Document:

Table of Contents  

REGISTRATION RIGHTS
AGREEMENT  

    THIS REGISTRATION RIGHTS AGREEMENT (the “Agreement”) dated as of February 17, 2004, between (i)
Brasil Telecom S.A. (the “Issuer”), a sociedade anônima organized under the laws of the Federative Republic of
Brazil (“Brazil”) and (ii) Citigroup Global Markets Inc. as the Initial Purchaser (as defined below) of U.S.$
200,000,000 of the Issuer's 9.375% Notes due 2014 (the “Notes”). Terms not otherwise defined herein are used as
defined in the Indenture (as defined below). 

WITNESSETH 

    
                 WHEREAS, the Issuer is today entering into an Indenture (the “Indenture”) dated as of February
17, 2004 with The Bank of New York, as Indenture Trustee (the “Trustee”), New York paying agent, Authentication
and Transfer Agent and Registrar and the Bank of Tokyo-Mitsubishi, London Branch acting as Principal Paying Agent
in Japan, pursuant to which it is today issuing U.S.$ 200,000,000 aggregate principal amount of its Notes;

    
                  WHEREAS, in order to provide additional liquidity to the holders of the Notes (the “Holders”),
the Issuer is willing to enter into this Registration Rights Agreement providing for the registration of the
Notes under the U.S. Securities Act of 1933, as amended;

    NOW, THEREFORE, the
parties hereto agree as follows: 

    
SECTION 1.                 Definitions.

    
                      As used in this Agreement, the following capitalized defined terms shall have the following
meanings:

    
                  “Affiliate” shall have the meaning set forth in Rule 405 of the Securities Act.

    
                  “Business Day” shall mean any date that is not a Saturday, Sunday or other day on which
         commercial banks in New York City are authorized or required by law to remain closed.

    
                  “Closing Date” shall mean the Closing Date as defined in the Purchase Agreement.

    
                  “Consummate” shall mean the occurrence of (a) the filing and effectiveness under the Securities
         Act of the Exchange Offer Registration Statement relating to the Exchange Securities to be issued in the
         Exchange Offer, (b) the maintenance of such Exchange Offer Registration Statement continuously effective
         and the keeping of the Exchange Offer open for a period not less than the minimum period required
         pursuant to Section 2 hereof and (c) the delivery by the Issuer to the Trustee of Exchange Securities in
         the same aggregate principal amount as the aggregate principal amount of Notes tendered by Holders
         thereof pursuant to the Exchange Offer.

    “Exchange Act” shall
mean the U.S. Securities Exchange Act of 1934, as amended from time to time.  

    “Exchange Date” shall
have the meaning set forth in section 2(a)(ii) hereof.  

    “Exchange Offer” shall
mean the exchange offer by the Issuer of Exchange Securities for Registrable
Securities pursuant to Section 2(a) hereof.  

    “Exchange Offer
Registration” shall mean a registration under the Securities Act effected
pursuant to Section 2(a) hereof.  

    “Exchange Offer
Registration Statement” shall mean an exchange offer registration statement on
Form F-1, F-2, F-3 or F-4, as applicable, and all amendments and supplements to
such registration statement, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference therein.  

    “Exchange Securities” shall
mean securities issued by the Issuer containing terms identical in all material
respects to the Notes (except that the Exchange Securities will not bear legends
restricting their transfer or be subject to increases of the annual interest
rate payable thereunder for failure to comply with this Agreement) and to be
offered to Holders in exchange for Notes pursuant to the Exchange Offer.  

    “Holder” shall mean
each person or entity that holds the Notes or the Registrable Securities, and
each of their successors, assigns and direct and indirect transferees who become
registered owners of Registrable Securities under the Indenture; provided that,
for purposes of Sections 4 and 5 of this Agreement, the term “Holder” shall
include Participating Broker-Dealers (as defined in Section 4(a)).  

    “Indenture” shall mean
the Indenture relating to the Notes dated the Closing Date, among the Issuer and
The Bank of New York, as Indenture Trustee (the “Trustee”), New York paying agent,
Authentication and Transfer Agent and Registrar and the Bank of
Tokyo-Mitsubishi, London Branch acting as Principal Paying Agent in Japan, as
the same may be amended from time to time in accordance with the terms thereof.  

    “Initial Purchaser” shall
mean Citigroup Global Markets Inc.  

    “Majority Holders” shall
mean the Holders of a majority of the aggregate principal amount of outstanding
Registrable Securities; provided that, whenever the consent or approval of Holders of a
specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Issuer or any of its Affiliates (other than
the Initial Purchaser or subsequent Holders of Registrable Securities if such
subsequent holders are deemed to be such Affiliates solely by reason of their holding
of such Registrable Securities) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage or
amount.  

