Document:

Date:  July 17, 2.000

To:    TELCON FIOS E CABOS PARA TELECOMUNICACOES S/A

Attn.: SR. MARCO VITIELLO                              Phone: (0-21-15) 212-8801
       President                                       Fax  : (0-21-15) 212-8851

From:  NIVALDO SEIXAS                                  Phone: (0-21-19) 789 4209
       Commercial Manager                              Fax  : (0-21-19) 789 4204

                       OPTICAL FIBERS - CONTRACT OF SUPPLY
                       -----------------------------------

1.  SUPPLY

1.1 Product: OPTICAL FIBER MONOMODO ACRILATO.

1.2 Quantity: 300.000 km OF OPTICAL FIBER

1.3 Delivery Dates: JULY 2.000 TO DECEMBER 2.002.

1.3.1 Scheduled Deliveries:

      Period            Year 2.000         Year 2.001        Year 2.002
------------------     ------------        ----------        ----------

    1st Quarter        ------------        28.500 km         31.500 km

    2nd Quarter        ------------        28.500 km         31.500 km

    3rd Quarter         27.000 km          30.000 km         33.000 km

    4th Quarter         27.000 km          30.000 km         33.000 km

1.4 Product Specification

1.4.1 Attenuation:  MINIMUM  OF  80%:   @1310nm  <=  0,344  dB/km  AND
                    MAXIMUM  OF  20%:   @1310nm  <=  0,354  dB/km.

                    MINIMUM  OF  80%:   @1550nm  <=  0,214  dB/km  AND
                    MAXIMUM  OF  20%:   @1550nm  <=  0,224  dB/km.

1.4.2 OTDR trace discontinuity 1310 and 1550nm: <= 0,02 dB.

1.4.3 Wave length of Zero Dispersion: 1300nm AND 1326nm.

1.4.4 Cladding Diameter: 125,0 +/- 2,0 [symbol omitted]M.

1.4.5 Cladding Non-Circularity: <= 1,5%.

1.4.6 Maximum variation of attenuation with temperature -60(Degree)C up to
      85(Degree)C (1310 e 1550nm): <= 0,06 dB/km.

1.4.7 Polarization of Dispersion Mode): <= 0,3 PS / [SYMBOL OMITTED] AVERAGE IN
      THE AREA FROM 1,3 TO 1,6 [symbol omitted] m.

1.4.8 Lenght:: MAXIMUM 1% OF 4.200M, 4% OF 8.400M AND MINUMUM OF 95% BEING
      MINIMUM LENGHT OF 12.600M, MULTIPLES OF 4.200M AND MAXIMUM OF 50.400M.

1.4.9 Complementary Specifications: ACCORDING TO TELCON "FO-002" AND XTAL
      "DMKV007-0".

1.5 Packing: the reels and the protecting layers will be returned to Xtal, as
    per invoice..

1.6 Delivery Term CAF: Telcom Factory.

2.  CONDITIONS

2.1 Payments: Net Price, without taxes to be paid in 30 days, valid for the
    period from July 2000 to September 2.000:

    o   7.500 km / MONTH - US$ 41,00 / km (FORTY ONE DOLLAR PER KILOMETER)

    o   1.500 km / MONTH - US$ 47,00 / km (FORTY SEVEN DOLLARS PER KILOMETER)

2.2 Payment Term: In US$ paid under Brazilian Commercial terms will be used,
    published in the Newspaper Gazeta Mercantil on the day of payment.

3.  TAXES

3.1 ICMS tax will be included in the State where the product is sold.

3.2 15%IPI aliquot to remain outstanding.

3.3 Others tax and contributions already included in the prices.

4.  LATE PAYMENTS

    There will be charged 2% (two percent) penalty, increasing 2,5% (two and
    half percent per month) late charge fee, on the amount or in the event delay
    is not attributed to Xtal Fibras Opticas S.A.

5.  COMMITMENT OF PURCHASE AND SALE

5.1 Xtal guarantees the delivery of 9.000 km per month, during the period from
    July 2000 to September 2.000.

5.2 Telcon guarantees to purchase up to 1.000 km additional / month at the
    price of US$ 47,00 / km, from July 2000 to September 2.000.

