Exhibit 10.24
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.
BUSINESS COOPERATION AGREEMENT
This private instrument is signed by and between
(a) MCDONALD'S COMERCIO DE ALIMENTOS LTDA., a company with registered
office in the City of Barueri, State of Sao Paulo, at Alameda Amazonas,
No. 253, registered with CNPJ/MF under No. 42,591,651/0001-43, herein
represented, pursuant to its Articles of Incorporation, by its
President, Xx. Xxxxxx Xxxxxxxxxxx, a Brazilian citizen, legally
separated, economist, bearer of Identification Card RG No.
6,557,358-4/SSP-SP, registered with CPF/MF under No. 942,171,908-59,
domiciled in the City of Barueri, State of Sao Paulo, at Alameda
Amazonas, No. 253, hereinafter referred to as "MCDONALD'S"; and, on the
other side,
(b) AOL BRASIL LTDA., a company with registered office in the City of Xxxxx
Xxxxx, State of Sao Paulo, at Xxxxxxx Xxxxxxxxxx, Xx. 000, Xxxxxx
Xxxxxxxxxxx ABC Plaza, 2nd floor, registered with CNPJ/MF under No.
03,032,579/0001-62, herein represented by its President, Mr. Xxxxxx
Xxxxxxx Xxx Xxxxxxx, a Brazilian citizen, married, business
administrator, bearer of Identification Card RG No. 6,459,765 SSP-SP
and registered with CPF/MF under No. 054,776,748-06, domiciled in Sao
Paulo, the Capital City of the State of Sao Paulo, at Avenida Marginal
do Rio Pinheiros, No. 5,200, Edificio Philadelphia, 2nd floor,
hereinafter referred to as "AOL".
The parties above have agreed by themselves and their
successors, as follows:
I.- DEFINITIONS
1.1.- For the purposes hereof, the following definitions shall apply equally to
the singular and plural forms of defined terms, as the context may require:
PARENTAL CONTROL: a tool incorporated into the AOL SERVICE and made available by
AOL to MCDONALD'S, whereby MCDONALD'S may select and/or close off sites or any
content MCDONALD'S may xxxx objectionable and/or inappropriate for access
through the TERMINALS;
LAUNCHING DATE: a date as shall be designated by written notice from MCDONALD'S
to AOL for the official launching of the PROJECT, which date shall mandatorily
fall within sixty (60) days from the date of execution hereof;
ANNIVERSARY DATE(S) is/are the date(s) marking completion of each year of the
effective period of the agreement, as of the LAUNCHING DATE;
SPACES: predefined and limited-space areas in the RESTAURANTS, especially
designated for the PROJECT activities, as shall be timely advised by MCDONALD'S;
NET SURFER: general designation of a customer of MCDONALD'S who uses the
TERMINALS;
INTERNET: the World Wide Web;
PARTNERS: legal entities not engaged in competing business (in regard to their
respective activities under the PROJECT), which contribute funds, property
and/or services, pay suppliers and share expenses, and which assume the risks
inherent in their respective participation in the PROJECT, all exclusively in
accordance with the terms hereof;
EFFECTIVE PERIOD is the period between the execution hereof and a term of five
(5) years as of the LAUNCHING DATE;
PERFORMANCE PERIOD is the period between the LAUNCHING DATE and the expiration
of the EFFECTIVE PERIOD;
MCINTERNET PORTAL: the PROJECT portal for access to the INTERNET, maintained and
operated by MCDONALD'S, or a MCDONALD'S designee, all at MCDONALD'S sole
discretion and subject to the terms of this agreement;
PROJECT: a project for digital inclusion proposed by MCDONALD'S, which
contemplates the installation of TERMINALS (as defined hereinbelow) through
which MCDONALD'S will provide its customers with several products and services,
educational and recreational content, access to the Internet, and others;
PROMOCODES: specific registration codes created by AOL, which will be furnished
to MCDONALD'S and assigned to ACQUIRED ACCOUNTS (as defined hereinbelow), in
connection with the PROJECT;
RESTAURANT: all points of sale in MCDONALD'S chain of fast-food restaurants,
except for MCDONALD'S kiosks, regardless of whether such points of sale are
operated by MCDONALD'S or any franchisee;
AOL SERVICE: any services and products provided, owned, operated, controlled,
distributed or authorized by or through AOL;
SLA - "SERVICE LEVEL AGREEMENT": instrument attached hereto in the form of
"ANNEX I", initialed by the parties and made an integral part of this agreement,
which provide for and regulate the services concerning the PROJECT; and
TERMINALS: computer terminals, microcomputers, notebooks, tablets PCs,
touch-screen terminals, hand-held PCs, and/or equivalent equipment installed in
the RESTAURANTS for the exclusive and specific purposes of the PROJECT, with a
minimum configuration as set forth in the SLA.
II.- PROJECT
2.1.- The object of this instrument is to establish the terms, covenants,
conditions and responsibilities of the parties, and to regulate their
participation in the implementation, maintenance and development of the PROJECT.
2.2.- The PROJECT will be implemented through the installation of TERMINALS in
the RESTAURANTS. The number of TERMINALS per RESTAURANT, as well as the SPACES,
will be timely designated by MCDONALD'S subject to the provisions of this
agreement.
