DRAFT AGREEMENT

Table of Contents

Exhibit 4(h)

DRAFT AGREEMENT FOR

SUPPLY AND RENDERING OF SERVICES

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INDEX

 

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AGREEMENT FOR SUPPLY AND RENDERING OF SERVICES

By this private agreement, on the one hand:

(a) AMAZÔNIA CELULAR S.A. , federal tax roll number CNPJ/MF 02.361.554/0002 -14, headquartered at Travessa Rui Barbosa, 931, Nazaré, in the city of Belém, PA, Brazil, represented herein by the undersigned proxies, hereinafter referred to simply as AMAZÔNIA; and (b) TELEMIG CELULAR S.A. , federal tax roll number CNPJ/MF 02.320.739/0001 -06, headquartered at Rua Levindo Lopes, 258, 8° andar, Funcionários, in the city of Belo Horizonte, MG, Brazil, represented herein by the undersigned proxies, hereinafter referred to simply as TELEMIG and, jointly with AMAZÔNIA referred to jointly as CONTRACTING PARTIES ; and, on the other hand,

(c) ERICSSON TELECOMUNICAÇÕES S.A , federal tax roll number CNPJ/MF 33.067.745/0001 -27, headquartered at Rua Maria Prestes Maia, 300, parte, Vila Guilherme, São Paulo, SP, Brazil, represented herein by its undersigned legal representatives, hereinafter referred to simply as ERICSSON; and (d) ERICSSON SERVIÇOS DE TELECOMUNICAÇÕES LTDA. , federal tax roll number CNPJ/MF 03.619.317/0001 -07, headquartered at Rua Maria Prestes Maia, 300, parte, Vila Guilherme, São Paulo, SP, Brazil, represented herein by its undersigned legal representatives, hereinafter referred to simply as ERICSSON SERVIÇOS, ERICSSON and ERICSON SERVIÇOS and jointly hereinafter referred to simply as CONTRACTED PARTIES ;

WHEREAS

- The CONTRACTING PARTIES are companies rendering mobile telephony services in Brazil;

- The CONTRACTED PARTIES are companies that supply materials, equipment and services for mobile telecommunication networks, with broad operations and experience in this field, and that they agree to undertake joint liability for prompt and full compliance with all obligations established herein;

-The CONTRACTING PARTIES requested from its suppliers proposals for implementation of a telecommunications network, by means of the “Request for Proposal” RFP no. CEL001-03, dated January 7, 2003, and a new “Request for Proposal” dated November 19, 2003. Given the several amendments undergone by said document and with a view to avoiding any future discussion on the rights and obligations of the parties, the CONTRACTING PARTIES delivered to its suppliers, on May 25, 2004, a revised “Request for Proposal”, consolidating all the information on the scope and extent of the rights, obligations and responsibilities of the parties (“CONSOLIDATED RFP”) (Attachment 1);

- The CONTRACTED PARTIES supplied, on June 28, 2004, based on the CONSOLIDATED RFP, a

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Proposal for the execution of services, for a fixed lump sum, subject to item 7.5 (“PROPOSAL”) (Attachment lI);

- The CONTRACTED PARTIES fully acknowledge the existence of other companies contracted by the CONTRACTING PARTIES in charge of the suppliance and implementation of ACCESSES that, jointly with the subject-matter previously contracted, shall make up the GSM Telecommunication Network of the CONTRACTING PARTIES , constituting a fundamental premise for the adequate and perfect fulfillment of this Agreement that seeks, on the hand of the CONTRACTED PARTIES , the synergy and accordance with the other companies contracted by the CONTRACTING PARTIES .

The PARTIES hereby agree to enter into this Supply and Rendering of Services Agreement (“AGREEMENT”), which shall be governed by the applicable regulations and by the following clauses and conditions:

CLAUSE 1 - DEFINITIONS

1.1 The definitions employed in this AGREEMENT are those included in the CONSOLIDATED RFP (Attachment I), in governing laws (as defined in Clause 5), and those identified in Attachment III (“DEFINITIONS”). In the case of any disagreements as to the meaning of the definitions herein, the definitions established in the governing laws shall prevail.

CLAUSE 2 – SUBJECT-MATTER

2.1 The subject-matter of this AGREEMENT is the suppliance and implementation, by the CONTRACTED PARTIES to the CONTRACTING PARTIES , on a “turn-key lump sum” basis (i.e., a complete job for a single lump sum), of all the new equipment, computer programs, services and new material that make up GSM System CORE ("CORE"), as described in detail in the CONSOLIDATED RFP (Attachment I) and in the PROPOSAL (Attachment II), including the rendering of installation services and integration of CORE to the other Network Elements that make up the CONTRACTING PARTIES’ Telecommunications Network, as established in the CONSOLIDATED RFP, as well as training, assisted operation and optimization services, as described in detail herein.

2.2. Besides the CORE’s suppliance and implementation, the CONTRACTED COMPANIES shall provide, in the quality of bonus, software and services, as provided for by Attachment VI.

