[GRAPHIC OMITTED] COMMERCIAL PROPOSAL 295/2000
Date: July 17, 2.000
To: TELCON FIOS E CABOS PARA TELECOMUNICACOES S/A
Attn.: SR. MARCO VITIELLO Phone: (0-21-15) 212-8801
President Fax : (0-21-15) 212-8851
From: NIVALDO SEIXAS Phone: (0-21-19) 789 4209
Commercial Manager Fax : (0-21-19) 789 4204
OPTICAL FIBERS - CONTRACT OF SUPPLY
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1. SUPPLY
1.1 Product: OPTICAL FIBER MONOMODO ACRILATO.
1.2 Quantity: 300.000 km OF OPTICAL FIBER
1.3 Delivery Dates: JULY 2.000 TO DECEMBER 2.002.
1.3.1 Scheduled Deliveries:
Period Year 2.000 Year 2.001 Year 2.002
- ------------------ ------------ ---------- ----------
1st Quarter ------------ 28.500 km 31.500 km
2nd Quarter ------------ 28.500 km 31.500 km
3rd Quarter 27.000 km 30.000 km 33.000 km
4th Quarter 27.000 km 30.000 km 33.000 km
1.4 Product Specification
1.4.1 Attenuation: MINIMUM OF 80%: @1310nm <= 0,344 dB/km AND
MAXIMUM OF 20%: @1310nm <= 0,354 dB/km.
MINIMUM OF 80%: @1550nm <= 0,214 dB/km AND
MAXIMUM OF 20%: @1550nm <= 0,224 dB/km.
1.4.2 OTDR trace discontinuity 1310 and 1550nm: <= 0,02 dB.
1.4.3 Wave length of Zero Dispersion: 1300nm AND 1326nm.
1.4.4 Cladding Diameter: 125,0 +/- 2,0 [symbol omitted]M.
1.4.5 Cladding Non-Circularity: <= 1,5%.
1.4.6 Maximum variation of attenuation with temperature -60(Degree)C up to
85(Degree)C (1310 e 1550nm): <= 0,06 dB/km.
1.4.7 Polarization of Dispersion Mode): <= 0,3 PS / [SYMBOL OMITTED] AVERAGE IN
THE AREA FROM 1,3 TO 1,6 [symbol omitted] m.
1.4.8 Lenght:: MAXIMUM 1% OF 4.200M, 4% OF 8.400M AND MINUMUM OF 95% BEING
MINIMUM LENGHT OF 12.600M, MULTIPLES OF 4.200M AND MAXIMUM OF 50.400M.
1.4.9 Complementary Specifications: ACCORDING TO TELCON "FO-002" AND XTAL
"DMKV007-0".
1.5 Packing: the reels and the protecting layers will be returned to Xtal, as
per invoice..
1.6 Delivery Term CAF: Telcom Factory.
2. CONDITIONS
2.1 Payments: Net Price, without taxes to be paid in 30 days, valid for the
period from July 2000 to September 2.000:
o 7.500 km / MONTH - US$ 41,00 / km (FORTY ONE DOLLAR PER KILOMETER)
o 1.500 km / MONTH - US$ 47,00 / km (FORTY SEVEN DOLLARS PER KILOMETER)
2.2 Payment Term: In US$ paid under Brazilian Commercial terms will be used,
published in the Newspaper Gazeta Mercantil on the day of payment.
3. TAXES
3.1 ICMS tax will be included in the State where the product is sold.
3.2 15%IPI aliquot to remain outstanding.
3.3 Others tax and contributions already included in the prices.
4. LATE PAYMENTS
There will be charged 2% (two percent) penalty, increasing 2,5% (two and
half percent per month) late charge fee, on the amount or in the event delay
is not attributed to Xtal Fibras Opticas S.A.
5. COMMITMENT OF PURCHASE AND SALE
5.1 Xtal guarantees the delivery of 9.000 km per month, during the period from
July 2000 to September 2.000.
5.2 Telcon guarantees to purchase up to 1.000 km additional / month at the
price of US$ 47,00 / km, from July 2000 to September 2.000.