    “Person” means an
individual, partnership, corporation, limited liability company, business trust,
joint stock company, trust, unincorporated association, joint venture or any nation or
government, any state, province or other political subdivision thereof, any
central bank (or similar monetary or regulatory authority) thereof, and any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.  

    “Prospectus” shall
mean the prospectus included in a Registration Statement, including any
preliminary prospectus, and any such prospectus as amended or supplemented by
any prospectus supplement and by all other amendments and supplements to such
prospectus, and in each case including all material incorporated by reference
therein.  

    “Purchase Agreement” shall
mean the Purchase Agreement dated as of February 9, 2004 between the Issuer and
the Initial Purchaser relating to the purchase of the Notes by the Initial Purchaser.  

    “Registrable Securities” shall
mean the Notes; provided, however, that the Notes shall cease to be Registrable
Securities (i) when a Registration Statement with respect to such Notes shall have been
declared effective under the Securities Act and such Notes shall have been
disposed of pursuant to such Registration Statement, (ii) when such Notes have
been sold to the public pursuant to Rule 144(k) (or any similar provision then
in force, but not Rule 144A) under the Securities Act or (iii) when the Notes
shall have ceased to be Outstanding or (iv) the Exchange Offer is Consummated;
provided further, that the securities with respect to which the Issuer has
caused to be filed and declared effective an Exchange Offer Registration
Statement and have commenced an Exchange Offer, in each case pursuant to and in
accordance with Section 2(a) hereof, and which have not been tendered by the last
Exchange Date (as defined in Section 2(a)(ii) hereof) by the Holder thereof
shall be deemed not to be Registrable Securities.  

    “Registration Expenses” shall
mean any and all expenses incident to performance of or compliance by the Issuer
with this Agreement, including without limitation: (i) all SEC, stock exchange
or National Association of Securities Dealers, Inc. registration and filing
fees, (ii) all fees and expenses incurred in connection with compliance with
state securities or blue sky laws (including reasonable fees and disbursements
of counsel for any underwriters or Holders in connection with blue sky
qualification of any of the Exchange Securities or Registrable Securities), (iii) all
expenses of any Persons in preparing or assisting in preparing, word processing,
printing and distributing any Registration Statement, any Prospectus, any
amendments or supplements thereto, any underwriting agreements, securities sales
agreements and other documents relating to the performance of and compliance
with this Agreement, (iv) all rating agency fees, (v) all fees and disbursements relating
to the qualification of the Indenture under applicable securities laws, (vi) the
reasonable fees and disbursements of the Trustee and its counsel, (vii) the
reasonable fees and disbursements of counsel for the Issuer and (viii) the
reasonable fees and disbursements of the independent public accountants of the
Issuer, including the expenses of any special audits or “cold comfort” letters
required by or incident to such performance and compliance, but excluding fees
and expenses of counsel to the underwriters (other than reasonable fees and
expenses set forth in clause (ii) above) or the Holders and underwriting
discounts and commissions and transfer taxes, if any, relating to the sale or
disposition of Registrable Securities by a Holder.  

    “Registration Statement” shall
mean any registration statement of the Issuer that covers any of the Exchange
Securities or Registrable Securities pursuant to the provisions of this Agreement and all
amendments and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference therein.  

    “SEC” shall mean the
United States Securities and Exchange Commission.  

    “Securities Act” shall
mean the U.S. Securities Act of 1933, as amended from time to time.  

    “Trustee” shall mean
the trustee with respect to the Notes under the Indenture.  

    SECTION 2.
Registration Under the Securities Act.  

    (a) To the extent
not prohibited by any applicable law or applicable interpretation of the staff of the SEC
(the “Staff”), the Issuer shall use its reasonable best efforts to cause to be filed an
Exchange Offer Registration Statement covering the offer by the Issuer to the Holders to
exchange all of the Registrable Securities for Exchange Securities and to have such
Exchange Offer Registration Statement remain effective until the closing of the Exchange
Offer. The Issuer shall use its best efforts to cause such Exchange Offer Registration
Statement to be declared effective by the SEC by February 17, 2005. The Issuer shall
commence the Exchange Offer promptly after the Exchange Offer Registration Statement has
been declared effective by the SEC and use its reasonable best efforts to have the
Exchange Offer Consummated not later than 60 days after such effective date. The Issuer
shall commence the Exchange Offer by mailing the related exchange offer Prospectus and
accompanying documents to each Holder stating, in addition to such other disclosures as
are required by applicable law:  

    (i)      that the
Exchange Offer is being made pursuant to this Agreement and that all Registrable
Securities          validly tendered and not properly withdrawn will be accepted for
exchange; 

    (ii) the dates of
acceptance for exchange (which shall be a period of at least 20 Business Days from the
date such notice is mailed) (the “Exchange Dates”);  

