject the subcontractor(s) appointed by
SIEMENS within a term of 10 (ten) days after receiving the notification sent by SIEMENS.
Once the 10 (ten) day term has expired without any negative manifestation, in writing, by
TIM, the subcontractor appointed by SIEMENS shall be considered accepted.  In any
circumstance, SIEMENS will remain fully accountable for the actions and/or omissions of
its subcontractors and the proper execution of this CONTRACT. 




4. PRICES



4.1.
             General Dispositions



4.1.1. * 



4.1.2. * 



4.1.3. * 



4.1.3.1. * 



4.1.4. The PARTIES are
in agreement with the fact that TIM will be entitled to require from SIEMENS ADDITIONAL
GOODS and SERVICES, initially not included in ATTACHMENT 1, and that SIEMENS, should it
consider to be technically and commercially feasible, shall supply these additional items
in accordance with the supply conditions of this CONTRACT, except in relation to prices,
which shall be agreed between the PARTIES. Should this be the case, SIEMENS shall offer
TIM a proposition for said supply. 



4.1.5             In
case of discrepancies between the values found on PURCHASE ORDERS AND those for UNIT
PRICES, then UNIT PRICES shall prevail. 




4.1.6             * 




4.2.              Price Structure



4.2.1             UNIT
PRICES related to this CONTRACT have the following base structure: 



4.2.2             UNIT
PRICES for IMPORTED GOODS are quoted in North-American Dollars and UNIT PRICES for LOCAL
GOODS and SERVICES are quoted in Brazilian Reals and monetarily updated in accordance
with sub-clause 5.3. 



4.2.3             * 




5. UNIT PRICES UPDATES



5.1.              GENERAL COMMENTS



For the purpose of
calculating the update of UNIT PRICES, the first 3 (three) decimal places will be
considered, addressing the dispositions contained in ATTACHMENT 1 to this CONTRACT. 



5.2.              IMPORTED GOODS



UNIT PRICES for
IMPORTED GOODS established in ATTACHMENT 1 are fixed and must be paid in compliance with
sub-clause 6.1. 



5.3.              SERVICES and LOCAL GOODS



5.3.1 * 



5.3.2             * 



5.4.
             GOODS WITH IMPORTED COMPONENTS




5.4.1 * 




5.4.2             * 



		5.4.2.1
*
 






		5.4.2.2
*






5.5
              BEST PRICE CLAUSE




5.5.1             * 



5.5.2             * 



6. TERMS AND
PAYMENT CONDITIONS



6.1.
             IMPORTED GOODS



6.1.1             * 



6.1.2 UNIT
PRICE for IMPORTED GOODS will be invoiced by SITA in two parts, one for HARDWARE and
another for SOFTWARE. In so far as concerns the COLLECTION DOCUMENTS for SOFTWARE, the
original ‘DARF’(Collection Document for the Internal Revenue Service - Documento de
Arrecadação da Receita Federal) document, for the mandatory income tax retention at the
source for the COLLECTION DOCUMENTS for SOFTWARE, must be sent directly to SIEMENS
through registered mail with receipt notice within 5 (five) working days counted from the
date of payment.  



6.1.3             * 




6.2
              LOCAL GOODS, GOODS WITH IMPORTED COMPONENTS and SERVICES



6.2.1
            Both, SSP and SES, shall issue COLLECTION DOCUMENTS in Reals for LOCAL GOODS,
GOODS WITH IMPORTED COMPONENTS e SERVICES, in compliance with the UNIT PRICES quoted in
ATTACHMENT 1.  TIM shall settle said COLLECTION DOCUMENTS addressing the following
payment conditions: 


		6.2.1.1 *
 
		6.2.1.2 *





6.3
              SERVICES



6.3.1 * 




6.4.
             SPARE PARTS



6.4.1 * 



6.5.
DOCUMENTATION  



6.5.1             * 




6.6.
DELAY IN PAYMENT  



6.6.1.            * 



6.6.2    * 



6.6.3.            * 




7. INVOICING



7.1.
             ON THE ISSUANCE OF THE COLLECTION DOCUMENT



7.1.1. Each COLLECTION
DOCUMENT issued by SIEMENS must contain the following information: 



(i)  Number and date of the PURCHASE ORDER and the reference number for the respective ITEM;

(ii) ITEM on the PRICE LIST and the corresponding value; (iii) FINAME code number, where applicable to the ITEM purchased;

(iv) Number of the internal order by TIM, when one exists and is informed by the company, and

(v) the SITE relative to the GOOD purchsed and/or the SERVICE rendered, when indicated by TIM on the PURCHASE ORDER. 




7.2 LOCAL GOODS,
GOODS WITH IMPORTED COMPONENTS and SERVICES



7.2.1. In so far as
concerns LOCAL GOODS, GOODS WITH IMPORTED COMPONENTS and SERVICES, the following
invoicing procedure should be used: 


	 	7.2.1.1. For the supply of LOCAL GOODS and GOODS WITH IMPORTED
 COMPONENTS to the SITE venue, SIEMENS will issue a supply invoice, in Reals, based on DDP values as per the provisions of ATTACHMENT 1.
 

	 	7.2.1.2. For the rendering of SERVICES, SIEMENS will
 issue and invoice/service receipt, in Reals, for the SERVICES concluded under the terms of this CONTRACT.
 

	 	7.2.1.3. After INITIAL ACCEPTANCE, SIEMENS will issue a COLLECTION DOCUMENTO in Reals for LOCAL GOODS, GOODS WITH IMPORTED COMPONENTS and SERVICES, based on the DDP values quoted in ATTACHMENT 1
declaring the payment terms and conditions, ACCORDING to the description contained in Sub-clause 6.2.







7.3
              IMPORTED GOODS



7.3.1. In spo far as
concerns IMPORTED GOODS the invoicing procedure foreseen in sub-clauses 6.1.1. and
 6.1.2. of this CONTRACT. 




7.4
              RECEPTION OF COLLECTION DOCUMENTS



7.4.1
            Supply invoices, as well as service invoices/receipts and other COLLECTION
DOCUMENTS shall be delivered directly to the PROJECT MANAGER, or other person appointed
and vested with powers by TIM to receive and sign off on the respective protocols for the
COLLECTION DOCUMENTS. 



7.4.2
            SIEMENS is responsible for receiving any part, equipment or material related
to the scope of this CONTRACT. Fpr this purpose, it will appoint one person who, in the
field, will be responsible for reception and checking of every part, equipment or
material received. 



7.4.3
            SIEMENS shall deliver TIM all its invoices for supply of GOODS in up to five
working days from their issuance, except where the respective receiving SITES for the
GOODS in case of point, are not ready or in condition to receive the respective GOOD. In
these cases, the five working day count will begin after the effective delivery of the
GOODS at the SITES. 



7.4.4
            Invoices/receipts for the SERVICES will be delivered directly to the PROJECT
MANAGER, or other person appointed and vested with powers by TIM to receive and sign off
on the respective protocols for the COLLECTION DOCUMENTS in up to five working days
counted from the date of issuance. Notwithstanding this, Invoices/receipts for the
SERVICES will be delivered up to the twenty-fifth day of the month of issuance. Should
the twenty-fifth day not be a working day, the delivery date is moved back to the first
working day before this date. 



7.4.5             If
the PROJECT MANAGER appointed in sub-clause 7.4.4. above refuse, without fair reason, to
receive the GOODS and SERVICES and/or sign the COLLECTION DOCUMENTS, SIEMENS will inform
TIM of the fact, in writing. If, within a maximum of 48 (forty-eight) hours counted from
the date of this communication, TIM will not receive the GOODS, SERVICES and/or not sign
the COLLECTION DOCUMENTS (with these being compliant with the terms of this CONTRACT),
said items will be considered automatically delivered and accepted, and the COLLECTION
DOCUMENTS accepted, for all legal and contractual purposes and intents. 



7.4.6             It
is agreed by the PARTIES that acceptance, express or tacit, of the COLLECTION DOCUMENT by
the PROJECT MANAGER or other person appointed and vested with powers by TIM to receive
and sign the respective protocols, will not release SIEMENS from its obligation to
rectify or substitute, as warranted by the case, the COLLECTION DOCUMENT in the chance
that TIM later finds any irregularity in relation to the terms of this CONTRACT. 



7.4.7
            SIEMENS, in any case, will present TIM with the respective COLLECTION
DOCUMENTS with minimum advance of 30 (thirty) days counted from the respective due dates. 



7.5 DELAYS AND/OR
ERRORS



7.5.1             in
case of delay in delivering the COLLECTION DOCUMENTS and/or errors identified in them,
the following procedure applies: 



a) if a possibility
for correcting the COLLECTION DOCUMENT presented by SIEMENS exists, by way of a
correction letter, TIM will then inform SIEMENS about said correction in up to 10 (ten)
working days counted from the date of reception, and SIEMENS will deliver said letter to
TIM within 3 (three) working days counted from the date of reception of TIM’s request; 



b) in case it is not
possible to correct the COLLECTION DOCUMENT presented by SIEMENS, by way of a correction
letter, and it is necessary to substitute it with a new COLECTION DOCUMENT, TIM will
return the first COLLECTION DOCUMENT to SIEMENS, in up to 10 (ten) working days, counted
from the date of reception, informing in writing the  irregular situation or the reason
for return, in order to make new issuance possible. 



