Document:

<PAGE>
 Portions of this Exhibit were omitted and have been filed separately with the
  Secretary of the Commission pursuant to the Company's application requesting
    confidential treatment under Rule 24b-2 of the Securities Exchange Act.

                                                                               1

                                                                    Exhibit 10.3

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                  AGREEMENT FOR SUPPLYING WEB CHANNEL SERVICE

                                 ENTERED INTO BY

                             TELEFONICA EMPRESAS S.A

                                       AND

                            AOL DO BRASIL LTDA - AOL.

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<PAGE>

                                                                               2

                   AGREEMENT FOR SUPPLYING WEB CHANNEL SERVICE

Through this present private instrument, which they have mutually agreed upon:

TELEFONICA EMPRESAS S.A., a limited liability company with its main place of
business at Av. Tambore, n degrees 341/371, in the town of Barueri, State of Sao
Paulo, enrolled in the National Registry for Legal Entities under n degrees
04.027.547/0001-31, in this act duly represented pursuant to its Bylaws,
hereinafter simply called "Telefonica Empresas", and

AOL BRASIL LTDA, with its main place of business in the town of Santo Andre,
State of Sao Paulo, at Av. Industrial n degrees 600, 2 degrees andar, enrolled
in the National Registry for Legal Entities under n degrees 03.032.579/0001-62,
in this act duly represented pursuant to its Articles of Association,
hereinafter simply called "AOL";

each one hereinafter simply called a "Party" and jointly, "Parties",

WHEREAS

AOL has as its object, among others, to provide interactive services (the "AOL
Services", as defined in this instrument);

AOL Service is made available for consultation and use by its users (the
"Subscribers") or, partially, by visiting users anywhere in the planet through
connection via the Internet;

AOL has agreements for service providing with the Subscribers, related to AOL
Services, including the dialed access services in Brazil;

The Parties, for the effects of this present Agreement, define that all the
references to AOL Subscribers within this Agreement will necessarily be a
reference to narrowband subscribers (dial-up).

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                                                                               3

AOL needs to have access to the Internet for the performance of its social
activities, which include providing access to AOL Services to its Subscribers
and/or to the content made available by AOL to its Subscribers and visiting
users (the "AOL Content");

Telefonica Empresas has both the experience and the technical capacity for
providing services in the Internet, being duly authorized by ANATEL [National
Agency of Telecommunications] to exploit telecommunication services;

Telefonica Empresas features, among its corporate strategic principles, the
adoption of business models that favor the access increase and development to
the Internet services by the increasing portions of its services users;

AOL wishes to hire a large representative volume of telecommunications services
with the Telefonica Empresas, particularly for providing AOL Services to its
Subscribers, for a set period of time, thus allowing the optimization of
TELEFONICA's network resources;

The expressions written in the present Agreement and/or its Exhibits, in initial
capital letters, having been initialed by the Parties, constitute an integrant
part of the Agreement (the "Exhibits"), shall have the meaning attributed to
them in this Agreement and/or in its Exhibits; and

AOL has with Telecomunicacoes de Sao Paulo S.A ("Telesp"), an agreement for
providing access infra-structure to narrowband Internet services, in the
modality called "Dial Provider";

In witness whereof, the Parties have agreed to execute the present Agreement for
Web Channel Supplying ("Agreement"), which shall be governed by the following
terms and conditions:

1. THE OBJECT

1.1. Through the present Agreement, and in the best form of the law, Telefonica
Empresas commits to supply AOL with the connection infra-structure of AOL
Network to the Internet

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                                                                               4

in Region III of the General Plan of Grants (hereinafter simply called "Web
Channel"), which infra-structure comprises a connection between the Telefonica
Network and AOL Network, as well as from AOL Network to the Internet, which will
be also made available to be used by any visiting users to have access to AOL
Content.

1.2. For the effects of the provisions of item 1.1., (a) Telefonica Network will
be understood as the IP network managed by Telefonica Empresas itself, so as to
provide AOL Subscribers and the visiting users to AOL Content with access to the
Internet and (b) AOL Network will be understood as being the servers' network
that are processing services and products with AOL Content and their respective
data communication equipment.

1.3. The Subscribers mentioned in Clauses 1.1. and 1.2. above are those
subscribers who use the Dial Provider service provided by Telecomunicacoes de
Sao Paulo SA in Region III of the General Plan of Grants (GPG).

2. DUTIES AND RESPONSIBILITIES OF TELEFONICA EMPRESAS.

When supplying the Web Channel to AOL, pursuant to the terms of this Agreement,
Telefonica Empresas' duties and responsibilities are:

2.1. To supply the necessary equipments for the Telefonica Network connection to
AOL Network, as set forth in Exhibit 1 (Technical Specifications of Equipment
and Services), with strict compliance with the quality and availability criteria
and parameters, described in Exhibit 2 (Quality Criteria).

2.2. To dimension the AOL Network interlinking channel with the Telefonica
Network in the following way: (a) for the downstream traffic (thus defined the
traffic arisen from the Telefonica Network to AOL Network), to make available
3kbps per Dial Provider port hired from Telesp and (b) for the upstream traffic
(thus defined the traffic arisen from AOL Network to the Telefonica Network),
Telefonica Empresas shall make available the traffic capacity needed.

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                                                                               5

2.3. To provide technical preventive and corrective assistance and to give
support for problem solving or for failures solving in the Telefonica Empresas
equipments, which are part of the Web Channel, within the terms and conditions
set forth in Exhibit 3.

2.4. To make use, of common concord with AOL, in the supplying of services,
object of the present Agreement, the best available technique, performing the
equipment updating, aiming at assisting AOL in the most updated and efficient
form possible.

2.5. Concerning AOL Network and within the technical limits that might be
provided through the performance of the present Agreement, to comply with the
current and future specifications that may eventually be set forth by AOL,
regarding the needs for equipment configuration, security aspects, access
filters, connection between networks and systems, which will be periodically
revised and updated, in accordance with the specifications mutually agreed upon
by the Parties, which is an integrant part of the present document, as Exhibit
1.

2.6. TELEFONICA commits to keep working and technical assistance teams pursuant
to the terms of Exhibit 2.

2.7. Whenever problems occur, which make the Infra-Structure supply unviable,
and that result either in suspension and/or unavailability of access to the
Telefonica Network, Telefonica Empresas will be responsible for solving such
problems within the maximum term set forth in Exhibit 2, so as to guarantee the
availability standard.

      2.7.1. Exhibit 3 (ii) contains the description of problems related to
      quality, low standard of availability or suspension of supply of access
      Infra-Structure to the Telefonica Network, to which the penalties
      established in Clause 9.3 are not applicable to Telefonica Empresas.

2.8. The necessary equipment and components for supplying the Web Channel shall
be provided by Telefonica Empresas, at its exclusive expenses. Telefonica
Empresas shall

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                                                                               6

always acquire from top rate suppliers, which make use of state-of-the-art
manufacturing technology, equipment and components that meet the technical
features needed, duly certified by ANATEL, in enough amounts to provide for
AOL's needs.

      2.8.1. Without adverse effects to the aforementioned, the use of new
      equipment, systems and/or equipment configuration which imply changes in
      the AOL Network or in the protocols and/or systems in use at AOL, can only
      occur with the previous written consent between the Parties.

2.9. Telefonica Empresas also commits to keep in full confidentiality each and
all operational procedures described in Exhibit 3 (Flux of Operational
Procedures).

2.10. Telefonica Empresas also commits to keep in full confidentiality each and
every information about AOL Subscribers and/or visiting users that navigate in
the Telefonica Network..

      2.10.1. Additionally, Telefonica Empresas commits to never make use of
      information (such as: names, commercial and residential addresses;
      telephone numbers, logins, e-mails, Web pages, used Internet services,
      etc,) of AOL Subscribers and/or visiting users who navigate through the
      Web Channel, except for Telefonica Empresas' technical and operational
      purposes, pursuant to the terms of this Agreement, being the commercial
      use of such information expressly forbidden.

2.11. Telefonica Empresas shall take the necessary steps (including with the
implementation of appropriate security measures) to prevent third parties to
have access to any information whatsoever that is in the Telefonica Network,
concerning AOL Subscribers and/or visiting users.

2.12. TELEFONICA will group routing information sent to AOL and will control the
addition or withdrawal of routing information. TELEFONICA will provide AOL with
routing information in the TELEFONICA's commutation points, as required by AOL.

<PAGE>

                                                                               7

2.13. TELEFONICA agrees to provide network engineering to perform operational
and long term planning.

      2.13.1. TELEFONICA will continue to perfect the network project in such a
      way as to reduce the risks to AOL, improve the strength and improve the
      cost/performance in the transmission system. AOL will be allowed to
      establish a last-resource-route in the network.