2.3. The CONTRACTED PARTIES hereby irrevocably and irreversibly undertake joint liability for the timely and proper compliance with all the obligations indistinctly ascribed to the CONTRACTED PARTIES by this AGREEMENT .

CLAUSE 3 – PROJECT AND LOCAL CONDITIONS

3.1 The CONTRACTED PARTIES expressly declare, for all purposes, that they are fully aware of the Basic Assumptions supplied by the CONTRACTING PARTIES regarding the subject-matter of this

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Agreement, the places where the services shall be rendered, the adjoining areas, access roads, soil and all the other factors and conditions that may influence cost and time required for carrying out the services described herein, and that they themselves shall be responsible for undertaking all the complementary investigations that they may deem necessary.

3.2 The preparation of the Executive Project is under the total and exclusive responsibility of the CONTRACTED PARTIES , which must use as a basis all the assumptions they regard as necessary for its preparation. Should the CONTRACTING PARTIES have prepared the Executive Project, the CONTRACTED PARTIES shall undertake to review it and to make the required changes in it, as necessary, being responsible for the project totally and exclusively. Under both hypotheses, the corresponding cost, whether of preparation or of reviewing the Executive Project, has been budgeted and taken into account in the price established in item 7.2 herein.

3.3 Pursuant to the provisions of items 3.1 and 3.2, the CONTRACTED PARTIES shall have no right to any complaint, indemnification, claim for additional payment, or claim regarding the characterization of extraordinary service, including for the purpose of justifying delays or extensions of the deadlines agreed upon in the agreement, due to alleged project errors, resulting from difficulties or hindrances of any nature, concerning the conditions that prevail at the place where the services are to be rendered, notably the geologic, climactic or environmental conditions, and concerning the conditions set forth in the documents of the AGREEMENT.

CLAUSE 4 - CHANGES

4.1. The CONTRACTING PARTIES may determine, in writing, changes affecting the basic assumptions supplied. Should the CONTRACTED PARTIES find out that the project changes determined by the CONTRACTING PARTIES shall increase the AGREEMENT’s lump sum value, or adversely affect the capacity of the CONTRACTED PARTIES to meet scheduled deadlines, the PARTIES shall negotiate, in good faith, an adjustment of the AGREEMENT’s lump sum and/or of the scheduled deadlines, so as to reflect the changes fairly.

4.2. The CONTRACTED PARTIES may suggest changes regarding the Basic Assumptions that were supplied by the CONTRACTING PARTIES , provided that these: (i) do not adversely affect the minimum conditions established in the CONSOLIDATED RFP; (ii) do not reduce CORE reliability, capacity, performance, quality and useful life; (iii) neither increase the value of the AGREEMENT nor generate any additional costs for the CONTRACTING PARTIES ; (iv) do not cause the key dates described in the time schedule to be delayed; (v) do not impair the Guarantees obtained and/or Insurance Policies taken out; (vi) do not effect negatively the CONTRACTED PARTIES ’ capacity in observing the scheduled dates; and (vii) do not affect the CONTRACTING PARTIES ’ Payment Schedule. The suggested changes may only be implemented once they have been discussed with and authorized by the CONTRACTING PARTIES .

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CLAUSE 5 – GOVERNING LAW

5.1 In the execution and interpretation of this AGREEMENT, all the regulations that govern the Personal Mobile Service, whether they be laws, decrees, administrative acts, instructions, or resolutions, among others, shall be taken into account, complied with and applied by the CONTRACTED PARTIES , regardless of whether or not any reference is made to them herein and/or in the documents attached to this AGREEMENT.

5.2 Without prejudice to compliance with and fulfillment of the other rules issued by the National Telecommunications Agency – ANATEL ( Agência Nacional de Telecomunicações ), any unit of certified products that may come to be supplied by the CONTRACTED PARTIES to the CONTRACTING PARTIES shall carry an identification plate in a visible spot, with the name of the manufacturer and the address of the supplier. When the product is imported, the sign shall also contain the name and address of the supplier in the country. All certified products that use radioelectric frequency, in addition to the above requirement, shall bear the following message: “This product can only go into operation once its operating license, issued by the appropriate technical body of the Ministry of Communications, has been obtained.”

CLAUSE 6 – DOCUMENTS INCLUDED

6.1 For all legal purposes and effects, this AGREEMENT comprises the documents listed below, as if they were transcribed herein. These documents hereinafter shall be referred to as Included Documents.

6.2 Should there be any discrepancy between this AGREEMENT and the documents that it comprises, the following order of prevalence shall apply, its being hereby established that the requirements of the CONSOLIDATED RFP explicitly mentioned in the PROPOSAL as not having been fulfilled or having been carried out differently from the specifications described in the CONSOLIDATED RFP shall prevail over the CONSOLIDATED RFP.