    (iii)    that any
Registrable Security not tendered will remain outstanding and continue to accrue
interest, but          will not retain any rights under this Agreement; 

    (iv)     that Holders
electing to have a Registrable Security exchanged pursuant to the Exchange Offer will be
         required to surrender such Registrable Security, together with the enclosed
letters of transmittal, to          the institutions and at the addresses (located in the
Borough of Manhattan, the City of New York)          specified in the notice prior to the
close of business on the last Exchange Date; and 

    (v)      that Holders
will be entitled to withdraw their election, not later than the close of business (New
York          time) on the last Exchange Date, by sending to the institutions and at the
addresses (located in the          Borough of Manhattan, the City of New York) specified
in the notice a telegram, telex, facsimile          transmission or letter setting forth
the name of such Holder, the principal amount of Registrable          Securities
delivered for exchange and a statement that such Holder is withdrawing his election to
have          such Notes exchanged. 

    (b)      As soon as
practicable after the last Exchange Date, the Issuer shall: 

    (i)      accept for
exchange Registrable Securities or portions thereof tendered and not          validly
withdrawn pursuant to the Exchange Offer; and 

    (ii)     deliver, or
cause to be delivered, to the Trustee for cancellation all Registrable
         Securities or portions thereof so accepted for exchange by the Issuer and issue,
and cause the Trustee          to promptly authenticate and mail to each Holder, an
Exchange Security equal in principal amount to the          principal amount of the
Registrable Securities surrendered by such Holder. 

    (c)      The Issuer
shall use its  reasonable  best efforts to complete  the Exchange  Offer as provided
 above and shall comply with the applicable  requirements  of the Securities  Act, the
Exchange Act and other  applicable laws and  regulations  in  connection  with  the
 Exchange  Offer.  The  Exchange  Offer  shall  not be  subject  to any conditions,
 other than that the Exchange Offer does not violate  applicable  law or any applicable
 interpretation of the Staff.  The Issuer  shall  inform the Initial  Purchaser  of the
names and  addresses of the Holders to whom the Exchange Offer is made, and the Initial
 Purchaser shall have the right,  subject to applicable law, to contact such Holders and
otherwise facilitate the tender of Registrable Securities in the Exchange Offer. 

    (d)      In the event
that the Issuer  determines  that the  Exchange  Offer  Registration  provided for in
Section 2(a) above is not available or may not be Consummated  as soon as practicable
 after the last Exchange Date because it would violate  applicable law or the applicable
 interpretations  of the Staff, or the Exchange Offer is not for any reason  Consummated
 by February 17, 2005,  then the Issuer may file any  Registration  Statement  with the
SEC that would  result in the  Holders of the Notes  being able to resell  their Notes in
such a manner that they cease to be Registrable  Securities,  and upon  effectiveness of
any such Registration  Statement,  the Issuer shall have satisfied its obligations
hereunder. 

    (e)      The Issuer
shall pay all Registration Expenses in connection with the registration pursuant to
Section 2(a). 

    (f)      An Exchange
Offer Registration Statement pursuant to Section 2(a) hereof will not be deemed to have
become effective unless it has been declared effective by the SEC.  As provided for in
the Indenture, in the event the Exchange Offer is not Consummated or the Registration
Statement referred to in Section 2(d) above has not been declared effective on or prior
to February 17, 2005, the annual interest rate on the Notes will be increased to 9.875%
per annum (0.50% in excess of the then current Note Rate), until the Exchange Offer is
Consummated or the Exchange Offer Registration Statement is declared effective by the
SEC, whereupon the interest rate will decrease permanently to the original interest rate
on the Notes. 

    SECTION 3.
Registration Procedures. In connection with the obligations of the
Issuer with respect to the Registration Statements pursuant to Section 2(a) and Section 2(d)
hereof, the Issuer shall as expeditiously as possible:  

    (i)      prepare and
file with the SEC a Registration Statement on the appropriate form under the Securities
Act,          which form (x) shall be selected by the Issuer and (y) shall comply as to
form in all material respects          with the requirements of the applicable form and
include all financial statements required by the SEC to          be filed therewith, and
use its reasonable best efforts to cause such Registration Statement to become
         effective and remain effective in accordance with Section 2 hereof; 

    (ii)     prepare and
file with the SEC such amendments and post-effective amendments to each Registration
         Statement as may be necessary to keep such Registration Statement effective for
the applicable period          and cause each Prospectus to be supplemented by any
required prospectus supplement and, as so          supplemented, to be filed pursuant to
Rule 424 under the Securities Act; to keep each Prospectus current          during the
period described under Section 4(3) and Rule 174 under the Securities Act that is
applicable          to transactions by brokers or dealers with respect to the Registrable
Securities or Exchange Securities; 

