Document:

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                                                                  Exhibit 10.1

                               SECOND AMENDMENT TO
                           LOAN AND SECURITY AGREEMENT

         This SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (this
"Amendment"), executed as of June 29, 2001, is made and entered into between
BANK ONE, NA, a national banking association with its main office in Chicago,
Illinois, successor by merger to Bank One, Texas, N.A. ("Lender"), and WHITE
ELECTRONIC DESIGNS CORPORATION, an Indiana Corporation ("Borrower").

                                    RECITALS

         A.       Lender and Borrower entered into that certain Loan and
                  Security Agreement, dated January 7, 2000 and amended on June
                  30, 2000 (the "Loan Agreement").

         B.       Lender and Borrower desire to further amend the Loan Agreement
                  as herein set forth.

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

                                    ARTICLE I
                                   Definitions

         Section 1.01 Definitions. Capitalized terms used in this Amendment, to
the extent not otherwise defined herein, shall have the same definitions
assigned to such terms in the Loan Agreement, as amended hereby.

                                   ARTICLE II
                        Amendments to the Loan Agreement

         Section 2.01 Amendment to Definitions. From and after the date hereof;
Section 1.01 of the Loan Agreement is amended by (i) the addition of the
definition of "Panelview" set forth below, and (ii) the replacement of the
definition of "Permitted Investments" with the definition set forth below.

         "Panelview" means Panelview, Incorporated, an Oregon Corporation.

         "Permitted Investments" means Investments of Borrower in: (a)
negotiable certificates of deposit issued by Lender, (b) any direct obligation
of the United States of America or any agency or instrumentality thereof which
has a remaining maturity at the time of purchase of not more than one year and
repurchase agreements relating to the same, (c) EDI, which shall not exceed at
any time outstanding the amount of availability resulting from Collateral of EDI
as shown on the most recent Borrowing Base Report, and (d) Panelview, which
shall not exceed $3,000,000 outstanding at any time. The amount of the
Investments that are outstanding to each of EDI and Panelview shall be the
remainder of (A) the sum of all disbursements to, and other Investments by
Borrower in, EDI or Panelview, as appropriate, minus (B) all receipts by
Borrower of accounts of EDI or Panelview, as appropriate.

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         Section 2.02 Amendment to Article V. From and after the date hereof,
Section 5.1(c) of the Loan Agreement is deleted in its entirety and replaced
with a new Section 5.1(c) which shall read as follows:

                           "(c) Subsidiaries; Ownership. Each of EDI and
                  Panelview is a subsidiary of Borrower. Borrower has no
                  subsidiaries other than EDI and Panelview. Neither EDI nor
                  Panelview has any subsidiaries. The outstanding stock of
                  Borrower has been duly and validly issued and is fully paid
                  and nonassessable and the number and owners of such shares of
                  capital stock are set forth on SCHEDULE 5.1(C)."

         Section 2.03 Amendment to Article VI. From and after the date hereof,
Sections 6.2 and 6.3 and Sections 6.5 through 6.11 of the Loan Agreement are
deleted in their entirety and replaced with new Sections 6.2 and 6.3 and
Sections 6.5 through 6.11 which shall read as follows:

                 "Section 6.2 Collection of Accounts.

                           (a) Borrower shall, and shall cause EDI to, cause all
                  moneys, checks, notes, drafts and other payments relating to
                  or constituting proceeds of accounts, or of any other
                  Collateral, to be forwarded to a Lockbox for deposit in (i)
                  the Collection Account, if such Lockbox is maintained pursuant
                  to a Lockbox agreement with Lender, and (ii) a Blocked
                  Account, if such Lockbox is maintained with a Collecting Bank
                  pursuant to a Blocked Account Agreement, in accordance with
                  the procedures set out in the corresponding Blocked Account
                  Agreement. In particular, Borrower shall, and shall cause EDI
                  to, (i) advise each Account Debtor to address to a Lockbox
                  specified by Lender all remittances with respect to amounts
                  payable on all accounts, and (ii) stamp all invoices relating
                  to any such amounts with a legend satisfactory to Lender
                  indicating that payment is to be made to Borrower or EDI, as
                  appropriate, via such specified Lockbox.

                           (b) Borrower shall cause Panelview to cause all
                  moneys, checks, notes, drafts and other payments relating to
                  or constituting proceeds of accounts, and of all other
                  Collateral provided by Panelview, to be deposited in, or
                  forwarded to, the Collection Account not less often than
                  weekly. Upon request of Lender, Borrower shall cause Panelview
                  to cause all such proceeds to be deposited in a Blocked
                  Account for forwarding to the Collection Account.

                           (c) Borrower and Lender shall (and Borrower shall
                  cause EDI to) cause all balances in each Blocked Account to be
                  transmitted daily to the Collection Account by wire transfer
                  or depository transfer check or Automated Clearing House
                  transfer in accordance with the procedures set forth in the
                  corresponding Blocked Account Agreement. Deposits in the
                  Collection Account that represent proceeds of accounts of
                  Borrower or of EDI shall be credited, subject to final
                  payment, to the payment of the Obligations TWO DAYS after the
                  date of actual receipt and deposit into the Collection Account
                  by Lender. Deposits in the Collection Account that represent
                  proceeds of accounts of

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                  Panelview shall be credited, subject to final payment, to the
                  payment of the Obligations on the date of actual receipt and
                  deposit into the Collection Account by Lender. The delay in
                  applying funds held in the Collection Account to the
                  Obligations shall in all respects be limited so that interest
                  on the Obligations is at all times less than interest
                  calculated at the Maximum Rate.

