Document:

TERMS OF ASSIGNMENT AND TRANSFER OF SHARES

 

EXHIBIT 10.11

TERM OF ASSIGNMENT AND TRANSFER OF SHARES,

FINANCIAL SETTLEMENT AND RELEASE

PURCHASE AND SALE OF SHARES ISSUED BY

TELE CENTRO OESTE CELULAR PARTICIPAÇÕES S.A.

Pursuant to the present instrument, the parties hereinafter identified:

(a) BID S.A., a corporation with headquarters at Av. Brasil, 331, Room 03,
Terra Vermelha, in the city of Sorocaba, State of São Paulo, enrolled with the
Corporate Taxpayer’s Registration Card — CNPJ under no. 02.573.260/0001-81,
herein represented by its Executive Vice-President, Antonio Roberto Beldi,
Brazilian, married, engineer, bearer of the ID Card — RG no. 4.169.337 SSP-SP
and enrolled with the Taxpayer’s Identity Card — CPF/MF under no.
618.760.038-04, residing in the city of Sorocaba, State of São Paulo, with
office at Av. Juscelino Kubitschek de Oliveira, 154, Lageado, in the city of
Votorantim, State of São Paulo (hereinafter referred to as “BID”); BELPART
PARTICIPAÇÕES LTDA., surviving entity of the merger of CABO PAULISTA S.A. into
Belpart Participações Ltda., a limited liability company with headquarters in
the City of São Paulo, State of São Paulo, at Rua Santa Clara, 49, 2nd floor,
Room 4, Downtown, ZIP Code 18030-420, enrolled with the Corporate Taxpayer’s
Registration Card — CNPJ/MF under no. 05.141.832/0001-41, whose organization
documents are filed at JUCESP (Companies Registrar of the State of São Paulo)
under NIRE no. 35.217.626.199, herein represented by its administrator, Mr.
Antonio Roberto Beldi identified above (hereinafter referred to as “BELPART”);
and SPLICE DO BRASIL TELECOMUNICAÇÕES E ELETRÔNICA S.A., a corporation with
headquarters at Av. Juscelino Kubitschek de Oliveira, 154, Lageado, in the city
of Votorantim, State de São Paulo, enrolled with the Corporate Taxpayer’s
Registration Card — CNPJ under number 45.397.007/0001-27, herein represented by
its Director Vice-President, Antonio Roberto Beldi identified above
(hereinafter referred to as “SPLICE” and, along with BID and BELPART, the
“Sellers”); and

(b) TELESP CELULAR PARTICIPAÇÕES S.A., corporation with headquarters at Rua
Abílio Soares, 409, in the city of São Paulo, State of São Paulo, enrolled with
the Corporate Taxpayer’s Registration Card — CNPJ under no. 02.319.126/0001-59,
herein represented by its Directors Francisco José Azevedo Padinha, portuguese,
married, engineer, bearer of RNE’s ID card V-248636-O and enrolled with the
Individual Taxpayer’s Identity Card —  CPF/MF under no. 055.063.577-70,
residing at Rua Abílio Soares, 409, Paraíso, São Paulo,

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and Gilson Rondinelli Filho,
brazilian, married, engineer, bearer of ID Card —
RG no. 4.347.710 SSP/SP, and enrolled with the Taxpayer’s
Identity Card —
CPF/MF under no. 439.603.328-15, residing at Rua Abílio Soares, 409, Paraíso,
São Paulo, (hereinafter referred to as “Buyer”),

and still, as Consenting Interveners,

(c) BRASILCEL N.V., a corporation organized in accordance with and existing
under the laws of Holland, with headquarters located at Strawinskyiaa 3105,
Amsterdam, Holland, herein represented by its attorneys-in-fact Francisco José
Azevedo Padinha, identified above, and Fernando Abella Garcia, spanish, single,
economist, bearer of ID Card — RNE V275827-Q MJ-DPF/DELEMAF/SR/RJ, and enrolled
with the Individual Taxpayer’s Identity Card — CPF/MF under no. 055.017.227-04,
with offices located at Praia de Botafogo, 501, 7th Floor, Torre
Corcovado —
Botafogo, Rio de Janeiro, RJ (hereinafter referred to as “Brasilcel”); and

(d) FIXCEL S.A., corporation with headquarters at Rua Santa Clara, 49, 2nd
Floor, Room 03, Downtown, in the city of Sorocaba, State of São Paulo, enrolled
with the Corporate Taxpayers’ Registration Card — CNPJ under no.
02.792.099/0001-37, herein represented by its Executive Vice-President, Antonio
Roberto Beldi, identified above, (hereinafter referred to as “Fixcel”).

     DECIDE to perfect and to formalize the Closing of the operations set
forth in the Agreement for the Purchase and Sale of Shares (the “Definitive
Agreement”) and in the Closing Term (the “Closing Term” and, along with the
Definitive Agreement, the “Definitive Agreements”), entered into by the parties
and interveners (or predecessors), respectively on March 24, 2003 and on April
11, 2003, according to which the Sellers are obliged to sell, and the Buyer is
obliged to buy, shares held by the Sellers (successor companies or assignees)
representing the control (the “Control Stock” or “Control Share”) of Tele
Centro Oeste Celular Participações S.A. (“TCOPar”), according to the clauses
and conditions set forth in this Term of Assignment and Transfer of Shares,
Financial Settlement and Release (the “Settlement Term”).

	1.	 	Definitions:

Unless otherwise explicitly defined, terms used in this Settlement Term will
have the same meaning ascribed to them in the Definitive Agreements.

	2.	 	Assignment and Transfer of Control Stock

	2.1	 	 The Sellers hereby assign, transfer and deliver to the Buyer, pursuant to
the amounts and in the proportion indicated below, the Control Stock (or
the rights to Control Stock as per item 2.3 below), consisting of the
total amount of 77,256,410,396 (seventy seven billion, two hundred fifty
six million, four hundred ten thousand, three hundred ninety six) common
shares, representing 61.10% (sixty one point ten per cent ) of the voting
capital and 20.37% (twenty point thirty seven per cent) of

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	 	 	the total capital of TCOPar, not including the treasury stock in the
amount of 5,791,393,886 (five billion, seven hundred ninety one million,
three hundred ninety three thousand, eight hundred eighty six) common
shares, free and clear of all liens, encumbrances, disputes, debts or
burdens, legal or conventional, judicial or non-judicial, except as set
forth in the new Annex 8.1.2 hereof, that substitutes, for all purposes,
the Annex 8.1.2 of the Definitive Agreements.

	 	 	 	 	 	 	 	 	 
	Seller	 	No of Control Shares	 	 	 	 
	
	 	
	 	 	 	 
	BID
	 	 	5,152,400,000	 
	BELPART
	 	 	67,374,010,396 	(1)
	SPLICE
	 	 	4,730,000,000 	(2)
	Total
	 	 	77,256,410,396	 

	(1)	 	Of this total, 1,231,800,000 shares were acquired by Splice for
Future Settlement, and will be transferred to BelPart and,
subsequently, to the Buyer according to Clause 2.3.

	 
	(2)	 	Of this total, 318,200,000 shares were acquired by Splice for
Future Settlement, and will be transferred to the Buyer according to
Clause 2.3.

2.2 The parties hereby execute the transfer terms and other documents necessary
to the registration, with the depositary institution in charge of bookkeeping
of the shares of TCOPar, in its books and record of the transfer of
75,706,410,396 (seventy five billion, seven hundred six million, four hundred
ten thousand, three hundred ninety six) Control Shares to the Buyer, whose
copies constitute Annex 2.2 hereof.

2.3 The parties hereby execute the Private Instrument of Assignment and
Transfer Right over Shares Acquired for Future Settlement, according to which
Sellers assign, transfer and deliver to the Buyer, all rights held over the
1,550,000,000 (one billion, five hundred fifty million) remaining Control
Shares, acquired for future settlement in the stock exchange, the copy of which
constitutes the Annex 2.3 hereof.