    (iii) to the extent
necessary or applicable, use its reasonable best efforts to register or qualify the
Registrable Securities under all applicable state securities or “blue sky” laws
of such jurisdictions as any Holder of Registrable Securities covered by a
Registration Statement shall reasonably request in writing by the time the
applicable Registration Statement is declared effective by the SEC, to cooperate
with such Holders in connection with any filings required to be made with the
National Association of Securities Dealers, Inc. and do any and all other acts
and things which may be reasonably necessary or advisable to enable such Holder
to consummate the disposition in each such jurisdiction of such Registrable
Securities owned by such Holder; provided, however, that the Issuer shall not be required
to (A) qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(a)(iii), (B) file any general consent to service of process or (C) subject
itself to taxation in any such jurisdiction if it is not so subject;  

    (iv)     make every
reasonable effort to obtain the withdrawal of any order suspending the effectiveness of a
         Registration Statement at the earliest possible moment; 

    (v)      a reasonable
time prior to the filing of any Registration Statement, any Prospectus, any amendment to
a          Registration Statement or amendment or supplement to a Prospectus or any
document which is to be          incorporated by reference into a Registration Statement
or a Prospectus after the initial filing of a          Registration Statement, provide
copies of such document to the Initial Purchaser and its counsel and          make such
representatives of the Issuer as shall be reasonably requested by the Initial Purchaser
or its          counsel available for discussion of such document, and shall not at any
time file or make any amendment          to the Registration Statement, any Prospectus or
any amendment of or supplement to a Registration          Statement or a Prospectus or
any document which is to be incorporated by reference into a Registration
         Statement or a Prospectus, of which the Initial Purchaser and its counsel shall
not have previously been          advised and furnished a copy or to which the Initial
Purchaser or its counsel shall reasonably object; 

    (vi)     obtain a
CUSIP number for all Exchange Securities or Registrable Securities, as the case may be,
not          later than the effective date of a Registration Statement; 

    (vii) use its
reasonable best efforts to cause the Indenture to be qualified under the Trust Indenture
Act of 1939, as amended (the “TIA”), in connection with the registration of the
Exchange Securities or Registrable Securities, as the case may be, cooperate
with the Trustee and the Holders to effect such changes to the Indenture as may
be required for the Indenture to be so qualified in accordance with the terms of
the TIA and execute, and use its best efforts to cause the Trustee to execute, all
documents as may be required to effect such changes and all other forms and
documents required to be filed with the SEC to enable the Indenture to be so
qualified in a timely manner; and  

    (viii)   use its
reasonable best efforts to cause the Exchange Securities to continue to be rated by one
         nationally recognized statistical rating organization (as such term is defined
in Rule 436(g)(2) under          the Securities Act), if the Registrable Securities have
been rated. 

    SECTION 4.
Participation of Broker-Dealers in Exchange Offer.  

    (a) The parties
hereto acknowledge that the Staff has taken the position that any broker-dealer that
receives Exchange Securities for its own account in the Exchange Offer in exchange for
Notes that were acquired by such broker-dealer as a result of market-making or other
trading activities (a “Participating Broker-Dealer”), may be deemed to be an “underwriter” within
the meaning of the Securities Act and must deliver a prospectus meeting the requirements
of the Securities Act in connection with any resale of such Exchange Securities. The
Issuer understands that it is the Staff's position that if the Prospectus contained in
the Exchange Offer Registration Statement includes a plan of distribution containing a
statement to the above effect and the means by which Participating Broker-Dealers may
resell the Exchange Securities, without naming the Participating Broker-Dealers or
specifying the amount of Exchange Securities owned by them, such Prospectus may be
delivered by Participating Broker-Dealers to satisfy their prospectus delivery obligation
under the Securities Act in connection with resales of Exchange Securities for their own
accounts, so long as the Prospectus otherwise meets the requirements of the Securities
Act.  

    (b)      In light of
the above, notwithstanding the other provisions of this Agreement, the Issuer agrees to
take all actions necessary to ensure the effectiveness of the Registration Statement
referred to in Section 2 as may be reasonably requested by the Initial Purchaser or by
one or more Participating Broker-Dealers, in each case as provided in clause (ii) below,
in order to expedite or facilitate the disposition of any Exchange Securities by
Participating Broker-Dealers consistent with the positions of the Staff recited in Section 4(a)
above provided that: 

    (i)      The Issuer
shall not be required to amend or supplement the Prospectus contained in the Exchange
Offer          Registration Statement for a period exceeding 180 days after the last
Exchange Date (as such period may          be extended pursuant to this Agreement) and
Participating Broker-Dealers shall not be authorized by the          Issuer to deliver
and shall not deliver such Prospectus after such period in connection with the resales
         contemplated by this Section 4; and 