5.2.1 to approach of the parts are above open to acquisition of amount surplus
      to the 1.000 km/mes indicated with price to be made a pact when of the
      confirmation of the additional delivery of the referred.

5.3 If Xtal does not execute the delivery of the product according to the item
    5.1 in a certain month, the delayed quantity should be added in the next
    month, maintaining the same commercial conditions of the previous month.

5.3.1 the sobreposicao of the amount in delay to the valid monthly program in
      the month of the delay, it will be applied independently of the closing of
      the negotiations trimestrais to approach of TELCON.

5.4 The non, partial or total inability of Xtal to deliver the product can only
    be justified if in the following cases:

5.4.1 Reduction of the supply of production input.

5.4.2 Interruption, of any origin, of the supply of production input.

5.4.3 Not available of equipment.

5.4.4 Force Majeur.

5.4.5 Strike.

5.5 If Xtal is unable to deliver product under 5.4, then Xtal will be held
    harmless of any legal actions.

5.6 This proposal/agreement substitutes and cancels the proposal/agreement
    256/2000 dated January 14, 2.000.

6.  PRODUCT GARANTEE

6.1 Xtal Fibras Opticas S/A will substitute any part of the product with another
    at no extra cost to the buyer, so long as buyer requests this change 10
    (ten) days prior to shipment, the warranty period for the product shall be
    06 (six) months from shipment date.

7.  REGULATION/ STATUTORY/ REQUISITS

7.1 Telcon should inform Xtal of any restructions imposed by the amount due
    Statutory/Requisits/Regulations.

8.  NOTIFICATION

8.1 All the notifications of a part to the other, according to this Contract,
    should be (i) sent by registered mail with greeting warning, to the
    addresses below; or (ii) sent by facsimile, to the numbers specified below,
    since they are confirmed by correspondent mail copy, with greeting warning,
    in the period of 5 (five) days, to count from the transmission of the
    referred facsimile.

    The addresses of Notification are:

    The addresses of Notification are: TELCON FIOS E CABOS PARA TELECOMUNICACOES
                                       S/A
                                       SR. SERGIO RAGUSA
                                       Diretor Tesoureiro
                                       Rua Chicri Maluf, 121 - Alto da Boa Vista
                                       CEP 18087-030
                                       Sorocaba - SP

                                       XTAL FIBRAS OPTICAS S/A
                                       SR. CELSO ARANTES SIMOES
                                       Diretor de Marketing & Vendas
                                       Rod. SP 340 Campinas/Mogi-Mirim, km 118
                                       CEP 13082-970
                                       Campinas - SP

8.2 All the notifications correspondents referred in the above way will be
    considered received by the other part (i) in the constant date of greeting
    correspondent's warning to the remittent; (ii) in the date of the
    transmission, in case of facsimile, since confirmed as described above; or
    (iii) in the constant date of the greeting protocol supplied by the parts
    that have received the notification. Any of the parts can modify the
    addresses and facsimile numbers above, by means of notification to the other
    part, sent in the form of this Clause.

9.  CONTRACT RENEGOTIATION

9.1 We established the period from August 21 to 25, 2.000 for the accomplishment
    of the renegotiations meeting for the supply conditions for the period of
    October to December of 2.000.

9.2 Quarterly Revision Prices.

9.3 We understand as systematic the commitment of the prices redefinition for
    the following Quarter to the average Quarter in the last fortnight of the
    2nd month of each quarter, establishing the dates in a specific
    correspondence.

9.4 If the parts do not reach an agreement about the supply conditions, in the
    negotiations for the following quarter, this contract will be automatically
    canceled .

10. VALIDITY OF THE PROPOSAL: This proposal is been worth until July 18, 2.000.

11. PROPOSAL APPROVAL

----------------------   --------------------------     ------------------------
RAFAEL B. GANDARA        CELSO ARANTES SIMOES           ANTONIO CARLOS DE CAMPOS
Financing Manager        Marketing & Sales Director     Managing Director

12. PROPOSAL ACCEPTANCE  - TELCON FIOS E CABOS PARA TELECOMUNICACOES S/A

Sorocaba, SP, _____ of July of 2.000.Dates: July 07, 2.000.