	3.	 	Price Ratification and Payment.

3.1 The Buyer and the Sellers hereby confirm and ratify the Price of the
Control Stock, which, increased by the compensation set forth in the
Definitive Agreement, is at the present date equal to R$1,505,511,001.57 (one
billion, five hundred five million, five hundred eleven thousand, one real and
fifty seven cents), corresponding to R$19.48719845 per thousand Control Shares,
to be paid according to Clause 2.3 of the Definitive Agreement, as follows:

     (a) the amount of R$254,585,321.13 (two hundred fifty four million, five
hundred eighty five thousand, three hundred twenty one reais and thirteen
cents) is paid herein to the Sellers as per Clause 2.3.(a) of the Definitive
Agreement, according to the written instructions given by the Sellers to the
Buyer, according to which the Sellers give the Buyer the broadest, fullest,
most, irrevocable and irreversible release, so that no more claims are made
against the Buyer, as to this installment of the Price;

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     (b) the amount of R$53,484,311.16 (fifty three million, four hundred
eighty four thousand, three hundred eleven reais and sixteen cents) is hereby
withheld as Collateral, in the form and for the purposes of Clause 4.4 of the
Definitive Agreement, that shall be paid and released by the Buyer to the
Sellers increased by the compensation and in accordance with the deadline set
forth in Clauses 2.3(b), 4.4 and other applicable provisions of the Definitive
Agreement;

     (c) the amount of R$80,226,466.74 (eighty million, two hundred twenty six
thousand, four hundred sixty six reais and seventy four cents) will be paid by
the Buyer to the Sellers, plus compensation and according to the term set forth
in Clause 2.3(c) of the Definitive Agreement, such obligation being represented
by 3 (three) promissory notes issued by the Buyer, in the amounts of
R$5,351,105.34, R$69,957,478.99 and R$4,917,882.41, which are now being
respectively delivered to BID, Belpart and Splice, in compliance with the
provisions of Clause 2.3.1 of the Definitive Agreement;

     (d) the amount of R$1,105,784,019.55 (one billion, one hundred five
million, seven hundred eighty four thousand, nineteen reais and fifty five
cents) will be paid in cash, in installments, in the amounts, conditions and
payment deadlines set forth in Annex 2.3(d) hereof, plus interest,
inflationary adjustment, exchange variation and other charges incurred up to
the date of each payment set forth in the referred Annex 2.3(d), that was
prepared and determined according to the provisions of Clauses 2.3(d) and 5.6
of the Definitive Agreement and based on the relation of the Financial
Obligation of the Sellers, in force on this date, that constitutes the new
Annex 5.6, and the parties declare to agree expressly, with no reservations,
with the related new Annexes 2.3.(d) and 5.6 hereof, that substitute, for all
due purposes and effects, the Annexes 2.3(d) and 5.6 of the Definitive
Agreements, observing the following:

          (d.1) out of this installment of the Price, the amount of R$18,711,031.22
(eighteen million, seven hundred eleven thousand, thirty one reais and twenty
two cents) is totally paid at this term to the Sellers, according to the
written instructions given by the Sellers to the Buyer, according to which the
Sellers give the Buyer the broadest, fullest, most irrevocable and irreversible
release, so that no more claims can be made against the Buyer regarding this
installment of the Price; and

          (d.2) also out of this installment of the Price, the amount of
R$74,550,018.02 (seventy four million, five hundred fifty thousand, eighteen
reais and two cents) of the installment of the Price, covered by Clause 2.3(d)
of the Definitive Agreement, as amended by this Clause 3.1(d), identified in
item B.10 of the Annex 2.3(d) and in the corresponding item of Annex 5.6
hereof, already reflect the negotiations discussed between the Sellers and the
BNDES Participações S.A. (“Bndespar”) involving the early liquidation by the
Sellers of the respective Financial Obligation of the Sellers, identified in
Annex 5.6. hereof. The referred installment will be due on 08/08/2003 to the
Sellers, increased with the compensation corresponding to the CDI variation
plus 2% (two per cent) per annum, calculated over the mentioned amount from the
present date until the date of its effective payment to the Seller. The Buyer
will have the right to pay the mentioned installment directly to Bndespar, in
the form of Clause 5.7.1 of the Definitive Agreement, in case the Sellers do
not present the Buyer, until the release maturity date of

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the referred installment, the following documents: (i) receipt issued by
Bndespar according to which Bndespar acknowledges the payment and settlement of
the Financial Obligation of the Sellers owed to Bndespar, with the subsequent
settlement of the debentures issued by BID and subscribed by Bndespar; and
(ii) documents proving the release and cancellation of the collateral
obligation created on the Control Stock to guarantee the referred obligations
of BID to Bndespar.

          (d.3) the Buyer and Brasilcel will be jointly liable for the benefit of
the Sellers, each of them in the condition of principal payer, of the
installment of the Price set forth in the Annex 2.3(d) hereof, the charges of
which are or will come to be pegged to currency exchange gains or losses.

3.1.1 The parties acknowledge that the amount of R$11,430,882.99 (eleven
million, four hundred thirty thousand, eight hundred eighty two reais and
ninety nine cents) is owed by the Buyer to Sellers, in addition to the amount
set forth in Clause 3.1(d) above, corresponding to the balance in favor of the
Sellers derived from the costs and expenses of refinancing and/or settlement of
the Financial Obligation of the Sellers incurred by the parties until this
date, described in Annex 3.1.1 hereof, which is totally paid to the Sellers
according to the written instructions delivered by the Sellers to the Buyer,
according to which the Sellers give the Buyer the broadest, fullest, most
irrevocable and irreversible release, so that no more claims are made against
the Buyer regarding this installment of the Price. The Sellers will deliver to
the Buyer the documents proving the referred costs and expenses, it being
understood that, once there is an adjustment in favor of the Sellers or of the
Buyer, such adjustment shall be added to or decreased from, according to the
case, of the installment of the Price with a maturity date immediately
subsequent thereto.

3.2 The Buyer, delivers to the Sellers the guarantees referred to in Clause 5.8
of the Definitive Agreement, issued based on the new Annex 5.6, whose copies
constitute the Annex 3.2 hereof, that will be delivered by the Sellers directly
to the respective creditors.

	4.	 	Representations and Other Undertakings and Provisions pertaining to the
Closing.

4.1 The parties consider effective and valid, for all due purposes, the
instruments and contracts referred to in items (iii), (iv) and (v) of Clause
5.1 of the Closing Term, as provided for in Clause 5.2 of the Closing Term.

4.2 The Buyer hereby pays to BELPART the price set forth in the agreement of
assignment of rights and obligations set forth in Clause 5.1 of the Definitive
Agreement, and BelPart grants to the Buyer, separately, the corresponding
release.

4.3 Representations:

     (a) The Buyer confirms that the representations and collateral guarantees
of the Buyer contained in the Definitive Agreement or in its respective Annexes
are, in their material aspects, true on this date, as if they had been made on
the Closing Date.

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(b) The Sellers declare and confirm to the Buyer as follows:

(i) The Sellers have performed, up to the present date, all their
duties according to the terms of the Definitive Agreement, including
the compliance by TCO and its controllers with the Performance Plan
for the management of TCO, covered by Annex 5.3 of the Definitive
Agreement, and have complied with, up to this Closing Date, the
guidelines mentioned in Clause 5.3 of the Definitive Agreement, not
having performed any of the acts described in Clause 5.3.1 which
have not been previously informed to the Buyer according to terms of
the same Clause 5.3.1. of the Definitive Agreement;

(ii) The Sellers confirm that the statements and guarantees of the
Sellers contained in the Clauses 8.1.1, 8.1.2, 8.1.3, 8.1.4, 8.1.5, 8.1.6
and 8.1.7 of the Definitive Agreement or in its respective Annexes are,
in their material aspects, true on this date, as if they had been made on
this Closing Date, except for the amendments derived from TCO’s regular
course of business. Particularly, the Sellers declare and guarantee that
they continue to be holders of the Control Stock, according to the
amounts and proportions indicated in Clause 2.1 above .

4.4 The Sellers deliver to the Buyer a declaration and a statement issued by
the financial institution in charge of the register of the shares of TCOPar
that confirms the amount of Control Stock effectively held by the Sellers on
the Closing Date.

4.5 The Buyer confirms having received the documents referred to in item (ix)
of Clause 6.2 of the Closing Term.

4.6 The Buyer waives the confirmation of availability of the corporate tax and
accounting books of TCO; thus, the delivery of such books will occur, as the
case may be, in headquarters of TCOPar and of each of the respective TCO
Controlled Companies.

	5.	 	Other Commitments.

     TCOPar, Splice and the Buyer shall communicate to their respective
shareholders and to the market, through the publication of a notice of material
fact, the Closing, on this date, of the sale of the control of TCOPar from the
Sellers to the Buyer.

	6.	 	Ratification to the Definitive Agreement.

     The parties and the interveners expressly ratify all clauses and
conditions of the Definitive Agreements that have not been expressly amended by
means of this Settlement Term, and confirm their respective obligations, which
shall be totally fulfilled according to the terms of the Definitive Agreements,
as amended by the present Settlement Term.

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	7.	 	Applicable Law and Venue.

The present Settlement Term shall be governed and construed in accordance with
the laws of the Federative Republic of Brazil. The parties will try to solve
amicably their disputes related to the Definitive Agreements and this
Settlement Term, in good faith. If it is not possible to reach an amicable
solution of the controversies that may arise from the interpretation or
application of the Definitive Agreements, as amended by the present Settlement
Term, such controversies and questions will be submitted to the exclusive
jurisdiction of the courts of the Capital of the State of São Paulo, with
preference over any other courts, irrespective of how privileged they might be.