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(a) AGREEMENT

(b) CONSOLIDATED RFP (Attachment I)

(c) PROPOSAL (Attachment II)

(d) DEFINITIONS (Attachment III)

(e) LIST OF UNIT PRICES (“LUP”) (Attachment IV)

CLAUSE 7 - PRICE

7.1 The system for executing the job that is the subject-matter of this AGREEMENT is the “turn-key lump sum” system.

7.2 The lump sum for supplying and implementing CORE shall be the sum of: (i) forty-two million, nine hundred fifty-two thousand, two hundred ninety reais and ninety-seven centavos (R$42,952,290.97), which amount shall be fixed and not adjustable, referring to local materials, equipment and services; and (ii) twenty-one million, six hundred thirty-one thousand, fifty-eight reais and twenty centavos (R$21,631,058.20), which amount refers to equipment, materials and software to be imported from abroad, worth, in foreign currency, on the date on which this agreement was signed, six million, at six million, nine hundred seventy-three thousand, two hundred sixty-one U.S. dollars and eighty-three centavos (US$6,973,261.83) . The suppliance, by the CONTRACTED PARTIES , of software and services in Attachment VI, in the amount of twenty-two million, five hundred thirty-five thousand, four hundred twenty-six reais and thirty-six centavos (R$22,535,426.36), shall occur as bonus, without any burden to the CONTRACTING PARTIES .

7.2.1 The price of the equipment, materials and software programs that shall be imported, as provided for under item 7.2 above, shall be adjusted in the case of fluctuation between the U.S. dollar exchange rate and the day preceding invoicing, as published in SISBACEN PTAX 800 Option 5, exceeds five per cent (5%). For the purposes of measuring this fluctuation, the U.S. dollar exchange rate to be taken into account is three point one zero two zero reais to the dollar (R$3.1020/USD) .

7.2.2 The price stated above includes, in addition to the CONTRACTED PARTIES ’ profit, all direct costs (materials, labor, administration, social charges, labor charges and taxes, among others) and indirect costs (charges, insurance, taxes, customs duties and expenses, operational transport expenses, the transport of materials, products and people and their respective insurance, packaging, bed and board, air fares, bus fares, local travel, equipment, tools, and consumable goods, among others) incurred or to be incurred by the CONTRACTED PARTIES in order to supply and implement CORE, its being inadmissible, under any circumstances and regardless of the reason, that any additional amounts be charged by the CONTRACTED PARTIES , given that they are being hired for a lump sum.

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7.2.3 The PARTIES acknowledge that the direct or indirect costs described above may undergo some fluctuation after this AGREEMENT has been signed and while it is being performed, due to foreseeable events such as inflation, fluctuation of the price of raw materials, the need to substitute materials or use of alternative means of production, project adjustments (provided that no changes are made to the Basic Assumptions supplied by the CONTRACTING PARTIES ), or changes in taxation, among others, the CONTRACTED PARTIES undertaking to bear the risk for these fluctuations and the ensuing added costs, this being an essential prerequisite for this AGREEMENT to be entered into. So that no doubts may arise as to the foreseeability of certain events, the following are hereby classified as foreseeable, in addition to the aforementioned items:

(i) strikes of the CONTRACTED PARTIES ’ personnel or of companies subcontracted by them;

(ii) acts of God and meteorological phenomena typical of the time or place where the services arebeing rendered, such as landslides, storms, and flooding, among others; and

(iv) delays in the importation of equipment and customs clearance.

7.3 The proposed lump sum price takes into account all of the activities (direct, indirect, accessory, alternative, and complementary, among others) required to supply and implement CORE, pursuant to the CONSOLIDATED RFP and the PROPOSAL, regardless of whether these activities are expressly listed herein. Only if the CONTRACTING PARTIES requests, in writing, changes to the Basic Assumptions, as per clause 4, or in the case of new contractual agreements, shall the CONTRACTED PARTIES be entitled to the respective adjustment of prices and deadlines.

7.4 In the case of new contractual agreements related to the scope established in the CONSOLIDATED RFP (Attachment I), the parties shall comply with the pricing listed on the List of Unit Prices (“LUP”) (Attachment IV), as well as with the same commercial terms agreed upon herein. The CONTRACTED PARTIES guarantee that, for a four (4) year period of time as from the signing of this AGREEMENT, the prices listed in the LUP shall be maintained as the maximum pricing values to be charged from the CONTRACTING PARTIES for supplying new goods and services, excluding the rights to adjustment described in the items below. Should the CONTRACTED PARTIES refuse to comply with the maximum amounts agreed upon, the CONTRACTING PARTIES shall be entitled to judicially request from the CONTRACTED PARTIES payment equal to twice the amount expended in excess, this AGREEMENT serving, together with the invoice, as the extrajudicial document valid for commencing an execution process.

7.5 The base date for the unit prices shown on the LUP is the date on which this AGREEMENT shall be signed.

7.5.1 The relative price of the materials, equipment (HWL) and domestic services (SERVL) and a portion equal to forty per cent (40%) of the materials and equipment that have imported raw materials or input (HWL/I), expressed in the LUP in domestic currency (R$), for the purposes of the provisions

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described in item 7.4 above, shall be adjusted after one-year periods, the adjusted amount being valid for the one-year period subsequent to adjustment, by applying the following formula:

I = 0.90 X(I ₁ - I ₀ ) / I ₀

Where:

I= Sought adjustment index.