7.5.2             TIM
shall pay the COLLECTION DOCUMENT presented by SIEMENS in accordance with the payment
conditions foreseen in clause 6. SIEMENS will deliver to TIM the COLLECTION DOCUMENT
corrected iin up to 30 (thirty) days before the due date. In case this term is not
addressed, TIM is entitled to postponing the payment for the same number of days
corresponding to the delay foreseen in this sub-clause. 



7.5.3
            SIEMENS shall indemnify TIM for any penalty to which it becomes liable,
before tax authorities or any other competent authority, caused by presenting an
irregular COLLECTION DOCUMENT, including the invoice, or due to not presenting the
document, having to bear any and all costs and/or losses stemming from such fact, as long
as ascribable to SIEMENS. 



8. AQUIESCENCE BY
BNDES



8.1
Without any loss to sub-clause 8.6 beow, SIEMENS will act in compliance
with all the relevant rules of the National Bank for Social and Economic Development – (Banco
Nacional de Desenvolvimento Econômico e Social - BNDES) in so far as concerns the supply
of LOCAL GOODS (except SOFTWARE), which must be addressed by the supplier for TIM to
become eligible for funding by BNDES (“BNDES Norms”). It is agreed by the PARTIES that
the values to be sought for funding under BNDES regulation will those relative to LOCAL
GOODS (except SOFTWARE).  



8.2 The
COLLECTION DOCUMENTS issued by SIEMENS, related to the purchase of locally manufactured
GOODS registered in the FINAME, must contain the code of the Special Agency for
Industrial Funding (Agência Especial de Financiamento Industrial – FINAME), in compliance
with the Computer Registry of Manufacturers (Cadastro de Fabricantes Informatizado -
CFI/FINAME), as long as this code has been cleared by the date of issuance of the
COLLECTION DOCUMENTS.  



8.3
              SIEMENS will be accountable for the accuracy and authenticity of all
information supplied to TIM linked to addressing SIEMENS’s responsibilities. 



8.4                TIM
will not accept more than one invoice for parts of the same GOOD, when the GOOD is
subject to funding by BNDES. All COLLECTION DOCUMENTS, including invoices, will be
subject to return fpor correction, as long as this is possible, or postponement of due
dates when they are not in compliance with the BNDES Norms or other procedures defined in
this CONTRACT. 



8.5
              Without any loss to the right to claim payment for any damages suffered by
TIM, in case SIEMENS is non-compliant with any of the obligations defined in this clause
8 and TIM does not qualify for obtaining funding in accordance with BNDES Norms for
reasons proven to be ascribable to SIEMENS, TIM will be entitled to rescinding this
CONTRACT, as long as SIEMENS  is not capable of correcting the violation(s) within a
period of 60 (sixty) days after being notified in writing by TIM, specifying when and in
which circumstances the funding operations could not be obtained in accordance with BNDES
Norms due to the violation of its obligations by SIEMENS. 



8.6
              SIEMENS will not be considered in violation of the responsibilities defined
in this clause 8, if TIM’s proposition for funding from BNDES is refused or postponed for
the following reasons: 


 


(i) After signature of
the CONTRACT, changes occur in any existing legislation, in government acts and/or in
acts by authorities, refusal or delay in obtaining relevant licenses or approvals, that
will affect adversely SIEMENS’s capacity to address the BNDES Norms; 



(ii) When TIM
purchases GOODS from SIEMENS that, due to accumulated base, exceed the quota for IMPORTED
GOODS (except SOFTWARE) and/or SERVICES versus LOCAL GOODS (except SOFTWARE) and/or
SERVICES required in accordance with BNDES Norms; and 



(iii) The ocurrence of
FORCE MAJEUR event. 



8.7
              SIEMENS guarantees that all LOCAL GOODS (except SOFTWARE), in response to
the RFQ issued by SIEMENS correspond to the BNDES Norms. 



9. DEDUCTIONS AND
RETENTIONS



9.1               TIM
will be entitled to, at its sole discretion, deduct and/or retain from any payment owed
to SIEMENS any sums owed to SIEMENS by TIM stemming from this CONTRACT, including: (i)
any damages liquidated and penalties in accordance with the provisions of clauseas 13 and
24, (ii) indemnity claims according to sub-clause 24.1, (iii) values charged from TIM,
stemming from taxes and labor or social security claims, in relations to obligations or
duties not addressed by SIEMENS foreseen in this CONTRACT or deriving from Law. 



		9.1.1. In
the cases foreseen in sub-clause 9.1. above, TIM will notify SIEMENS with 30 (thirty)
days in advance of the intended date for the deduction/retention, so that SIEMENS can
release TIM from the above-mentioned claims, with this release remaining at the sole
discretion of TIM. Should the values to be retained be in excess of the sum to be paid to
SIEMENS, after the 30-day (thirty) period, TIM will be entitled to carrying out the
deduction/retention in shorter term, in order to ensure the existence of balance to be
deducted from or retained.






9.2               In
case the sum to be retained should exceed the value of the COLLECTION DOCUMENTS, SIEMENS
will settle the difference stemming from this within sixty (60) days counted from the
date of reception of the respective communication issued by TIM. 



9.3. The payment of
sums owed to TIM by SIEMENS will be suspended in cases where: 



(i) The documents
required to perform payment, in compliance with the provisions established in this
CONTRACT, are not presented; or 



(ii) Errors and/or
delays in issuance of COLLECTION DOCUMENTS in accordance with the  terms and conditions
presented in clause  7.5. 



9.4. SSP, DFV and SES will
supply TIM monthly with copies of the documents confirming the collection of social
contributions (INSS and FGTS), for its staff, as well as for the staff of its Brazilain
subcontractors (the “DOCUMENTS OF Social CONTRIBUTION”); with said DOCUMENTS OF SOCIAL
CONTRIBUTION being relative to, and at least, the end of the 3rd (third) calendar month
preceding their delivery date to TIM. 



		 9.4.1. Should
SSP, DFV or SES be remiss in addressing clause 9.4 above, TIM will be authorized to
retain 100% (one hundred percent) of the payments owed to SSP, DFV or SES, unless where
otherwise agreed by Siemens and TIM.






10. PAYMENT
PROCEDURES



10.1              * 



10.2              The
above-mentioned information in sub-clause 10.1 will be updated with, at least, 15
(fifteen) days advance notice whenever SIEMENS needs to change the information previously
supplied to TIM. 



10.3
             Incorrect information supplied by SIEMENS related to banking details will
not be object of any penalty levied against TIM. 



10.4. The value
credited in SIEMENS’s bank account, once cleared and available, shall be considered due
settlement for all payment obligations attributed to TIM in the respectiv COLLECTION
DOCUMENT. 



10.5. SIEMENS is strictly
forbidden from receiving or executing credit titles, Sales of receivables, discounts,
bank collection, invoicing, agreements or security credits stemming from this CONTRACT,
totally or partially, without prior authorization in writing from TIM, with said
authorization being waived in case such transactions occur between SIEMENS and Siemens
Consultoria Ltda., with PARTIES having to agree on the corresponding operational
procedures. 



10.6
             Should the bank chosen by TIM to carry out transfer of values owed to
SIEMENS, charge any sort of fee, tariff or cost to perform the transfer, said fees,
tariffs or costs will be totally absorbed by TIM. 




11. TERM



11.1. The term of this
CONTRACT begins on the date of its signature, producing retroactive effects to May 08th
2003, and will remain valid until December 31st 2004, and can be extended, through common
agreement between the PARTIES, for equal and successive 6-month (six)  periods until the
numbers defined in ATTACHMENT 1, SCHEDULE A, to the CONTRACT. 