                           (d) Borrower shall, and shall cause EDI and Panelview
                  to, hold any payments which are received by Borrower, EDI or
                  Panelview (including any payment evidenced by a promissory
                  note or other instrument) in trust for Lender. Borrower shall,
                  and shall cause EDI and Panelview to, cause all such payments
                  to be (1) deposited in the Collection Account, or (ii)
                  delivered to Lender, as promptly as possible in the exact form
                  received, together with any necessary endorsements.

                  Section 6.3 Verification and Notification. Lender shall have
         the right at any time at Borrower's expense (a) to verify the validity,
         amount or any other matter relating to any accounts of Borrower, EDI or
         Panelview, and (b) to notify Account Debtors of Borrower, EDI and
         Panelview to make payment of all amounts directly to Lender and enforce
         collection of any such accounts and to adjust, settle or compromise the
         amount or payment thereof, in the same manner as Borrower, EDI and
         Panelview.

                  Section 6.5 Invoices. Upon request, Borrower shall, and shall
         cause EDI and Panelview to, deliver to Lender, copies of customers'
         invoices or the equivalent, original shipping and delivery receipts or
         other proof of delivery, customers' statements, the original copy of
         all documents, including, without limitation, repayment histories and
         present status reports, relating to accounts and such other documents
         and information relating to the accounts as Lender shall specify.

                  Section 6.6 Ownership; Defense of Title.

                           (a) Borrower shall, and shall cause EDI and Panelview
                  to, defend its title in and to the Collateral and shall defend
                  the security interest of Lender in the Collateral against the
                  claims and demands of all Persons.

                           (b) Borrower shall, and shall cause EDI and Panelview
                  to, (i) protect and preserve all properties material to its
                  business, including Intellectual Property, and maintain all
                  tangible property in good and workable condition in all
                  material respects, with reasonable allowance for wear and
                  tear, and (ii) from time to time make or cause to be made all
                  needed and appropriate repairs, renewals, replacements and
                  additions to such properties necessary for the conduct of its
                  business.

                  Section 6.7 Location of Offices and Collateral. Neither
         Borrower nor EDI or Panelview shall change the location of its place of
         business (or, if it has more than one place of business, its chief
         executive office) or the place where it keeps its books and records
         relating to the Collateral or change its name, identity or corporate
         structure without giving Lender at least thirty (30) days' prior
         written notice thereof. All inventory

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         of Borrower, other than inventory in transit to any such location, and
         all equipment, other than motor vehicles, shall at all times be kept by
         Borrower at one of the locations set forth in SCHEDULES 5.1(O) and (P).
         All inventory of EDI, other than inventory in transit to any such
         location, and all equipment, other than motor vehicles, shall at all
         times be kept by EDI at one of the locations set forth in the Schedule
         to the Security Agreement executed by EDI. All inventory of Panelview,
         other than inventory in transit to any such location, and all
         equipment, other than motor vehicles, shall at all times be kept by
         Panelview at one of the locations set forth in the Schedule to the
         Security Agreement executed by Panelview,

                  Section 6.8 Records Relating to Collateral.

                           (a) Borrower shall, and shall cause EDI and Panelview
                  to, at all times keep and maintain (i) complete and accurate
                  records of inventory on a basis consistent with past practices
                  of Borrower, EDI or Panelview, as appropriate, itemizing and
                  describing the kind, type and quantity of inventory of
                  Borrower, EDI and Panelview, the cost therefor and a current
                  price list for such inventory, (ii) complete and accurate
                  records of all other Collateral, (iii) a list of all customers
                  of each of Borrower, EDI and Panelview, with names, addresses
                  and phone numbers, (iv) a list of all distributors for each
                  product line included in each of Borrower's, EDI's or
                  Panelview's inventory, (v) a current customer open order
                  report against current inventory, and (vi) a current list of
                  all salesmen and employees of each of Borrower, EDI and
                  Panelview. Data bases containing the foregoing shall at all
                  times be accessible and available to Lender.

                           (b) Borrower shall, and shall cause EDI and Panelview
                  to, conduct a physical count of all inventory, wherever
                  located, at least annually and make adjustments to its books
                  and records to reflect the findings of such count and such
                  adjustments shall be immediately reported to Lender.

                  Section 6.9 Inspection. Lender (by any of its officers,
         employees or agents) shall have the right at any time or times to (a)
         visit the properties of each of Borrower, EDI and Panelview, inspect
         the Collateral and the other assets of each of Borrower, EDI and
         Panelview and inspect and make extracts from the books and records of
         each of Borrower, EDI and Panelview, all during customary business
         hours, (b) discuss each of Borrower's, EDI's and Panelview's business,
         financial condition, results of operations and business prospects with
         their respective, (i) principal officers, (ii) independent accountants
         and other professionals providing services to Borrower, EDI or
         Panelview, and (iii) any other Person (except that any such discussion
         with any third parties shall be conducted only in accordance with
         Lender's standard operating procedures relating to the maintenance of
         confidentiality of confidential information of borrowers), (c) verify
         the amount, quantity, value and condition of, or any other matter
         relating to, any of the Collateral and in this connection to review,
         audit and make extracts from all records and files related to any of
         the Collateral, and (d) access and copy the records, lists, reports and
         data bases referred to in SECTION 6.8. Borrower shall, and shall cause
         EDI and Panelview to, deliver to the Lender upon request any instrument
         necessary to authorize an independent accountant or other professional
         to have discussions of the type outlined

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<PAGE>

         above with the Lender or for the Lender to obtain records from any
         service bureau maintaining records on behalf of Borrower, EDI or
         Panelview,

                  Section 6.10 Maintenance. Borrower shall, and shall cause EDI
         and Panelview to, maintain all equipment of each of Borrower, EDI and
         Panelview in good and working order and condition, reasonable wear and
         tear accepted.