      2.13.2. TELEFONICA will keep the facilities, equipment and software in use
      so as to supply the Services in such a way that they can operate in
      accordance with their specifications (for instance, transmission of
      support information applicable by TELEFONICA), including (a) keeping the
      equipment in good operational conditions, (b) assuming the repairs and
      preventive maintenance of the equipment, including at a minimum level, in
      accordance with the applicable recommendations of the equipment
      manufacturer and (c) effecting software maintenance, including at a
      minimum level, in accordance with the software applicable documentation
      and TELEFONICA's software recommendations.

      2.13.3. TELEFONICA agrees not to restrain the traffic from and to AOL,
      unless it is required to do so by AOL or is compelled to do so by a court
      order or applicable law. Before restraining the traffic, as allowed in
      this provision, TELEFONICA will send a reasonably previous written notice
      to AOL, about the date, length, scope and reasons for such restraint.

      2.13.4. TELEFONICA will manage the infra-structure and the interconnection
      points with other Internet servers and clients to minimize AOL `s traffic
      loss and delay. Such management will include the creation of new
      interconnection points, as required.

2.14. TELEFONICA will provide alternative paths in its structure in the meeting
points, so as to discard common points of failure in the TELEFONICA's
infra-structure.

<PAGE>

                                                                               8

3. AOL'S DUTIES AND RESPONSIBILITIES

These are AOL's duties and responsibilities:

3.1. AOL shall, within a ten-day-term, prior to the installation, provide all
the necessary infra-structure for the protection of the equipment owned by
Telefonica Empresas, which are needed to provide the Infra-Structure, in
accordance with the standards set forth in Exhibit 4 - Infra-Structure
Requirements-, which integrates this Agreement.

3.2. AOL shall keep the equipment received from Telefonica Empresas as if it
belonged to it itself, watching over its integrity. In the event of evidenced
theft, stealing, loss, misplacement, damage or destruction of the equipment,
even if partial, AOL shall refund the respective amounts, in updated values, to
Telefonica Empresas.

3.3. As of this instrument execution date, the Parties will perform the full
exchange of IP traffic, being therein understood exclusively the national
traffic between AOL Network and TELEFONICA Network. To achieve this, the
following conditions will be applied to the "national traffic":

      3.3.1. AOL commits not to connect AOL Network to the networks of other
      companies, with the exception of:

            3.3.1.1. those that provide dial-up access outside the State of Sao
            Paulo;

            3.3.1.2. those that provide broad band access to AOL, provided that
            such companies do not supply Internet transit to AOL;

            3.3.1.3. AOL and/or America Online Latin America, Inc. shareholders,
            as well as the companies directly or indirectly controlled by AOL
            Time Warner, Inc. in Brazil;

<PAGE>

                                                                               9

            3.3.1.4. the companies that provide services, in the cases when such
            connection is implemented to supply or to receive restricted
            specific content and/or related to any joint promotion, on any
            account, of AOL's trademark and Services, and provided that such
            companies do not offer Internet transit to AOL.

            3.3.1.5. the companies to which AOL supplies its own Content
            (including Content arisen from the companies directly or indirectly
            controlled by AOL Time Warner, Inc.), provided that such companies
            do not offer Internet transit to AOL.

      3.3.2. AOL shall inform TELEFONICA about the connections it performs with
      its network..

      3.3.3. It is understood by "Internet Transit", pursuant to the terms of
      this Agreement, the communication flux between AOL network's equipment and
      the equipment of a third party, using the routing protocol TCP/IP, aiming
      at reaching other networks ( which is not the network of the third party
      referred to).

4. PRICE AND PAYMENT CONDITIONS

4.1. In return for the services rendered by virtue of the execution of the
present Agreement, AOL commits to monthly pay to Telefonica Empresas, the amount
established in the Price List contained in Exhibit 5 to this document.

      4.1.1. Not withstanding the provisions of item 4.1 above, AOL will be
      exempt from the payment of the amounts established in Exhibit 5 in the
      following hypotheses:

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                                                                              10

            4.1.1.1. while the agreement for providing access infra-structure to
            the broad band Internet services in the modality Dial Provider,
            executed between AOL and Telecomunicacoes de Sao Paulo S.A. is in
            full force; and

            4.1.1.2. in the event that the Web Channel occupation is equal or
            lower than what was set forth in Clause 2.2 of the present
            instrument.

      4.1.2. The Web Channel occupation that exceeds in Mbps, the dimensioning
      established in Clause 2.2. to this Agreement, will be charged to AOL by
      Telefonica Empresas, in accordance with Exhibit 5, independently of the
      provisions of Clause 4.1.1.

            4.1.2.1. So as to verify the traffic that exceeds the established in
            2.2., Telefonica will measure such traffic every five (5) minutes.
            Telefonica will discard the traffic peaks from all those measures,
            through the exclusion of 5% of the samples which correspond to the
            measures with the highest traffic values. Out of the rest of the
            samples (rest of 95%), Telefonica will consider the highest measure
            as being the value to be used for the charge.

4.2. All the tributes, taxes, contributions, including para-fiscal ones, and the
other charges levied on the present date onto the services, object of the
present Agreement, are included in the prices of Exhibit 5. In the assumption
that, subsequently to the execution date of the present Agreement, new tributes
are created or that those, either directly or indirectly levied on the services,
are increased, the respective increase shall reflect onto the prices.

4.3. The prices set forth in Exhibit 5, will be automatically re-adjusted at
each twelve-month period, by the IGP-DI [General Price Index- Internal
Availability]variation, as of the execution date of the present Agreement.

Besides the afore-detailed amounts, each Party shall bear its respective costs
concerning its equipment and the other necessary means to allow the
infra-structure supply, on the part of

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                                                                              11

Telefonica Empresas, and the infra-structure fruition on the part of AOL, and
will provide the necessary investments for complying with the duties which were,
either set forth or arisen from this Agreement.

5. BETTER CONDITIONS

5.1. Neither Telefonica Empresas, nor its Affiliates will offer or provide to
any client, services comparable to the services herein offered with (i)
geographic coverage; (ii) contractual term; (iii) traffic volume in the Web
Channel, equal or lower than that hired by AOL ("Comparable Services") (a) for
prices (net amounts of taxes) which are lower than those charged from AOL, or
(b) in accordance with any terms and conditions which are more favorable to such
client than AOL's terms and conditions (each one of (a) or (b) are the "More
Favorable Terms"). If Telefonica Empresas or any of its Affiliates offers or
provides Comparable Services in More Favorable Terms, to any client, Telefonica
Empresas shall offer AOL such services, under the terms and conditions
applicable to such client. If Telefonica Empresas or its Affiliates offers or
provides services to a client which do not constitute Comparable Services, (such
Services are the "Non-Comparable Services") then, within thirty (30) days
subsequently to that service offer or providing, Telefonica Empresas will offer
AOL such services at the available prices and under the terms and conditions
applicable to that client. If an applicable law or regulation changes in such a
way that this clause requires that Telefonica Empresas performs in a way which
is not allowed, pursuant to this new law or regulation, then this clause shall
be considered re-written so as to reflect, the closest possible, the original
intention of the Parties. Under AOL's request (requirements which shall not be
made more than once per quarter year) the Financial Administrative
Vice-President of Telefonica Empresas shall state, in writing, whether
Telefonica Empresas has complied with the duties set forth in this Clause. If,
concerning the Non-Comparable Services, AOL's service requests need changes in
its terms and conditions, then, the Parties shall work in good faith to adjust
such terms and conditions towards a mutual deal that complies with such
requests.

<PAGE>

                                                                              12

5.2. In case Telefonica Empresas violates one of the duties described in the
above provision, the prices, pursuant to this Agreement, must be immediately
adjusted so as to be either equal or lower than the corresponding prices offered
to other clients and, regarding the payments made by AOL, as set forth by this
Agreement, as of the date when TELEFONICA started the offer for that client, and
the resulting adjustment can be refunded by TELEFONICA, at AOL's discretion, as
credit for future payments or under the form of a single payment within a period
of time that does not exceed thirty (30) days as of AOL's notification of such
violation.

5.3. In the event of material changes in the Market Price, AOL, every six months
counted as of the execution of this instrument, will send mail to Telefonica
Empresas, requesting price adjustment of the Services, so that the latter can
reflect the amount charged for Comparable Services in the market.

      5.3.1. It is understood by "Market Price", the comparative net price
      offered by another company that renders Comparable Services, as defined in
      item 5.1 above, in at least one locality of one of the five geographic
      regions of the Federative Republic of Brazil, and with a contractual term
      and IP traffic volume to be supplied, which are, at least, equal to those
      offered to AOL, pursuant to this Agreement.

