Agreement For The Assigment Of Advertising Space

AGREEMENT FOR THE ASSIGNMENT OF ADVERTISING SPACE


ENTERED INTO BY


TELECOMUNICACOES DE SAO PAULO S.A. -TELESP


WITH


AOL DO BRASIL LTDA. - AOL


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AGREEMENT FOR THE ASSIGNMENT OF ADVERTISING SPACE


By the present instrument, the parties: (a) TELECOMUNICACOES DE SAO PAULO S.A. -TELESP, with its main place of business in the city of Sao Paulo, State of Sao Paulo, at Rua Martiniano de Carvalho, 851, enrolled in the National Registry of Legal Entities-CNPJ/MF under n(0) 02.558.157/0001-62, in this act represented pursuant to its Bylaws, hereinafter simply called "TELESP" and (b) AOL DO BRASIL LTDA., with its main place of business in the city of Sao Paulo, State of Sao Paulo, at Avenida Industrial, n(0) 600, 2(0) andar, enrolled in the National Registry of Legal Entities-CNPJ/MF under n(0) 03.032.579/001-62, in this act represented pursuant to its Bylaws, hereinafter simply called "AOL" and collectively with "TELESP", the "Parties",


WITNESSETH


WHEREAS AOL provides services related to the worldwide computer network ("Internet"), such as Internet access service and the provision of editorial, commercial content as well as of other contents to the Internet through, including but not limiting to, its home page on the Internet, accessible at the address WWW.AOL.COM.BR, simply called "AOL HOME PAGE";


WHEREAS AOL is a company in the market of access services and of availability of content in the Internet ("AOL Services") and, in view of the big audience and covering of AOL Services in the national territory, which provides great visibility to the goods and services of its advertisers in general, being also awarded with a significant basis of paying subscribers.


WHEREAS TELESP is interested in reaching the market of subscribers of AOL Services of AOL in the State of Sao Paulo;


WHEREAS TELESP is interested in advertising its trademark in the AOL Services, aiming at reaching the aforementioned "target public";


In witness whereof, the parties enter into the present agreement for the assignment of Advertising Space ("Agreement"), that shall be governed by the following clauses and conditions:


1-THE OBJECT


1.1. This Agreement has as its purpose the hiring, by TELESP, of advertising
space in AOL Services ("AOL HOME PAGE"), complying with the provisions of
Clause 2.1 herein below and its Sub-clauses, for a twelve-month term,
counted as of January 1, 2003, for the conveyance of advertising of the
trademarks of TELESP's or Telefonica Group's ownership.


2- AMOUNTS AND FORM OF PAYMENT


2.1. For the advertising space made available pursuant to the terms of this Agreement, (independently of the actual use of such spaces by TELESP) TELESP shall pay AOL, monthly, the amount calculated by the application of the price list contained in Exhibit II, attached to the present instrument. In the amounts contained in Exhibit II all the direct and indirect taxes and fees levied on the services herein agreed upon are included, as well as the [**] by AOL.


2.1.1. The parties expressly agree that the monthly amount set forth in
Clause 2.1 above, shall be adjusted (higher or lower, as the case may
be) by means of prior notice, at least [**] ([**]) days in advance, in
the assumption of attested increase or reduction of the rates or yet of
the creation or cessation of any taxes, contributions or incidental
charges over the advertising conveyance, object of the present
Agreement, being assured, nonetheless, that such amounts shall not
undergo any increase by virtue of fact or act exclusively attributed to
AOL.


2.1.2. The monthly amount defined in clause 2.1 shall be adjusted, as
of the present date, at each [**]-month ([**]) term, or a lesser
period, if allowed by the legislation in force, based on the variation
of the General Price Index-Internal Availability - IGP-DI- conveyed by
Getulio Vargas Foundation, or, in case such index is discontinued,
based on another index that shall eventually lawfully replace it.


2.3. The amounts to be monthly paid by TELESP to AOL (as well as the respective advertising space to be made available by AOL to TELESP), shall be verified monthly pursuant to the strict terms of Exhibit II, so as to reflect the overall number of AOL's subscribers exposed to the retained advertising ("Target Public").