                  Section 6.11 Power of Attorney. Borrower, EDI and Panelview
         each hereby appoints Lender as its attorney-in-fact, with power (a) to
         endorse the name of Borrower, EDI or Panelview, as appropriate, on any
         cheeks, notes, acceptances, money orders, drafts or other forms of
         payment or security that may come into Lender's possession, and (b) to
         sign the name of Borrower, EDI or Panelview, as appropriate, on any
         invoice or bill of lading relating to any accounts, inventory or other
         Collateral."

                                  ARTICLE III
                              Conditions Precedent

         Section 3.01 Conditions Precedent. The effectiveness of this Amendment
is subject to the satisfaction of the following conditions precedent, unless
specifically waived in writing by Lender:

                  (a)      The representations and warranties contained herein
         and in all other Loan Documents shall be true and correct as of the
         date hereof as if made on the date hereof.

                  (b)      No Default or Event of Default shall have occurred
         and be continuing.

                  (c)      Borrower, EDI and Panelview shall have executed and
         delivered to Lender this Amendment.

                  (d)      All corporate proceedings taken in connection with
         the transactions contemplated by this Amendment and all documents,
         instruments and other legal matters incident thereto shall be
         satisfactory to Lender and its legal counsel in their sole discretion.

                                    ARTICLE IV
                 Ratifications, Representations, and Warranties

         Section 4.01 Ratification by Borrower. The terms and provisions set
forth in this Amendment modify and supersede all inconsistent terms and
provisions set forth in the Loan Agreement and, except as expressly modified and
superseded by this Amendment, the terms and provisions of the Loan Agreement are
ratified and confirmed and continue in full force and effect. The Loan Agreement
as amended by this Amendment shall continue to be legal, valid, binding and
enforceable in accordance with its terms.

         Section 4.02 Renewal and Extension of Security Interests and Liens.
Borrower hereby renews and affirms the liens and security interests created and
granted in Loan Documents.

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<PAGE>

Borrower agrees that this Amendment shall in no manner affect or impair the
liens and security interests securing the Obligations, and that such liens and
security interests shall not in any manner be waived, the purposes of this
Amendment being to modify the Loan Agreement as herein provided, and to carry
forward all liens and security interest securing same, which are acknowledged by
Borrower to be valid and subsisting.

         Section 4.03 Representations and Warranties. Borrower represents and
warrants to Lender as follows: (i) the execution, delivery and performance of
this Amendment and any and all Loan Documents executed and/or delivered in
connection herewith have been authorized by all requisite corporate action on
the part of Borrower and Will not violate the articles or bylaws of Borrower or
any agreement to which Borrower is a party; (ii) the representations and
warranties contained in the Loan Agreement as amended hereby and in each of the
other Loan Documents are true and correct on and as of the date hereof as though
made on and as of the date hereof; (iii) no Event of Default under the Loan
Agreement has occurred and is continuing; and (iv) Borrower is in full
compliance with all covenants and agreements contained in the Loan Agreement, as
amended hereby.

                                    ARTICLE V
                                  Miscellaneous

         Section 5.01 Survival of Representations and Warranties. All
representations and warranties made in the Loan Agreement or any other Loan
Document, including without limitation, any Loan Document furnished in
connection with this Amendment, shall survive the execution and delivery of this
Amendment and the other Loan Document, and no investigation by Lender or any
closing shall affect such representations and warranties or the right of Lender
to rely thereon.

         Section 5.02 Reference to Loan Agreement. Each of the Loan Documents
and the Loan Agreement and any and all other agreements, documents or
instruments now or hereafter executed and delivered pursuant to the terms hereof
or pursuant to the terms of the Loan Agreement as amended hereby, are hereby
amended so that any reference in such Loan Documents to the Loan Agreement shall
mean a reference to the Loan Agreement as amended hereby.

         Section 5.03 Expenses of Lender. Borrower agrees to pay on demand all
reasonable costs and expenses incurred by Lender directly in connection with the
preparation, negotiation and execution of this Amendment and the other Loan
Documents executed pursuant hereto and any and all amendments, modifications,
and supplements thereto, including, without limitation, the costs and fees of
Lender's legal counsel, and all costs and expenses incurred by Lender in
connection with the enforcement or preservation of any rights under the Loan
Agreement, as amended hereby, or any other Loan Document, including, without
limitation, the reasonable costs and fees of Lender's legal counsel.

         Section 5.04 Severability. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.

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         SECTION 5.05 APPLICABLE LAW. THIS AMENDMENT SHALL BE DEEMED TO HAVE
BEEN MADE AND TO BE PERFORMABLE IN AND SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

         Section 5.06 Successors and Assigns. This Amendment is binding upon and
shall inure to the benefit of the parties hereto and their respective
successors, assigns, heirs, executors, and legal representatives, except that
none of the parties hereto other than Lender may assign or transfer any of its
rights or obligations hereunder without the prior written consent of Lender.

         Section 5.07 Counterparts. This Amendment may be executed in one or
more counterparts, each of which when so executed shall be deemed to be an
original, but all of which when taken together shall constitute one and the same
instrument.

         Section 5.08 Effect of Waiver. No consent or waiver, express or
implied, by Lender to or for any breach of or deviation from any covenant,
condition or duty by either Borrower, shall be deemed a consent to or waiver of
any other breach of the same or any other covenant, condition or duty.

         Section 5.09 Headings. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.

         Section 5.10 Conflicting Provisions. If any provision of the Loan
Agreement as amended hereby conflicts with any provision of any other Loan
Document, the provision in the Loan Agreement shall control.