            5.3.1.1. The Market Price defined in item 5.3.1 above, cannot be
            considered as a valid price for the purposes of this provision, in
            case it is:

            (i)   a price which is lower than that effectively incurred for
                  providing such Comparable Services;

            (ii)  offered by a company with evident deficit spending and that
                  such price is lower than the price of cost of that same
                  company; or

            (iii) predatory prices, with the intention of damaging or defrauding
                  TELEFONICA's participation in the market, and which are below
                  the actual costs incurred by the company that renders those
                  Comparable Prices.

<PAGE>

                                                                              13

      5.3.2. TELEFONICA shall be entitled to revise and confirm the validity of
      the proposed Market Price, within a thirty-day term, counted as of the
      receipt of the mail sent by AOL, pursuant to the terms of 3.1. above.

      5.3.3. Subsequently to the acknowledgement of AOL's mail, and provided
      that it is of common concord between the Parties, a specific instrument of
      addendum to the present Agreement can be executed to adjust the Price List
      contained in Exhibit F of the present instrument to the new values.

      5.3.4. In case Telefonica does not validate the market prices suggested by
      AOL, the values contained in the Price List of Exhibit 5 to this
      instrument will remain in force.

6. EFFECTIVE DATE

6.1. The present Agreement shall be in force on the date of its execution and
will be valid until [**].

7. TERMINATION

7.1. AOL will be allowed to legally terminate the present Agreement, with no
encumbrances, independently of any proceedings or judicial or extrajudicial
notification, through a simple written notification to Telefonica Empresas, in
case Telefonica Empresas:

      (i)   subcontracts third parties or transfers to third parties, in the
            whole or in part, its rights and duties arisen from this Agreement,
            without AOL's previous written authorization;

      (ii)  fails to comply with any obligation set forth in this Agreement and
            this fault is not remedied within a thirty-day term subsequently to
            AOL's notification; and

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                                                                              14

      (iii) files for "concordata" [debt rehabilitation proceedings]or has its
            bankruptcy, liquidation or dissolution ruled, confessed or required.

7.2. Telefonica Empresas will be allowed to legally terminate the present
Agreement, with no encumbrances, independently of any proceedings or judicial or
extrajudicial notification, through a simple written notification to AOL, in
case AOL:

      (iv)  transfers to third parties, in the whole or in part, its rights and
            duties arisen from this Agreement, without Telefonica Empresas'
            previous written authorization;

      (v)   fails to comply with any obligation set forth in this Agreement and
            this fault is not remedied within a sixty-day term subsequently to
            Telefonica Empresas' notification; and

      (vi)  files for "concordata" or has its bankruptcy, liquidation or
            dissolution ruled, confessed or required.

7.3. Pre-termination of the present Agreement, by AOL, or by Telefonica
Empresas, in any circumstances, including those established in Clauses 7.1 and
7.2 above, shall subject the Party that has given reason for the Agreement
termination, to the payment of compensatory fine to the other Party, within a
thirty-day term, counted as of the termination date, equivalent to [**]
([**]%) of the total remaining value of the present Agreement, calculated on the
grounds of the Price List contained in Exhibit 5. For the purposes of
calculation of such fine, the following formula shall be applied:

F = 0.325 x V x NP x MV, where:

F = fine to be paid by the Party that has terminated the Agreement;

V = Value = Price list per Mbps contained in Exhibit 5;

NP = number on Mbps made available to AOL in the month previous to the
termination month;

MV = number of months still missing until [**].

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                                                                              15

7.4. In any event of pre-termination ( with cause , in accordance with Clause
7.2, or without cause, in accordance with Clause 7.3) claimed by Telefonica
Empresas, the latter shall keep supplying the Web Channel service to AOL, hired
pursuant to the terms of this Agreement, under the same conditions herein agreed
upon, for a (90) ninety-day term, as of that termination date, with no loss to
the obligation of payment of fine, if it is the case, in accordance with Clause
7.3.

7.5. In the event of expiration or termination of this Agreement, AOL and
Telefonica Empresas commit to immediately stop the use and to return to the
Owner Party the possible Confidential Information (as defined below) related to
this Agreement, as well as any codes, accesses or addresses supplied by both
Parties.

8. CONFIDENTIALITY AND INTELLECTUAL PROPERTY

8.1. Each Party shall adopt protection measures for the information related to
its services and transactions, subject matter of the present Agreement, which
shall be as strict or even stricter than those adopted by the other Party, to
prevent such Confidential Information from being anyhow violated, disclosed,
revealed, published, sold, assigned, rent, leased or transferred in any way by
the Party at issue, its directors, employees, representatives or any third
parties.

      8.1.1. The expression "Confidential Information" shall mean all the
      subject matters related to the Parties, their business and operations
      revealed or made available by the Revealing Party to the Receiving Party
      for the purposes of hiring the services, object of the present Agreement,
      including, but not limited to: economic commercial merchandizing legal
      contractual data, know-how, clients' and users' information, financial and
      accounting statements, data on employees and administrators, management,
      strategic planning, adopted policies, technical information and all the
      copies and derivates, whatever the transmission form.

<PAGE>

                                                                              16

      8.1.2. For the purposes of this Agreement, it will not be considered as
      Confidential Information: (a) the information that is made available to
      the public in general through a means that does not result in its
      disclosure by the Receiving Party or its representatives, its parent
      company, controlled companies or companies that, either directly or
      indirectly, are subject to the same control to which such Receiving Party
      is subject to; (b) the information, the disclosure of which, is demanded
      by a governmental authority or competent court order, under the penalty of
      incompliance being featured or another penalty, being assured that, in
      such hypotheses, the material to be disclosed will be the minimum required
      and shall be object of all the applicable governmental or judicial
      protection, being that the Receiving Party that is compelled to disclose
      such information, must notify the respective Revealing Party, previously
      to the disclosure, or (c) the information, the disclosure of which has
      been previously authorized, in writing, by the respective Revealing Party.

8.2. All the information contained in the present Agreement and any other
revealed by one Party to the other, cannot be revealed by the Receiving Party of
the information, during the validity of the present Agreement and during a (3)
three-year term subsequent to its expiration or termination, under the penalty
of such Party being civilly and legally liable for such acts, being such
obligation extensive to each Party's employees, attorneys-in-fact,
representatives and administrators, among others.

      8.2.1. For the purposes of the present Agreement, the expression
      "Revealing Party" shall mean: (a) Telefonica Empresas, whenever Telefonica
      Empresas reveals Confidential Information to AOL; (b) AOL, whenever AOL
      reveals Confidential Information to Telefonica Empresas. Likewise, the
      expression "receiving Party" shall mean: (c) Telefonica Empresas, whenever
      Telefonica Empresas receives Confidential Information from AOL; and (d)
      AOL whenever AOL receives Confidential Information from Telefonica
      Empresas.

8.3. The Receiving Party of Confidential Information commits:

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                                                                              17

      8.3.1. To keep secret and make its employees and representatives keep
      secret the Confidential Information of the Revealing Party and/or of its
      respective suppliers and their users, that they may eventually get to
      know.

      8.3.2. To permanently respect and make respect the copyrights, trademarks
      and patents, business and industrial secrets and other intellectual
      property rights of the Revealing Party and/or of their suppliers and their
      respective users and inform each one of them about any violation it may
      eventually get to know.

      8.3.3. Not to use, except with the prior express written consent of its
      respective owner, any name, trademark, logotype or symbol of the Revealing
      Party's ownership and/or of its suppliers, nor make any statement or
      reference that shows the existence of any contractual or relation or
      commercial bond with them, without having such reference or statement been
      previously agreed upon, in writing, by the Revealing Party and/or its
      suppliers and their respective users, as the case may be.

8.4. If any of the Parties is eventually legally compelled to reveal
Confidential Information of the other Party and/or information about this
Agreement, by operation of the law, by ANATEL imposition or court decision, the
Party which has been required to reveal the aforementioned information, shall
promptly send to the other Party a written notification.

8.5. Violation to the duties established in this Clause 8 or incompliance with
the confidentiality duties set forth in this instrument, shall subject the
infracting party to compensate all the losses incurred by the party damaged by
such violation, being this duty to indemnify exclusively limited to the direct
damages, duly evidenced, that such damaged party will eventually undergo by
virtue of the incompliance with the confidentiality duties herein agreed upon.

8.6. Notwithstanding the provisions about the confidentiality set forth in this
Clause Eighth, AOL is allowed , without violating such confidentiality duties,
to supply information about the Agreement, at any time, to the "United States
Securities and Exchange Commission" -

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                                                                              18

SEC, in case it is requested to do so by it. AOL straightforwardly commits to
plead, within the greatest comprehensiveness it believes necessary and in
complete concord with the previous supply of information, at the time of the
information due to SEC, that Sec keeps the secrecy, pursuant to the terms of
this Agreement.