12. DUTIES AND
OBLIGATIduties and OBlIGAtionS of the PARTIES



12.1.
            DUTIES AND OBLIGATIONS OF SIEMENS



12.1.1            With
no loss to any other obligation established in this CONTRACT, SIEMENS commits to: 



	a) 
 	supply
the SYSTEM, including the GOODS and SERVICES, all of the highest quality, adequate to
their purposes and in conditions of affording integration with the SYSTEM as specified in
ATTACHMENT4;
 






	b) 
 	carry
out installation, tests and configuration services for the GOODS, deploying suitable
technical labor to perform and supervise these activities, in accordance with the terms
defined in this CONTRACT;
 






	c) 
 	supply
the DOCUMENTATION related to the operation of the GOODS and SERVICES;
 






	d) 
 	attend,
at its own costs, meetings with representatives from TIM, at any moment, whenever
required by the latter, in writing, with a minimum of 24 (twenty-four) hours advance
notice;
 






	e) 
 	promptly
supply all the information concerning the execution of the CONTRACT, that are known by
SIEMENS and are requested by TIM, as long as these do not refer to commercial and/or
technical secrets belonging to SIEMENS;
 






	f) 
 	strictly
observe the SCHEDULE, and having to inform TIM immediately about any occasional delay
that might have happened or might come to happen;
 






	g) 
 	take
every necessary step in relation to subcontractors in order to ensure the correct
execution of this CONTRACT, having to replace them whenever requested by TIM by way of
notification issued with a minimum of 30 (thirty) days advance notice, as long as the
reason is duly justified, it being agreed that, in this case, the PARTIES shall discuss
the influences of such substitution;
 






	h) 
 	remove,
at its own responsibility and expenses, all packaging and surplus material from the
GOODS, transporting them from the SITES where the GOODS were installed, in addition to
preserving the GOODS in adequate conditions of preservation and cleanliness, addressing
TIM’s regulations and procedures and any other government requirement, where applicable;
 






	i) 
 	whenever
applicable, submit the DOCUMENTATION for approval by TIM, it being agreed that the
eventual approval by TIM does not reduce or exclude SIEMENS’s responsibility in relation
to the DOCUMENTATION;
 






	j) 
 	communicate
immediately to TIM of any and all error or flaw detected, in the GOODS and/or SERVICES;
 






	k) 
 	allow
and make it possible for TIM, by way of authorized representatives, at its own expenses
and by way of prior written communication to SIEMENS with 5 (five) working of advance
notice, to have free access to venues where activities related to performing this
CONTRACT are being performed, however, with TIM preserving the confidential nature of any
information to which it will have access; as well as maintaining records of every relevant event,
communication, decisions, irregularities, observations and claims;
 





	l) 
 	obtain
previous permission in writing from TIM in the case of access to SITES under TIM’s
responsibility;
 






	m) 
 	purchase
in its own name, except where agreed otherwise by the PARTIES, the GOODS to be supplied,
being the sole responsible party for the respective payment, being forbideen the use of
TIM’sname in these transactions;
 






	n) 
 	issue
the reports requested by TIM in the format and terms previously duly agreed by the
 PARTIES;
 






	o) 
 	define
and maintain at TIM’s disposal a technical and professional team large enough to address
the requirements in relation to deadlines and quality defined in this CONTRACT, with said
technical and professional team reporting to the PROJECT MANAGER appointed by SIEMENS,
who will be responsible, among other activities, for performing the necessary interface
with TIM;
 






	p) 
 	contract
all the insurance required by TIM according to the provisions of clause 22;
 






	q) 
 	pay
salaries, all labor and security charges, as well as any other charge required by the
applicable legislation, of its staff and that of its subcontractors in relation to the
object of this CONTRACT, with such obligations being exclusively its responsibility;
 






	r) 
 	address
all obligations related to occupational safety rules applicable to the object of this
CONTRACT, in compliance with the existing legislation, having the obligation of supplying
all its employees and those of its subcontractors any and all collective or individual
protection equipment (in particular hardhats, safety belts, etc.), as well as requiring
their use and compliance with the pertinent rules, making sure of then proper use of said
equipment items;
 






	s) 
 	supply,
directly or by subcontracting, items produced locally duly registered in the FINAME,
where applicable, in accordance with the legislation in force;
 






	t) 
 	provide
in all HARDWARE, on visible sites, identification plates containing: name of the
manufacturer registered, venue and date of manufacture of the item, in addition to its
technical identification and serial number, in accordance with the legislation in force;
 






	u) 
 	once
addressed the terms and conditions foreseen in clause 13, be fully responsible for any
eventual accident or damages caused by its employees or subcontractors to TIM and to
third parties, stemming from performing this CONTRACT;
 






	v) 
 	be
totally responsible for its employees and subcontractors, including for the charges
related to social security, accidents and any charges of administrative, punitive, tax
ore civil nature, with SIEMENS being considered sole employer, it being expressly stated,
as of this moment, that there is no form of labor bond between the employees and
subcontractors of SIEMENS and TIM;
 






	w) 
 	be
wholly responsible for the delivery of the GOODS and SERVICES to the SITES designated in
accordance with the PURCHASE ORDERS ACCEPTED, being responsible, also, for all additional
expenses resulting from delivery to wrong venues, as long as not caused through TIM’s
fault, assuming all the transport-related risks in any case; and
 






	x) 
 	be
totally responsible for the removal of any GOODS delivered to SITES, withouit having been
requested by TIM.
 







12.2.  DUTIES AND
OBLIGATIONS OF TIM



12.2.1            With
no loss to the other obligations foreseen in this CONTRACT, TIM commits to : 



	a) 
 	address
all its contract obligations in relation to SIEMENS, in the terms agreed in the CONTRACT;
 






	b) 
 	supply
SIEMENS with all additional information about the object of this CONTRACT, upon request,
in writing, as well as clarify any doubts related to this CONTRACT;
 






	c) 
 	approve
or negate contracting of subcontractors by SIEMENS in the terms of clause 3.4;
 






	d) 
 	sign
the INITIAL ACCEPTANCE TERM and the FINAL ACCEPTANCE TERM, whenever there is a respective
INITIAL or FINAL ACCEPTANCE of the contract supply operations;
 






	e) 
 	issue
PURCHASE ORDERS in compliance with ATTACHMENT 3, prior to the execution of said GOODS and
SERVICES.
 






	f) 
 	authorize
and ensure SIEMENS, throughout the term of this CONTRACT,  free access to the SITES, in
accordance with TIM’s internal rules, by SIEMENS staff and subcontractors, by way or
previous request in writing from SIEMENS;
 






	g) 
 	communicate
in writing and in due time to SIEMENS, whenever possible, the occurrence of impeding fact
against the execution of any under its charge;
 






	h) 
 	supply
all the documentation, as long as applicable and available, that might be requested by
SIEMENS for the execution of the object of this CONTRACT;
 






	i) 
 	operate
and maintain the GOODS, in accordance with the manuals and instructions delivered by
SIEMENS;
 






	j) 
 	receive
the GOODS and SERVICES delivered by SIEMENS, as long as they are in compliance with the
conditions foreseen in this CONTRACT, signing the competent COLLECTION DOCUMENTS; and
 






	k) 
 	justify
in writing the penalties that it will eventually impose on SIEMENS.







13. RESPONSIBILITIES



13.1. Once addressed
the provisions defined in sub-clauses 13.1.1 to 13.1.4 below, SIEMENS becomes responsible
for all claims, administrative and legal suits stemming from its proven action or lack
thereof, omission, including those by its subcontractors, in relation to this CONTRACT,
releasing TIM from any responsibility under this aspect. SIEMENS will take on al expenses
resulting from any damages caused by its employees and subcontractors to TIM and to third
parties, observing the dispositions of this clause. 


	 
 	13.1.1 Bearing in mind the disposed above, in case of any notification, summons or booking, TIM will inform said fact to SIEMENS, in writing, with copies of all the pertinent documentation, in due time allowing
SIEMENS to fully exercise its right of defense. Without prior acquiescence in writing by SIEMENS, TIM will not be able to fully recognize the total or partial grounds for the notification, summons or booking.

 

	 
 	13.1.2 SIEMENS will, then, take on running the defense for the notification, summons or booking, with the obligation of standing in for TIM in the respective suits, or, when this is not legally permissible, the
defense will be run in common agreement by the PARTIES, however, always addressing the guidance offered by SIEMENS.
 

	 
 	13.1.3 TIM commits to collaborating with SIEMENS, for the good running of the defense for any eventual notification, summons or booking.
 

	 
 	13.1.4 In case SIEMENS should stop acting in defending said claims or actions, TIM will be entitled to take all the appropriate legal measures and will be reimbursed of all expenses resulting from such measures,
including eventual sentencing, legal costs and lawyers’ fees.










13.2.             Once
observed the terms and conditions defined following this, and as long as caused by proven
fault or intent by SIEMENS and/or its subcontractors, SIEMENS will become responsible and
will indemnify TIM for: (i) any expenses or eventual sentences in relation to bodily
injury and/or death of any person, and for (ii) any form of damage, to TIM or to third
parties, all of which stemming from the execution of this CONTRACT. 



13.3 The overall
responsibility of the PARTIES, resulting from and due to this CONTRACT, including any of
its ATTACHMENTS or other document part of it or applicable to it, including all fines,
penalties, indemnities, or compensations eventually owed to the other PARTY and/or to
third parties, regardless of the number of events, is limited to 100% (one hundred
percent) of the value of this CONTRACT. 



13.4 Notwithstanding
the disposed and foreseen in any other provision of this CONTRACT, including any of its
ATTACHMENTS or other document part of it or applicable to it, it expressly agreed that
the PARTIES will not answer, in any situation, for indirect or consequent losses and
damages, including as an example loss of production, loss of revenue, loss of data, loss
of profits or revenue, in relation to the PARTY or any third parties. 




14. MANAGEMENT AND
EXECUTION OF THE CONTRACT



14.1
             SIEMENS declares having technical knowledge about all regions where the
CONTRACT will be implemented, being aware of eventual conditions that may adversely
impact the costs and the execution of the CONTRACT, as well as the TECHNICAL
SPECIFICATIONS, sketches, plants, descriptive documents, memorial of relevant
calculations, no being to claim ignorance in claiming any adjustments our complaints in
relation to the object supplied. 