         SECTION 5.11 ENTIRE AGREEMENT. THIS AMENDMENT, THE LOAN AGREEMENT AND
ALL OTHER LOAN DOCUMENTS EXECUTED AND DELIVERED IN CONNECTION WITH AND PURSUANT
TO THIS AMENDMENT AND THE LOAN AGREEMENT REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

         EXECUTED as of the date first written above.

                                    LENDER:

                                    Bank One, NA

                                           /s/ Kathy Robertson
                                     By: _______________________________________
                                           Kathy Robertson, Vice President

                                    BORROWER:

                                    White Electronic Designs Corporation

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                                         /s/ Hamid R. Shokrgozar
                                    By: ________________________________________
                                         Hamid R. Shokrgozar, President and CEO

                            Confirmation by Guarantor

         The undersigned hereby (i) consents, acknowledges, and agrees to the
execution, delivery, and performance by Borrower of this Amendment, (ii)
acknowledges and agrees that this Amendment does not affect, diminish, waive, or
release his obligations under the Unlimited Guaranty executed by it and dated
January 7, 2000, (iii) ratifies and confirms its obligations pursuant to such
Unlimited Guaranty, and (iv) covenants, acknowledges, and agrees that it
guaranties the repayment of the Guaranteed Indebtedness, as provided in such
Unlimited Guaranty.

                                    Electronic Designs, Inc.

                                        /s/ Hamid R. Shokrgozar
                                    By: ________________________________________
                                        Hamid R. Shokrgozar, President and CEO

         Panelview has reviewed the Loan Agreement and the amendments thereto,
including this Amendment, and executes this Amendment to acknowledge its
agreement to be bound by the terms of Article VI of the Loan Agreement, as
amended.

                                    Panelview, Inc.

                                        /s/ Hamid R. Shokrgozar
                                    By: ________________________________________
                                        Hamid R. Shokrgozar, CEO

                                       8EXHIBIT 4.1

           AUTHORIZATION AGREEMENT PVCP/SPV NUMBER 011/2003 - ANATEL

AUTHORIZATION  TERM FOR PERSONAL MOBILE SERVICE CELEBRATED BETWEEN THE BRAZILIAN
TELECOMMUNICATIONS AGENCY - ANATEL - AND TELE CENTRO OESTE CELULAR PARTICIPACOES
S.A.

By means  of the  present  Authorization  Term,  on the one  side THE  BRAZILIAN
NATIONAL  TELECOMMUNICATIONS  AGENCY  -  ANATEL -  henceforward  referred  to as
ANATEL,  which is an entity of the federal  government  according to Federal Law
9472 of July  16,  1997,  the  General  Telecommunications  Law (Lei  Geral  das
Telecomunicacoes  - LGT),  registered  with the  Brazilian Tax Roll under number
(CGC/MF) 02.030.715/0001-12 and herein represented by the President of the Board
of Directors of ANATEL Mr. LUIZ GUILHERME  SCHYMURA DE OLIVEIRA,  in conjunction
with member of the Board of Directors, LUIZ TITO CERASOLI, and on the other side
Tele Centro Oeste Celular  Participacoes S.A., registered with the Brazilian Tax
Roll under number (CGC/MF) 02.558.132/0001-69,  herein represented by its acting
Chief  Executive  Officer MR.  SERGIO  ASSENCO  TAVARES DOS SANTOS,  a Brazilian
engineer,  widowed,  General Registry number 131.306 SSP/DF, and by its Director
of  Administration  and Human  Resources Mr.  GETULIO NERY CARDOSO,  a Brazilian
engineer, married, General Registry number 290.486 SSP/DF, henceforward referred
to as  AUTHORIZEE,  celebrate the present  Authorization  Term  registered  with
ANATEL  under  number  53500.000263/2003  and  agree to  abide by the  following
provisions:

                                   CHAPTER I

                 OBJECT, AREA, AND PERIOD OF THE AUTHORIZATION

CLAUSE 1.1 - The  present  Agreement  is the  issuance of the  Authorization  to
exploit the Personal  Mobile Service - PMS - provided  under a private  business
system in the  geographical  area constituted by the Federal District of Brazil,
Region II of the PGA-SMP.

PARAGRAPH ONE. The Object of this  Authorization  comprises the Personal  Mobile
Services  provided under a private  business  regime,  in conformity with Anatel
regulatory  requirements and  particularly  compliant with the provisions of the
PMS Regulation and of the General Authorization Plan for the PMS.

PARAGRAPH  TWO.  The  authorization  herein  is  issued  based on  article  214,
subsection  V of the  General  Telecommunications  Law and on the  Rule  for the
Adaptation of the Authorization and Concession  Instruments from Cellular Mobile
Service  - CMS  to  Personal  Mobile  Service  - PMS  (Norma  de  Adaptacao  dos
Instrumentos de Concessao e de Autorizacao do Servico Movel Celular - SMC para o
Servico  Movel  Pessoal - SMP),  approved  by Anatel  Resolution  number 318, of
September 27, 2002 and amended by Anatel  Resolution number 326, of November 28,
2002, henceforward referred to as ADAPTATION RULE, replacing CONCESSION CONTRACT
No.  031/97-DOTC-SFO-MC,  of November 4, 1997,  published  in Diario  Oficial da
Uniao  (Brazilian  Federal  Official  Gazette) on November 5 1997,  henceforward
referred to as REPLACED INSTRUMENT.

CLAUSE 1.2 - Personal    Mobile    Service    is    the    terrestrial    mobile
telecommunications  service of collective  interest  which allows  communication
among mobile stations and from mobile stations to other stations,  observing the
terms of the regulations.

CLAUSE 1.3 - The  AUTHORIZEE  has the right to exploit the means  related to the
rendering of the services,  observing the terms of the regulations as well as of
articles 154 and 155 of the General Telecommunications Law.