I ₀ = Initial index concerning the cost index corresponding to the date on which this AGREEMENT shall be signed.

I ₁ = Same index concerning the month immediately prior to the foreseen adjustment month, i.e., the 12 ^th , 24 ^th , and 36 ^th months after the month on which this AGREEMENT shall be signed, and so forth.

(i) The adjustment established in this item shall only apply to payments of amounts that concern new purchases made as from the first day immediately following the end of the twelfth (12 ^th ) month after the signing of this AGREEMENT.

(ii) The index to be adopted shall be the Economic Index / IGP- DI (General Price Index - Internal Availability), column 2, published by the Conjuntura Econômica magazine of Fundação Getúlio Vargas or, in its absence, any similar index that may come to replace it.

(iii) The coefficient calculated through the adjustment formula shall be worked out up to the third decimal, the other ones being disregarded.

(iv) Should the law come to allow a reduction in the frequency of adjustment, the PARTIES may negotiate a new adjustment period, to be considered for the purposes of this AGREEMENT.

7.5.2 The price in reais of the materials, equipment, and software expressed in the LUP in foreign currency (U.S. dollars – USD), for the purposes of what has been described in item 7.4 above, shall be calculated using the USD exchange rate of three point zero two zero reais per dollar (R$3.1020/USD); this shall be adjusted when the difference between the USD exchange rate and the rate on the day immediately preceding invoicing, as published by SISBACEN PTAX 800 Option 5, is greater than five per cent (5%).

7.5.3 The price, in reais, of the portion equal to sixty per cent (60%) of the national equipment and materials that contain some imported raw materials or input (HWIJI), for the purposes of what has been described in item 7.4 above, shall be adjusted for new purchases only when the difference between the USD exchange rate and the rate on the day immediately preceding actual purchase, as published by SISBACEN PTAX 800 Option 5, is greater than five per cent (5%). For the purpose of assessing this difference, the USD exchange rate to be taken into account is three point zero two zero reais per dollar (R$ 3.1020/USD);

7.6 The total value of this AGREEMENT, for the purpose of what has been described in Clauses 17

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and 18, shall be equal to the sum of the amounts in reais calculated in item 7.2 (i) and (ii).

CLAUSE 8 – PAYMENT TERMS

8.1 Payments shall only be made once the CONTRACTING PARTIES has accepted that the events to which they refer have indeed occurred, according to the following Timetable and subsequent items:

 

8.1.1 The CONTRACTED PARTIES shall undertake to supply a table with the prorated value per Site, to be paid in connection with events 1 and 2 mentioned in item 8.1 above. This table shall be submitted to the CONTRACTING PARTIES for approval immediately after this AGREEMENT has been signed.

8.1.2. The parties agree that payment of the advance described as Event 0 of item 8.1 is subject to submission by the CONTRACTED PARTIES of a Bank Letter of Guarantee, the value of which shall be equal to twenty per cent (20%) of the total value of this AGREEMENT, as per item 7.6, to be issued by a first-tier financial institution, which shall be required to waive the benefits granted under articles

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827, 835 and 838 of the Brazilian Civil Code. The said Bank Letter of Guarantee shall be valid up to the time when Event 1 of item 8.1 has been discharged.

8.2 The payments shall be made in accordance with the payment timetable above either on the sixtieth (60 ^th ) day following acceptance of the corresponding physical event or on the thirtieth (30 ^th ) day following submission to the CONTRACTING PARTIES of the invoice, in two (02) copies of like tenor, the latest of the two dates being the prevailing payment date, subject to the provisions of Clause 9. The CONTRACTED PARTIES shall, monthly, before each invoicing, request to the CONTRACTING PARTIES the percentage to be invoiced against AMAZÔNIA and against TELEMIG.

8.3 The payments shall be subject to discharging all obligations undertaken and/or resulting from this AGREEMENT, the CONTRACTING PARTIES being required to deposit the amount owed directly into the bank accounts indicated by the CONTRACTED PARTIES , the respective payment slips being valid as payment receipts.

8.4. One of the conditions for payment (except for event 0 – anticipation of payment, shown in item 8.1) is the obtainment by the CONTRACTED PARTIES of a firm financing offer, signed by a first-tier, domestic or international, public or private and/or from export credit agencies (hereinafter referred to simply as BANK). This firm finance offer shall include the term of the loan, the interest rate, commissions and covenants in keeping with normal market standards, the conditions of which, at the very least, must be equal to those presented by the CONTRACTED PARTIES in letter CE/EDB/ETT 04 055 and 04.056 issued on 6/21/04, and guarantees that the CONTRACTING PARTIES is able to provide, in the light of its preceding commitments to third parties and/or resulting from statutory limitations. If, at the time of the payment(s) owed to the CONTRACTED PARTIES pursuant to this clause, the CONTRACTING PARTIES and the BANK have not signed the financing agreement on an unconditional, irrevocable and irreversible basis under the terms of the firm offer of financing signed by the financial institution, due to a fact or action imputable solely to the CONTRACTING PARTIES , the latter shall continue to make the payments owed to the CONTRACTED PARTIES , in accordance with the payment timetable stipulated herein.