9. INDEMNIFICATIONS

9.1. Each Party agrees to indemnify and exempt the other Party concerning losses
and damages, for the damages incurred by the other Party arisen from any third
party's claims on the grounds of (a) violation by one Party of any duty,
statement or warranty set forth in the present Agreement or (b) damages caused
by willful misconduct or fault on the part of its employees and/or contracted
parties, damages which will have to be verified through legal proceedings. This
clause shall apply only to those cases to which there are no specific defined
penalty in this Agreement and in its Exhibits.

9.2. AOL agrees to indemnify, defend and exempt Telefonica Empresas, regarding
loss stemming from any third party's claims for violation of intellectual
property rights by virtue of any material developed by AOL, supplied to
Telefonica Empresas for providing services, subject matter of this Agreement.
Furthermore, Telefonica Empresas agrees to indemnify, defend and exempt AOL
regarding loss stemming from any third party's claims for violation of
intellectual property rights by virtue of services, subject matter of this
Agreement, by virtue of any materials or services used for providing such
services or of any other developed materials.

9.3. Concerning the default of the provisions related to services availability,
in accordance with Exhibit 2, Telefonica Empresas will be solely exclusively
liable for granting the discounts established in the present instrument, no
other additional values being owed to AOL, on any other account.

<PAGE>

                                                                              19

      9.3.1. Such discounts will be proportionally granted related to each hour
      (or hour fraction) during which the service interruptions have occurred,
      in accordance with the following formula:

      D = 1*N*AS/1440,

      Where:

      D = amount of the discount;

      N = number of 30-minute interruptions. After the first 30-minute-period of
      interruption, the last fraction of the interruption period will be
      considered a 30-minute-period of interruption.

      A S = amount to be paid for the service

      9.3.2. Notwithstanding what has been herein detailed, such limitations
      shall not apply to damages caused by one Party's infractions to any duty
      related to confidentiality, as established in this Agreement.

9.4. The duty of any of the Parties to indemnify the other Party, in accordance
with the terms of this Agreement, is limited to the maximum amount of R$
1,000,000.00 (one million reais).

10. MISCELLANEOUS

10.1. This Agreement cannot be assigned or transferred, not even partially, by
any of the Parties, without the previous written consent of the other Party.

10.2. The Clauses of this Agreement, as well as its Exhibits that, due to their
nature, a perennial feature, particularly those related to intellectual property
rights and confidentiality, shall survive this Agreement's expiration or
termination.

<PAGE>

                                                                              20

10.3. Each Party will appoint a representative that will be authorized to
represent it in all the subjects related to this Agreement. If one of the
Parties replaces such representative it shall immediately advise the other Party
of such a fact, in writing.

10.4. In the assumption that any clause, term or provision of this Agreement is
declared invalid, illegal or unaccomplishable, the other provisions` validity,
legality or accomplishment will not be, in any way, affected or damaged.

10.5. Any omission or tolerance by any of the Parties in demanding from the
other the strict fulfillment of the obligations herein agreed upon or in
performing any duty arisen from this Agreement, will not constitute their
renewal or waiver, nor will this affect the Party's right to perform it at any
time. The isolate partial performance of any right, appeal, power or privilege
stemming from this Agreement, will not hinder any other subsequent performance
of them, nor the performance of any other right, appeal, power or privilege.

10.6. The Exhibits mentioned and listed below, initialed by the Parties, are
integrant parts of this Agreement for all legal purposes.

10.7. The notives and notifications stemming from the present Agreement will be
made by mail, copied and docketed, addressed to the addresses contained in the
qualification of the Parties or to other addresses, as previously informed by
them. Depending on the Parties' convenience, notifications and communications
arisen from the present Agreement may be made via fac-simile, being, in such a
case, considered as validly received when and if correctly sent.

      10.7.1. The communications and notifications will be addressed to the
      addresses indicated in the introduction and to the fax numbers of the
      Parties' representatives, indicated below:

IF TO TELEFONICA EMPRESAS:

A/c Gerencia Comercial

<PAGE>

                                                                              21

Av. Brigadeiro Faria Lima, 1.188 - 9 andar - SP/SP
Fax: (11) 3038-7680

With a copy to:
A/c Diretor Juridico
Av. Brigadeiro Faria Lima, 1.188 - 13 andar - SP/SP
Fax: (11) 3038-7840

<PAGE>

                                                                              22

IF TO AOL:

A/c Diretor Juridico
Av. Marginal do Rio Pinheiros, 5200 - Ed. Philadelphia - 2 degrees. andar - CEP
05693-000 - Sao Paulo - SP - Brazil
Fax: +55 (11) 3759 7401

With a copy to:
A/c Diretor de Operacoes Av. Marginal do Rio Pinheiros, 5200 - Ed. Philadelphia
- 2 degrees. andar - CEP 05693-000 - Sao Paulo - SP - Brazil
Fax: +55 (11) 4993-5999

10.8. Each and every change, alteration or amendment to the present Agreement
will only be valid if performed through written instrument, signed by all the
Parties.

10.9. In the event of any conflict between the present Agreement and any of its
Exhibits, the provisions of this Agreement shall always fully prevail,

      10.9.1. The Parties agree that the present instrument shall be governed by
      the legal provisions in force at the time of its execution, including the
      Brazilian Civil Code, except for a court decision to the contrary.

10.10. The present Agreement is irrevocably irreversibly executed, binding the
Parties and their respective successors, on any account. For the purposes of the
present Agreement, the company that results from the merger, purchase or
incorporation of any of the Parties, independently of its having the same
corporate denomination and/or register of the originally contracting Parties,
will be considered its successor.

10.11. The Parties may agree about the application of the conditions agreed upon
in this instrument to other AOL colligate companies.

10.12. The Parties elect the central court of the County of the City of Sao
Paulo to settle any conflicts that may arise from this Agreement, with the
exclusion of any other, privileged as it may be.

<PAGE>

                                                                              23

In witness whereof, the Parties execute this Agreement in four counterparts of
equal form and content, in the presence of the undersigned witnesses.

                                                    Sao Paulo, August 25, 2003.

/s/ Nelson Patricio dos Reis                /s/ Fausto Luiz Martins Piers Junior
____________________________                ____________________________________
TELEFONICA EMPRESAS S.A.

/s/ Milton da Camargo Rocha
____________________________                ____________________________________
America OnLine

WITNESSES:

1. /s/ Gisele Braz                           2.
  ___________________________                   ________________________________
Name: Gisele G. Brito S. Braz                Name:

<PAGE>

                                                                              24

EXHIBIT 1- TECHNICAL SPECIFICATIONS OF EQUIPMENT AND SERVICES

1. ROUTERS AND SWITCHES

These equipments must be supplied by top rate suppliers and meet the specific
configuration needs of each locality (POP). They must be flexible so as to
accept including, but not limited to, QoS,CoS and filters.

2. INTERCONNECTION OF TELEFONICA NETWORK AND AOL NETWORK

Telefonica Empresas commits to provide data circuits between the Telefonica
Network and the AOL Network where all the traffic from/to AOL content will
necessarily go through, traffic which is required by AOL's users and by AOL's
narrowband Subscribers, connected to the Telefonica Network or AOL's visiting
users served by Telefonica.

3. DEVICES OF TRAFFIC CACHING

AOL and Telefonica will be able to analyze caching solutions which aim at
improving the reply times to AOL content, decrease the traffic of the Telefonica
Network internal links, provided that the correct accessibility to AOL content
is guaranteed and the information about the traffic of AOL's users, subscribers
and visiting users is maintained.

4.MONITORING OF TELEFONICA NETWORK SERVICES

Telefonica shall make devices available to AOL, which will allow the monitoring
of data circuits occupation (in absolute and percental terms), in real and
historic time.

<PAGE>

                                                                              25

EXHIBIT 2- QUALITY CRITERIA

WEB CHANNEL SERVICE QUALITY LEVEL (SLA )

Telefonica Web Channel shall:

      -     have minimum availability of 99.8% ; it will be allowed to have an
            interruption maximum which totalizes 8 hours per year, a
            1-hour-maximum interruption per month and one isolate interruption
            that cannot exceed the limit of 30 minutes; preventive maintenances
            will not be counted as interruptions.

      -     have a maximum occupation of 70% of the installed capacity. Whenever
            the 70% occupation figure is reached, Telefonica Empresas shall
            provide expansion of the installed capacity.

Preventive Maintenance

      -     Preventive maintenance schedule will be on Tuesdays and Thursdays,
            provide that such days do not coincide with holydays - from 4:00 am
            to 6:00 am.