14.2 This
CONTRACT will be executed by SIEMENS in compliance with the TECHNICAL SPECIFICATIONS
contained in ATTACHMENT 4 and the technical regulations published by ANATEL and by ABNT (“Brazilain
Association of Technical Norms - Associação Brasileira de Normas Técnicas”) applicable on
the date of execution of the SERVICE or of supplying the GOOD.  



14.3 Each PARTY shall
formally inform the other PARTY the full name and function of its PROJECT MANAGER. 


	 
 	14.3.1 The PARTIES will appoint substitutes, with the same powers as the original PROJECT MANAGER, in case of occasional absence or impediment of the PROJECT MANAGERS informed.







14.4
              SIEMENS will maintain available to TIM, for the term of this CONTRACT, its
PROJECT MANAGER, who will be responsible for the implementation, inspection, and
installation of the SYSTEM, as well as for the operation of the GOODS and SERVICES. 



14.5
             PROJECT MANAGERS will be authorized to solver, definitively, any and all
issues related to the performance of this CONTRACT as long as said issues fall within
their scope of competence, as defined by each PARTY. 



14.6              TIM
will appoint its PROJECT MANAGER, who  will be responsible for inspecting this  CONTRACT,
from the onset of term to the signature of the FINAL ACCEPTANCE TERM by  TIM, with
SIEMENS being mandated to collaborate with these inspections. 



14.7
SIEMENS will appoint a duly registered in the Regional Council of
Engineering and Architecture - Conselho Regional de Engenharia e Arquitetura (CREA) in
each state where there is rendering of SERVICE by SIEMENS, with the PROJECT MANAGER being
responsible for the execution of the SERVICES.  



14.8
             Whenever the presence of engineers or technicians from either PARTY is
needed, in venues and times appointed by the other PARTY, for performing a specific
activity, each PARTY will take on the expenses for its own engineers or technicians,
except where the PARTY requesting the presence is unable to perform it as initially
planned, for proven reasons attributed exclusively to it. 



14.9
             Every communication related to the operation of this CONTRACT will be
carried out by registered mail, or through electronic means (with proof of remittance),
addressing the disposed in clause 30.6, and sent to the other PARTY’s PROJECT MANAGER,
except in the case of verbal understandings, defined due to urgency and that must be
confirmed, through the same means, within three (3) days of happening. 





15. EVENTS
(MILESTONES)



15.1              Each
PARTY will address the SCHEDULE in the terms foreseen in it and in this CONTRACT. 



15.2
             Signature of the INITIAL ACCEPTANCE TERM by TIM or the payment to SIEMENS of
any monies owed under the terms of this CONTRACT will not release SIEMENS from its
responsibility in relation to the activities carried out and to be carried out, and will
not imply in their FINAL ACCEPTANCE. 




16.
PROGRESS, INSPECTION AND TEST REPORTS



16.1
              SIEMENS will present TIM, weekly, with reports on the progress of the
implementation of the SYSTEM, for the purpose of keeping TIM informed on: (i) the current
stage always in comparison with the SCHEDULE; (ii) the next steps to be taken by SIEMENS
in relation to the problems faced or to be faced; and (iii) the corrections performed or
to be performed. 



16.2              Once
addressed the provisions foreseen in sub-clauses 3.2 and 12.1.1.”k”, TIM will be entitled
to inspect and test the GOODS and SERVICES to be supplied by SIEMENS, for the purpose of
verifying its compliance with the applicable technical regulations and the specifications
foreseen in this CONTRACT. In these terms, the following can be performed: 




a) Quality control tests;

b) Inspection at the moment of supply delivery; and

c) Inspection of the installation.



16.3
             Except where agreed otherwise by the PARTIES, SIEMENS will supply at its own
expenses, whatever is needed to perform the tests in compliance with ATTACHMENT 5. 



16.4              The
ACCEPTANCE procedures for the SYSTEM, including for any ITEM, are defined in ATTACHMENT 5. 





17. TRANSFER OF
OWNERSHIP AND RISKS



17.1              The
right of property and responsibility for the risks related to the GOODS and SERVICES
supplied by SIEMENS will be transferred to TIM at the moment of signature, by TIM, of the
respective INITIAL ACCEPTANCE TERM, in accordance with this CONTRACT. 



17.2              In
the event of imperfections, defects, errors, omissions or any other irregular situation
raised in the execution of this CONTRACT, caused by SIEMENS, these will be solved by
SIEMENS within the deadlines agreed, with no cost to TIM. 



18. SOFTWARE
LICENSE AND INTELLECTUAL PROPERTY RIGHTS



18.1
             SIEMENS grants TIM the non-exclusive and not transferable right to use and
operate the SOFTWARE supplied under this CONTRACT as well as the DOCUMENTATION and the
correlated intellectual property rights for 50 (fifty) years, counted the first-use
moment by TIM, for the HARDWARE originally installed or in connection with this HARDWARE,
in accordance with the terms of this CONTRACT (“SOFTWARE License”), as long as TIM meets
the payment conditions foreseen in CONTRACT. In so far as SOFTWARE not supplied directly
by SIEMENS, the company declares owning the necessary rights to transfer the respective
license to TIM for use of the SOFTWARE, as long as TIM meets the payment conditions
foreseen in the CONTRACT. 



18.2
             SIEMENS will supply TIM for the warranty period, without additional costs,
the UPDATES for the licensed SOFTWARE and the respective rights, as soon as they become
available. The PARTIES agree that these UPDATES are supplied free of charges for TIM, and
should contain solutions to problems or errors detected during the warranty period.
However, it is agreed that additional functionalities contained in these UPDATES can only
be used by TIM after agreement by the PARTIES and the consequent issuance of the PURCHASE
ORDER for these additional functionalities. 



18.3              Any
UPGRADES will be supplied by SIEMENS to TIM, as soon as they become available, at prices
and conditions to be agreed previously by the PARTIES. 



18.4
             SOFTWARE License cannot be transferred by TIM to third parties, with the
exception of its AFFILIATES in Brazil, with the respective license being, anyway, linked
or in connection  with the HARDWARE supplied by SIEMENS for which the SOFTWARE was
initially installed. 



18.5
             SIEMENS will transfer to TIM all significant information: related to the
GOODS and SERVICES, such as know-how, notices and news, for the purpose of enhancing the
SYSTEM. SIEMENS will make available (whenever and as soon as as it becomes available)
information related to the content of new launches of the main SOFTWARE, new SYSTEM
architecture and new SERVICES. 



18.6. The obligations
of the PARTIES in so far as concerns the licenses foreseen in this clause will outlive
the termination of the CONTRACT, regardless of the reason for it. 



18.7              For
administrative and customs purposes, pertinent regulations about supply and licensing of
imported SOFTWARE are laid out in ATTACHMENT 7. 



18.8.             It
is agreed by the PARTIES that the limitation of responsibility established in clause 13
will not be applicable to the responsibilities belonging to SIEMENS before TIM in so far
as concerns violation of correlated SOFTWARE, DOCUMENTATION and intellectual property
rights. 



18.9              The
correlated SOFTWARE use license, DOCUMENTATION and intellectual property right hereby
granted by SIEMENS do not constitute any form of transfer of ownership, nor does it
confer upon TIM any right of cession, sublicensing or sale of the SOFTWARE, rights that
belong exclusively to SIEMENS. TIM commits to preserving the ownership notices and brand
found on the SOFTWARE and in its physical environment. 



18.10             TIM
commits, for itself and for its partners, employees and representatives, to preserve the
integrity of the SOFTWARE, it being forbidden to perform any form of reverse engineering,
de-compilation, break down or creation of derived works based on the SOFTWARE, as well as
modifying the characteristics of the SOFTWARE, enhancing or altering it in any way,
without prior and specific, written consent and authorization from SIEMENS. It is
established that, from this point on, any alteration to be made on the SOFTWARE, of
interest to TIM, at any time, can only be performed by SIEMENS or by person expressly
authorized by SIEMENS. 



18.11             TIM
also commits to using the SOFTWARE exclusively for its own use, being forbiden to sell,
transfer, lend, sub-license, cede, alienate, record or generate costs in any way, the
whole or in part, under any modality, free or for a price, temporarily or permanently,
the SOFTWARE, to any third parties, without prior and specific, written consent and
authorization from SIEMENS. 



18.12
            Transgression by TIM of any of these conditions for use of SOFTWARE will
render TIM liable to pay SIEMENS for proven damages and losses caused by TIM, addressed
the restrictions foreseen in clause 13 of this CONTRACT. 




18.13
            DEFENSE AGAINST VIOLATION COMPLAINT.



18.13.1
          SIEMENS commits to maintaining TIM free of any suit/complaint filed/presented
due to transgression of patent or copyright rights, brand, commercial privilege or other
property right (“EXCLUSIVE RIGHTS”) resulting from the use of the SOFTWARE, DOCUMENTATION
and any correlated intellectual property rights, by TIM, with SIEMENS having to indemnify
TIM for any costs, losses and damages, that are attributed to it, or for values related
to agreements entered by SIEMENS, as long as TIM: (i) informs SIEMENS in writing of said
suit/complaint and its content, and (ii) attributes to SIEMENS control of such procedures
or legal or amicable negotiations, as needed. 