5.2.1 to approach of the parts are above open to acquisition of amount surplus
to the 1.000 km/mes indicated with price to be made a pact when of the
confirmation of the additional delivery of the referred.
5.3 If Xtal does not execute the delivery of the product according to the item
5.1 in a certain month, the delayed quantity should be added in the next
month, maintaining the same commercial conditions of the previous month.
5.3.1 the sobreposicao of the amount in delay to the valid monthly program in
the month of the delay, it will be applied independently of the closing of
the negotiations trimestrais to approach of TELCON.
5.4 The non, partial or total inability of Xtal to deliver the product can only
be justified if in the following cases:
5.4.1 Reduction of the supply of production input.
5.4.2 Interruption, of any origin, of the supply of production input.
5.4.3 Not available of equipment.
5.4.4 Force Majeur.
5.4.5 Strike.
5.5 If Xtal is unable to deliver product under 5.4, then Xtal will be held
harmless of any legal actions.
5.6 This proposal/agreement substitutes and cancels the proposal/agreement
256/2000 dated January 14, 2.000.
6. PRODUCT GARANTEE
6.1 Xtal Fibras Opticas S/A will substitute any part of the product with another
at no extra cost to the buyer, so long as buyer requests this change 10
(ten) days prior to shipment, the warranty period for the product shall be
06 (six) months from shipment date.
7. REGULATION/ STATUTORY/ REQUISITS
7.1 Telcon should inform Xtal of any restructions imposed by the amount due
Statutory/Requisits/Regulations.
8. NOTIFICATION
8.1 All the notifications of a part to the other, according to this Contract,
should be (i) sent by registered mail with greeting warning, to the
addresses below; or (ii) sent by facsimile, to the numbers specified below,
since they are confirmed by correspondent mail copy, with greeting warning,
in the period of 5 (five) days, to count from the transmission of the
referred facsimile.
The addresses of Notification are:
The addresses of Notification are: TELCON FIOS E CABOS PARA TELECOMUNICACOES
S/A
SR. SERGIO RAGUSA
Diretor Tesoureiro
Rua Chicri Maluf, 121 - Alto da Boa Vista
CEP 18087-030
Sorocaba - SP
XTAL FIBRAS OPTICAS S/A
SR. CELSO ARANTES SIMOES
Diretor de Marketing & Vendas
Rod. SP 340 Campinas/Mogi-Mirim, km 118
CEP 13082-970
Campinas - SP
8.2 All the notifications correspondents referred in the above way will be
considered received by the other part (i) in the constant date of greeting
correspondent's warning to the remittent; (ii) in the date of the
transmission, in case of facsimile, since confirmed as described above; or
(iii) in the constant date of the greeting protocol supplied by the parts
that have received the notification. Any of the parts can modify the
addresses and facsimile numbers above, by means of notification to the other
part, sent in the form of this Clause.
9. CONTRACT RENEGOTIATION
9.1 We established the period from August 21 to 25, 2.000 for the accomplishment
of the renegotiations meeting for the supply conditions for the period of
October to December of 2.000.
9.2 Quarterly Revision Prices.
9.3 We understand as systematic the commitment of the prices redefinition for
the following Quarter to the average Quarter in the last fortnight of the
2nd month of each quarter, establishing the dates in a specific
correspondence.
9.4 If the parts do not reach an agreement about the supply conditions, in the
negotiations for the following quarter, this contract will be automatically
canceled .
10. VALIDITY OF THE PROPOSAL: This proposal is been worth until July 18, 2.000.
11. PROPOSAL APPROVAL
- ---------------------- -------------------------- ------------------------
RAFAEL B. GANDARA CELSO ARANTES SIMOES ANTONIO CARLOS DE CAMPOS
Financing Manager Marketing & Sales Director Managing Director
12. PROPOSAL ACCEPTANCE - TELCON FIOS E CABOS PARA TELECOMUNICACOES S/A
Sorocaba, SP, _____ of July of 2.000.