    (ii)     any
application of the procedures to an Exchange Offer Registration, to the extent not
required by the          positions of the Staff or the Securities Act and the rules and
regulations thereunder, will be in          conformity with the reasonable request to the
Issuer by the Initial Purchaser or with the reasonable          request in writing to the
Issuer by one or more broker-dealers who certify to the Initial Purchaser and
         the Issuer in writing that they anticipate that they will be Participating
Broker-Dealers; and provided          further that, in connection with such application
of any procedures to an Exchange Offer Registration,          the Issuer shall be
obligated (x) to deal only with one entity representing the Participating
         Broker-Dealers, which shall be the Initial Purchaser unless it elects not to act
as such representative,          (y) to pay the reasonable fees and expenses of only one
counsel representing the Participating          Broker-Dealers, which shall be counsel to
the Initial Purchaser unless such counsel elects not to so act          and (z) to cause
to be delivered only one, if any, “cold comfort” letter with respect to the Prospectus
         in the form existing on the last Exchange Date and with respect to each
subsequent amendment or          supplement, if any, effected in connection therewith. 

    (c)      The Initial
Purchaser shall have no liability to the Issuer or any Holder with respect to any request
that they may make pursuant to Section 4(b) above. 

    SECTION 5.
Indemnification and Contribution.  

    (a)      The Issuer
agrees to indemnify and hold harmless the Initial Purchaser and each Holder, their
respective affiliates, directors and officers and each Person, if any, who controls the
Initial Purchaser or any Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, legal fees and other reasonable and duly
documented expenses incurred in connection with any suit, action or proceeding or any
claim asserted, as such fees and expenses are incurred), joint or several, that arise out
of, or are based upon, any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement or any Prospectus or any omission or alleged
omission to state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under which they
were made, not misleading, except insofar as such losses, claims, damages or liabilities
arise out of, or are based upon, any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with any information
relating to the Initial Purchaser or any Holder furnished to the Issuer in writing
through the Initial Purchaser or any selling Holder expressly for use therein. 

    (b)      Each Holder
agrees, severally and not jointly, to indemnify and hold harmless the Issuer, the Initial
Purchaser and the other selling Holders, their respective affiliates, the directors of
the Issuer, each officer of the Issuer who signed the Registration Statement and each
Person, if any, who controls the Issuer, the Initial Purchaser and any other selling
Holder within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the indemnity set forth in paragraph (a) above, but
only with respect to any losses, claims, damages or liabilities that arise out of, or are
based upon, any untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with any information relating to such Holder furnished
to the Issuer in writing by such Holder expressly for use in any Registration Statement
and any Prospectus. 

    (c) If any suit,
action, proceeding (including any governmental or regulatory investigation), claim or
demand shall be brought or asserted against any Person in respect of which
indemnification may be sought pursuant to either paragraph (a) or (b) above, such Person
(the “Indemnified Person”) shall promptly notify the Person against whom such
indemnification may be sought (the “Indemnifying Person”) in writing; provided that the
failure to notify the Indemnifying Person shall not relieve it from any liability that it
may have under this Section 5 except to the extent that it has been materially prejudiced
(through the forfeiture of substantive rights or defenses) by such failure; and provided,
further, that the failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have to an Indemnified Person otherwise than under this Section 5.
If any such proceeding shall be brought or asserted against an Indemnified Person and it
shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain
counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified
Person and any others entitled to indemnification pursuant to this Section 5 that the
Indemnifying Person may designate in such proceeding and shall pay the fees and
reasonable and duly documented expenses of such counsel related to such proceeding, as
incurred. In any such proceeding, any Indemnified Person shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person
shall have mutually agreed to the contrary; (ii) the Indemnifying Person has failed
within a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person; (iii) the Indemnified Person shall have reasonably concluded that there may be
legal defenses available to it that are different from or in addition to those available
to the Indemnifying Person; or (iv) the named parties in any such proceeding (including
any impleaded parties) include both the Indemnifying Person and the Indemnified Person
and representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them. It is understood and agreed that
the Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and reasonable and duly
documented expenses of more than one separate firm (in addition to any local counsel) for
all Indemnified Persons, and that all such fees and expenses shall be reimbursed as they
are incurred. Any such separate firm (x) for the Initial Purchaser, its affiliates,
directors and officers and any control Persons of such Initial Purchaser shall be
designated in writing by the Initial Purchaser, (y) for any Holder, its affiliates,
directors and officers and any control Persons of such Holder shall be designated in
writing by the Majority Holders and (z) in all other cases shall be designated in writing
by the Issuer. The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify
each Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time an
Indemnified Person shall have requested that an Indemnifying Person reimburse the
Indemnified Person for fees and expenses of counsel as contemplated by this paragraph,
the Indemnifying Person shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 45 days
after receipt by the Indemnifying Person of such request and (ii) the Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such request prior to
the date of such settlement. No Indemnifying Person shall, without the written consent
of the Indemnified Person, effect any settlement of any pending or threatened proceeding
in respect of which any Indemnified Person is or could have been a party and
indemnification could have been sought hereunder by such Indemnified Person, unless such
settlement (A) includes an unconditional release of such Indemnified Person, in form and
substance reasonably satisfactory to such Indemnified Person, from all liability on
claims that are the subject matter of such proceeding and (B) does not include any
statement as to or any admission of fault, culpability or a failure to act by or on
behalf of any Indemnified Person.  