	 
 	18.13.1.1 TIM will collaborate with SIEMENS in the defense of such legal suits/complaints set out in the sub-clause above, it being certain that eventual costs relate to said defenses,
including external lawyers’ fees contracted on request by SIEMENS or travel expenses will be born by SIEMENS.
 

	 
 	18.13.1.2  With no loss to the disposed in sub-clause 18.13.1. above, should TIM be impeded from using the SOFTWARE, SIEMENS will obtain at its own expenses: (i) the right for TIM to use the SOFTWARE; or (ii)
replacement or modification of SOFTWARE in order to avoid violation of the EXCLUSIVE RIGHTS without impairing the functionality and performance of the SOFTWARE to the standards agreed in the CONTRACT.

 

	 
 	18.13.1.3 Should none of the options referred to in sub-clause 18.13.1.2 above be feasible, SIEMENS will remove the violated SOFTWARE and restitute TIM any and all sums disbursed to SIEMENS for this purpose,
monetarily corrected. In case removal of the SOFTWARE affects essential functional capacities of the SYSTEM, SIEMENS will be obliged to restore the SYSTEM’s capacity to the original standards agreed, with no
loss I indemnifying TIM for eventual damages caused as a consequence of its acts or omissions.






18.13.2           The
rights foreseen in this clause 18 constitute the sole remedy for TIM in case of real or
alleged violation of any EXCLUSIVE RIGHT by third parties. 



19. TECHNICAL
WARRANTIES



19.1.             The
PARTIES agree that TIM will inform SIEMENS, in writing, of the occurrence of situations
or facts are detected requiring the execution of the Warranty clause with replacement or
repair under warranty of the ITEMS. 



19.2.
            SIEMENS guarantees that (i) the SERVICES and GOODS are of the highest quality
and suited to performing the purpose for which they are meant; (ii) have never been used
before, and (iii) do not feature vices, defects, irregularities or errors, and being in
compliance with the TECHNICAL SPECIFICATIONS foreseen in ATTACHMENT 4. 



19.3.
            SIEMENS commits to presenting the RATIFICATION CERTIFICATES for the GOODS
supplied, where applicable, with their respective expiry dates duly updated, committing
further to renewing, before ANATEL, the RATIFICATION CERTIFICATES whenever these expire
or is deemed necessary. 



19.4.             The
warranties foreseen in this clause 19 include peripheral and associated equipment
supplied by third parties to SIEMENS, according to the provisions of ATTACHMENT 4. 



19.5.
            Should SIEMENS not manufacture the GOODS, it shall obtain warranty from the
manufacturer in favor of TIM in the same terms and conditions agreed in this CONTRACT. 



19.6.             It
is agreed by the PARTIES that all GOODS must correspond to the GSN specifications
foreseen in Brazilian legislation, including in so far as regulations issued by ANATEL
and ABNT. In case of GOODS, whose standard is not specific for the GSM network, SIEMENS
will guarantee their performance, reliability and functionality. The PARTIES also agree
that SIEMENS cannot be held responsible for the consequences of any changes to the GSM
specifications carried out after supplying the GOODS to TIM. 




19.7
             HARDWARE WARRANTY



19.7.1            The
PARTIES agree that TIM will inform SIEMENS in writing of the occurrence of situations or
facts are detected requiring the execution of the Warranty clause with replacement or
repair under warranty of the ITEMS. 



19.7.2            The
warranty period for all the HARDWARE, for each NETWORK ELEMENT or SITE is of twenty-four
(24) months, counted from the date of signature of the INITIAL ACCEPTANCE TERM by TIM or
of the COMMERCIAL LAUNCH, prevailing whichever one occurs first. SIEMENS will extend the
warranty period for a further six (6) months for all the defective HARDWARE that has
undergone repair or been replaced during the warranty period, as long as the remaining
warranty period is less than six (6) months. 



19.7.3            In
the event of vices, defects, irregularities and/or errors found during the warranty
period established in the sub-clause above, based on the TECHNICAL SPECIFICATIONS,
SIEMENS is mandated to repairing or substituting, at its sole discretion, the defective,
irregular or incorrect HARDWARE, at no additional cost for TIM, within : (i) 30 (thirty)
days, for local HARDWARE; (ii) 60 (sixty) days for imported HARDWARE; and (iii) 75
(seventy-five) days for OEM HARDWARE; all these terms counted from the date of reception
of the notification sent to SIEMENS. 



19.7.4            The
GOODS with imperfections, defects, irregularities or errors substituted will have their
property returned to SIEMENS. 




19.8
             SOFTWARE WARRANTY



19.8.1            The
PARTIES agree that TIM will inform SIEMENS in writing whenever the occurrence of
situations or facts requiring the execution of the warranty clause with substitution or
repair under warranty of the ITEMS is detected. 



19.8.2
            SIEMENS guarantees TIM that each SOFTWARE, to be supplied to TIM, duly
installed and in operation, will be free of defects that impact on the use of the
SOFTWARE in compliance with the TECHNICAL SPECIFICATIONS and in accordance with
ATTACHMENT 4, during the period of 24 (twenty-four) months counted from the date of
signature of the INITIAL ACCEPTANCE TERM by TIM or of the COMMERCIAL LAUNCH, whichever
occurs first. In the case of an interruption of the SYSTEM caused by the SOFTWARE,
SIEMENS will offer TIM a temporary solution in 24 (twenty-four) hours counted from the
moment of reception of the notification sent by TIM reporting the filure raised. 




19.9
             SERVICE WARRANTY



19.9.1            The
PARTIES agree that TIM will notify SIEMENS in writing whenever the occurrence of
situations or facts requiring the execution of the warranty clause with substitution or
repair under warranty of the ITEMS is detected. 



19.9.2            The
warranty period for the SERVICES counted from the date of signature of the INITIAL
ACCEPTANCE TERM by TIM or of the COMMERCIAL LAUNCH, whichever occurs first. SIEMENS will
extend the warranty period for a further (6) six months for every SERVICE not in
compliance with the TECHNICAL SPECIFICATIONS and that has been repaired during the course
of the warranty period, as long as the remaining warranty period is less than six (6)
months. 



19.9.3
           SIEMENS guarantees TIM that the SERVICES will be performed in a careful and
professional manner, in accordance with the TECHNICAL SPECIFICATIONS, with ATTACHMENT 4
and any other specification agreed by the PARTIES, in writing, for said SERVICES. Should
evidence be found that the SERVICES were not performed in this way,  based on the
TECHNICAL SPECIFICATIONS and any other specification agreed by the PARTIES, in writing,
SIEMENS, at its own expenses, must immediately correct any existing defects or
shortcomings, in the terms and conditions that it agrees to with TIM. 




19.10
            ITEM CHANGES OR SUBSTITUTIONS



19.10.1           At
any moment during the execution of this CONTRACT, SIEMENS may request substitution of
ITEMS supplied, as well as changes in the projects and specifications related to them, by
way of written agreement between the PARTIES. 



19.10.2
                            Substitutions, modifications or replacements of the ITEMS
must address each one of the following conditions: 



	(a) 	May
not impact TIM’s capacity of fulfilling its obligations foreseen in the Authorization
Terms signed with ANATEL for the rendering of telecommunications services or its capacity
to operate the SYSTEM in       accordance with the TECHNICAL SPECIFICATIONS;
 






	(b) 	May
not affect the physical or physical exchange or the performance specifications of the
SYSTEM except where established otherwise, always in writing, by TIM;
 






	(c) 	May
not increase the prices established in this CONTRACT, except when established otherwise,
always in writing, in common agreement by the PARTIES;
 






	(d) 	May
not reduce safety conditions for the ITEM;
 






	(e) 	Must
be functionally equivalent and compatible with the ITEM replaced, without any need for
ant form of adaptation; and
 






	(f) 	Must
not, in any circumstance, reduce or diminish any of SIEMENS’s obligations in addressing
the warranties tendered to TIM.
 







19.11
            SPARE PARTS



19.11.1  The PARTIES
agree that TIM will notify SIEMENS in writing whenever the occurrence of situations or
facts requiring the execution of the warranty clause with substitution or repair under
warranty of the SPARE PARTS is detected. 



19.11.2 SIEMENS
guarantees the availability of SPARE PARTS and correlated SERVICES, at market prices, for
the GOODS produced and supplied by Siemens for a period of 5 (five) years counted from
the last supply date for each ITEM to TIM. For GOODS manufactured by third parties,
Siemens guarantees the availability of SPARE PARTS in compliance with the respective
third party policies and for the period in which said third parties maintain available
the respective SPARE PARTS. 