CLAUSE 1.4 - This  authorization  is in effect  for an  indeterminate  period of
time.

CLAUSE 1.5 - The service shall be exploited with the use, by the AUTHORIZEE,  of
the  subrange  of  radiofrequencies   set  forth  in  the  REPLACED  INSTRUMENT,
designated below:

          Mobile Station Transmission: 824.0 to 835.0 MHz / 845.0 to 846.5 MHz
          Radiobase  Station  Transmission:  869.0 to 880.0 MHz / 890.0 to 891.5
          MHz

CLAUSE 1.6 - The right to use the  radiofrequencies  mentioned  in the  previous
clause will be in effect until July 24, 2006, which corresponds to the remaining
period. This period can be extended only one single time for 15 (fifteen) years,
and such extension implies payment by the AUTHORIZEE.

<PAGE>

PARAGRAPH ONE. The  radiofrequency  will be used on a primary basis and such use
will be restricted to the respective Service Area.

PARAGRAPH  TWO. The right to use the  radiofrequency  is  conditional  upon it's
efficient and appropriate use.

PARAGRAPH THREE. The sharing of the  radiofrequency may be authorized by Anatel,
provided  that  such  sharing  does not  imply  harmful  interference  or impose
limitations to the rendering of PMS.

CLAUSE 1.7 - The  AUTHORIZEE  shall,  for  the  extension  of the  right  to use
radiofrequencies associated to this Authorization, pay a biennial fee during the
extension  period,  corresponding to 2% (two percent) of its PMS revenues in the
year previous to the payment, net of applicable taxes and social contributions.

PARAGRAPH  ONE.  When  calculating  the amount  referred  to in the head of this
Clause,  the net revenue  considered will be that resulting from the application
of  the  Service,   the  Basic,  and  the  Alternative  plans,   object  of  the
authorization herein.

PARAGRAPH  TWO.  The  percentage  referred to in the head of this clause will be
calculated  relative  to the  revenues,  net of tax  deductions  and  applicable
contributions,  attained  between  January and December of the previous year and
obtained from the financial  statements  prepared  according to basic accounting
principles   approved  by  the  AUTHORIZEE's   Administration   and  audited  by
independent  auditors,  and the  payment  will be due on  April  30 of the  year
following the calculation of the fee.

PARAGRAPH THREE. The first  installment of the fee will be due on April 30, 2008
and will be computed  considering  the net income  calculated  from January 1 to
December  31, 2007.  The  subsequent  installments  will be due every 24 (twenty
four) months, and will be calculated based on the previous year's revenues.

PARAGRAPH  FOUR. Any delay in paying this fee will imply in payment of a fine of
0.33% (point  thirty-three  percent) per day of delay,  until a maximum limit of
10% (ten percent),  added to the SELIC  reference fee for federal  bonds,  which
shall be applied to the amount of the debt  considering the total number of days
in which the payment was overdue.

CLAUSE 1.8 - Requirement to extend the right to use  radiofrequencies  should be
forwarded to Anatel within thirty months prior to the original maturity date.

SOLE PARAGRAPH.  The requirement will be refused only if the interested party is
not  making  rational  and  appropriate  use  of  the  radiofrequencies,  if the
interested party has committed repeated infractions in its activities,  or if it
is necessary to alter the destination of the use of the radiofrequency.

                                   CHAPTER II

                            VALUE OF THE REPLACEMENT

CLAUSE 2.1 - The value of the  replacement  of the  REPLACED  INSTRUMENT  by the
AUTHORIZATION TERM herein is R$ 9,000.00 (nine thousand Brazilian reais).

SOLE  PARAGRAPH.   Failure  to  pay  any  pending  installments  resulting  from
commitments   assumed   regarding  the  amounts  owed  for  the   Concession  or
Authorization  of Cellular Mobile Service - CMS, will imply in the forfeiture of
the  Authorization  herein,  regardless of the  application  of other  penalties
established.

                                  CHAPTER III

                   MODE, FORM, AND CONDITIONS OF THE SERVICE

CLAUSE 3.1 - The  AUTHORIZEE is obliged to render the services  which are object
of the Authorization in such a way as to fully meet the obligations  inherent to
the service rendered under a private regime,  observing the criteria,  formulas,
and parameters defined in this Authorization Term.

PARAGRAPH ONE. Default in meeting the obligations  related to the object of this
Authorization  Term will ensue the application of the sanctions set forth herein
and allow temporary suspension by Anatel.  Additionally,  according to the case,
the forfeiture of this  Authorization  will be declared,  as provided by article
number 137 of the General Telecommunications Law.

<PAGE>

CLAUSE 3.2 - The   AUTHORIZEE   will   exploit  the   service   object  of  this
Authorization  at its own account  and risk,  under the regime of broad and fair
competition established in the General  Telecommunications Law, and will be paid
by means of prices changed, as determined by this Authorization Term.

PARAGRAPH ONE. The AUTHORIZEE  will not be entitled to any type of  exclusivity,
or to any assumption of guarantee of financial or economic balance, neither will
it be entitled to claim any right as to the  admission  of new  providers of the
same service.

PARAGRAPH TWO. The AUTHORIZEE  will not have any vested right to the maintenance
of the  conditions in force after the issuance of the present  Authorization  or
the start of activities,  and shall abide by the new conditions  provided by law
and by the applicable regulations.

PARAGRAPH  THREE.  The  rules  shall  grant a  sufficient  amount  of  time  for
compliance with the new conditions.

CLAUSE 3.3 - The   AUTHORIZEE  shall  grant  free  access  to  public  emergency
services, as defined in the regulations.