In witness whereof, the parties sign this document in four (04) counterparts of
equal tenor and form, in the presence of two (02) witnesses signed below.

São Paulo, April 25, 2003.

Sellers:

BID S.A.

Antonio Roberto Beldi

Director Vice-President

BELPART PARTICIPAÇÕES LTDA.

Antonio Roberto Beldi

Administrator

SPLICE DO BRASIL

TELECOMUNICAÇÕES E ELETRÔNICA S.A.

Antonio Roberto Beldi

Director Vice-President

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[Signature Page of the Term of Assignment and Transfer of Shares, Financial

Settlement and Release dated as of 04/25/2003]

Buyer:

TELESP CELULAR PARTICIPAÇÕES S.A.

Francisco José Azevedo Padinha

Gilson Rondinelli Filho

Directors

Consenting Interveners:

	 	 	 
	

	 	

	BRASILCEL N.V	 	
FIXCEL S.A.
	Francisco José Azevedo Padinha	 	
Antonio Roberto Beldi
	Fernando Abella Garcia	 	
Director Vice-President
	Proxies	 	 

Witnesses:

	 	 	 	 	 	 	 	 	 
	1.	 	 	 	

	2.

	

	 	 
	 	

	 	 	 	

In the event of any inconsistency between this free English translation and the
Portuguese original of this Term of Assignment and Transfer of Shares, Financial
Settlement and Release, the latter version shall prevail.

8<PAGE>
                                                                   Exhibit 10.22

         PRIVATE INSTRUMENT OF THE TERMS OF THE FIRST ISSUE OF NON-CONVERTIBLE
                    DEBENTURES OF TELESP CELULAR PARTICIPACOES S.A.

By means of this Private Instrument, the issuer,

TELESP CELULAR PARTICIPACOES S.A., a publicly-held company with its main place
of business in the City of Sao Paulo, State of Sao Paulo, at Rua Abilio Soares,
no. 409, enrolled as corporate taxpayer with the registry of the Ministry of
Finance (CNPJ/MF) under the number 02.558.074/0001-73, herein represented in the
form of its bylaws ("Issuer");

and as underwriter.

TELESP CELULAR S.A., a publicly-held company with its main place of business in
the City of Sao Paulo, State of Sao Paulo, at Rua Abilio Soares, no. 409, 15th
floor, enrolled as corporate taxpayer in the registry of the Ministry of Finance
(CNPJ/MF) under the number 02.319.126/0001-59, herein represented in the form of
its bylaws as underwriter by providing a guarantee under the terms of Clause
VIII below ("Underwriter");

and as fiduciary agent,

OLIVEIRA TRUST D.T.V.M. Ltd., financial institution with its main place of
business in the City of Rio de Janeiro, State of Rio de Janeiro, at Avenida das
Americas no. 500, Bloco 13, Grupo 205, enrolled as corporate taxpayer in the
registry of the Ministry of Finance (CNPJ/MF) under the number
36.113.876/0001-91, herein represented in accordance with its bylaws,
collectively representing the debenture holders of the 1st debenture issue of
the Issuer ("Debenture holders") ("Fiduciary Agent"),

do hereby lawfully register the Private Instrument of the Terms of the First
Issue of Non-Convertible Debentures of Telesp Celular Participacoes S.A.
(respectively, "Indenture", "1st Issue" and "Debentures"), which shall be
governed by the clauses and conditions described hereinafter.

Clause I - AUTHORIZATION

1.1. The present Indenture is entered into pursuant to the authorization granted
by the Board of Directors of the Issuer at a meeting held on July 10th, 2003
("BDM"), under the terms of article 59, paragraph 1, of Law no. 6404, of
December 15, 1976 and subsequent alterations thereof ("the Corporation Law") and
article 17, section III of its bylaws.

<PAGE>

Clause II - REQUIREMENTS

2.1      Registration with the Brazilian Securities Exchange Commission

2.1.1. The 1st Issue shall be registered with the Brazilian Securities and
Exchange Commission ("CVM"), under the terms described in Law no. 6385 of
December 7, 1976, in the Corporation Law and subsequent alterations thereof, and
in other applicable legal and regulatory provisions.

2.2      Filing and Publishing the Minutes of the Board of Directors Meeting

2.2.1. The minutes of the BDM are being filed before the Commercial Registry of
the State of Sao Paulo ("JUCESP"). -------

2.3      Registration of the Indenture

2.3.1. This Indenture shall be registered with JUCESP in compliance with the
provisions of article 62, subparagraph II of the Corporation Law.

2.4      Registration with the National Association of Investment Banks

2.4.1. The public offering of debentures of the 1st Issue shall be registered at
the National Investment Bank Association ("ANBID") within 15 (fifteen) days as
of the date of the CVM's granting the respective registration in accordance with
the provisions in ANBID's Self- Regulatory Code for Public Offerings of
Securities.

Clause III - CHARACTERISTICS OF THE 1st ISSUE

3.1       Series

3.1.1. The 1st Issue shall be made in 1 (one) sole series.

3.2      Total Amount of the 1st Issue

3.2.1. The total amount of the 1st Issue shall be R$700,000,000.00 (seven
hundred million Brazilian reais) on the Date of Issue, as defined below.

3.3       Number of Debentures

3.3.1. A total of 7,000 (seven thousand) Debentures shall be issued.

3.4       Use of Funds

<PAGE>

3.4.1. The funds raised through the 1st Issue shall be used to refinance the 2nd
Issue of Promissory Notes by the Issuer.

3.5    Limit for the 1st Issue

3.5.1. The 1st Issue shall remain within the limits described in article 60 of
the Corporation Law, since the Issuer's paid-up capital on this date is
R$4,373,661,469.73 (four billion, three hundred and seventy-three million, six
hundred and one thousand, four hundred and sixty-nine Brazilian reais and
seventy three cents), and the total amount of the 1st Issue, on the Date of
Issue, as defined below, shall be R$700,000,000.00 (seven hundred million
Brazilian reais).

3.6    Placement and Procedure

3.6.1. The Debentures shall be the object of a public offering, intermediated by
financial institutions belonging to the securities distribution system, for
placement through the Securities Distribution System ("SDT"), administered by
ANDIMA - National Association of Financial Market Institutions ("ANDIMA") and
operated by the Securities Custody and Settlement Center ("CETIP"), and through
the BOVESPA FIX ("BOVESPA FIX") trading system of the Sao Paulo Stock Exchange
("BOVESPA"), in custody of the Brazilian Clearing and Depository Corporation
("CBLC"), utilizing the differentiated distribution procedure specified in
article 33 of CVM Instruction no. 13 of September 30, 1980. There shall be no
advance reserves, nor shall minimum or maximum lots be set, with preference
given to clients of the financial institutions coordinating the public
distribution who wish to invest in Debentures, regardless of the chronological
order.

3.6.2. Public distribution of the Debentures shall only begin after the CVM
confirms registration and the announcement of the beginning of distribution is
published.

3.7    Designated Bank

3.7.1  Banco Bradesco S.A. shall be the Issuer's designated bank before the SND
and CBLC ("Designated Bank").

3.8    Registrar

3.8.1  Banco Bradesco S.A. shall be the Registrar for the Debentures ("Registrar
Institution").

Clause IV - CHARACTERISTICS OF THE DEBENTURES OF THE 1st ISSUE

4.1    Date of Issue

<PAGE>

4.1.1. For all legal purposes, the date of issue of the Debentures shall be
August 1st, 2003 ("Date of Issue").

4.2      Term and Form of Subscription and Payment

4.2.1. The Debentures shall be subscribed at their Nominal Value (as defined in
item 4.3.1), plus Remuneration, calculated on a pro rata basis, from the Date of
Issue to the effective date of payment.

4.2.2. Payment for the Debentures shall be in cash in Brazilian currency at the
time of subscription.

4.3      Nominal Unit Value of the Debentures

4.3.1. The nominal value of the Debentures, on the Date of Issue, shall be
R$100,000.00 (one-hundred thousand Brazilian reais) ("Nominal Value").

4.4       Trading

4.4.1. The Debentures shall be registered for trading with (i) the National
Debenture System ("SND"), administered by ANDIMA and operated by CETIP; and (ii)
with BOVESPA FIX, custodied at CBLC.

4.5      Form and convertibility

4.5.1. The Debentures shall be book entry debentures not convertible to the
Issuer's stock.

4.5.2. No certificates representative of the Debentures shall be issued. For all
intents and purposes, the statement issued by the financial institution
responsible for entry of the Debentures shall be proof of ownership of the same.
Additionally, the SND shall issue an Assets Position Report with a statement in
the name of the Debenture holder issued by the financial institution responsible
for the custody of said securities when deposited with the SND. CBLC shall issue
the custody statement in the name of the Debenture holder for Debentures
deposited with CBLC.