19.11.3 TIM will be
able to test the SPARE PARTS in 5 (five) working days after their supply. Once this term
has been exceeded, without TIM performing any tests, the SPARE PARTS are considered
accepted and approved. In case any error or vices are found on the SPARE PARTS, based on
the TECHNICAL SPECIFICATIONS, TIM will return to SIEMENS, at the latter’s expenses, the
defective SPARE PART within 5 (five) working days counted from the date the notification
is issued by TIM. TIM will proceed with payment for the SPARE PARTS supplied free of
errors or vices in accordance with the payment conditions foreseen in this CONTRACT. 




20. PERFORMANCE BOND  



20.1  As a guarantee
of addressing all its obligations foreseen in this CONTRACT, SIEMENS will deliver to TIM
a “PERFORMANCE BOND” issued by prime banking institution, approved by  TIM, whose terms
must address the provisions established in ATTACHMENT 6 of this CONTRACT, as well as
criteria defined below: 



20.2. For the term of
this CONTRACT, PERFORMANCE BONDS will be issued for consecutive periods based on the
value corresponding to 15% (fifteen percent) of the supply operations for GOODS and
SERVICES estimated by TIM, adopted the following: 


	a)
 	For the first period
of the PERFORMANCE BOND, to be composed of the first 8 (eight) months of this CONTRACT’s
term, the value of the PERFORMANCE BOND will be of R$ 16,500,000.00 (sixteen million
Reals), corresponding to 15% (fifteen percent) of the total value for supply of GOODS and
SERVICES foreseen for this period, with the corresponding PERFORMANCE BOND being
presented by SIEMENS to TIM in up to  30 (thirty) days counted from the date of signature
of this CONTRACT;
 

	b)
 	In up to 15 (fifteen)
days before the end of the term for the PERFORMANCE BOND supplied for the period foreseen
in inset “a” above, SIEMENS commits to delivering the new PERFORMANCE BOND, in
replacement for the previous one, to address 15% (fifteen percent) of the value estimated
by TIM for the following 6 (six) months, with SIEMENS having to formally request from TIM
the related value estimated, in due time, to address the time frame defined in this inset; 
 

	c)
 	After the expiry of
the term for the PERFORMANCE BOND foreseen in inset “b” above, SIEMENS will deliver a new
PERFORMANCE BOND, in replacement for the previous one and so on, successively at every
period of 6 (six) months until the end of the term of this CONTRACT, under the same terms
as foreseen in inset “b” above.
 






20.3. It is agreed
that, due to the periodic issuance of the PERFORMANCE BONDS, in the format foresen above,
SIEMENS will, after the expiry of the CONTRACT term, contract a new PERFORMANCE BOND, to
remain valid until December 31st 2005, corresponding to 3% (three percent) of the value
effectively invoiced by the end of the CONTRACT term. 



20.4 TIM is entitled
to foreclosing on the PERFORMANCE BOND in case of SIEMENS not addressing any of its
obligations foreseen in this CONTRACT, notifying SIEMENS promptly of the exercise of the
PERFORMANCE BOND. 



20.5 It is also agreed
that the PERFORMANCE BONDS will be issued on first demand condition,  irrevocable,
unchangeable and not subject to any prior condition for their execution. 




21. IMPORTATION OF
GOODS



21.1
             GENERAL INFORMATION



21.1.1
Except where otherwise agreed by the PARTIES, TIM will be responsible for the
importation, from SITA, of the IMPORTED GOODS that it requests by way of issuing the
corresponding PURCHASE ORDER.  



21.1.2.           TIM
will obtain all the necessary approvals to act as importer under Brazilian laws. SSP will
advise TIM in any necessary information in relation to the importation procedures to be
followed, and will forward TIM any documents required by any applicable Brazilian
legislation. 




21.2.
            IMPORT AND EXPORT LICENSES



21.2.1            SITA
will be responsible for obtaining any licenses and/or government approval required by the
exporting county. The PARTIES will support each other in obtaining any government
approval and/or license required by any applicable legislation. Whatever costs are
incurred, or come to incur, in obtaining the export licenses will be borne by SITA. TIM
will be responsible for obtaining any licenses and/or government approval for the
importation of the GOODS, where this is required by the importing country. Whatever costs
are incurred, or come to incur, in obtaining the import licenses will be borne by TIM.
Should SIEMENS import any of the IMPORTED  GOODS in its own name, by way of written
request issued by TIM, it will reimburse SIEMENS for the previously agreed costs related
to this import operation. 




21.3
             SHIPMENT IDENTIFICATION FOR IMPORTED GOODS



21.3.1            Any
and all documents and consignations must be addressed and identified by SITA in
accordance with the latest instructions supplied, in writing, by TIM, with these
instructions having to be forwarded to SITA, with a minimum advance of 10 (ten) days
working days of the date foreseen for shipment. Any additional costs incurred by TIM due
to errors committed by SITA in addressing these instructions will be borne by SITA. 




21.4.
            FREIGHT DOCUMENTATION FOR IMPRTED GOODS



21.4.1            SITA
will be responsible for forwarding TIM an original copy of the shipment embarkation
documents, for each shipment,  preferably 7 (seven) days prior to the arrival of the
means of transport, with copies of said documents having to be sent to TIM immediately
after the related embarkation. Any costs incurred, including warehousing (in places not
belonging to TIM) and the retention charges as a consequence of inadequate or
insufficient documentation, as well as in case of delay or non-compliance with this
clause, ascribable to SITA, must be borne b the latter. SITA must guarantee that a full
document set will accompany the GO0ODS throughout their journey: 


	Bill of Lading; 


	Commercial Invoices; 


	Packing List; and 


	Any other documentation required and/or agreed by SIEMENS and TIM.






21.4.2 For insurance
purposes, SITA must inform TIM of the arrival date foreseen for the  GOODS and the
respective value of each shipment, with minimum advance of 3 (three) days before the
arrival date foreseen for the specific shipment. 



22. INSURANCE



22.1.
            SIEMENS must contract, at its own expenses and from a prime insurance
company, transportation insurance covering: (i) for LOCAL GOODS and GOODS WITH IMPORTED
COMPONENTS, from the manufacture plant to the LOCALITY appointed by TIM for the delivery
of the related GOODS; and (ii) for IMPORTED GOODS, from the manufacture plant of origin
to the respective country border; in both cases, in compliance with the applicable
legislation, with the corresponding policies having to ensure replacement value for the
GOODS being transported. 


	 
 	22.1.1 SIEMENS will contract,
in TIM’s name, transport insurance for IMPORTED GOODS from the country border to the
LOCALITY for delivery of the GOODS,  with TIM having to reimburse SIEMENS for the
corresponding costs, as long as previously approved in writin by TIM, according to the
disposed in sub-clause 6.1.3. of this CONTRACT.





22.2. SIEMENS must
tender insurance of risks of engineering, installation and assembly of the  SYSTEM
covering damages caused by SIEMENS, its subcontractors, or damages caused by chance
events or force majeur. This insurance must be issued by a prime insurance company,
previously approved by TIM, and must cover all reasonable risks inherent to the SERVICES
and GOODS foreseen in the object of this CONTRACT. The insurance must remain effective
until the signature of the INITIAL ACCEPTANCE TERM by TIM or the COMMERCIAL LAUNCH takes
place, whichever happens first. 



22.3. SIEMENS will
retain civil responsibility insurance to the value of R$ 2,500,000.00 (two million, five
hundred thousand Reals), covering material and/or personal damages caused by SIEMENS, or
its subcontractors, to TIM or third parties, during the implementation of the SYSTEM, to
remain valid until the signature of the INITIAL ACCEPTANCE TERM by TIM or until the
COMMERCIAL LAUNCH occurs, whichever happens first. This insurance will be issued by prime
insurance company, previously approved by TIM. 



22.4. The insurance
eventually contracted by TIM will not imply in reason for SIEMENS not to contract the
insurance foreseen in this CONTRACT, and will not affect TIM’s right to impose any
penalty, indemnity or responsibility on SIEMENS, according to the provisions foreseen in
this CONTRACT, even if due to event recovery. 



22.5. Coverage
conditions for the policies must be analyzed and approved previously by TIM, and cannot
undergo any form of change during the term of this CONTRACT, without prior consent and
authorization in writing by TIM.

 22.6. SIEMENS will present TIM with copies of the
policies, fully settled, foreseen in sub-clauses 22.2. and 22.3. above, immediately after
their contracting and at each renewal. 




23. TAXES



23.1              In
so far as concerns LOCAL GOODS, GOODS WITH IMPORTED COMPONENTS and SERVICES, SIEMENS will
be responsible for the payment of all taxes and social contributions ascribed to it,
including charges for social security, required by the Federal, State and Municipal
Governments, as well as by independent government agencies and class associations, except
for the rate differential for ICMS (tax related to the circulation of goods and services
for interstate transportation and communication) in interstate acquisitions, in
connection with this CONTRACT or the execution of its object by SIEMENS, including fines
and other accessory  obligations. 



23.2
              SIEMENS must forward to TIM, upon request, proof of the payments mentioned
in sub-clause 23.1 above. 



23.3              In
the event of changes to the tax legislation, any  taxes, duties or social contributions
created, altered or extinguished, as well as the occurrence of additional legal
definitions after the date of signature of this CONTRACT, that may impact on the prices
hereby contracted, will influence proportionately the prices hereby contracted. 