To:   Pirelli Cabos S/A

Att:  Mr. Jorge A. Firpo                              Phone: (021-11) 4998-487
      Director of Supply                              Fax  : (021-11l) 4998-4727

From: Nivaldo Seixas                                  Phone: (021-19) 789 4209
      Commercial Commercial Manager                   Fax  : (021-19) 789 4204

CONDITIONS OF SUPPLY - OPTICAL FIBERS

1.  SUPPLY

1.1 Product: Monomodo Acrylate Optical fiber.

1.2 Quantity: 120.000 km of Optical Fiber.

1.3 Delivery Dates: July 2000 to June 2001.

1.4 Schedule of deliveries for the 3rd quarter of 2000:

 LOT       DATES        CONTRACT-AMOUNT(KM)     AVAILABILITY "SPOT" AMOUNT(KM)
-----  ---------------  -------------------     ------------------------------

  1    July 2000               10.000                       5.000

  2    August 2000             10.000                       5.000

  3    September 2000          10.000                       5.000

1.5 Product Specification

1.5.1 Attenuation: @1310nm \060= 0,344 dB/km and @1550nm \060= 0,214 dB/km.

1.5.2 Length: Minimum of 12.600m, with multiples of 2.100m, up to 50.400m.

1.5.3 Complementary Specifications: According to Pirelli specifications and Xtal
      " DMKV007-00 ".

1.6 Packaging: The reels and the protecting layers are returned to Xtal in
    usable conditions, as per invoice.

1.7 Delivery Term: Pirelli Factory.

2.  SUPPLY CONDITIONS

2.1 Price:

2.1.1 Net price of the Optical Fiber, without Taxes:

      a) Contract: US$ 39.00 / km (thirty nine dollars per kilometer).

      b) "Spot" Sales: US$ 45.00 / km (forty five dollars per kilometer) as of
         July 07, 2.000.

2.1.2 The price and the amount will be renegotiated for each following quarter,
      until the 10 (tenth) of the antecedent month to the beginning of each
      quarter.

2.1.3 Payment: In US$ paid under Brazilian Commercial terms will be used,
      published in the Newspaper Gazeta Mercantil on the day of payment.

2.1.4 Terms: Payment to 07 working days, without incurring any taxes.

3.  INCIDENTS TAXES

3.1 ICMS Tax will be included in the State where the product is sold.

3.2 15% IPI aliquot to remain outstanding.

4.  LATE PAYMENTS

    There will be charged 2%(two percent) penalty, increasing 2,5% (two and half
    percent) late charge fee, on the amount or in the event delay is not
    attributed to Xtal Fibras Opticas S/A.

5.  COMMITMENT OF PURCHASE AND SALE

    The purchase and the delivery of 100% (a hundred percent) of each scheduled
    lot is confirmed automatically.

6.  PRODUCT GUARANTEE

    Xtal Fibras Opticas S/A will substitute any part of the product with another
    at no extra cost to the buyer, so long as buyer requests this change 10
    (ten) days prior to shipment, the warranty period for the product shall be
    06 (six) months from shipment date.

7.  REGULATION / STATUTORY / REQUISITS

    Pirelli should inform Xtal of any restructions imposed by the amount due to
    Statutory/ Requisits/ Regulations..

8.  PROPOSAL VALIDITY

    This proposal is valid been until July 12, 2000.

9.  PROPOSAL APPROVAL

----------------------   -----------------------------  ------------------------
Rafael B. Gandara        Celso Arantes Simoes           Antonio Carlos de Campos
Manager Adm. Financier   Director of Marketing & Sales  Managing Superintendent

10. ACCEPTANCE OF THE PROPOSAL - PIRELLI CABLES S/A

    Santo Andre, SP, _____ of July 2000.

----------------------------                     ----------------------------
  Jose Francisco Goncalves                                Jorge Firpo
    Manager of Supplies                              Director of Supplies

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