    (d)      If the
indemnification provided for in paragraphs (a) and (b) above is unavailable to an
Indemnified Person or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such paragraph, in
lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount
paid or payable by such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative benefits
received by the Issuer from the offering of the Securities and the Exchange Securities,
on the one hand, and by the Holders from receiving Securities or Exchange Securities
registered under the Securities Act, on the other hand, or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i) but also
the relative fault of the Issuer on the one hand and the Holders on the other in
connection with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations.  The relative
fault of the Issuer on the one hand and the Holders on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact relates to
information supplied by the Issuer or by the Holders and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or
omission. 

    (e)      The Issuer
and the Holders agree that it would not be just and equitable if contribution pursuant to
this Section 5 were determined by pro rata allocation (even if the Holders were treated
as one entity for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above.  The amount
paid or payable by an Indemnified Person as a result of the losses, claims, damages and
liabilities referred to in paragraph (d) above shall be deemed to include, subject to the
limitations set forth above, any reasonable and duly documented legal or other expenses
incurred by such Indemnified Person in connection with any such action or claim.
 Notwithstanding the provisions of this Section 5, in no event shall a Holder be required
to contribute any amount in excess of the amount by which the total price at which the
Securities or Exchange Securities sold by such Holder exceeds the amount of any damages
that such Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.  No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation. 

    (f)      The remedies
provided for in this Section 5 are not exclusive and shall not limit any rights or
remedies that may otherwise be available to any Indemnified Person at law or in equity. 

    (g)      The indemnity
and contribution provisions contained in this Section 5 shall remain operative and in
full force and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of the Initial Purchaser or any Holder, their
respective affiliates or any Person controlling the Initial Purchaser or any Holder, or
by or on behalf of the Issuer, its respective affiliates or the officers or directors of
or any Person controlling the Issuer, (iii) acceptance of any of the Exchange Securities
and (iv) any sale of Registrable Securities pursuant to any shelf or other Registration
Statement. 

    SECTION 6.
Miscellaneous.  

    (a) No
Inconsistent Agreements.  The Issuer has not entered into, and on or after the date of
this Agreement will not enter into, any agreement which is inconsistent with the rights
granted to the Holders of Registrable Securities in this Agreement or otherwise conflicts
with the provisions hereof. The rights granted to the Holders hereunder do not in any
way conflict with and are not inconsistent with the rights granted to the holders of the
Issuer's other issued and outstanding securities under any such agreements.  

    (b) Amendments
and Waivers. The provisions of this Agreement, including the provisions of this
sentence, may not be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given unless the Issuer has obtained the
written consent of Holders of at least a majority in aggregate principal amount of the
outstanding Registrable Securities affected by such amendment, modification, supplement,
waiver or consent; provided, however, that no amendment, modification, supplement, waiver
or consent to any departure from the provisions of Section 5 hereof shall be effective as
against any Holder of Registrable Securities unless consented to in writing by such
Holder.  

    (c) Notices. All
notices and other communications provided for or permitted hereunder shall be made in
writing by hand-delivery, registered first-class mail, telex, telecopier, or any courier
guaranteeing overnight delivery (i) if to a Holder, at the most current address given by
such Holder to the Issuer by means of a notice given in accordance with the provisions of
this Section 6(c), which address initially is, with respect to the Initial Purchaser, the
address set forth in the Purchase Agreement; and (ii) if to the Issuer, initially at the
Issuer's address set forth in the Purchase Agreement and thereafter at such other
address, notice of which is given in accordance with the provisions of this Section 6(c).
All such notices and communications shall be deemed to have been duly given: at the
time delivered by hand, if personally delivered; five business days after being deposited
in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt is
acknowledged, if telecopied; and on the next business day if timely delivered to an air
courier guaranteeing overnight delivery. Copies of all such notices, demands, or other
communications shall be concurrently delivered by the Person giving the same to the
Trustee, at the address specified in the Indenture.  