2.3.1. So as to comply with the provisions of Clause 2.3, the Parties
assume, as a rule for the verification of the Target Public (expressed
in the number of subscribers in the left column of the chart on Exhibit
II), throughout the validity of the present Agreement, the [**] of [**]
([**]) subscribers for each AOL's [**] in the Telefonica do Estado de
Sao Paulo's [**], independently of the effective occupation of the
aforementioned [**].


2.4. The monthly installments determined in Clause 2.1 above, shall be due on the [**] week day of each month, subsequent to the conveyance month, thus being the [**] one due on the [**] week day of [**].


2.4. AOL shall present to TELESP, at least [**] ([**]) days prior to the aforementioned payment date, the respective collection documents, related to the reference month services and TELESP shall make the respective payment through credit to bank current accounts, to be subsequently informed by AOL.


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2.4.1. The deposit slip in AOL's favor, as the case may be, shall
be considered adequate for the verification of the acquittance of the
payments due by TELESP.


2.5. In the assumption that the payments set forth in this clause are not effected on the date herein agreed upon, a [**] percent ([**] %) fine, besides a [**] percent ([**] %) interest on arrears per month or month fraction, as well as the price-level restatement verified by the variation of the General Index of Prices- Market (IGP-M), conveyed by the Getulio Vargas Foundation, shall be levied on the amount of the installment due, as of the due date until the date of the effective payment.


2.6. The amount set forth in Clause 2.1 does not include any costs related to the creation of advertising material, neither does it include commissions by chance owed to advertising and publicity agencies, which shall be TELESP's responsibility.


3- ADVERTISING


3.1. The advertising spaces to be made available by AOL, for the display of TELESP's trademark, shall comply with the following:


a) TELESP will request, through the Media Plans for each
campaign, the channels that will be used, according to the
specific needs, provided that the provisions of Exhibit I of
this Agreement are complied with and that the availability of
AOL's inventory is respected. The Parties agree that the
format, the intensity and the period of time for the
conveyance of the advertising pieces, contained in Exhibit I,
can be altered by mutual agreement of the Parties.


b) For the purposes of conveyance, the formats to be considered
as being advertising formats shall be the ones mentioned in
Exhibit I, as well as the new formats that may be developed,
conveying Telefonica Group's goods and services, provided that
they are previously approved, in writing, by the Parties.


c) TELESP, at its own exclusive discretion, shall define the
content of the advertising pieces, and can, inclusive, use the
space for the conveyance of advertising of any of the
Telefonica's Group's companies, except for the cases of
conveyance of advertising material of companies, the product
and/or service of which are direct competitors to AOL in the
segment of providing access to the Internet.


d) TELESP shall provide AOL, as the case may be, with the
material to be conveyed, up to the [**] ([**]) day of the
month previous to the intended conveyance, and TELESP can
replace the supplied material, at its own exclusive
discretion, provided that it informs AOL, as the case may be,
with at least [**] ([**]) days prior notice. In case of


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failure in the supply of the material, in accordance with what
has been herein agreed upon, AOL shall be released of the
obligation of conveying the aforementioned advertising.


e) The insertions will be bound to the compliance of AOL's rules
and policies for the other advertisers, to the conditions set
forth in this Agreement and shall further comply with the
specific terms and conditions set forth in the media plan,
monthly jointly devised by the Parties and which establishes
the conveyance prices, the conveyance period and the form and
place of the advertising display.


3.2. AOL agrees to make monthly available to TELESP, the retained spaces, pursuant to the terms of the Agreement, equivalent to, at least, [**] percent ([**]%) of the monthly amount mentioned in Clause 2.2 above. In the assumption that AOL, as the case may be, even if justifiably, fails to deliver the amounts of imprints within the term agreed upon, the Parties agree that the positive balance may eventually be used by TELESP within the maximum term of [**] ([**]) months.


4. LINKS


4.1. AOL will be able to, at its own exclusive discretion, keep links in the home page and in the AOL Service for direct access to the "TELEFONICA" Home Page, accessible through the address: WWW.TELEFONICA.COM.BR, by means of the inclusion of banners or any other form of active advertising conveyance.


5. RESPONSIBILITIES OF THE PARTIES


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