4.6       Type

4.6.1. The Debentures shall be unsecured, i.e. without guarantee or preference.

4.6.2. The Debentures have the Underwriter's trust guarantee under the terms of
Clause VIII below.

4.7       Term and Maturation

<PAGE>

4.7.1. The Debentures are for a term of 5 (five) years and the maturity date is
August 1st, 2008 ("Maturity Date"), at which time the Issuer is obliged to
proceed to payment of Debentures still in circulation at their Nominal Value
plus Remuneration described in item 4.8 below, calculated on a pro rata basis,
from the last payment date of said Remuneration.

4.8       Remuneration

4.8.1. For the initial Remuneration Period (as defined in item 4.8.5. below),
the Debentures shall pay a remuneration ("Remuneration") that includes
remuneratory interest, from the Date of Issue, on the Nominal Value, equivalent
to the average overnight interbank deposit rate, denominated DI extra group over
rate, expressed in a percentage per year of 252 days, calculated and published
by CETIP in its Daily Bulletin available on its website
(http://www.cetip.com.br) and in the newspaper "Gazeta Mercantil", national
edition or in lieu of the same in another mass circulation newspaper ("DI
Rate"), with an exponentially added percentage factor, to be defined in the
bookbuilding procedure that shall not exceed 105.50%. Remuneration shall be
calculated exponentially and cumulatively on a pro rata basis for business days
transpired, on the Nominal Value from the Date of Issue, or the maturity date of
the most recent Capitalization Period (defined in item 4.8.3 below), whichever
is applicable, until the actual date of payment, in accordance with the
following formula:

            J = VN x (Interest Factor - 1), where:

J = Remuneration value due at the end of each Capitalization Period as defined
in item 4.8.3. below,

VN = Nominal Value at the beginning of the Capitalization Period;

Interest Factor = product of the DI Rates, with a percentage factor added
exponentially, to be defined in the bookbuilding procedure, not exceeding
105.50%, from and including the date of the beginning of the Capitalization
Period through the date of the end of the Capitalization Period, excluding the
latter, calculated to 8 (eight) decimal places, rounded, and determined as
follows:

            Interest Factor = product from K=1 to K=n of (1 + (TDI [subscript K]
x P/100)), where:

n = total number of DI Rates considered in the adjustment of assets, n being a
whole number.

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P = a percentage factor applied on the DI Rate, informed up to 2 (two) decimal
places, to be defined in the bookbuilding procedure, not exceeding 105.50%;

TDI [subscript K] = DI Rate, expressed per day, calculated to 8 (eight) decimal
places, rounded, and determined as follows:

            TDI [subscript K] = ((DI [subscript K]/100 +1) to the power of
(1/252)) - 1, where:

DI [subscript K] = DI Rate published by the CETIP, expressed as a percentage per
year, taken to 2 (two) decimal places.

4.8.1.1. The DI Rate shall include the number of decimal places published by
CETIP.

4.8.2. Remuneration shall be due each six months, from the Date of Issue, on the
dates set in item 4.8.6 below (each date for Remuneration payment, a
"Remuneration Payment Date").

4.8.3. The Remuneration Capitalization period ("Capitalization Period") is, for
the initial Capitalization Period, the interval of time starting on and
including the Date of Issue, in the case of the first Capitalization Period, and
ending on the day immediately prior to the initial Remuneration Payment Date,
and for the other Periods of Capitalization is the period starting on and
including a Remuneration Payment Date and ending on the day immediately prior to
the subsequent Remuneration Payment Date.

4.8.4. Each Capitalization Period succeeds the previous one uninterruptedly
until the Maturity Date.

4.8.5. Remuneration Period means the period during which the conditions for
Debenture Remuneration are in force, being established herein that the initial
Debentures Remuneration Period shall begin on the Date of Issue and conclude on
August 1st, 2004.

4.8.6. Payment of Debenture Remuneration during the Remuneration Period shall be
effected on the 1st of February, 2004 and on August 1st, 2004.

4.8.7. If no DI Rate has been announced by the CETIP for any pecuniary
obligations by their maturity date, the latest published DI Rate shall be used,
with no compensation due from the Issuer to the Debenture holders for delayed
announcement of the DI Rate to be applied. If the delay in announcing the DI
Rate is of more than 10 (ten) consecutive days, then the provisions in the items
below shall be applied in relation to setting a new parameter for Debenture
Remuneration.

4.8.8. In the case of termination, failure to calculate and/or announce the DI
Debenture Rate for more than 10 (ten) consecutive days after the expected date
of its calculation

<PAGE>

and/or announcement, or if it becomes impossible to apply the DI rate to the
debentures due to legal provision or court determination, the Fiduciary Agent
must, within 20 (twenty) days as of the day on which the DI had been overdue for
more 10 (ten) consecutive days, call a General Meeting of Debenture Holders (in
accordance with the provisions described in article 124 of the Corporation Law),
to deliberate, in common agreement with the Issuer, and in observance of
BACEN/CVM Joint Decision no. 13, of March 14, 2003 and/or applicable
regulations, a new parameter for Debenture Remuneration to be proposed by the
Issuer.

4.8.9. If, during the General Meeting of Debenture Holders, no agreement
regarding the new Remuneration is reached between the Issuer and Debenture
Holders representing not less than 2/3 (two thirds) of the total Debentures in
circulation, the Issuer must purchase all Debentures in circulation within 30
(thirty) days as of the date of the respective General Meeting of Debenture
Holders, at their Nominal Value plus Remuneration due up to the date of their
effective purchase, calculated on a pro rata basis, from the Date of Issue or
the latest Remuneration Payment Date, whichever is first. For the purpose of
calculating the Remuneration applicable on the Debentures to be purchased under
the terms of this item, the latest officially announced DI rate shall be paid
for each day of delay in announcing the rates.

4.9.     Renegotiation (Repactuacao)

4.9.1. The first renegotiation of Debentures shall take place within 1 (one)
year from the Date of Issue ("Renegotiation Date").

4.9.2. The Board of Directors of the Issuer shall decide and notify conditions
applicable to the subsequent Remuneration Period ("New Remuneration Period") to
the Debenture Holders not less than 20 (twenty) days before the Renegotiation
Date, including:

a) the length of the New Remuneration Period;

b) the remuneration during the New Remuneration Period; and

c) the periodicity of payment of remuneration during the New Remuneration
   Period.

4.9.3. The conditions set by the Issuer's Board of Directors pursuant to the
provisions in item 4.9.2 above shall be notified to the Debenture Holders under
the terms of item 4.1.8 of Clause IV within 20 days of the Renegotiation Date.
If any Debenture Holders do not agree with the conditions set by the Board of
Directors of the Issuer for the New Remuneration Period, said Debenture Holders
may, between the date of publishing the notice of new conditions for the
Debentures and within 10 (ten) days prior to the Renegotiation Date, may notify
through CETIP and/or BOVESPA FIX, whichever be the case, or in the case of
Debenture Holders not associated with the CETIP and/or BOVESPA systems through
correspondence forwarded to the Issuer, of their decision to exercise the right
to sell the Debentures under the terms of item 3.18 of Clause IV of the
Indenture. If the conditions for renegotiation are not announced by the Issuer
by 20

<PAGE>

(twenty) days prior to the Renegotiation Date, the Issuer must redeem all
Debentures at Nominal Value, plus Remuneration, calculated on a pro rata basis,
from the Date of Issue or the last Remuneration Payment Date to the date of
actual redemption.

4.9.4. The Issuer is obliged to purchase the Debentures from Debenture Holders
expressing such a wish as provided for in item 4.9.3 above, at the Nominal Value
plus Remuneration due up to the date of effective purchase, which must occur on
the date of conclusion of the corresponding Remuneration Period. The purchase
referred to in item 4.9.4 will not be subject to the addition of any premium of
any kind.

4.9.5. The conditions applicable to the Debentures during the New Remuneration
Period arising from renegotiation will be subject to an additional clause added
to this present Indenture.

4.10      Amortization

4.10.1. There shall be no partial amortization of the Debentures, and their
Nominal Value shall be paid in full on the Maturity Date.

4.11      Purchase Option

4.11.1. The Issuer may purchase the Debentures in circulation at any time,
either partially or in full, for a price not exceeding their Nominal Value plus
Remuneration, calculated on a pro rata basis, from the Date of Issue or the last
Remuneration Payment Date to the effective purchase date, in observance of the
provisions in article 55, paragraph 2, of the Corporation Law. In this case,
Debentures purchased by the Issuer may be cancelled, remain in treasury or be
placed on the market again.