8.5 Payments shall be made on working Mondays, Wednesdays or Fridays. Payments falling due on other days of the week shall be paid on the immediately subsequent working Monday, Wednesday or Friday, as appropriate, at no extra cost to the CONTRACTING PARTIES.

8.6 The CONTRACTED PARTIES shall, when issuing receipts or invoices, ensure these documents are correctly filled in. They shall mandatorily include the number of the AGREEMENT, the identification of the portion to be paid, the rates of applicable taxes and their respective amounts, a detailed list of the materials and equipment supplied and the registration code(s) for the equipment at BNDES/FINAME, as applicable.

8.7 The CONTRACTING PARTIES , should there be any credits in its favor resulting from fines or damages caused by the CONTRACTED PARTIES in connection with this AGREEMENT, may at its

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discretion deduct these amounts from the payments disbursed to the CONTRACTED PARTIES , as of the issuance of the Statement of Partial Acceptance and/or of the Statement of Final Acceptance, as appropriate, subject to prior notice in writing to the CONTRACTED PARTIES .

8.8 The CONTRACTED PARTIES reserve themselves the right to suspend activities resulting from this AGREEMENT thirty (30) days after the CONTRACTING PARTIES receive an extrajudicial or judicial notice from the former, in the case of unjustified delays in payment in excess of thirty (30) days. This hypothesis does not apply neither to the cases mentioned in items 8.4 and 8.7 above, nor to those cases described in this AGREEMENT where failure of the CONTRACTING PARTIES to pay is expressly authorized and justified.

8.9 Concerning past-due payments, where the AGREEMENT or the law lacks provisions justifying non-payment, the CONTRACTED PARTIES shall have the right to charge interest on overdue payment from the CONTRACTING PARTIES , at the rate of one per cent (1%) per month, plus monetary indexation based on the IGP-DI general price index up to the date on which payment actually occurs, other than in those cases stipulated herein that expressly eliminate the incidence of monetary indexation.

8.10 The CONTRACTED PARTIES may neither assign nor pledge to third parties the amounts to which they are entitled under this AGREEMENT without prior authorization to do so from the CONTRACTING PARTIES .

CLAUSE 9 – TAXES AND SOCIAL SECURITY CONTRIBUTIONS

9.1 Regarding the National Social Security Institute – INSS, the CONTRACTING PARTIES shall comply with Law 9.711/98 and regulatory instruction 100/2003, as well as with the amendments introduced by IN105/2004. It is mandatory to specify the Social Security payments, as well as to inform the INSS Specific Registration number (CEI – Cadastro Específico do INSS ) and the address of the location in the invoice or receipt for services rendered under the responsibility of the CONTRACTED PARTIES .

9.2 All taxes must also be broken out in each invoice submitted, together with an indication of the tax rate applied or inclusion of the exemption text, as determined by current laws. The amounts concerning supplies of materials and/or of equipment of their own or of third parties, indispensable for the CONTRACTED PARTIES to carry out their services shall be indicated in each invoice submitted, under penalty of taxes due being withheld for the full amount of the fiscal document.

9.3 Responsibility for opening and discharging CEI registration lies with the CONTRACTING PARTIES . However, the CONTRACTED PARTIES shall be responsible for preparing, organizing and submitting to the CONTRACTING PARTIES all the documentation required by the INSS for clearance of work sites where social security is concerned, including of subcontracted parties, in accordance with the directives of the CEI manual that is part of this AGREEMENT.

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9.3.1 The documents to be presented shall either be the original ones or authenticated copies thereof, collated and organized in the form of a DATA BOOK, by CEI registration number, to be submitted within fifteen (15) days, at most, of the completion of the work at a given site.

9.3.2 Should the CONTRACTED PARTIES fail to submit the aforementioned documentation by the established deadline, the CONTRACTING PARTIES shall hereby be authorized to withhold fifty per cent (50%) of the value of the subsequent payment due according to the agreement, regardless of any warning or notices, which percentage shall only be released by the CONTRACTING PARTIES once the requested documents have been properly submitted.

9.3.3 The last payment stipulated herein shall only be made after the CONTRACTED PARTIES submit to the CONTRACTING PARTIES all the documentation necessary for normal discharging of CEI registration numbers at the INSS.

9.3.4 Should the CONTRACTED PARTIES use the same insured parties to service several contracting companies, alternately, during the same time period, they shall be exempt, pursuant to article 171 and the sole paragraph of INSS Regulatory Instruction no. 100/03, from preparing separate Payroll and Payment Forms for the Severance Indemnity Fund for Employees and Information for Social Security (GFIP – Guia de Recolhimento do Fundo de Garantia por Tempo de Serviço e Informações à Previdência Social ), provided that this situation is duly demonstrated, the CONTRACTED PARTIES being the only ones responsible for said information.