CLAUSE 3.4 - The  Authorizee  shall  guarantee to its users the free exercise of
their choice of Switched Fixed  Telephone  Services  provider for forwarding the
long-distance  messages,  in  compliance  with  the  provisions  under  the  PMS
regulation, particularly under the Adaptation Rule.

CLAUSE 3.5 - Any alteration in the control of the AUTHORIZEE  will be subject to
control by Anatel for purposes of verification of the obligatory  conditions for
the  issuance and  maintenance  of the  Authorization,  in  compliance  with the
regulations.

SOLE PARAGRAPH. The conditions provided under Paragraph Two of Article 10 of the
General  Concession  Plan  (Plano  Geral de  Outorgas  - PGO),  as well as those
established by the General  Authorization  Plan (Plano Geral de Autorizacoes) of
the  PMS,  and  under  Article  133 in the  General  Telecommunications  Law are
obligatory conditions for issuance and maintenance of the Authorization.

CLAUSE 3.6 - The transfer of the Authorization  Term will be subject to approval
by Anatel,  as  provided  by  Paragraph  Two under  Article  136 of the  General
Telecommunications Law.

SOLE  PARAGRAPH.  For purposes of  subsection I under  Article 98 of the General
Telecommunications  Law,  the  operating  time of the Cellular  Mobile  Services
during the term of the REPLACED INSTRUMENT will be considered.

CLAUSE 3.7 - The AUTHORIZEE shall freely establish the rates to be practiced for
the  rendering  of PMS and define the  Service  Plans  with  structures,  forms,
criteria, and values that should be reasonable and  non-discriminatory,  but may
vary as to their  technical  characteristics,  their specific  costs,  and other
facilities offered to users, as defined in PMS regulations,  particularly in the
ADAPTATION RULE.

                                   CHAPTER IV

                             THE SCOPE COMMITMENTS

CLAUSE 4.1 - The scope commitments  established in the REPLACED INSTRUMENT shall
be maintained, including obligations regarding service and coverage.

CLAUSE 4.2 - Default in meeting the  commitments  will subject the AUTHORIZEE to
the sanctions set forth in this Term and in the  regulations,  and may result in
the extinction of the authorization.

                                   CHAPTER V

                             QUALITY OF THE SERVICE

CLAUSE 5.1 - The present  Authorization  is subject to the  assumption  that the
service provided by the AUTHORIZEE is of adequate  quality,  considering as such
the service which fully meets the reliability,  efficiency,  security, currency,
generality, and courtesy conditions.

PARAGRAPH ONE. Reliability is characterized by the continual exploitation of the
service with strict adherence to the regulatory requirements provided by Anatel.

PARAGRAPH TWO.  Efficiency is  characterized by the fulfillment and preservation
of the parameters  provided in this  Authorization  Term and by the rendering of
assistance and service to users within the time periods set herein.

<PAGE>

PARAGRAPH THREE. Security in the exploitation of the service is characterized by
rigorous  confidentiality  of the data  relative  to the use of the  service  by
users,  as well as by the strict  preservation  of secrecy as to the information
transmitted in the scope of its exploitation.

PARAGRAPH FOUR.  Currency is characterized  by the use of up-to-date  equipment,
installations,  and techniques used in the exploit of the service, including the
incorporation of technological  advances which will definitely bring benefits to
users, in accordance with the provisions set forth herein.

PARAGRAPH FIVE. Generality is characterized by the non-discriminatory  provision
of the service to each and every user,  and the  AUTHORIZEE is obliged to render
the service to whomever requests it, in compliance with the regulations.

PARAGRAPH SIX. Courtesy is characterized by the respectful and immediate service
provided  to all  users  of the  authorized  service,  as well as by the  strict
observance  of the  obligations  to  promptly  inform  and meet the needs of all
those, users and non-users, who ask for information from the Authorizee, as well
as any action or any type of request as provided herein.

CLAUSE 5.2 - The AUTHORIZEE  shall meet the quality  targets  established in the
General  Plan for Quality  Goals  (Plano Geral de Metas de Qualidade - PGMQ) for
the PMS.

SOLE PARAGRAPH. For purposes of the provisions under Paragraph Five of Article 1
of the PGMQ-PMS,  commercial  activities of the PMS in locations  where Cellular
Mobile  Services  already  exists are  considered to have started at the date of
publication of the summary of this Term.

CLAUSE 5.3 - The exploitation of the authorized service can only be suspended in
conformity of the PMS regulations, issued by Anatel.

                                   CHAPTER VI

                                 NUMBERING PLAN

CLAUSE 6.1 - The AUTHORIZEE agrees to abide by the Numbering  Regulations issued
by Anatel and shall  guarantee to the user the  portability of access codes,  in
conformity with the regulations.

                                  CHAPTER VII

                               BILLING THE USERS

CLAUSE 7.1 - The rates,  as well as the form of measurement and the criteria for
billing the services  rendered shall be  established by the AUTHORIZEE  based on
the PMS  regulations,  in conformity with the provisions under Clause 3.7 of the
present Authorization Term.

                                  CHAPTER VIII

                      RIGHTS AND OBLIGATIONS OF THE USERS

CLAUSE 8.1 - The rights and  obligations  if the users are those  established in
the General  Telecommunications Law and in the regulations,  with no harm to the
rights  provided for in Law 8078 of September 11, 1990 in the cases ruled by it,
nor to the rights provided for in the PMS contracts.

                                   CHAPTER IX

                    RIGHTS AND OBLIGATIONS OF THE AUTHORIZEE

CLAUSE 9.1 - The rights and obligations of the AUTHORIZEE are those provided for
in the General Telecommunications Law and in the regulations.