    (d) Successors
and Assigns. This Agreement shall inure to the benefit of and be binding upon the
successors, assigns and transferees of each of the parties, including, without limitation
and without the need for an express assignment, subsequent Holders; provided that nothing
herein shall be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms of the Purchase Agreement. If any
transferee of any Holder shall acquire Registrable Securities, in any manner, whether by
operation of law or otherwise, such Registrable Securities shall be held subject to all
of the terms of this Agreement, and by taking and holding such Registrable Securities
such Person shall be conclusively deemed to have agreed to be bound by and to perform all
of the terms and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof. The Initial Purchaser (in its capacity as Initial
Purchaser) shall have no liability or obligation to the Issuer with respect to any
failure by a Holder to comply with, or any breach by any Holder of, any of the
obligations of such Holder under this Agreement.  

    (e) Purchases and
Sales of Securities. The Issuer shall have the right to purchase Registrable Securities
only as contemplated in the Indenture; provided, however, that, notwithstanding the
foregoing, the Issuer shall not and the Issuer shall use its reasonable best efforts to
cause its Affiliates not to, purchase and then resell or otherwise transfer any
Registrable Securities, if doing so adversely affects the rights of the Holders hereunder.  

    (f) Third Party
Beneficiary. The Holders shall be third party beneficiaries to the agreements made
hereunder between the Issuer, on the one hand, and the Initial Purchaser, on the other
hand, and the Initial Purchaser shall have the right to enforce such agreements directly
to the extent it deems such enforcement necessary or advisable to protect its rights or
the rights of Holders hereunder.  

    (g) Counterparts.
This Agreement may be executed in any number of counterparts and by the parties hereto
in separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same agreement.  

    (h) Headings.
The headings in this Agreement are for convenience of reference only and shall not limit
or otherwise affect the meaning hereof.  

    (i) Governing
Law. This Agreement shall be governed by the laws of the State of New York.  

    (j) Severability.
In the event that any one or more of the provisions contained herein, or the application
thereof in any circumstance, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.  

    (k) Jurisdiction.  

    (i) The Issuer
agrees that any legal suit, action or proceeding arising out of or relating to this
Agreement or the transactions contemplated herein may be instituted in any U.S. federal
or New York State court in the Borough of Manhattan in the City of New York (each a “New
York court”) and the Issuer hereby waives any objection which it may now or hereafter
have to the laying of venue of any such proceeding, and irrevocably submits to the
jurisdiction of such courts, with respect to actions brought against it as defendant, in
any suit, action or proceeding.  

    (ii) The Issuer
(A) irrevocably appoints CT Corporation System, at its offices located at 111 Eighth
Avenue, New York, New York 10011 (together with any successor, the “Process Agent”), as
its authorized agent in the Borough of Manhattan in The City of New York upon which
process may be served in any such suit, action or proceeding, acknowledges that the
Process Agent has accepted such designation and agrees that service of process upon the
Process Agent, and written notice of such service to the Issuer, by the person serving
the same to the address set forth in the Purchase Agreement, shall be deemed in every
respect effective service of process upon the Issuer in any such suit, action or
proceeding and (B) agrees to take any and all action, including the execution and filing
of any and all such documents and instruments as may be necessary to continue such
designation and appointment of the Process Agent in full force and effect so long as any
of the Notes shall be outstanding.  

    (l) Waiver of
Immunity. To the extent that the Issuer has or hereafter may acquire any immunity
from jurisdiction of any court or from any legal process (whether through service of
notice, attachment prior to judgment, attachment in aid of execution, execution or
otherwise) with respect to itself or its property, it hereby irrevocably waives such
immunity in respect of its obligations under this Agreement to the fullest extent
permitted by law.  

    IN WITNESS WHEREOF,
the parties have executed this Agreement as of the date first written above. 

	 	 BRASIL TELECOM S.A.
	 
	 
	 	By:____________________________________
	 	      Name:
	 	      Title:
	 
	 	By:____________________________________
	 	      Name:
	 	      Title:

	 	WITNESSES:
	 
	 
	1. 	____________________________________
	 	Name:
	 
	2.  	____________________________________
	 	Name:

The foregoing
Agreement is hereby
 confirmed and accepted as of the
 date first above written. 

CITIGROUP GLOBAL
MARKETS INC.,
 as the Initial Purchaser 

	 	 
	 
	 
	 	By:____________________________________
	 	      Name:
	 	      Title:

	STATE OF NEW YORK	)	 
	 	)	ss:
	COUNTY OF NEW YORK	)	 

    On this 17th day of
February, 2004 before me, a notary public within and for said county,          personally
appeared ________________, to me personally known who being duly sworn, did say that
_____ is          a ________________ of Citigroup Global Markets, Inc., one of the
persons described in and which executed          the foregoing instrument, and
acknowledge said instrument to be the free act and deed of said          corporation. 