9.3.5 Should application of the provisions described in item 9.3.4 above come to be questioned by INSS inspections, making it impossible for the CONTRACTING PARTIES to discharge CEI registration, the CONTRACTED PARTIES shall be entirely responsible for any costs or damages ensuing from this situation, including the payment of possible fines that said inspection might levy from the CONTRACTING PARTIES .

9.4 Regarding the Tax on Services of Any Nature (ISSQN – Imposto Sobre Serviços de Qualquer Natureza ), the CONTRACTING PARTIES shall comply with the municipal laws of the places where the services are actually rendered, regardless of what is stated in the laws of the municipality in which the service provider is headquartered.

9.5 The CONTRACTING PARTIES , when it is the withholding party, shall pay the taxes mandated by the laws currently in force and is hereby authorized to discount these amounts from the amounts it shall owe the CONTRACTED PARTIES by force of this AGREEMENT.

9.6 For any new contractual arrangements, pursuant to item 7.4 above, the PARTIES agree to review the prices listed in the LUP should any taxes be created, changed or eliminated, after this AGREEMENT has been signed, provided that this is shown to affect the prices agreed to herein and set out in the LUP.

9.7 Not withstanding the payment terms agreed to in their specific clause, all fiscal documents

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concerning services rendered by the CONTRACTED PARTIES shall be issued and delivered to the facilities of the CONTRACTING PARTIES by the twentieth (20 ^th ) day of the month in which the respective invoice or receipt is issued, so as to allow the CONTRACTING PARTIES to pay the appropriate taxes within the timeframe established by law.

CLAUSE 10 - DEADLINE

10.1 The PARTIES agree that the deadline for CORE supply and implementation is three hundred (300) days, as of the date on which this AGREEMENT is signed, in compliance with the terms of the Implementation Schedule that is part of the PROPOSAL (Attachment II) and the hypotheses of survival of the clauses expressly described in this AGREEMENT.

10.2 The deadlines stipulated in this clause may only be extended subject to an Agreement Addendum and in the following cases:

a) temporary suspension of the service by direct order of the CONTRACTING PARTIES , in writing, for reasons that cannot be imputed to the CONTRACTED PARTIES , pursuant to Clause 13. In this case, the CONTRACTING PARTIES shall refund the CONTRACTED PARTIES for the direct costs incurred by the latter as a result of and for the time period during which the suspension remains in effect. The CONTRACTING PARTIES shall not be responsible for compensating the CONTRACTED PARTIES for lost income.

b) fortuitous events or force majeure, duly evidenced by the CONTRACTED PARTIES , pursuant to the provisions of Clause 19. In this case, each PARTY shall bear the cost of its own losses for the period during which the extension remains in effect.

c) failure imputable only to the CONTRACTING PARTIES to provide a suitable environment for implementation of the CORE required for the performance of the subject-matter hereof, as per item 12.1 (b). In this case, the CONTRACTING PARTIES shall refund the CONTRACTED PARTIES for the direct costs incurred by the latter as a result of failure to make the environment available, and for as long as this situation persists. The CONTRACTING PARTIES shall not be responsible for compensation to the CONTRACTED PARTIES for lost income as a result of the extension.

10.3 The potential extension granted in the cases mentioned in item 10.2 above shall correspond to the number of days of delay that actually occur and shall only be applied to the services that are proven to have been hindered by the delay.

10.4 The following shall not justify falling behind schedule in the performance of any of the services: the fact that the CONTRACTING PARTIES may totally or partially reject any of the services and/or materials executed and/or employed if they do not correspond to the requirements, obligations and conditions of this AGREEMENT. Similarly, eventual suspension of services determined by the CONTRACTING PARTIES ’ inspectors in the case of irregularities being identified, as per Clause 13, shall not be accepted as justification for falling behind schedule.

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CLAUSE 11 – OBLIGATIONS OF THE CONTRACTED PARTIES

11.1 In addition to the other obligations described herein, the CONTRACTED PARTIES shall jointly:

(a) Fulfill the Implementation Schedule that is part of the PROPOSAL (Attachment II) as well as the other obligations included herein and in the other Attachments;

(b) Prepare and deliver to the CONTRACTING PARTIES , by the fifteenth (15 ^th ) day of the subsequent month, a DATA BOOK containing a copy of the documents listed below, regarding performance of the services during the previous month, under penalty of the payments possibly due to the CONTRACTED PARTIES by the CONTRACTING PARTIES for the services that concern the respective Site, as defined herein, being withheld, and of becoming liable to the fine set out in item 17.1 (ii), should the CONTRACTED PARTIES fail to solve the irregularities of the documentation within thirty (30) days as from receipt of a notice to this effect from the CONTRACTING PARTIES . Alternatively, the aforementioned DATA BOOK may be requested by the CONTRACTING PARTIES , solely at its discretion, whenever the latter regards it as necessary, within a time frame that shall be reasonably set in a notice to the CONTRACTED PARTIES on this matter.