4.12      Early Maturity

4.12.1. Pursuant to the provisions in items 4.12.2 and 4.12.3 below, the
Fiduciary Agent must declare all obligations related to the Debentures to have
reached early maturity and demand immediate payment from the Issuer at their
Nominal Value, plus Remuneration, calculated on a pro rata basis, from the Date
of Issue or the last Remuneration Payment Date, independently from any and all
notice, claim or judicial or extrajudicial notification, in the event of any of
the following instances:

(i)    non-payment by the Issuer or the Underwriter of the Nominal Value,
       Remuneration or any other amounts due the Debenture holders on the
       respective due dates;

(ii)   request for creditor protection or composition formulated by the Issuer,
       Underwriter or any of their subsidiary companies;

(iii)  liquidation or bankruptcy of the Issuer, Underwriter or any of their
       subsidiary companies;

<PAGE>

(iv)   legitimate and reiterated protest of bonds or notes drawn on the Issuer,
       whose aggregate amount does not exceed R$90,000,000.00 (ninety million
       Brazilian reais), adjusted by the General Market Prices Index published
       by Fundacao Getulio Vargas ("IGP-M") from the date of the Emission,
       unless the protest was made in error or bad faith of a third-party, as
       long as this is properly proven by the Issuer, if it was canceled, or, if
       surety is provided to the court, in any event, within 30 (thirty) days of
       its occurrence;

(v)    early maturity of any obligation of the Issuer due to a default on the
       obligation to pay any amount greater than or equal to R$90,000,000.00
       (ninety million Brazilian reais), adjusted by the IGP-M as of the Issue
       Date, or the equivalent in other currencies, as long as the corresponding
       creditor is in some way requesting payment of the obligation;

(vi)   change in corporate ownership or structure that leads directly or
       indirectly to the removal of Telefonica, S.A. or Portugal Telecom,
       S.G.P.S. S.A. from the control of the Issuer;

(vii)  cancellation, suspension, extinction or lost of effectiveness and
       validity of the authorization of the Underwriter to provide personal
       mobile services in the area corresponding to the State of Sao Paulo (or
       an act that replaces it) except when substituted by another license under
       the terms of the legislation in force;

(viii) non-fulfillment by the Issuer or Underwriter of any relevant
       non-pecuniary obligation specified in this Indenture and not remedied
       within 30 (thirty) days as of the Issuer being notified of the respective
       default in notice sent by the Fiduciary Agent; and

(ix)   other cases provided for by law.

4.12.2. The occurrence of any of the events indicated in sub items (ii) and
(iii) of item 4 above will lead to automatic early maturity of the Debentures.
In the case of any of the events indicated in sub items (i) and (iv) through
(ix) of item 4.12.1. above, the Fiduciary Agent should call a meeting within 5
(five) business days as of the date on which it has knowledge of the event, a
General Meeting of Debenture Holders to deliberate on the declaration of early
maturity of the Debentures.

4.12.3. After holding the General Meeting of Debenture Holders mentioned in item
4.12.2 above, the Fiduciary Agent may declare all current obligations of the
Debentures redeemable in advance and demand immediate payment of the Nominal
Value, plus Remuneration and charges up to the date of their effective payment,
under the terms of item 4.12.1 above, unless Debenture holders representing at
least 2/3 (two thirds) of the Debentures in circulation decide to not to declare
early maturity of the obligations arising from the Debentures, in which case
there shall be no early maturity of the Debentures.

<PAGE>

4.13     Payment in the Event of Early Maturity

4.13.1. In the event of early maturity of the Debentures, under the terms of
item 4.12. above, the Issuer must make payment of the Nominal Value in
circulation, plus Remuneration, calculated on a pro rata basis, from the Issue
Date or from the last Remuneration Payment Date until the date of effective
payment, and any other values owed by the Issuer under the terms of this
Indenture of the Issue, within 5 (five) business days as of the Fiduciary Agent
notifying the Issuer through registered letter at the address stated in Clause
IX of this Indenture, otherwise being obliged to pay the late-penalty charges
specified in item 4.14 below.

4.14     Place of Payment

4.14.1. Payments due on the Debentures will be made, depending on the case, in
the following ways: (i) the procedures adopted by CETIP, for Debentures
registered with the SND; (ii) the procedures adopted by CBLC for Debentures
registered with BOVESPA FIX; or, in the case of Debenture holders not associated
with SND or CBLC, (iii) at the main office of the Issuer or (iv) through the
Designated Bank.

4.15     Extension of Terms

4.15.1. Due dates for payment of any obligation related to the Debentures are
considered extended to the first subsequent business day, if the due date is a
business or banking holiday in the City of Sao Paulo, without any addition to
the amounts to be paid, except for payments made through CETIP and/or CBLC, in
which cases there will only be an extension when the payment date coincides with
a national holiday, a Saturday or a Sunday.

4.16     Fines and Late Charges

4.16.1. In the event of the Issuer delaying payment of any amount due to
Debenture holders, the overdue debits not paid by the Issuer shall, as of the
date of default up to the date of effective payment, and regardless of warning,
notification or judicial or extrajudicial claim, be subject to: (i) a
non-compensatory fine of 2% (two per cent); (ii) late charges of 1% (one per
cent) per month; and, (iii) incidence of Remuneration, calculated on a pro rata
basis, from the date on which payment was due until the date of effective
payment by the Issuer.

4.17     Loss of the Right to Additional Amounts

4.17.1. Without prejudice to the established in item 4.16. above, absence of the
Debenture holder to receive the amount corresponding to any of the pecuniary
obligations owed by the Issuer on the dates specified in this Indenture or in an
official notification published by the Issuer, the holder shall have no right to
receive remuneration and/or late charges for the period of the delay the
payment, but shall be guaranteed the rights acquired until the corresponding due
date.

<PAGE>

4.18     Publicity

4.18.1. Except for the announcements at the beginning and end of distribution of
the Debentures which shall be published in Gazeta Mercantil (daily financial
newspaper), all actions and decisions that may in any way involve the interests
of Debenture holders shall necessarily be published in the form of an
announcement in the newspapers used by the Issuer to publish such items.

Clause V - ADDITIONAL OBLIGATIONS OF THE ISSUER AND UNDERWRITER:

5.1. The Issuer and Underwriter, when applicable, assume an obligation to:

a)       provide the Fiduciary Agent with:

a.1) as soon as possible, any information that may reasonably be requested
of it;

a.2) on the same date of publication, the information conveyed in the manner
specified in item 2.4 above; and

a.3) information regarding any of the events mentioned in item 4.12 above;

a.4) within 60 (sixty) days after the end of every quarter of its financial
reporting period, a copy of the income statements for this period, and the
Underwriter's balance sheet for the quarter then ending;

a.5) within 90 (ninety) days after the end of each reporting period: (i) income
statements for the period; (ii) a statement by the Director of Investor
Relations that it is up-to-date with the fulfillment of all obligations stated
in the Indenture; and (iii) the Underwriter's balance sheet for the reporting
period then ending;

b) maintain updated registration with the CVM as a publicly-held company and
provide its shareholders and Debenture holders with income statements drawn up
and approved as specified in article 176 of the Corporation Law, when requested;

c) call a meeting of Debenture holders under the terms of Clause VII to
deliberate on any of the matters that are directly or indirectly connected with
this Issue, in the event of the Fiduciary Agent not doing so;

d) comply with all determinations issued by the CVM in relation to the
Debentures, including by sending documents and provided information that may be
requested of it, and should maintain an appropriately functional investor
services unit as required by CVM;

e) notify the Fiduciary Agent immediately pursuant to CVM Instruction no.
358/01, if applicable, of any substantial alteration in its financial,
economical, commercial,

<PAGE>

operational, regulatory or corporate ownership situation or in its business
affairs that: (i) prevents or hinders in a relevant manner the execution of its
obligations arising from this Indenture and the Debentures; or, (ii) provide
income statements or financial information to the CVM that fail to reflect its
real financial situation;

f) not take any action in disagreement with the Bylaws or with this Indenture,
especially actions that may direct or indirectly affect punctual and complete
fulfillment of obligations assumed to the Debenture holders;

g) comply with all relevant aspects of the laws, rules, regulations and orders
applicable in any jurisdiction in which it does business or holds assets and
which may negatively and substantially impact this business or assets;

h) prepare, together with the coordinators of the public distribution of the
Debentures, all the documents required to obtain registration of the
distribution with the CVM;

i) hire, during the period of validity of the Debentures, at its expense, a
rating agency to publish a report with a summary of its risk rating;

j) maintain paid up insurance polices relevant to the activities of Issuer; and

k) submit, in the form of the law, its income statements to examination by an
independent auditing company registered with the CVM.