CLAUSE 9.2 - When obtaining  services and when  acquiring  equipment or supplies
associated  to the object of the  present  Authorization  Term,  the  Authorizee
agrees  to  consider  offers  placed by  independent  suppliers,  including  the
Brazilian ones, and to base their decisions as to the different offers presented
on the observance of objective criteria regarding cost, delivery conditions, and
technical specifications provided for in the applicable regulations.

<PAGE>

SOLE PARAGRAPH.  When obtaining the  above-mentioned  services or supplies,  the
procedures  set forth in the Standard  Procedures  for  Acquisition of Services,
Equipment and Supplies by Providers of Telecommunications  Services (Regulamento
sobre  Procedimentos  de Contratacao de Servicos e Aquisicao de  Equipamentos ou
Materiais pelas Prestadoras de Servicos de Telecomunicacoes), approved by Anatel
Resolution 155, of August 5, 1999.

                                   CHAPTER X

                     OBLIGATIONS AND PREROGATIVES OF ANATEL

CLAUSE 10.1 - In  addition to the other  prerogatives  intrinsic  to its role of
regulatory body, and to the other obligations  resulting from this Authorization
Term, the following shall constitute responsibilities of Anatel:

I.    to follow and to inspect the  exploitation of the service with the purpose
      of meeting the regulations;

II.   to regulate the exploitation of the authorized service;

III.  to apply the  penalties  established  in the  regulations  of the service,
      particularly in this Authorization Term;

IV.   to provide for the good quality of the service,  as well as to receive, to
      address,  and to find solutions for complaints placed by the users, giving
      them  notice,  in no longer  than 90  (ninety)  consecutive  days,  of the
      actions taken in order to prevent any violation of its rights;

V.    to pronounce  the  Authorization  terminated in the cases set forth in the
      General Telecommunications Law;

VI.   to provide for  guaranteed  interconnection,  settling any claims  arising
      between the Authorizee and the remaining carriers;

VII.  to continuously  monitor the  relationship  between the Authorizee and the
      remaining carriers in order to settle any occasional conflict;

VIII. to  repress  any  conduct  by the  Authorizee  which  is  contrary  to the
      competition  regime,  in accordance  with the  provisions of the Brazilian
      Administrative  Council on Economic Defense  (Conselho  Administrativo  de
      Defesa Economica - CADE), the regulations, and particularly the provisions
      under Clause 10.2 and Clause 10.3 of this Chapter;

IX.   to perform the  inspection of the service in the form  established in this
      Authorization Term; and

X.    to collect the fees relative to FISTEL,  adopting the procedures  provided
      for in the applicable legislation.

CLAUSE 10.2 - Anatel   may  install  a  Procedure  to  Investigate  Breaches  of
Obligations (Procedimento para Apuracao de Descumprimento de Obrigacoes - PADO),
so as to look into any falsehood or inconsistency of conditions  declared by the
AUTHORIZEE relative to its  non-participation  in the control of other companies
or to any other regulatory impediment regarding economic  concentration whenever
there should be any indication of relevant  influence on its part or on the part
of any affiliated  company,  controlled  company,  or controlling company on the
legal entity providing PMS, as provided for in the Regulation for  Investigation
of Control and of  Transference  of Control in Providers  of  Telecommunications
Services  (Regulamento  para Apuracao de Controle e de Transferencia de Controle
em Empresas  Prestadoras  de Servicos  de  Telecomunicacao),  approved by Anatel
Resolution 101, issued February 04, 1999.

SOLE PARAGRAPH.  The  presentation of proof,  following  procedures  established
under this Clause,  of the existence of any situation  which  characterizes  the
untruthfulness or the inconsistency of the conditions declared by the Authorizee
shall imply the annulment of the present Authorization,  as set forth in Article
139 of the General Telecommunications Law.

CLAUSE 10.3 - Anatel may additionally set up administrative proceedings aimed to
investigate  any  violation  of the  economic  order,  in  accordance  with  the
provisions under Law 8884/94.

                                   CHAPTER XI

                             THE INSPECTION REGIME

CLAUSE 11.1 - Anatel shall  perform the  inspection  of the services in order to
assure full observance of the  responsibilities  agreed to in this Authorization
Term.

<PAGE>

PARAGRAPH  ONE. The  inspection  to be  performed  by Anatel  shall  include the
inspection  and   monitoring  of  the   activities,   the  equipment,   and  the
installations  of the  Authorizee,  which implies in free access to all data and
information concerning the Authorizee and third parties.

PARAGRAPH TWO. The information  collected  during the activities  related to the
inspection  shall be made  public  in the  Library,  with the  exception  of the
information which, as a result of express request by the Authorizee, is regarded
as confidential by Anatel.

PARAGRAPH THREE. All information  considered  confidential in the form described
by in Paragraph Two above shall be used exclusively in the procedures correlated
with the present Authorization Term, and it will be the responsibility of Anatel
and of those  appointed  by Anatel,  to account  for any form of full or limited
disclosure  of the referred to  information  outside the scope of use  specified
above.

CLAUSE  11.2 - The  AUTHORIZEE  is  granted  the right to follow  each and every
inspection activity performed by Anatel,  through its appointed  representative;
it cannot however hinder or impede inspection  actions, in which case it will be
subject to the penalties provided for in the regulations.

                                   CHAPTER XII

            TELECOMMUNICATIONS NETWORKS AND ACCESS TO VISITING USERS

CLAUSE 12.1 - The Authorizee  shall observe the regulatory  provisions as to the
implementation and operations of the telecommunications  networks supporting the
rendering of PMS, particularly the provisions in the Telecommunications Services
Regulation  issued  by  Resolution  73 of  November  25,  1998,  in the  General
Interconnection  Regulations  (Regulamento  Geral de Interconexao),  approved by
Resolution 40 of July 23, 1998 and in the PMS regulations.