		
	 	____________________________________
	 	Notary Public
	 	COMMISSION EXPIRES

[Notarial Seal] 

 

REGISTRATION RIGHTS
AGREEMENT 

Dated February 17, 2004 

between 

BRASIL TELECOM S.A. 

as Issuer, 

and 

CITIGROUP GLOBAL
MARKETS INC. 

as the Initial PurchaserTable of Contents  

EXECUTION COPY

COMPANY SUPPORT
AGREEMENT  

OPIC CONTRACT OF
INSURANCE NO. F431 (BRAZIL)  

between  

OVERSEAS PRIVATE
INVESTMENT CORPORATION  

and  

BRASIL TELECOM S.A.  

Dated as of February
17, 2004  

TABLE OF CONTENTS  

Page 

ARTICLE ONE

DEFINITIONS AND INTERPRETATION  

	Section 1.01.	Defined Terms	2 
	Section 1.02.	Interpretation	3 

ARTICLE TWO

REPRESENTATIONS AND WARRANTIES OF THE COMPANY 

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

ARTICLE THREE

            COVENANTS OF THE COMPANY 

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

ARTICLE FOUR

(INTENTIONALLY OMITTED)  

ARTICLE FIVE

              DEFAULTS AND REMEDIES 

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

ARTICLE SIX

               MISCELLANEOUS 

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

Exhibit A - Form of
Self-Monitoring Questionnaire 

COMPANY SUPPORT
AGREEMENT  

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

W I T N E S S E T H:  

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

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

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

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

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

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

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

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

ARTICLE ONE

DEFINITIONS AND INTERPRETATION  

Section 1.01. Defined Terms. 

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

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

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

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

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

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

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

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

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

    “GAAP” means
generally accepted accounting principles.  

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

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

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

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

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

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

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

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

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

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

Section 1.02. Interpretation. 

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

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

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

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

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

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

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

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

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

ARTICLE TWO

                                                                   REPRESENTATIONS AND
WARRANTIES OF THE COMPANY

    The
Company represents and warrants to OPIC that: 

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

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

Section 2.02. Compliance with Law; Corrupt Practices. 

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

Section 2.03. Environmental Matters. 

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

Section 2.04. Transaction Document Representations. 

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

Section 2.05. Disclosure. 

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

Section 2.06 Foreign Governing Authority Restructuring. 

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

ARTICLE THREE

COVENANTS OF THE COMPANY  

    The
Company covenants and agrees as follows: 

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

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

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

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

Section 3.02. Compliance with Corrupt Practices Laws. 

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

Section 3.03. Accounting and Financial Management. 

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

Section 3.04. Financial Statements and Other Information. 

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

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

Section 3.05. Access to Records; Inspection. 

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

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

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

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

Section 3.07. Environmental Compliance.  

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

Section 3.08. No Alteration of Agreements. 

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

Section 3.09. Worker Rights. 

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

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

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

Section 3.10. No Defeasance of Notes; Subrogation. 

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

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

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

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

Section 3.11. Reimbursement. 

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

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

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

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

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

Section 3.12. Indemnification. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Section 3.13.
    Service Marketed.

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

ARTICLE FOUR

(INTENTIONALLY OMITTED)  

ARTICLE FIVE
 DEFAULTS AND REMEDIES  

Section 5.01. Events of Default. 

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

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

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

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

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

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

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

Section 5.02. Remedies upon Event of Default. 

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

ARTICLE SIX

 MISCELLANEOUS  

Section 6.01. Notices. 

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

If to the Company: 

         Brasil Telecom S.A

         SIA/Sul - ASP- Lote D- Bloco B

         Brasilia, DF 71215-000

         Brasil

         Attn: Chief Financial Officer

         FAX: 55 61 415 1870

If to OPIC: 

         Overseas Private Investment Corporation

         1100 New York Avenue, N.W.

         Washington, D.C. 20527

         United States of America

         Attn:    Vice President for Insurance

         FAX:     (202) 408-5142

         Re:      OPIC Insurance Contract No. F431 (Brazil)

Section 6.02. Benefits of Agreements. 

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

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

Section 6.03. Termination. 

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

Section 6.04. Governing Law. 

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

Section 6.05. Jurisdiction and Consent to Suit. 

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

Section 6.06. Agent for Service of Process. 

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

Section 6.07. Jury Trial Waiver. 

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

Section 6.08. Succession. 

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

Section 6.09. Integration; Amendments. 

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

Section 6.10. Severability. 

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

Section 6.11. No Waiver. 

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

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

Section 6.12. Further Assurances. 

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

Section 6.13. Counterparts. 

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

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

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

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

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

Exhibit A  

Form of Self Monitoring
Questionnaire 

[Attached]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}]]