(i) Tax Payment Form for the Tax on Services (ISS – Imposto sobre Serviços ), paid in the municipality in which the services are rendered, other than in the cases in which Municipal Law transfers to the CONTRACTING PARTIES the obligation of withholding the Tax on Services at source and consequently of paying it;

(ii) Tax Payment Form for Income Tax Withheld at Source, when it occurs;

(iii) Payment Form for Social Security Contributions;

(iv) Payment Form for the Contributions to the Severance Indemnity Fund for Employees (FGTS – Fundo de Garantia de Tempo de Serviço );

(v) Payment Forms for the Union, Assistance and Confederative Contributions - General Registry of Unemployed People (CAGED – Cadastro Geral de Desempregados );

(vi) Proof of delivery of Individual Protection Equipment (EPI – Equipamentos de Proteção Individual ), to be supplied to the staff of the CONTRACTING PARTIES and of its subcontractors;

(vii) List of the people who worked in the month to which the report applies, under the responsibility of the CONTRACTED PARTIES and of its subcontractors;

(viii) Employee Registration Card (FRE – Ficha de Registro de Empregados ), admittance and periodical examination of the employees hired by the CONTRACTED PARTIES and by its subcontractors during and for the execution of the services that are the subject-matter of this AGREEMENT;

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(ix) Employee Contract Rescission Statement and dismissal examination; and

(x) Monthly report showing the number of employees of the CONTRACTED PARTIES and its subcontractors by number of hours worked, number of accidents with and without leave of absence, with a copy of the Occupational Accident Communication (CAT – Comunicação de Acidente do Trabalho ) and proof of payment of the Occupational Accident Insurance (SAT – Seguro de Acidente do Trabalho).

(c) Deliver to the CONTRACTING PARTIES a copy of all the original documentation that makes up the aforementioned DATA BOOK at the end of this AGREEMENT;

(d) Only subcontract the services covered by this AGREEMENT with approval of the CONTRACTING PARTIES , pursuant to Clause 30. In this case, the aforementioned documents (DATA BOOK) should be supplied by the subcontracted company, the CONTRACTED PARTIES continuing to be the sole parties responsible for supplying to the CONTRACTING PARTIES all elements covered by this AGREEMENT;

(e) Ensure that all its employees and the employees of the subcontractors are duly registered, in accordance with the laws currently in effect, undertaking, furthermore, to keep all legal obligations pertaining to the activities carried out by their employees up to date, including those of a labor nature and related to social security;

(f) Ensure that appropriate security measures are taken to avoid accidents and that all the work carried out is executed in accordance with the appropriate occupational safety and health laws, regardless of whether the work is being carried out by the CONTRACTED PARTIES themselves or subcontracted by them;

(g) Replace their employees, at any time, should the CONTRACTING PARTIES so request, provided there is evidence of inadequate employee performance, the CONTRACTED PARTIES being held responsible, furthermore, for all costs resulting from the replacement;

(h) Adequately protect the assets of the CONTRACTING PARTIES and of third parties, ensuring the conservation and maintenance of its facilities, equipment and materials. During the process of supplying and installing the equipment hereby agreed to, the CONTRACTED PARTIES and its employees or third parties under their responsibility shall also comply with the standards that concern the use and conservation of the CONTRACTING PARTIES ’ facilities under penalty of payment for damages caused;

(i) Be responsible for obtaining all the licenses and/or authorizations required in order to supply and implement the CORE, including environmental licenses, and, furthermore, bear all costs necessary for obtaining them;

(j) To maintain in Brazil, throughout the period of validity of this AGREEMENT, a workshop for the

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replacement of circuit boards and components, so as to ensure that all the parts sent for repairs by the CONTRACTING PARTIES be returned by the CONTRACTED PARTIES within sixty (60) days at most, both for locally manufactured and imported equipment;

(k) Supply CORE in compliance with the rules published by the Ministry of Communications, by ANATEL and by other public administration offices, including, but not limiting themselves to, those that concern the Personal Mobile System (SMP – Sistema Móvel Pessoal), where materials and equipment are concerned, until the date of issue of the Statement of Initial Acceptance, bearing all the costs inherent and resulting from this;

(l) Inform the CONTRACTING PARTIES , on a weekly basis, of the progress of the services under contract, in accordance with the Implementation Schedule, showing how events are progressing, an analysis of possible deviations from the schedule and measures taken to recover lost time, including with regard to services carried out by those sub-contracted, as applicable;

(m) Provide, at any time, the information required by the CONTRACTING PARTIES on the process of supplying the subject-matter of this AGREEMENT and on the Implementation Schedule established in the PROPOSAL (Attachment II), containing the details necessary for keeping track of timing well and reliably;

(n) Provide the CONTRACTING PARTIES with a copy of the insurance policies taken out in the name of the CONTRACTED PARTIES , pursuant to Clause 24, as well as the proof of payment of their respective premiums;