SOLE PARAGRAPH. Changes in technology standards promoted by the AUTHORIZEE shall
not represent any burden placed  unilaterally  and arbitrarily on the user. This
is also valid regarding the existing conditions of the service provided to users
and visitors.

CLAUSE 12.2 - The remuneration for the use of the network between the Authorizee
and the remaining  carriers of  telecommunications  services  shall abide by the
provisions  under Article 152 of the General  Telecommunications  Law and by the
provisions under the PMS regulations, particularly in the ADAPTATION RULE.

SOLE  PARAGRAPH.  The document  provided for under Item 7 of the Adaptation Rule
shall henceforward constitute Annex I of the present AUTHORIZATION TERM.

                                  CHAPTER XIII

                                   SANCTIONS

CLAUSE 13.1 - The  AUTHORIZEE is subject to inspection by Anatel,  in conformity
with the  applicable  legal  and  regulatory  provisions,  and  shall,  whenever
requested,  provide  statements in the form  established in the PMS regulations,
granting free access to its technical resources and accounting records.

CLAUSE 13.2 - Default in fulfilling  conditions or meeting the  responsibilities
agreed to in  respect  to the  Authorization  will  subject  the  Authorizee  to
notification,  fines, temporary suspension,  or forfeiture,  as set forth in the
PMS regulation.

                                  CHAPTER XIV

                        TERMINATION OF THE AUTHORIZATION

CLAUSE 14.1 - The  Authorization  shall be considered  terminated as a result of
discharge,  forfeiture,  lapse,  resignation,  or annulment,  as  established in
Articles 138 to Article 144 of the General  Telecommunications Law and according
to the procedures described in the regulation.

SOLE  PARAGRAPH.   The  declaration  of  termination   shall  not  preclude  the
application  of  the  corresponding  penalties,  as  provided  for  herein,  for
violations performed by the AUTHORIZEE.

<PAGE>

                                   CHAPTER XV

                     LEGAL REGIME AND APPLICABLE DOCUMENTS

CLAUSE 15.1 - The    present    Authorization    is   ruled   by   the   General
Telecommunications Law and the resulting  regulations,  without prejudice to the
Brazilian legal order,  the General  Telecommunications  Law, or the regulations
resulting from it.

CLAUSE 15.2 - The  exploitation of the service herein  authorized shall observe,
as part of this  Authorization  Term,  the  regulations  established  by  Anatel
particularly the documents specified in the PMS regulations.

CLAUSE 15.4 - The  interpretation of rules and provisions in this  Authorization
Term shall take into  consideration,  in addition to the documents  specified in
this Chapter,  the general rules of  hermeneutics  and the rules and  principles
contained in the General Telecommunications Law.

                                  CHAPTER XVI

                             TRANSITORY PROVISIONS

CLAUSE  16.1 -  Until  the  ratification  or the  agreement  on the  VU-M  rate,
according  to the option  made by the PMS  carrier,  both the value for  network
compensation  and the  criteria for  processing  and  transferring  values among
entities  rendering  Cellular  Mobile  services  and  Switched  Fixed  Telephone
Services shall be maintained.

                                  CHAPTER XVII

                                     COURT

CLAUSE 17.1 - Any disputes arising from this Authorization Term shall be settled
by the Forum of the District Court of the Federal  Justice of Brasilia,  Federal
District of Brazil.

                                 CHAPTER XVIII

                                FINAL PROVISIONS

CLAUSE 18.1 - This Authorization Term shall be effective upon the publication of
its summary in the Diario Oficial da Uniao (Brazilian Federal Official Gazette).

CLAUSE 18.2 - Barring the provisions  expressly set forth in this  Authorization
Term, all other provisions in the REPLACED INSTRUMENT,  referred to in Paragraph
2 of  Clause  1.1,  are no  longer  in  effect.  The  parties  are  aware of the
provisions and conditions in this  Authorization  Term, and sign it in 3 copies,
of equal meaning and form, in the presence of the witnesses, who also sign the 3
copies, thus rendering it legally and officially effective.

Brasilia, February 03, 2003

PP. ANATEL

--------------------------------
Luiz Guilherme Schymura de Oliveira
President of the Board of Directors

--------------------------------
LUIZ TITO CERASOLI
Member of the Board of Directors

<PAGE>

PP. AUTHORIZEE

--------------------------------
SERGIO ASSENCO TAVARES DOS SANTOS
Acting Chairman and President

--------------------------------
GETULIO NERY CARDOSO
Director of Administration and Human Resources

WITNESSES

--------------------------------
JARBAS JOSE VALENTE
CREA-DF 4346

--------------------------------
Nelson Mitsuo Takayanagi
SSP-DF 435023

<PAGE>

                                  ATTACHMENT I

                             DECLARATION OF OPTION

In conformity  with the  provisions  under Item 7 of the Adaptation  Rule,  TELE
CENTRO OESTE CELULAR  PARTICIPACOES S.A., registered with the Brazilian Tax Roll
under number  (CNPJ/MF)  02.558.132/0001-69,  herein  represented  by its acting
Chief  Executive  Officer MR.  SERGIO  ASSENCO  TAVARES DOS SANTOS,  a Brazilian
engineer,  widowed,  General Registry number 131.306 SSP/DF, opts for submission
to Item 5 and its subitems in the Remuneration Criteria Rule for Use of personal
Mobile Service  Provider  Networks,  approved by Resolution 319 of September 27,
2002,  requesting the  ratification of the TU-M rate, whose maximum value should
be the maximum value if the initial VU-M rate in its Area of Coverage.
Brasilia, February 03, 2003

Sergio Assenco Tavares dos Santos
Acting Chief Executive Officer

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