      -     Telefonica will advise AOL with at least two (2) working days in
            advance, informing which localities or elements of the Telefonica
            Network will be affected (including the Telefonica Web Channel).
            Exceptions to what has been established above shall be previously
            agreed upon between the Parties, case by case.

<PAGE>

                                                                              26

EXHIBIT 3- FLUX OF OPERATIONAL PROCEDURES

This document sets forth the ranking for failures in the Telefonica Network
services.

The Flux of Operational Procedures will be described in detail, subsequently to
the agreement execution, conciliating the operational fluxes of the attendance,
operation and maintenance teams both of Telefonica Empresas and AOL's.

Among the aspects to be approached by the Operational Procedures detailed
description are:

      1.    Methodology and procedures for occurrences (problems) opening,
            follow-up and closing;

      2.    Follow-up of the Service Quality Level (SLA)

      3.    Diagram of the Operational Flux;

      4.    Contacts for occurrences ranking (see chart below to be filled out
            and periodically used in common concord by the Companies).

Scheduling Times and Persons in Charge

<TABLE>
<CAPTION>
Level        Opening Time                      Name / Position
-----        ------------          ---------------------------------------------
<S>          <C>                   <C>
                                   Services operation of the  Telefonica Network
Critical     Immediate             Coordinator/Manager/Superintendent/Director
                                   0800-XXXXXX

               > 2 hs              Telefonica Network's Services Manager
High
               > 3 hs              Superintendent/Director

               > 4 hs              Telefonica Network's Services Manager
</TABLE>

<PAGE>

                                                                              27

<TABLE>
<S>                                <C>
Medium
               > 5 hs              Superintendent/Director

               > 6 hs              Telefonica Network's Services Manager
Low
               > 7 hs              Superintendent/Director
</TABLE>

1. Access via Web

Telefonica Empresas' reports will be available in a URL with username and
password, as detailed below:

URL: https;//www.telefonicaempresas.net.br/endereco-dos-relatorios

Username: login name

Password: login password

<PAGE>

                                                                              28

EXHIBIT 4- INFRA-STRUCTURE REQUISITES

1. Aiming at this Agreement execution and with no loss of the duties assumed in
the other clauses, TELEFONICA EMPRESAS shall be responsible for:

      1.1. Allocate measurement tools for equipment maintenance.

      1.2. Allocate workforce for installation, for testing the transmission
      equipment and the network infra-structure.

2. Aiming at this Agreement execution and with no loss of the duties assumed in
the other clauses, the CONTRACTING PARTY shall be responsible for:

      2.1. Make arrangements in the installation places (CONTRACTING PARTY'S
      facilities):

      (FOR ACCESSES THROUGH METALLIC PAIRS- MODEMS)

      a) illumination in accordance with the existing technical standards;

      b) 110/220 VAC plugs;

      c) easy safe access, in accordance with the security rules in force;

      (FOR ACCESSES THROUGH OPTICAL FIBER - ELO)

      - To allocate room for the transmission equipment installation in its
      facilities, as well as to make arrangements for the environment
      illumination and for the energy system of continuous current (C.C.), which
      can meet at least the following demands:

      a) energy needed for the transmission equipment:

      - Feeding: - 48 VCC +/-25%;

      - Estimated maximum consume: 2A/system of 2Mbps (the final consume will be
      bound to the CONTRACTING PARTY'S demand).

<PAGE>

                                                                              29

      Obs.: The CONTRACTING PARTY shall make arrangements for having a system of
      rectifiers and their respective battery banks, which can have the features
      above mentioned, depending on the autonomy that it defines as a
      requirement.

      b) Air conditioning for the equipment room:

      -     Temperature, at average level of (24 degrees +/- 2 degrees) C;

      -     Relative Humidity: lower than (50% +/-5%);

      -     Climatic Gradient: lower than 20 degrees C/ hour, with relative
            humidity lower than 90%.

      c) Equipment room:

      -     The equipment room must be at least 3,5 m high, being the ducts of
            the existing or to-be-ordered air conditioning already deduced;

      -     The minimum installation area for up to 10 systems must be 12 m2
            (3x4), being each frame's measurement the following: 120mm width,
            225 mm depth and 2200mm height and  availability of:

      -     Power plant with 10A switches and at least two (2) 110/220 VCA plugs
            for testing tools;

      -     Ground point with a maximum of 5 ohms of ohmic resistance;

      -     Conduits on the ground and conveyors for running the equipment
            interconnection cables;

      -     In case it is necessary, a duct or sub-duct net must be either
            allocated or built in the CONTRATING PARTY'S facilities, in
            accordance with the actual technical rules, for the installation of
            the optical fiber cable.

      (FOR ACCESSES THROUGH DIGITAL RADIO)

      To allocate the necessary area and or infra-structure for the installation
      of Digital Radio Equipment (Aerial/Radio) in its facilities, as well as to
      implant/make arrangements, in the Aerial/Radio spot, for the items that
      shall comply with at least the following requirements:

<PAGE>

                                                                              30

      a) Franklyn type lightning arrester, with protection cone over the
         equipment, which shall not be over 30 degrees;

      b) Illumination;

      c) Feeding = - 48VCC + or - 25%;

      d) Estimate consume = 2 systems 2 Mbps;

      e) 110/220 VAC plugs;

      f) Easy safe access, in accordance with the security rules in force.

      (FOR ACCESSES THROUGH OPTICAL FIBER - OPTICAL MODEM)

      -     To allocate room for the transmission equipment installation in its
      facilities, as well as to make arrangements for the environment
      illumination and for the energy system of continuous current (C.C.), which
      can meet at least the following demands:

      a) Energy needed for the transmission equipment:

      -     Feeding: - 48 VCC +/-25%;

      -     Estimate maximum consume: for 16 x 2 Mbps modem, it is 3A, or for
      4x2 Mbps modem, it is 2A.

      b) Air conditioning for the equipment room:

      -     Temperature, at average level of (24 degrees +/- 2 degrees) C;

      -     Relative Humidity: lower than (50% +/-5%);

      -     Climatic Gradient: lower than 20 degrees C/ hour, with relative
      humidity lower than 90%.

      d) Equipment room:

      -     Minimum height is not compulsory, since it shall be installed at
      1,40m off the ground ( in case a rack is used).

      -     A minimum installation area of at least 16 systems of 2 Mbps is
      equivalent to 1,5m x 1,00m, being that 1,00m corresponds to the free space
      in wall for the allocation of the optical modem and of the BEO/DIO (Frame
      of Optical Alteration/ Optical Intermediate Distributor).

<PAGE>

                                                                              31

      -     Power plant with 10A switches and at least two (2) 110/220 VCA plugs
            for testing tools;

      -     Ground point with at least 5 ohms of ohmic resistance.

      e) In case it is necessary, a duct or sub-duct net must be either
         allocated or built in the CONTRACTING PARTY'S facilities, in accordance
         with the technical rules in force for the installation of optical fiber
         cables.

<PAGE>

                                                                              32

      EXHIBIT 5- PRICE LIST

1. Amounts in net reais per Mbps (without ICMS [Value-Added Tax on Sales an
Services], with PIS [Employees' Profit Participation Plan] and COFINS [Tax for
Social Security Financing] ) for national Internet transit.

<TABLE>
<CAPTION>
                            AMOUNT PER
     MBPS BAND                MBPS
------------------         -----------
<S>                        <C>
 1 Mbps to 10 Mbps         R$ [**]
11 Mbps to 25 Mbps         R$ [**]
26 Mbps to 40 Mbps         R$ [**]
      >41Mbps              R$ [**]
</TABLE><PAGE>
                                                                    EXHIBIT 10.4

       AGREEMENT FOR AVAILABILITY OF ADVERTISING SPACE BETWEEN SERVER AND
       TELECOMUNICACOES DE SAO PAULO S.A. - TELESP - ADHESION AGREEMENT.

                                                                    MODEL

--------------------------------------------------------------------------------
             REQUEST FOR REGISTRATION OF STANDARD OR MODEL AGREEMENT
--------------------------------------------------------------------------------

ILLUSTRIOUS REGISTRAR OF THE PUBLIC REGISTRY OF DOCUMENTS AND CIVIL REGISTRY OF
LEGAL ENTIITES OF THE CAPITAL

TELECOMUNICACOES DE SAO PAULO S/A - TELESP- with its address at Rua Martiniano
de Carvalho, n(0) 851, in this Capital, undersigned, comes before Your Honor to
request the REGISTRATION of the attached document of: AGREEMENT FOR AVAILABILITY
OF ADVERTISING SPACE.

It requests granting of the above.