24. PENALTIES



24.1.
            PENALTIES  IMPOSED BY ANATEL



24.1.1            Once
addressed the limits of responsibility foreseen in clause 13, and as long as stemming
from proven fault or intent by SIEMENS or its subcontractors, SIEMENS will indemnify TIM
for the sum total of the fines and penalties imposed by TIM to ANATEL, in relation to any
absence or lack of RATIFICATION CERTIFICATES for the GOODS and for any non-compliance or
the technical requirements established by ANATEL, for said GOODS, with this indemnity
payment being limited to the maximum value of the ITEM, per event, it being agreed that
SIEMENS will not have to indemnify TIM for any other fines or penalties imposed to it by
ANATEL. 




24.2.
            PENALTIES FOR DELAY IN SUPPLY



24.2.1            in
the event that, due to circumstances for which SIEMENS is proven to be responsible, the
SYSTEM or part of the of the SYSTEM is not ready for approval in the acceptance tests,
according to: (i) the dates agreed in the SCHEDULE, as long as the conditions established
in  ATTACHMENT 8 by TIM are addressed; or (ii) the obligations stemming from the
RESPONSIBILITY MatriX foreseen in ATTACHMENT 2, TIM will be entitled to levying from
SIEMENS the following fines: 



(A) for each SITE not
ready for undergoing ACCEPTANCE TESTS, and whose delay exceeds 10 (ten) days, a fine of
0.33% (zero point three three percent) over the VALUE OF THE SITE (as defined in the
respective PURCHASE ORDER(S)) per day late, limited, however, to 20% (twenty percent) of
the VALUE OF THE SITE; 



(B) for all other
GOODS and SERVICES and whose delay exceeds 10 (ten) days, a fine of 0.33% (zero point
three three percent) over the GOOD or SERVICE late (as defined in the PURCHASE ORDER(S))
per day late, limited, however, to 20% (twenty percent) of the GOOD or SERVICE late. 



24.2.2            The
eventual acceptance by TIM, of extension of the deadlines to be met by SIEMENS, will not
release SIEMENS from the responsibility for eventual delays in supplying GOODS or in
performing SERVICES that were required before the appearance of said extensions. 



24.3.
            PENALTIES FOR NOT ADDRESSING TECHNICAL SPECIFICATIONS



24.3.1            In
the event that the GOODS installed do not address the TECHNICAL SPECIFICATIONS found in
ATTACHMENT 4, in the terms of this instrument, TIM will be able to levy a single fine,
for each GOOD, and to a maximum of 10% (ten percent) over the value of the afore
mentioned GOOD, with no loss to its replacement under the provisions of clause 19. 




24.4.
            PENALTIES FOR NOT ADDRESSING DEADLINES FORESEEN IN CLAUSE 19 (TECHNICAL
WARRANTIES)



24.4.1
           During the warranty periods of the HARDWARE and/or SOFTWARE, in case SIEMENS
incurs in delay of delivery, for proven reasons of its own fault or intent, TIM will be
entitled to apply for each GOOD that is late in excess of 10 (ten) days 0.33% (zero point
three three percent) of its value, for each day late counted from non-compliance of the
deadlines established in clause 19 (Technical Warranties), counted from the date of TIM’s
written notification to SIEMENS when the occurrence of situations and facts where the
execution of the warranty clause with substitution or repair of the GOODS to a maximum
value of 20% (twenty percent) of the value of the above mentioned GOOD is detected. 




24.5.
            PENALTIES FOR “DOWN TIME”



24.5.1
           SIEMENS assures that all NETWORK ELEMENTS (BSC) will be available for TIM
during the respective warranty periods, as foreseen in this instrument. 



24.5.2
           SIEMENS assures that the annual failure rate for each NETWORK ELEMENT (BSC)
will not exceed 40 (forty) minutes of ”down time” (out of operation) per calendar year (“Annual
Failure Rate”). 



	 	 24.5.2.1 In
case the Annual Failure Rate is exceeded, by proven fault or intent of SIEMENS, it shall
pay the penalties for the time exceeding the Annual Failure Rate, according to the
provisions defined below:
 






	   	(a) fine
0.33% (zero point three three percent) of the value of the NETWORK ELEMENT impacted, for
every 15 (fifteen) minutes of down time exceeding the Annual Failure Rate, however,
limited to 1.5% (one point five percent) over the value of the NETWORK ELEMENT in case of
point, regardless of the number of events; and
 






	  	(b) once
the maximum fine limit is reached, according to the dispositions of the preceding inset,
and with “down time” persisting for the NETWORK ELEMENT, TIM will be entitled to levy a
fine of 0.5% (zero point five percent) over the value of the NETWORK ELEMENT impacted
(BSC) for every 10 (ten) minutes of ”down time” exceeding the maximum down time length,
stipulated in the preceding inset, limited to  a 5% (five percent) over the value of the
NETWORK ELEMENT in case of point.






24.5.3            For
the purposes of this sub-clause 24.5, the Annual Failure Rate will not take into account
down time caused by: 



	(i) 	preventive
and/or corrective maintenance in accordance with the terms of this  CONTRACT;
 






	(ii) 	handling,
sizing or alterations made unduly by TIM and/or its subcontractors, as long as proven by
SIEMENS; and 
 






	(iv) 	FORCE
MAJEUR events. 






24.5.4 In case the
above defined fines have all been applied to their maximum limit, TIM will be entitled
to, at its sole discretion, rescind the CONTRACT. 



24.5.5
           Payment of the respective fines will not release SIEMENS from addressing its
obligations. 



24.5.6
During the term of this CONTRACT, in case of conflict or doubt in relation to
the terms and conditions herein foreseen, and the terms and conditions of system support
contract signed or to be signed by the PARTIES, the more beneficial conditions for TIM
shall prevail, it being strictly forbidden for TIM to conjugate conditions from more than
one contract simultaneously.  



24.5.7            The
PARTIES are expressly in agreement with the fact that the penalties foreseen in this
clause or in any other clause in this CONTRACT, do not eliminate, nor in any way reduce
the obligations or the duties of the PARTIES, that will remain valid until fully
achieved, notwithstanding the payment of said penalties. 




25. RESCISION



25.1. Any of the
PARTIES may rescind this CONTRACT: (i) in the event of declaration of bankruptcy, request
for Chapter 11 bankruptcy, legal or extra-judicial dissolution of the other PARTY; and
(ii) in the event of total or partial cession or transfer of this Contract, without prior
consent from the other PARTY; with, to this end, the PARTY impacted inform in writing the
other PARTY, with immediate effect, with no loss to the right of collection of eventual
credits owed by one PARTY to the other. 



25.2. The PARTY, which
has suit filed against it that might impact on its credibility or ontegrity, will
immediately attribute to the other PARTY the right to immediate rescission of this
CONTRACT. 



25.3. If any of the
PARTIES does not address its contractual obligations, the PARTY that feels harmed will
inform the other PARTY in writing, so that the latter will have 30 (thirty) consecutive
days to do so counted from the reception of said notice issued by the PARTY to right the
situation. Once the term defined has expired with the PARTY considered delinquent having
addressed and met its obligations, the innocent PARTY will be able to rescind this
instrument. 



25.4. TIM will pay
SIEMENS the total value of the GOODS and SERVICES already delivered or shipped up to the
date of reception of the rescission notice,  added to the total value for the GOODS and
SERVICES ready for delivery or in process of being manufactured, whether at  SIEMENS, or
at its subcontractors’ facilities, as well as any materials or equipment ordered by
 SIEMENS to third parties, in addressing the ACCEPTED PURCHASE ORDERS, up to the last day
preceding the date the date the rescission notification is sent, duly attested by SIEMENS
and validated by TIM based on the TECHNICAL SPECIFICATIONS. In any event, TIM will hold
the option to request conclusion of supply of the GOOD or SERVICE in process of
manufacture/undertaking, according to the terms and conditions foreseen in the respective
PURCHASE ORDERS. 



	  	25.4.1. Any
and all GOODS and SERVICES ready for delivery, or in process of manufactured, or already
ordered by SIEMENS from third party suppliers, to address the ACCEPTED PURCHASE ORDERS,
will become property of TIM, with the latter becoming responsible for the costs or
picking up and transporting the GOODS, except where TIM decides to exercise the option of
requesting the conclusion of supply for the GOOD or SERVICE, event in which the company
will only take on the UNIT PRICES for said GOODS and SERVICES.
 






25.5.             In
the event of termination of this CONTRACT, for whatever reason, the PARTIES’ duties and
obligations, acquired before the effective termination date, shall remain unchanged and
valid, with the PARTIES being mandated to address them in compliance with provisions of
this CONTRACT. 



	  	25.5.1. It
is agreed between the PARTIES that the rights and obligations resulting from clauses 13
(Responsibilities), 18 (Software License and Intellectual Property Rights), 19 (Technical
Warranties), 24 (Penalties) and 27 (Confidentiality) will outlive the termination,
remaining valid after termination of the Contract.