5.2. The Issuer and the Underwriter assume an obligation to inform the Fiduciary
Agent of (a) the occurrence of any event specified in item 4.12 above, within 48
(forty eight) hours as of its occurrence and (b) immediately after its
occurrence, any event, fact or action, that may lead to (i) a violation by the
Issuer, Underwriter, or by any of their directly or indirectly controlled
companies of any law, decree or regulation that may direct or indirectly affect
in a negative and substantial way their business affairs, earnings or financial
or operational situation; (ii) in a violation of any obligation or duty on the
part of the Issuer, the Underwriter, or their directly or indirectly controlled
companies, stated in any contract or agreement, or violation of terms and
conditions established a in contract or agreement that binds the Issuer, the
Underwriter, or any of their directly or indirectly controlled companies that
may directly or indirectly affect in a negative and substantial manner their
business affairs, earnings or financial or operational situation.

5.3. The Issuer assumes the obligation to compensate the Fiduciary Agent for all
expenses shown to have been incurred to protect the rights and interests of the
Debenture holders or meet their credits, including legal fees and other expenses
and costs incurred due to collection of any amount due to the Debenture holders
under the terms of this Indenture.

5.3.1. The expenses referred to in item 5.3. above will cover the following
items and others:

<PAGE>

a) publication of reports, notes and notifications as specified in this
Indenture, and others that may be required by the applicable regulations;

b) certificates;

c) travel expenses, when necessary to carry out their duties, with the amounts
of expenses limited to the those attributed by the Issuer to its own employees
for travel and accommodation; and,

d) any additional and special reports or surveys that may be required, if there
are omissions and/or unclear items in the information related to the strict
interests of the Debenture holders.

5.3.2. Amounts owed the Fiduciary Agent for expenses incurred in protecting
rights and interests of the Debenture holders, or meeting credits owed them that
have not been paid off in the manner of items 5.3 and 5.3.1. above shall be
added to the debt of the Issuer and be preferred to the Debentures in order of
payment.

5.3.3. Expenses shall be reimbursed immediately after the delivery to the Issuer
of documents proving the expenses incurred as required for the protection of the
rights of the Debenture holders.

Clause VI - FIDUCIARY AGENT

6.1. The Issuer designates and constitutes as Fiduciary Agent of the 1st Issue,
Oliveira Trust D.T.V.M. Ltda., described above, which hereby and in the best
form of the law, accepts the nomination to represent the interests of the
Debenture holders as a group before the Issuer, under the terms of the law and
of the present Indenture.

6.2. The Fiduciary Agent of the Debenture holders designated in this Indenture,
states:

a) that it accepts the function to which it was designated and fully assumes the
duties and attributions specified in the specific legislation and in this
Indenture;

b) fully accepts this Indenture, all its terms and conditions;

c) under the penalties of the law, that it is not impeded under the terms of
article 66, paragraph 3, of the Corporation Law, and does not find itself in any
of the conflict of interest situations specified in article 10 of CVM
Instruction no. 28/1983, to exercise the function conferred on it; and

d) it has no connection with the Issuer that impedes the full exercise of its
functions.

6.3. The Fiduciary Agent shall exercise its functions starting from the date of
signature of this Indenture and remain stay in the exercise of its functions
until the final maturity of the Debentures of the 1st Issue or until it is
effectively replaced.

<PAGE>

6.4. The Issuer shall owe the Fiduciary Agent the following remuneration as fees
for the duties and attributions assumed under the terms of the legislation and
applicable regulation and this Indenture:

a) annual installments of R$15,000.00 (fifteen thousand Brazilian reais), due
to the former on the date of signing this Indenture and the rest due annually
until the maturity of the Debentures or cancellation of all Debentures, in the
event that they are in treasury, in observance of the provisions in item (b)
below;

b) the remuneration specified above in item "a" shall be owed even after the
maturity of the Debentures, if the Fiduciary Agent is still acting in the
collection of amounts due but not paid to the Debenture holders by the Issuer;

c) the installments referred to above will be updated annually, or as frequently
as the law allows, starting from the date of registration of the Debentures with
the CVM until the date of effective payment, on the basis of the IGP-M, or in
its absence, the index replacing it;

d) to the remuneration of Fiduciary Agent there shall be added the following
taxes at the rates effective at the time of each payment: ISS (Services Tax),
PIS (Contribution to the Program of Social Integration), COFINS (Contribution to
Financing of Social Security) and any other tax levied on the remuneration,
excepting income tax, which shall be paid by the Fiduciary Agent;

e) the remuneration of the Fiduciary Agent does not include expenses it incurs
in the exercise of its functions and in the execution of its duties, which shall
be reimbursed by Issuer in the manner prescribed by items 5.3., 5.3.1. and
5.3.2. above, when such costs are properly proven;

f) in the event of default on payment obligations to the Debenture holders
established in this Indenture, all expenses with legal procedures that may be
incurred by the Fiduciary Agent to protect the interests of the Debenture
holders shall be borne by the Issuer;

in the event of default of the Issuer, all expenses with legal procedures, in
addition to administrative costs, that the Fiduciary Agent may incur in order to
protect the interests of the debenture holders should be previously approved and
subsequently advanced by the debenture holders and as foreseen in Law and in
this Indenture, reimbursed by the Issuer at the time of submitting the
corresponding supporting documents. These expenses to be advanced by the
debenture holders also include expenses with legal honorariums of third parties,
court deposits, costs and fees for the actions proposed by the Fiduciary Agent
or arising from actions brought against them in the exercise of its function,
and even though they cause it losses or financial risks, as the representative
of the Debenture holders as a group. Any court expenses, deposits and costs
arising from defeat in lawsuits shall also be borne by the debenture holders, as
well as the remuneration and reimbursable expenses of the Fiduciary Agent in the
event of the Issuer remaining in

<PAGE>

default in relation to the payment of these amounts for a period of more than 60
(sixty) days, and the Fiduciary Agent may request previous guarantee from the
debenture holders to cover the risk of defeat in lawsuit.

6.5. The duties of the Fiduciary Agent include, without prejudice of others in
the regulations:

a) protect the rights and interests of the Debenture holders, and use in the
exercise of the function the same care and diligence that any active and upright
person normally exercises in the administration of their own property;

b) resign the function, in the event of conflict of interests or any other type
of unsuitability arising;

c) keep in good custody all registration, correspondence and other papers
related to the exercise of its functions;

d) verify, at the time of accepting the function, the truthfulness of the
information contained in the Indenture and attempt to remedy any defects,
omissions or faults of which it has knowledge, including checking the regularity
of the constitution, maintenance of sufficiency and enforceability of the
fiduciary guarantee for the Debentures constituted under the terms of Clause
VIII below;

e) register this Indenture and any amendments with the competent agencies,
should the Issuer not do so, and correct any lacunae or irregularities there may
be. In this case, the Issuer shall provide the information and documents
required for said registration;

f) monitor the observance of periodicity in the presentation of the mandatory
information and to advice Debenture holders of any omissions, errors or
misstatements in such information;

g) issue reports on the sufficiency of the information of the proposals for
changes in the conditions of the Debentures, including any proposal for
replacement of the fiduciary guarantee granted by the Fiduciary Agent under the
terms of Clause VIII below;

h) request updated clearance certificates from the Civil Court distributors, the
Public Treasury Courts, Registry offices of Protest, Labor Courts, Federal Court
and the Attorney of the Public Treasury in the jurisdiction of the Issuers'
headquarters, when it believes this is required for the faithful conduct of its
functions;

i) request extraordinary auditing of the Issuer should it believe necessary;

j) whenever necessary, call a meeting of Debenture holders by publishing an
announcement at least three times in the newspapers in which the Issuer
publishes its announcements;

<PAGE>

k) attend the meeting of Debenture holders in order to provide any information
requested of it;

l) draft a report for Debenture holders under the terms of article 68, paragraph
1, subparagraph "b", of the Corporation Law, which should contain at least the
following information:

l.1) any omission or misstatement it is aware of in the information published by
the Issuer or any default or delay in the mandatory presentation of information
by the Issuer;

l.2) alterations to the bylaws taking place in the period;

l.3) comments on the Issuer's income statements, focusing on economic, financial
and capital structure indicators;

l.4) position of the distribution or placement of the Debentures in the market;

l.5) redemption, amortization and payment of the Remuneration of the Debentures
executed in the period, as well as acquisitions and sales of the Debentures
effected by the Issuer, if applicable;

l.6) follow up of the use of the funds obtained through the 1st Debenture Issue,
in accordance with the data obtained from the Issuer's administrators;

l.7) list of any goods or valuables delivered to its management;

l.8) fulfillment of other obligations assumed by the Issuer in this Indenture;
and,

l.9) statement as to its capacity to continue in the exercise of the function of
Fiduciary Agent;

m) place the report referred to in the previous item at the disposal of
Debenture holders within 4 (four) months as of the conclusion of the Issuer's
reporting period, at least in the following places:

m.1)  Issuer's headquarters;

m.2) its office or, if it is financial institutions, in the place indicated by
the latter;

m.3) CVM;

m.4) Stock Exchanges, or organized over-the-counter market, when applicable;
and,

m.5) within the premises of the financial institution(s) coordinating the
placement of the Debentures, as indicated by the latter;