Sao Paulo,  August 22, 2003.

Signed by: FERNANDO ELIAS RIBEIRO
                National Registry of Individuals:
                 Identity Card:

 THREE STAMPS OF THE 2ND REGISTER OF DOCUMENTS AND CIVIL OF LEGAL ENTITIES.

<PAGE>

--------------------------------------------------------------------------------

                 AGREEMENT FOR AVAILABILITY OF ADVERTISING SPACE

                                  ENTERED INTO

                                     BETWEEN

                       TELECOMUNICACOES DE SAO PAULO S.A.

                                       AND

                                     SERVER

--------------------------------------------------------------------------------

<PAGE>

                 AGREEMENT FOR AVAILABILITY OF ADVERTISING SPACE

Through this present private instrument, the Parties:

(a) TELECOMUNICACOES DE SAO PAULO S.A., a limited liability company with its
main place of business in the City of Sao Paulo, at Rua Martiniano de Carvalho,
851, enrolled in the National Registry of Legal Entities under n(0)
02.558.157/0001-62, in this act duly represented pursuant to its Bylaws,
hereinafter simply called "TELESP",

and

(b) SERVER, duly qualified in the Request for Services, which is an integrant
inseparable party to this Agreement, hereinafter simply called "SERVER"; and,
when jointly with TELESP, "Parties".

WHEREAS

The SERVER provides services related to the world computer net ("Internet"),
such as the Internet access service and the supply of editorial commercial
content, as well as content of other natures to the Internet through its
Internet portals, accessible in its electronic address ("www"), simply called
"PORTAL";

 The SERVER is a company in the Internet market portals and, due to its audience
and coverage, it grants great visibility to products and services of advertising
clients in general, and which also has an expressive subscribers basis;

TELESP is interested in displaying its trademarks and products to the SERVER's
subscribers market;

                                       3
<PAGE>

TELESP has published in the site WWW.TELEFONICA.COM.BR/SP, on July 7, 2003 its
Promotional Plan for Supplying Access Infra-Structure to Narrowband Internet
Services ("Promotional Plan"), subsequently complemented on July 22, 2003;

The SERVER is interested in adhering to such Promotional Plan's terms and
conditions; and

The SERVER fulfills the conditions set forth in the Promotional Plan for Hiring
Advertising Space by TELESP.

In witness whereof, the Parties decide to enter into the present Agreement for
Availability of Advertising Space ("Agreement"), through the execution of the
Request for Services, which will be governed by the following clauses and
conditions:

1. OBJECT

1.1.  This Adhesion Agreement has as its purpose hiring advertising space, by
      TELESP, in the SERVER'S PORTAL to release advertising of trademarks of
      TELESP ownership or of its direct or indirect controlling, controlled or
      colligate companies, provided that the provisions of Clause 2.1. and its
      Sub-Clauses hereinbelow are complied with.

1.2.  It is hereby set forth that the SERVER shall not release TELESP
      advertising or advertising of its direct or indirect controlling,
      controlled or colligate companies, which are the SERVER's competitors.

                                       4
<PAGE>

2. VALUES AND FORM OF PAYMENT.

2.1.     TELESP will monthly pay the SERVER, for the advertising space made
         available, pursuant to the terms of this Agreement, the amount
         calculated in accordance with Exhibit II to the present Agreement,

         2.1.1.   Each Party will bear the taxes of its responsibilities, in
                  accordance with the legislation in force, no kind of repassing
                  of taxes being admitted, including related to the creation of
                  new levying taxes or to modifications in the levying rules
                  (whether modification on the calculation basis or of the
                  aliquots).

2.2.     The monthly amount defined in Clause 2.1. will be readjusted every
         twelve (12) months, as of the current date, in the event of the
         Agreement extension, by the variation of the IGP-DI [General Price
         Index- Internal Availability], released by the Getulio Vargas
         Foundation, or, in case of that index extinction, by another index that
         will eventually legally replace it.

         2.2.1.   In case the legislation eventually allows, the re-adjustments
                  which item 2.2 above refers to, will occur in the least
                  periodicity possible.

2.3.     The amounts to be monthly paid by TELESP to the SERVER will be monthly
         calculated in accordance with the strictest terms of Exhibit II, so as
         to reflect the quantity of the SERVER's subscribers exposed to the
         hired advertising ("Target Public").

         2.3.1.   It is hereby set forth that TELESP will pay the SERVER the
                  aforementioned values solely for the Ports which provide the
                  occupation set forth in Exhibit 2 to this Agreement.

                                       5
<PAGE>

2.4.    TELESP will make available to the SERVER, until the fifth (5th) day of
        the month subsequent to the invoicing cutting date of the Dial Provider
        and/or E1 services ,a statement report ("Statement Report") containing
        the total amount of Dial Provider Ports and/or E1s, with the occupation
        established in item 1 of Exhibit II to this Agreement ("Statement
        Report"), occurred the previous month.

         2.4.1.   The SERVER shall invoice the amounts to be paid by TELESP by
                  virtue of the present Agreement, in accordance with the
                  Statement Report, in up to two (2) days subsequent to its
                  receipt, with maturity date on the twelfth (12th) of each
                  month.

                  2.4.1.1. The amounts related to this Agreement's first and
                           last month will be invoiced PRO RATA DIE.

         2.4.2.   TELESP shall make the respective payment through credit in
                  bank current accounts, to be informed by the SERVER in the
                  Request for Services.

         2.4.3.   The deposit vouchers in the SERVER's favor will be considered
                  as able documents for evidencing the acquittal of the payments
                  due by TELESP.

         2.4.4.   Subsequently to the invoicing of the amounts stated in the
                  Statement Report, the SERVER may challenge, with justication,
                  TELESP's report within up to ten (10) days, counted as of such
                  invoicing date.

         2.4.5.   TELESP will have a (10) ten-day term, counted as of the
                  receipt of the SERVER's challenge to appraise and adjudge such
                  challenge, informing the SERVER within the same period of
                  time.

                                       6
<PAGE>

         2.4.6.   In case TELESP considers that the SERVER's challenge of the
                  Statement Report has grounds, the SERVER shall, in the
                  following month's invoice, include the amounts resulting from
                  the challenge verification, added of the charges set forth in
                  item 2.6, calculated on the basis of the overcharged
                  difference..

2.5.     If, after TELESP's decision about the SERVER's challenge, the
         divergence between the Parties still persists, the issue shall be
         solved in accordance with the terms of Clause 10 hereinbelow.

2.6.     Assuming that the payments established in this Clause are not honored
         on the date herein agreed upon, there will levying on the amount of the
         portion due, independently of notification, of fine for payment on
         arrears of two per cent (2%) or of the maximum percentage allowed by
         the legislation in force that may eventually replace it, a single time,
         and fine for payment on arrears of one per cent (1%) per month or
         fraction of month, as well as monetary restatement verified by the
         variation of the General Index of Prices - DI (IGP-DI), released by the
         Getulio Vargas Foundation, as of the maturity date until the date of
         the effective payment. In the absence of that index, the official index
         that eventually replaces it, will be applied to the Agreement,
         calculated PRO RATA DIE., .

         2.6.1.   In the hypothesis of failure of payment for a period of thirty
                  (30) consecutive days, independently of notification, the
                  SERVER will be freed from the duty to make available the
                  advertising space hereby hired, regarding the unpaid amounts.

3. ADVERTISING

3.1.     The advertising spaces must be assigned by the SERVER in its Home Page
         and on the other pages of its site.

                                       7
<PAGE>

3.2.     The advertising spaces must be assigned exclusively to TELESP or to its
         direct and indirect controlling, controlled or colligate companies for
         all its products, exception made to the products which directly compete
         with the SERVER's, being agreed that TELESP, at its exclusive
         discretion, will define the content of the advertising releases.

3.3.     At TELESP's discretion, it will inform with ten (10) working days in
         advance, through each campaign's Media Plan, the channels to be used,
         in accordance with the specific needs, provided that the provisions of
         Exhibit I to this Agreement are complied with and the SERVER's
         inventory availability is respected. The Parties agree that the
         advertisements format, intensity and releasing period, contained in
         Exhibit I, can be changed, of common concord between the Parties.

3.4.     For releasing purposes, the formats mentioned in Exhibit I, as well as
         the new formats that may eventually appear, promoting TELESP's products
         and services and those of its direct or indirect controlling,
         controlled or colligate companies, provided that this is previously
         agreed upon, in writing, between the Parties, will be considered as
         advertising formats.

3.5.     TELESP shall supply the SERVER with the material to be released, within
         up to five (5) days prior to the intended release, and TELESP can
         replace the supplied material, at its exclusive discretion, provided
         that it advises the SERVER within, at least, five (5) days in advance,
         as of the material replacement.