25.6. The PARTIES
agree, from this moment on, that no rescission indemnity or fine will be owed between the
PARTIES for the rescission of this CONTRACT according to the terms and conditions
foreseen above. 



26. FORCE MAJEUR 



26.1. For the purposes
and intents of this CONTRACT, the PARTIES are free of any responsibility or penalties,
in the event of occurrence of events considered as chance events or of force majeur (“FORCE
MAJEUR”), according to the single paragraph of article 393 of the Brazilian Civil Code,
once the procedures stated below have been followed:  



26.2. In the event of
occurrence of FORCE MAJEUR events, the affected PARTY will dedicate its best efforts to
annulling the effects of said events. In case the FORCE MAJEUR event lasts over 60
(sixty) days, any of the PARTIES will be entitled to cancel the part of the PURCHASE
ORDER affected by such event, free of any onus, with TIM remaining obliged to the payment
to the remaining parties of the PURCHASE ORDERS unaffected by the FORCE MAJEUR.  



26.3. FORCE MAJEUR
cases must be notified to the other PARTY in writing, within 7 (seven) days counted from
the date the impacted PARTY learns of the FORCE MAJEUR. Lack of communication within the
above-defined timeframe will impair the right to allege the referred cases.  




27. CONFIDENTIALITY



27.1              The
PARTIES, its AFFILIATES, employees and subcontractors may not disclose any  CONFIDENTIAL
INFORMATION to which they have access, due to this CONTRACT to any third parties, with
said CONFIDENTIAL INFORMATION being used only for the purposes of this  CONTRACT.
Disclosure and/or reproduction, total or partial, of any CONFIDENTIAL INFORMATION or of
this CONTRACT, or of any detail of its progress, can only be made with prior consent and
in writing from the other PARTY. The obligations indicated in this clause will outlive
the termination of this CONTRACT by five (5) years, regardless of the reason for
termination. 



27.2              The
above foreseen confidentiality obligation is not applicable to CONFIDENTIAL INFORMATION
that: 



a) the receiving PARTY
can demonstrate is already in public domain or that becomes of public domain, not through
violation of this CONTRACT by the receiving PARTY; 



b) belonged to the
receiving PARTY before its reception from the issuing PARTY, as attested by written
records of the former; 



c) is developed
independently of the receiving PARTY, as attested by written records; 



d) is approved for
disclosure by way of written authorization from the issuing PARTY; and 



e) whose disclosure is
required by law or other rule imposed by government agency. 




28. ARBITRATION



28.1.             In
the event of litigation or divergence stemming from this CONTRACT or of agreements, in
relation to its execution, the PARTIES will make every effort in the sense of settling
them amicably. The agreement attempt will be considered unsuccessful, as soon as one of
the PARTIES informs this to the other PARTY, in writing. 



28.2. Once
the agreement attempt has been unsuccessful, divergences will be settled in definitive
based on the procedural rules of the Arbitration and Mediation Chamber of the
Brazil-Canada Chamber of Commerce, through an arbitral court composed by 3 (three)
arbitrators appointed in compliance with the above-mentioned rules. Arbitration will be
based on the law, with Brazilian material law being applicable and voided the use of any
other Materia legalis.  



28.3.             The
forum of the city of São Paulo, State of São Paulo, at the facilities of the Arbitration
and Mediation Chamber of the Brazil-Canada Chamber of Commerce is chosen for installing
arbitral proceedings, utterance and execution of the arbitral sentence. Complementarily,
the procedural law for this forum will be applicable to the provisions of the Arbitration
and Mediation Chamber of the Brazil-Canada Chamber of Commerce. 



28.4.             The
official language used in the arbitral proceedings will be Portuguese. 



28.5.             The
arbitral sentence must have its grounds stated in writing and will not be liable to any
other appeals or ratification by the Legal System. The arbitration tribunal will also
decide on the costs of the arbitration process, as well as the fees to be paid to the
arbitrators. 



28.6.             The
arbitral sentence will be immediately obeyed in all its terms by the PARTIES, and must be
issued within a maximum of 6 (six) months counted from the onset of arbitral procedures. 




29. JOINT
RESPONSIBILITY



29.1.             Once
observed the limits of responsibility and the other conditions fixed in clause 13, SSP,
DFV, SITA and SES, are and will be jointly responsible for each other, before TIM, for
all the obligations that they have expressly taken on through this CONTRACT. To this end,
and based on the terms herein foreseen, TIM will be entitled to, in a single opportunity
and exclusively in a proven violation of any of the said obligations by one or more of
the above-mentioned companies, demand that these obligations be addressed by any one of
the listed companies. 




30. GENERAL
DISPOSITIONS



30.1.
            ALTERATIONS



Any and all
modifications to this CONTRACT shall be mutually agreed, in writing, and signed by the
legal representatives of the PARTIES. 



30.2.
            INDEPENDENT CONTRACTING PARTIES



The relationship
between the PARTIES is purely contractual in nature, with no labor relations existing
between them or the employees or representatives of one PARTY in relation to the other.
The PARTIES will not be responsible for any acts practiced by the other PARTY, or by the
employees or representatives of the other PARTY, except within the limits, terms and
conditions foreseen in this CONTRACT. 



30.3.
            NOVATION



With no loss to the
limits, terms and conditions herein foreseen, abstention by the PARTIES from using any
right, choice or power attributed to them in this CONTRACT or in law, will not imply in
novation or waiver of the rights assured in this CONTRACT or in law, which may be
practiced at any moment, constituting the referred abstention in mere liberality by the
PARTY. 



30.4.
            MODIFICATION OF THE SYSTEM



In the event any
technical changes or modifications are necessary to the SYSTEM, SIEMENS must inform TIM,
with at least thirty (30) days advance notice of its implementation, and prior
authorization must be obtained, in writing, from TIM before beginning any activities.




30.5.
            INVALID CLAUSES



In the event one or
more clauses in this CONTRACT are or become legally invalid, null or annullable, the
remaining clauses of the CONTRACT will not be affected. The PARTIES will be entitled to
substitute the legally invalid, null or annullable clauses with other legally valid
clauses, and that must correspond to the intention of the invalid, null or annulled
clauses and the object of this CONTRACT. 



30.6.
            COMMUNICATIONS



Except in so far as
concerns operational procedures, whose treatment is provided for in sub-clause 14.9 of
this CONTRACT, any communication, instruction or other communication to be sent in
compliance with the terms of this CONTRACT to any of the PARTIES, must always be done in
writing, and sent with Reception Notice (Aviso de Recebimento – AR), to the following
addresses (or to other addresses informed in writing by one PARTY toi the other, under
the terms and conditions of this CONTRACT).  


	If meant for TIM:	Rua Fonseca Teles, n.o 18/30
	 	São Cristóvão - Rio de Janeiro - RJ
	 	CEP 20940 200
	 	At.: Cláudio Bastos
	 
	 	At.: Márcia Silveira
	 
	If meant for SIEMENS:	Siemens Ltda.
	 	Avenida Mutinga n.o 3800
	 	Setor: ICM-N, 2o andar
	 	Pirituba - São Paulo – SP
	 	CEP: 05110-901
	 	At.: Jairo Cardoso de Oliveira
	 
	 	At.: André Luiz Nunes Machado





30.7.
TITLES OF THE CLAUSES  



The titles of the
clauses in this CONTRACT have been included for mere convenience or reference purposes
and will not affect the meaning or interpretation of this CONTRACT. 




30.8.
            LANGUAGE



The Portuguese
language will be the language used in all documents and communications  related to this
CONTRACT, except where otherwise agreed by the PARTIES, such as in the case of a few
TECHNICAL SPECIFICATIONS. 



30.9.
            LAWS



This CONTRACT will be
ruled and interpreted in accordance with the laws of the Federated Republic of Brazil. 



IN WITNESS OF THIS,
the legal representatives of the PARTIES sign this CONTRACT in 6 (six) copies of equal
form and content in the presence of 2 (two) witnesses, undersigned. 




Rio de Janeiro,
November 2, 2002. 




     /s/ Luis Roberto Antonik           /s/ Mozart Galvão 

________________________________________________________________________

TIM CELULAR S.A.





    /s/ Luis Roberto Antonik           /s/ Mozart Galvão

________________________________________________________________________

TIM SUL S.A.





__________________________________________________

SIEMENS LTDA.




__________________________________________________

SIEMENS MOBILE COMMUNICATIONS S.p.A.




___________________________________________________

SIEMENS ENGENHARIA E SERVICE LTDA.




___________________________________________________


DFV TELECOMUNICAÇÕES E INFORMÁTICA S.A.







Witnesses:



	____________________________________________	____________________________________________
	Name:	Name:
	RG:	RG:
	CIC:	CIC:





Last page of the Contract for Supply of GOODS and SERVICES





















ATTACHMENT 1 - PRICE
LIST, DISCOUNTS 
AND VOUCHERS









* represents omitted
information, which is the subject of a request for confidential treatment with the SEC 








ANNEX 1
UNIT PRICE LIST, DISCOUNTS AND
 VOUCHERS



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ANNEX 1
UNIT PRICE LIST, DISCOUNTS AND
 VOUCHERS



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