<PAGE>

n) publish announcements, in the same newspapers in which the Issuer publishes
its announcements, notifying Debenture holders that the report is at their
disposal in the places indicated in paragraph "m" above;

o) keep an updated list of Debenture holders and their addresses, including
through requesting information from the Issuer and the institution providing
registration services for the Debentures;

p) coordinate the lottery of the Debentures to be redeemed or repaid, when
applicable;

q) supervise the fulfillment of the terms contained in this Indenture,
especially those imposing positive or negative obligations;

r) notify the Debenture holders, if possible individually, within 10 (ten) days
of the occurrence of the event, of any default by the Issuer of obligations
assumed in this Indenture and indicate the place where it will provide the
interested parties with further information. Notification with the same content
should be sent to the CVM and the stock exchanges or organized over-the-counter
market when applicable. In cases where it is not possible to notify Debenture
holders individually, the Fiduciary Agent shall have the notification referred
to in this item "r" published in the newspapers used by the Issuer to publish
its announcements in the form of item 4.18 of this Indenture; and

s) bear all civil, labor and/or pensions charges, and all expenses arising from
the provision of their services, including taxes, fees and contributions of any
nature that are owed or may be owed due to the provision of their services.

6.6. Subject to item 4.12, in the case of default of the Issuer, the Fiduciary
Agent shall take all and any measures to protect rights or defend interests of
the Debenture holders as a group, and should to this end:

a) declare early maturity of the Debentures in the cases permitted in this
Indenture and charge its principal and accessories, pursuant to the conditions
of the present Indenture;

b) apply for bankruptcy of the Issuer;

c) take all measures required to ensure payment to the Debenture holders; and,

d) represent the Debenture holders in cases of bankruptcy, composition,
liquidation, dissolution and/or extinction of the Issuer.

6.6.1. The Fiduciary Agent shall only not be liable for not observing the
measures described on items "a", "b", and "c" of item 6.6. above, if a meeting
of Debenture holders is called and authorizes it, after deliberation by holders
of all Debentures in circulation. In the cases referred to in sub-item "d" of
item 6.6. above, deliberation by Debenture holders representing the majority of
the Debentures in circulation shall be sufficient.

<PAGE>

6.7. In the event of absence, temporary impediment, resignation, death,
liquidation, dissolution, extinction or any other case of the Fiduciary Agent's
position becoming vacant, a Debenture holders meeting shall be called within 30
(thirty) days, as of the event that caused the vacancy, to select the new
fiduciary agent. This meeting may be called by the Fiduciary Agent to be
replaced, by the Issuer, or by Debenture holders representing at least 10% (ten
percent) of the Debentures in circulation, or by the CVM. In the event of the
meeting not being called within 15 (fifteen) days before the end of the above
mentioned period, the Issuer shall have the duty of doing so, and the CVM may
appoint a temporary replacement until the process of selecting the new Fiduciary
Agent is concluded. Replacement shall not lead to the remuneration for the new
Fiduciary Agent being greater than that received by the former Fiduciary Agent.

6.7.1. In the event of the Fiduciary Agent being unable to continue to exercise
its functions due to circumstances supervening this Indenture, it shall
immediately notify the fact to the Issuer and Debenture holders and request its
replacement.

6.7.2. Debenture holders may, after the closing of the period for the
subscription and payment of all Debentures, proceed to replace the Fiduciary
Agent and appoint a replacement in a meeting of Debenture holders called
especially for this purpose.

6.7.3. In the event of the Fiduciary Agent's being effectively replaced, the
replacement shall receive the same remuneration as the former Fiduciary Agent in
all terms and conditions, and the first annual installment owed the replace
shall be calculated on a pro rata basis starting from the date of the beginning
of its exercise of the function of fiduciary agent. This remuneration may be
altered through mutual agreement between the Issuer and the replacement
fiduciary agent as long as this is previously approved by the meeting of
Debenture holders.

6.7.4. In any event, confirmation of the Fiduciary Agent's replacement shall be
subject to previous notification to CVM and any subsequent rules.

6.7.5. Replacement of the Fiduciary Agent on a permanent basis shall be noted in
an amendment to this Indenture, which should be filed with the Commercial
Registry where this Indenture is to be registered.

6.7.6. The substitute fiduciary agent shall immediately after designation notify
the Debenture holders through an announcement published in the newspapers where
the Issuer publishes its announcements in relation to the Issue.

6.7.7. If the Fiduciary Agent resigns, it must remain in the exercise of its
functions until a substitute institution has been selected by the Issuer and
approved by the Debenture holders and effectively assumes the Fiduciary Agent
functions. The replaced Fiduciary Agent shall receive a proportion of the annual
remuneration calculated on a pro rata basis up to the date of its effective
replacement.

6.7.8. CVM rules are applicable in the event of replacement of the Fiduciary
Agent.

<PAGE>

Clause VII - MEETING OF DEBENTURE HOLDERS

7.1. Debenture holders may meet at any time, observed article 71 of the
Corporation Law, in order to deliberate on matters of interest of the Debenture
holders as a group.

7.2. Debenture holders meetings may be called by the Fiduciary Agent, the
Issuer, or by Debenture holders representing at least 10% (ten percent) of
Debentures in circulation, or by the CVM.

7.3. Debenture holders meetings are governed in so far as it is applicable by
the provisions of the Corporation Law for the general meetings of shareholders.

7.4. Debenture holders meetings will officially come to order at the first time
stated in the call to meeting, with the presence of Debenture holders
representing at least half the Debentures in circulation, or with the presence
of any number at the second time stated in the call to meeting.

7.5. Each Debenture shall give the right to one vote at Debenture holders
meetings and agents may be appointed whether or not they are Debenture holders.
Decisions shall be made by a majority of those attending, except for matters for
which a special quorum is specified by law or in this Indenture.

7.6. Any change in the term of the Debentures, or their Remuneration, the
release or replacement of the guarantee, or the alteration of the composition of
this item 7.6. shall depend on the approval of Debenture holders representing
all Debentures in circulation (except in the cases provided for in item 4.8.9
and item 4.9, which shall observe the procedures described therein).

7.7. Any change in the composition of items 4.8.9, 4.9 and 4.12 shall depend on
the approval of Debenture holders representing at least 2/3 (two thirds) of the
Debentures in circulation.

7.8. Any change in the other terms and conditions of this Indenture that are not
subject to special quorums shall depend on the approval of Debenture holders
representing at least half the Debentures in circulation.

7.9. For the purposes of calculating the start and deliberation quorum for the
meeting in connection with this Clause VII, the number of Debentures in the
Issuer's Treasury, or the number of Debentures held by subsidiaries, controlled
companies or controlling shareholder shall be excluded.

7.10. The presence of the Issuer's legal representatives' will be allowed at
Debenture holders meetings.

<PAGE>

7.11. The Fiduciary Agent shall attend the Debenture holders meeting and provide
Debenture holders with information as requested of it.

Clause VIII - GUARANTEE

8.1. The Underwriter described in the preamble to this Indenture, hereby and in
the best form of law, assumes an obligation before the Debenture holders, in its
capacity as principal payor and joint debtor, to fulfill all and any obligations
of the Issuer specified in this document, including without limitation, the
payment of the Nominal Value plus Remuneration and any late charges, as well as
any other charges arising from lawsuits if required, including those related to
debts coming due in advance. This guarantee (the "Guarantee") is irrevocable and
irreversible for all legal purposes. The Underwriter also resigns the rights
described in article 333, sole paragraph, 366, 827, 834, 835, 837, 838 and 839
of the Brazilian Civil Code and articles 77 and 595 of the Civil Procedure Code.

8.2. This Guarantee shall remain in force until full, effective and irrevocable
payment of all the Issuer's obligations arising from the Debentures and from
this Indenture, including cases of renegotiation or extension.

8.3. The Underwriter certifies that the provision of the Guarantee was duly
authorized by Special General Meeting held on July 10, 2003.