3.6.     Insertions will be bound to the use of the price list for advertising
         release, in accordance with Exhibit I.

                                       8
<PAGE>

3.7.     The SERVER commits to make the hired spaces monthly available to
         TELESP, pursuant to the terms of this Agreement, equivalent to, at
         least, fifty per cent (50%) of the monthly value mentioned in Clause 2
         above and in Exhibit II.

3.8.     TELESP commits to use, every three (3) months, counted as of this
         Agreement execution date, at least fifty per cent (50%) of the monthly
         value mentioned in Clause 2 above and in Exhibit II. The spaces
         corresponding to the remainder fifty per cent (50%) and possibly unused
         along the three (3) months of compulsory release, must always be used
         in the three (3) subsequent months.

3.9.     The Parties commit to program the form and term of usage of the hired
         spaces, which were occasionally unused, during the Agreement's
         validity, ninety (90) days prior to the Agreement expiration, so that
         the possible programmed spaces, unused until then, are used throughout
         the subsequent quarter of year, even if subsequently to the Agreement
         expiration.

3.10.    The SERVER will make a report of its ad-server available to TELESP,
         herein understood as an inside control tool of the advertising
         campaigns, through an exclusive access password, so that the latter can
         verify the effective use of the advertising hereby hired.

4. LINKS

4.1.     The SERVER shall keep links in its respective PORTALS for direct access
         to the TELEFONICA Portal, accessible through the address
         WWW.TELEFONICA.COM.BR, through the inclusion of banners or any other
         form of advertising active release.

4.2.     The Parties hereby agree that the links mentioned in item 4.1
         hereinbefore will not be able to direct users to the Portals of

                                       9
<PAGE>

         TELESP's companies or to those of its direct or indirect controlling,
         controlled or colligate companies, which are the SERVER's competitors.

5. RESPONSIBILITIES OF THE PARTIES

5.1.     The Parties will appoint its respective, duly qualified,
         representatives for the purposes of this Agreement, who will be
         responsible for the technical information interchange between the
         Parties about the release of the publicity advertisements.

5.2.     TELESP will not be responsible for the services rendered by the SERVER,
         being each one responsible for complying with the legislation in force
         and for responding before consumers, public bodies and third parties.

5.3.     The SERVER bears no responsibility for the services provided by TELESP
         before its consumers, public bodies and third parties. TELESP will be
         solely exclusively responsible for the content of the advertisements to
         be released in the Portal, particularly concerning the compliance with
         the relevant legislation, specially, albeit not exclusively, the
         Consumer Protection Code, the Standard Rules of the Advertising
         Activity-CENP [Executive Council of Standard Rules] and the
         Self-Regulation Publicity Code of CONAR [National Council for
         Advertising Self-Regulation].

5.4.     Pursuant to the terms of the Promotional Plan, bound to the present
         Agreement, the SERVER commits to guarantee its full fidelity with the
         services of Access Infra-Structure to Narrowband Internet Services,
         hired with TELESP, in accordance with the Promotional Plan, and shall
         assure that the integrality of the dialed access connections to the
         Internet in Region III of the GPG finishes in the CLTS [Commuted
         Landline Telephone Service] network or in any other TELESP network.

                                       10
<PAGE>

         5.4.1.   The fidelity commitment set forth in the Promotional Plan and
                  ratified in accordance with the terms of item 5.4 above, is
                  conditioned to the attendance, by TELESP, of the requests for
                  Dial Provider Ports and/or the SERVER's E1.

         5.4.2.   In the situations when TELESP states that it will not comply
                  with the requests of the Dial Provider Ports SERVER, the
                  latter shall, by hiring E1, assure that the integrality of the
                  dialed access connections to the Internet in region III of the
                  GPG finishes in the CLTS network or in any other TELESP
                  network.

                  5.4.2.1. In the assumptions of item 5.4.2., in case the SERVER
                           eventually hires E1 outside the conditions set forth
                           in the Promotional Plan, it will not be entitled to
                           any payment, as a result of having entered into this
                           Agreement, regarding those E1s.

         5.4.3.   With no loss to the provisions of item 5.4.2., whenever TELESP
                  fails to meet the service levels ("SLA") set forth in the
                  Agreement for Services Providing and in the Agreement for
                  Supplying Access Infra-Structure for to the Internet Services
                  - Dial Provider, the SERVER will be freed from the fidelity
                  duty established in item 5.4 above, for the localities where
                  the ports, the service level (SLA) of which has not been
                  provided.

6. VALIDITY

6.1.     The present Agreement will remain valid and in force for the term of
         one (1) year, counted as of the execution of the Request for Service,
         date when the advertising release, hereby hired, will start, and can be
         extended until December 31, 2005, through the SERVER's previous express
         wish.

                                       11
<PAGE>
         6.1.1.   This Agreement cannot be extended pursuant to the terms of
                  item 6.1 above, in case the SERVER eventually fails to comply
                  with any of this Agreement's conditions or those of the
                  Promotional Plan, or in case the Agreement for Supplying
                  Access Infra-Structure to the Narrowband Internet Services,
                  entered into by virtue of the Promotional Plan (Dial Provider
                  and/or E1) is eventually terminated.

7. TERMINATION

7.1.     The present instrument cannot be terminated in advance by any of the
         Parties, due to unjustified accusation.

7.2.     Any of the Parties can terminate the Agreement in the event of:

         7.2.1.   Bankruptcy of the other Party;

         7.2.2.   Incompliance, by the other Party, with any of the duties set
                  forth in this Agreement, without the due remedy within a (60)
                  sixty-day term, counted as of the notification date to the
                  Violating Party;

         7.2.3.   Incompliance with any provision of the Promotional Plan;

         7.2.4.   Failure in the payment on the part of TELESP, pursuant to the
                  provisions of item 2.6.2.

7.3.     In any assumption of termination of the present Agreement, the
         Agreement for Supplying Access Infra-Structure to the Narrowband
         Internet Services and the Agreement for Improvement of Telephonic
         Traffic, entered into with TELESP by virtue of

                                       12
<PAGE>
         the Promotional Plan, are immediately terminated, being the Party which
         has not given reason for termination, the creditor of the termination
         fine set forth in those agreements, and the aforementioned fine will
         have to be paid to the creditor Party within thirty (30) weekdays,
         counted as of those Agreements' termination date.

         7.3.1.   It is hereby set forth that none of the Parties can claim any
                  other indemnification or compensation apart from the penalty
                  set forth in item 7.3 above, including losses and damages,
                  arisen from this instrument advanced termination.

7.4.     In any event of termination of this Agreement, as well as the natural
         expiration of its validity term, the Parties will be committed to
         settle its duties until the termination date.

8. CONFIDENTIALITY

8.1.     Both Parties, by virtue of the access they have had and will have to
         the other Party's privileged or confidential information, reciprocally
         commit, except for the assumptions set forth in 8.2 below:

                  a) not to disclose, either totally or partially, the
                  existence, the object and/or content of this Agreement to any
                  third parties whatsoever, which are not their respective
                  administrators, representatives, employees or consultants,
                  from whom it shall demand, under its exclusive responsibility,
                  equal confidentiality duties;

                  b) not to allow access of third parties to the other Party's
                  confidential information, apart from their administrators,
                  representatives, employees or consultants and to these, just
                  in the extension needed to allow the achievement of this
                  Agreement's object.

                  c) not to use any information, except for the purposes
                  established in the Agreement; and

                                       13
<PAGE>

                  d) to keep full confidentiality regarding the received
                  information, including rigorously endeavoring to prevent
                  circulation of copies, e-mails, faxes and other forms of
                  private or public communication of such information, besides
                  those which are strictly needed for complying with this
                  Agreement.

8.2.     The Parties state that there will be no violation to the provisions of
         this clause, in the assumptions when:

                  a) the information becomes available to the public in general,
                  through a means that does not result in its disclosure by the
                  Parties or their representatives, controlling, controlled
                  companies or companies that, either directly or indirectly,
                  are subject to the same control that the Party is subject to,
                  which have been authorized in accordance with letter "c"
                  below:

                  b)disclosure is demanded by a governmental authority or
                  competent court order, under the penalty of incompliance being
                  featured or another penalty. In such hypotheses, the content
                  to be disclosed shall be object of all the applicable
                  governmental or judicial protection, being that the Party that
                  is compelled to disclose such information, must promptly
                  notify the other Party, about the disclosure; or

                  (c) the disclosure has been previously authorized, in writing,
                  by the other Party, in writing.