(o) Appoint a Project Manager to interact with the Project Manager appointed by the CONTRACTING PARTIES , fully managing the obligations of the CONTRACTED PARTIES and of the subcontracted parties. The Project Manager shall: a) have full knowledge of the entire context of the Projects; and b) have the authority to make day-to-day decisions concerning the Project and the respective staff;

(p) Fulfill, observe, respect, comply and ensure compliance with all laws currently in force concerning the protection and conservation of the environment, as well as the internal recommendations, procedures, standards and policies of the CONTRACTING PARTIES ;

(q) Guarantee safe warehousing and storage, as well as the prompt removal or elimination of any residues eventually generated, whether or not within the scope of this AGREEMENT, with a view to full compliance with the environmental protection laws currently in force;

(r) Protect the CONTRACTING PARTIES from any judicial and/or administrative claims to which the CONTRACTED PARTIES and parties associated to it may give rise and that, in any way, result from the legal relation between the parties to the AGREEMENT, bearing the full responsibility and ensuing costs and undertaking, moreover, to formally request, vis à vis the appropriate authorities, that the CONTRACTING PARTIES be exempted from liability for the claim or replaced in connection with it. Should the CONTRACTING PARTIES come to face any claims against it, the CONTRACTED

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PARTIES shall undertake to refund all the costs that the CONTRACTING PARTIES may come to incur as a result of such claims, including, with regard to costs, the full amount of the legal fees that the CONTRACTING PARTIES may come to disburse to defend its interests, as well as the fees for experts and accountants or for any expenses incurred in connection with the investigation, defense, maintenance, preservation or execution of any of the rights described herein, regardless of when the claims are made, pursuant to the provisions of item 17.3 herein;

(s) Guarantee that the materials and equipment (hardware and software) supplied shall be fully compatible with the materials and equipment supplied by the other companies hired by the CONTRACTING PARTIES for the implementation of the Telecommunications Network, so that the network’s functioning and operation shall be flawless, and in compliance with the internationally accepted standards mentioned in the CONSOLIDATED RFP.

CLAUSE 12 – OBLIGATIONS OF THE CONTRACTING PARTIES

12.1 In addition to the other obligations described herein, the CONTRACTING PARTIES shall:

(a) Pay the payments owed to the CONTRACTED PARTIES , as per Clause 8;

(b) Make available to the CONTRACTED PARTIES a suitable environment for the implementation of CORE, as described in the CONSOLIDATED RFP (Attachment I) and as required for performance of this AGREEMENT;

(c) Allow access to all the sites belonging to the CONTRACTING PARTIES , twenty-four (24) hours a day, three hundred and sixty-five (365) days a year, subject to the CONTRACTED PARTIES supplying a list of personnel who shall have access to the site, together with the respective documentation. The deadlines for the sites owned by third parties shall be negotiated with the CONTRACTING PARTIES ahead of time;

(d) Appoint a Project Manager, during the process of supplying CORE, to interact with the Project Manager of the CONTRACTED PARTIES , who shall have: a) full knowledge of the entire context of the Project; and b) full authority to make day-to-day decisions concerning the Project and the respective personnel;

(e) inform the CONTRACTED PARTIES, in writing, of the reasons that motivated possible rejection of equipment and/or services delivered.

CLAUSE 13 – INSPECTION OF PERFORMANCE OF THE AGREEMENT

13.1 The CONTRACTING PARTIES and its employees, agents or representatives shall always have the right to inspect the performance of the CONTRACTED PARTIES under this AGREEMENT, but this in no way shall exempt the latter from full and exclusive responsibility or diminish said responsibility for the services rendered and the materials/equipment supplied.

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13.2 The CONTRACTING PARTIES has the right to decide that part or even all of this AGREEMENT shall be suspended, subject to an extrajudicial or judicial notice to the CONTRACTED PARTIES . This suspension shall not exempt the CONTRACTING PARTIES from their financial obligations regarding the CONTRACTED PARTIES in connection with equipment and services already delivered and accepted by the former, pursuant to item 8.1 herein.

13.3 If suspension is decided upon because CORE implementation or supply is not in compliance with the terms hereof or with the governing laws and regulations, and should the CONTRACTED PARTIES fail to solve the irregularities found within the timeframe determined by the CONTRACTING PARTIES , thereby jeopardizing fulfillment of the Implementation Schedule that is part of the PROPOSAL (Attachment II), the CONTRACTING PARTIES may rescind this AGREEMENT, pursuant to Clause 32, in which case the CONTRACTED PARTIES shall have no right to any indemnification, being entitled merely to receive payment for the events discharged and accepted by the CONTRACTING PARTIES up to the date on which rescission is communicated, besides being liable for the penalties described in item 17.1 (i).

CLAUSE 14 – PERFORMANCE TESTS AND ACCEPTANCE OF THE SERVICES

14.1 While the AGREEMENT is being performed, the CONTRACTING PARTIES may choose between monitoring the acceptance tests in the field or working wit