Clause IX - REPRESENTATIONS AND GUARANTEES OF THE ISSUER, UNDERWRITER AND
            FIDUCIARY AGENT

9.1. The Issuer and the Underwriter jointly represent and guarantee to the
Debenture holders and the Fiduciary Agent that on the date of the signing this
Indenture:

a) they are duly organized and constituted companies existing under the form of
limited liability companies and in the case of the Issuer a publicly held
company in accordance with the Brazilian law;

b) they are duly authorized and were granted all licenses and authorizations
required for the execution of this Indenture, the issuance of Debentures, the
provision of guarantee, and the fulfillment of their obligations hereby
specified, having satisfied all legal and statuary requirements necessary for
the above;

c) the legal representatives of the Issuer and of the Underwriter signing this
Indenture have powers granted by their bylaws and/or delegated powers to assume
in the names of the Issuer and of the Underwriter the obligations now
established and, acting as agents, they had their powers legitimately granted,
being their respective mandates in full force;

d) the execution of this Indenture, the issue and placement of the Debentures
and the provision of guarantee do not violate or contradict (a) any contract or
document in which

<PAGE>

the Issuer and/or the Underwriter (and/or its controlling shareholders,
controlled companies and directly or indirectly controlled subsidiaries or
affiliates) are a party or through which any of their goods or properties are
attached; (b) any law, decree, regulation to which the Issuer and/or the
Underwriter (and/or its controlling shareholders, controlled companies and
directly or indirectly controlled subsidiaries or affiliates) or any of their
goods and properties are subject; or (c) any administrative or judicial order,
decision or sentence that affects the Issuer and/or the Underwriter (and/or its
controlling shareholders, controlled companies and directly or indirectly
controlled subsidiaries or affiliates) or any of their goods or properties;

e) the Issuer and Underwriter have all the relevant authorizations and licenses
required by the federal, state and municipal authorities for the exercise of
their activities;

f) the Issuer and Underwriter are complying with the laws, regulations,
administrative rules and determinations of governmental agencies, autarchies or
courts applicable to the conduct of their business affairs;

g) the Issuer's income statements and those of the Underwriter, dated June 30,
2003, correctly represent the financial positions of the Issuer and Underwriter
on that date and were duly drawn up in accordance with the fundamental
accounting principles of Brazil;

h) the preliminary prospectus and final prospectus ("Prospectuses") contain and
shall contain, on the date at the beginning of the distribution of the
Debentures: (i) all relevant information in relation to the Issuer and
Underwriter in the context of the present Debenture Issue and required to enable
the investors and their consultants to correctly analyze the assets and
liabilities of the Issuer and Underwriter, their financial status, profits,
losses, perspectives and rights in relation to the Debentures, not containing
false statements or omissions of relevant facts, in the circumstances in which
these statements were made; (ii) the statements contained in the prospectuses in
relation to the Issuer and Underwriter are true and correct and not misleading
or untrue; (iii) the opinions, analyses and forecasts (if applicable) expressed
in the Prospectuses in relation to the Issuer and the Underwriter were given in
good-faith after considering all relevant circumstances and based on reasonable
assumptions; (iv) there are no facts in relation to the Issuer and/or the
Underwriter or to the Debentures not published in the prospectuses whose
omission, in the context of this 1st Issue, means that any relevant statement in
the Prospectuses is incorrect, misleading or untrue; and, (v) every effort were
made by the Issuer to ensure that the statements, information and facts
described in the Prospectuses in relation to the Issuer and Underwriter are
true;

i) except for the contingencies as informed in the Prospectuses, there is no
lawsuit, administrative proceeding or arbitration hearing or inquiry, of which
the Issuer and/or Underwriter is aware, that could cause an adverse impact on
the Issuer and/or the Underwriter, their financial or other situations, or their
activities;

j) this Indenture constitutes a legal, valid and binding obligation on the
Issuer and the Underwriter and is enforceable in accordance with its terms and
conditions; and,

<PAGE>

9.2 The Fiduciary Agent declares and guarantees to the Issuer and the
Underwriter that:

a) it is a properly organized and constituted financial institution and exists
in accordance with Brazilian laws;

b) it is duly authorized to execute this Indenture and fulfill its obligations
as specified herein, having been satisfied all the legal and statutory
requirements necessary for this;

c) the legal representatives signing this Indenture have powers under the bylaws
and/or delegated powers to assume in their name the obligations herein
established and as agents have legitimately granted powers and the respective
mandates are in full force;

d) the execution of this Indenture and fulfillment of its obligations as
specified herein do not violate any previous obligation assumed by the Fiduciary
Agent;

e) this Indenture constitutes a legal, valid and binding obligation for the
Fiduciary Agent, and is enforceable in accordance with its terms and conditions;
and

f) it has verified the regularity of the guarantee constituted as described in
Clause VII, and according to the balance sheet of the Underwriter as of March
31, 2003, described below, it was observed the Underwriter's sufficiency and
enforceability as required by subparagraph IX of Article 12 of CVM Instruction
no. 28 23/11/83.

---------------- --------------- -------------------- ---------------------
Shareholder's     Total           Permanent Assets     Current and
Equity            Liabilities                          Non-Current Assets
---------------- --------------- -------------------- ---------------------
3,274,152.00      2,903,633.00    3,485,719.00         2,692,066.00
---------------- --------------- -------------------- ---------------------

Clause X - NOTIFICATIONS

10.1. All documents and notifications to be sent by any of the parties under the
terms of this Indenture should be forwarded to the following addresses:

To the Issuer:
TELESP CELULAR PARTICIPACOES S.A.
Rua Abilio Soares, n. 409, 15 andar
Sao Paulo - SP
Cep: 04005-001
FAO: Mr. Edson Menini
Tel.: (11) 3059 7530

<PAGE>

Fax. (11) 3059 7412

To the Underwriter:
TELESP CELULAR S.A.
Rua Abilio Soares, n. 409, 15 andar
Sao Paulo - SP
Cep: 04005-001
FAO: Mr. Edson Menini
Tel.: (11) 3059 7530
Fax. (11) 3059 7412

To the Fiduciary Agent:
OLIVEIRA TRUST D.T.V.M. LTDA.
Avenida das Americas, 500, Bloco 13, Grupo 205
Condominio Downtown - Barra da Tijuca
Rio de Janeiro - RJ Cep: 22640-100
FAO: Mr. Juarez Dias Costa
Tel.: (21) 2493 7003
Fax: (21) 2493-4746

To the Designated Bank:
Banco Bradesco S.A.
Cidade de Deus, sem numero
Predio Novissimo, 3 andar
Department of Operational Control Treasury and Funding
Vila Yara - CEP 06029-900
Osasco - SP
Tel:(11) 3684-8243
Fax (11) 3684-8245
FAO: Mr. Paulo Cesar da Silva

For the Registrar institution
Banco Bradesco S.A.
Cidade de Deus, sem numero
Predio Novissimo, 2 andar
Department of Securities and Custody
Vila Yara - CEP 06029-900
Osasco - SP
Tel:(11) 3684-3749
Fax (11) 3684-2714
FAO: Mr. Jose Donizetti de Oliveira

10.2. Documents and notifications will be considered delivered when received,
according to the case, under protocol or with "Delivery Notice" issued by the
Brazilian Mail and

<PAGE>

Telegraph Company (Empresa Brasileira de Correios e Telegrafos) or by telegram
to the addresses above. Notifications by facsimile or electronic mail shall be
considered received on the date of sending, as long as their delivery is
confirmed through indicative reply sent by the equipment used in transmission
and that the latter contain enough information for the identification of the
sender and addressee of the notification.

10.3. Originals of documents sent by facsimile or electronic mail should be
forwarded to the addresses mentioned in item 10.1 above within 24 (twenty-four)
hours of sending the message.

Clause XI         GENERAL PROVISIONS

11.1. There shall be no assumption of waiver of any of the rights arising from
this Indenture. Therefore no delay, omission or waiver in the exercise of any
right or faculty of the Fiduciary Agent and/or Debenture holders in reason of
any default of the Issuer's obligations shall harm such rights or faculties or
constitute a resignation of the latter or acceptance of such default, nor will
constitute innovation or modification of any obligations assumed by the Issuer
in this Indenture, or precedent concerning any other default or delay.

11.2. This Indenture is irrevocably and irreversibly signed and is binding on
the parties and their successors under any title.

11.3. In the event of any of the provisions made in this Indenture being judged
invalid or ineffective, all the other dispositions not affected by such a
judgment shall prevail and commit the parties in good-faith to replace the
provisions affected with others that produce the same effect insofar as this is
possible.

11.4. The Court of the District of Sao Paulo is elected to the exclusion of any
other, no matter how privileged, to settle the any issue arising from of this
Indenture.

         Being fairly and freely agreed, this Indenture is signed in 6 (six)
identical counterparts in the presence of the 02 (two) undersigned witnesses.

                            Sao Paulo, July 14, 2003.

                       TELESP CELULAR PARTICIPACOES S.A.

  ------------------------------             ------------------------------
  Name:                                      Name:
  Position:                                  Position:

<PAGE>

                             TELESP CELULAR S.A.

  ------------------------------             ------------------------------
  Name:                                      Name:
  Position:                                  Position:

       OLIVEIRA TRUST DISTRIBUIDORA DE TITULOS E VALORES MOBILIARIOS LTDA

  ------------------------------
  Name:
  Position:

  WITNESS:

  1. ______________________________          2. ______________________________
     Name:                                      Name:
     CPF:                                       CPF:

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