8.3.     The Parties acknowledge that the provided confidential information
         constitute exclusive property of the Party that has supplied such
         information and disclosing such information or the fact of having
         entered into this Agreement does not imply, anyhow, license,
         authorization, assignment, transference, either tacit, express or
         implied, of any copyright, or the right to intellectual property, idea,
         concept, trademark, patent or other ownership right of the Parties.

                                       14
<PAGE>
8.4.     For the purposes of this Agreement, it is understood by confidential or
         privileged information each and all information and documents of any
         kind which are delivered to one of the Parties by the other Party, or
         by its consultants, auditors, accountants, attorneys, representatives
         and employees, which relate to the Parties' businesses or to the
         businesses of their respective clients, suppliers and associates,
         including, but not limiting in any way, management data, financial data
         and market strategies. The Parties shall advise those to whom they
         provide access to confidential information of the other Party about the
         secrecy and non-disclosure duty herein agreed upon.

8.5.     The Parties will remain under the obligation of keeping the strictest
         secrecy regarding the confidential or privileged information obtained
         by virtue of the Agreement execution, for a (5) five-year term, counted
         as of its expiration.

8.6.     Violation to the duties established in this Clause 8 or incompliance
         with the confidentiality duties set forth in this instrument, shall
         subject the infracting party to compensate all the losses incurred by
         the Party damaged by such violation, being this duty to indemnify
         exclusively limited to the direct, duly evidenced damages, that such
         damaged Party will eventually undergo by virtue of the incompliance
         with the confidentiality duties herein agreed upon.

9. OTHER CONTRACTUAL CONDITIONS

9.1.     The present Agreement cannot be assigned or in anyhow transferred to
         third parties by any of the Parties, without the prior express consent
         of the other Party.

9.2.     All the deals between the Parties related to the execution of the
         present Agreement shall be made in writing, exception made to possible
         verbal policies arisen due to emergencies, which shall be formalized by
         the Parties, within the maximum term of five (5) days, subsequent to
         the event occurrence.

                                       15
<PAGE>
9.3.     Except for an express provision otherwise, all this Agreement's terms
         and conditions will expire, independently of notice or judicial or
         extrajudicial notification.

9.4.     Tolerance to possible infractions of the other Party to the conditions
         set forth in this Agreement will not be considered as case law or
         renewal or yet waiver to the rights that the legislation and the
         Agreement assure to each Party.

9.5      This Agreement binds the Parties and their successors, on any account.

9.6.     None of the Parties will be liable for losses and damages, particularly
         incidental or indirect damages and loss of profit, nor will it
         indemnify commercial failure of the other Party, nor will it be liable
         for claims of third parties or clients arisen from failures occurred in
         the performance of the other Party's responsibility, except for the
         situations of direct damages and in those cases in which deliberate
         action or omission of one Party to damage the other (malice) is
         evidenced.

9.7.     The present Agreement is fully bound and dependent on the terms stated
         in the Promotional Plan, published by TELESP in its site:
         HTTP://WWW.TELEFONICA.COM.BT/SP, on July7, 2003, subsequently
         complemented on July 22, 2003.

9.8.     The Parties agree that, in the event of conflict between the
         Promotional Plan and the present Agreement, the provisions set forth in
         this Agreement will prevail.

10.CONFLICT SOLVING

10.1.    The Parties shall lend their best efforts towards solving, in a
         friendly way, any conflicts that may eventually arise from the
         execution of the present Agreement.

                                       16
<PAGE>
10.2.    The conflicts arisen from divergence towards the Statement Report to
         which item 2.4 hereinbefore refers to, will be solved in the following
         way:

         10.2.1.  In case the difference between the minutes stated in the
                  Statement Report delivered by TELESP and the well-founded
                  verification performed by the SERVER is higher than three per
                  cent (3%), the SERVER will be allowed, at its expenses, to
                  audit the verification process used by TELESP.

                  10.2.1.1.  For the purposes of the auditing established in
                             item 10.2.1 above, the SERVER shall appoint
                             independent auditors, chosen among the four major
                             auditing firms in the market, to perform such
                             auditing.

                  10.2.1.2.  Within thirty (30) days, counted as of the
                             auditors' appointment by the SERVER, TELESP shall
                             allow the onset of the auditing process, by
                             complying with the necessary conditions required
                             for the auditing process.

                  10.2.1.3.  Having the auditing been concluded, the verified
                             amount will be compared to the amount invoiced by
                             the SERVER and paid by TELESP and, there being any
                             difference, it will be inserted in the subsequent
                             month invoicing.

11. VENUE

10.12.   It is hereby elected the Central Court of the County of Sao Paulo - SP,
         which will have jurisdiction to settle any conflicts that may arise
         from this Agreement execution, with the exclusion of any other,
         privileged as it may be.

                                       17
<PAGE>

Sao Paulo, July 22, 2003.

/s/ FABIO SILVESTRE MICHELI                  /s/ STAEL PRATA SILVA FILHO
---------------------------------            ----------------------------------
FABIO SILVESTRE MICHELI                      STAEL PRATA SILVA FILHO
VICE-PRESIDENT                               EXECUTIVE VICE-PRESIDENT
COMMERCIAL -RESIDENTIAL                      OF STRATEGIC PLANNING

                   TELECOMUNICACOES DE SAO PAULO- S.A. -TELESP

                                       18
<PAGE>

                                    EXHIBIT 1

                              ADVERTISEMENT FORMAT

1.       TELESP will make preferentially available two (2) advertising formats
         for the release in the Portals, to which the conversion rules based on
         the CPT [Cost Per Thousand] will be applied. In case there is
         availability and interests of the Parties, TELESP will use
         differentiated formats and models, but this has to be duly and
         previously agreed upon between the Parties.

         1.1.     CPT means the cost per one thousand impressions released by
                  the Portal

         1.2.     The preferential formats are:

                  1.2.1.   Full Banner: 468 pixels up to 12Kbytes.

                  1.2.2.   Pop Up: 230 x 220 pixels up to 12 Kbytes.

         1.3.     TELESP will pay the amounts stated in the Chart below per
                  achieved CPT, in accordance with each SERVER's profile.

                  1.3.1.   Profile Premium: SERVERS which present in their
                           Portals more than four hundred and fifty thousand and
                           one( 450,001) single visitors per month;

                  1.3.2.   Profile Specific : SERVERS which present in their
                           Portals public segmentation of over 70% of their
                           bases. Segmentation means the homogeneous profiles of
                           public with merchandizing relevance (financial
                           institutions, specific associations, professional,
                           class and religious entities).

<PAGE>

                  1.3.3.   Profile Standard: SERVERS with more than ten thousand
                           and one (10,001) and fewer than four hundred and
                           fifty thousand and one (450,001) single visitors per
                           month.

                  1.3.4.   Profile Light: SERVERS with fewer than ten thousand
                           (10,000) single visitors per month and/or whose
                           volume of monthly impressions is not sufficient for
                           the coverage of the payments effected by TELESP. In
                           this case, TELESP will use specific formats to be
                           uninterruptedly released in its home page, throughout
                           the validity of the Agreement.

                                      CHART
       ---------------------------------------------------------------------
                                 CHART- AMOUNTS
       ---------------------------------------------------------------------

       ---------------------------------------------------------------------
                  PROFILE             FORMAT               PRICES
       ---------------------------------------------------------------------
                                    Full Banner           R$ 20,00

                  Premium             Pop Up              R$ 15,00
       ---------------------------------------------------------------------
                                    Full Banner           R$ 25,00

                 Specifics            Pop Up              R$ 20,00
       ---------------------------------------------------------------------
                                    Full Banner           R$ 10,00

                 Standard             Pop Up               R$ 8,00
       ---------------------------------------------------------------------

<PAGE>

                                   EXHIBIT II
                          PRICE AND PAYMENT CONDITIONS

1.       TELESP will pay the SERVER for the advertising space made available,
         pursuant to the terms of this Agreement, a monthly amount of
         twenty-seven REAIS and eighty CENTAVOS (R$ 27,80) per each Dial
         Provider port with occupation of fourteen thousand (14,000) minutes per
         month and/or the amount of six hundred and sixty-six REAIS and ninety
         CENTAVOS (R$ 666,90) per each E1 with occupation of three hundred and
         thirty thousand (330,000) minutes per month.

         1.1.     For the purposes if item 1 above, it is hereby agreed by the
                  Parties that each Dial Provider Port corresponds to the
                  audience of ten (10) users and that each E1 corresponds to the
                  audience of three hundred (300) users, independently of
                  variation.

         1.2.     It is understood by users, each and every subscriber or
                  visiting user to the SERVER's Portal.

2.       The occupation of the Ports will be measured in accordance with the
         provisions set forth in the Agreements for Access Infra-Structure to
         the Narrowband Internet Services, entered into by virtue of the
         Promotional Plan.

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