2.3.- Notwithstanding Subsection 2.2 above, during the EFFECTIVE PERIOD set
forth hereunder MCDONALD'S will implement the PROJECT in at least six hundred
(600) RESTAURANTS, and will install a minimum number of three thousand and six
hundred (3,600) TERMINALS. The number of RESTAURANTS and the installation
schedule effective as of the LAUNCHING DATE are set forth in
2
ANNEX II (the "SCHEDULE"), initialed by the parties and made an integral part of
this agreement.
2.3.1.- Within the first one hundred and twenty (120) days from the LAUNCHING
DATE, TERMINALS will only be activated in RESTAURANTS in those cities where AOL
already provides for local access, the list of which is attached hereto as ANNEX
III, initialed by the parties and made an integral part of this agreement.
2.3.2.- After the expiration of the period referred to in Paragraph 2.3.1 above,
MCDONALD'S will give AOL ninety (90) days' prior notice of the installation of
TERMINALS with reference to each additional city.
2.3.3.- AOL hereby acknowledges and agrees that there may be technical,
business, operational, financial, logistic or franchise impediments for the
installation of RESTAURANTS pursuant to Subsection 2.3 above, and that, in such
case, the only consequence arising therefrom will be the review contemplated by
Subsections 6.1 and 6.2 hereinbelow.
2.4.- The parties agree that, throughout the EFFECTIVE PERIOD and pursuant to
Subsection 5.1 "viii", AOL will have a right of first refusal, on the same terms
and conditions as offered by any competitors, to participate in any other
projects contemplating any activities as contemplated by the PROJECT in the
territory of Brazil, which are carried out by other companies within the same
economic group as MCDONALD'S in Brazil, whether using the "McDonald's" trademark
or any other trademark containing the "MC" prefix.
2.4.1.- The right of first refusal provided above shall be exercised in writing
within thirty (30) days as of the date on which AOL receives written notice to
that effect from MCDONALD'S.
2.5.- The parties will cooperate in joint efforts to solicit new AOL subscribers
in the manner set forth in this agreement, including, without limitation, by
demonstrating the AOL SERVICE, having MCDONALD'S employees registering new AOL
accounts near the TERMINALS, distributing AOL's CD-ROMs, all to be carried out
within the SPACES.
2.6.- The parties agree that, to make the project feasible, a commitment to
contribute a minimum amount equal to approximately Twenty Million United States
Dollars (US$20,000,000.00), net of taxes, is required, and that MCDONALD'S shall
have the right, at MCDONALD'S sole discretion and without incurring any penalty,
liability, and/or charges and/or reimbursements, to terminate this instrument if
(i) by the LAUNCHING DATE, or (ii) within not more than sixty (60) days from the
date of execution hereof, whichever occurs first, no assurance is given that the
contribution of the minimum amount referred to above will be made. Such amount
shall be contributed by an ideal number of five (5) PARTNERS or by MCDONALD'S,
at MCDONALD'S sole discretion.
2.6.1.- For the effects of Subsection 2.6 above, AOL must necessarily be
furnished with a notice pursuant to Subsection 11.1 hereinbelow indicating
whether MCDONALD'S intends to terminate this instrument or keep it in force by
representing that an assurance of such minimum contribution has been given
either by the PARTNERS or by MCDONALD'S. In the absence of such notice, this
agreement will be deemed to remain in force.
3
III.- NET SURFING
3.1.- NET SURFERS will browse from the TERMINALS, and the first page to be
brought up will always be that of MCINTERNET PORTAL.
3.2.- MCDONALD'S will establish, at MCDONALD'S sole discretion, the minimum
charges made by the RESTAURANTS to NET SURFERS for using the TERMINALS, and
shall give AOL prior notice of any change thereof.
3.3.- It is hereby agreed between the parties that any employee of MCDONALD'S
may, on MCDONALD'S behalf and at MCDONALD'S sole discretion, cut off a NET
SURFER connection where such NET SURFER is accessing sites and/or content that
MCDONALD'S deems objectionable or inappropriate.
3.4.- The parties agree that any educational content in the MCINTERNET PORTAL,
as well as any content inserted by the other PARTNERS, will be freely accessible
through the INTERNET.
3.5.- As regards content of all other sites in the MCINTERNET PORTAL, the
parties agree that such content may be accessible in part through the INTERNET,
for the exclusive purpose of fostering the PROJECT and AOL. The parties will
mutually agrees on the levels of content accessibility through the INTERNET, it
being hereby agreed that, in the event contemplated by this Subsection,
exclusive access to most of the MCINTERNET PORTAL's content will always be
provided to NET SURFERS who are AOL subscribers.
3.6.- During the EFFECTIVE PERIOD hereof, AOL will offer the NET SURFERS a
special unlimited plan (the "Special Unlimited Plan") and a special
limited-hours plan (the "Special Limited Plan").
3.6.1.- The fee for the Special Unlimited Plan will be Thirty-Two Reals
(R$32,00), which already includes an initial discount of Two Reals and
Ninety-Five Centavos (R$2.95) on the standard unlimited plan offered on the
market by AOL, it being hereby agreed that AOL may review its fee, at its sole
discretion, provided that AOL maintains such discount at a rate of eight and
forty-five hundredths of one percent (8.45%) on the standard unlimited plan.
3.6.2.- The fee for the Special Limited Plan will be Ten Reals and Ninety-Nine
Centavos (R$10,95), and such plan may be used for access to the INTERNET only
from 6:00 AM to 8:00 PM. All other conditions under the Unlimited Plan will be
applicable to the Special Limited Plan. AOL may review the fee for such plan, at
AOL's sole discretion, provided that such review is never made in greater
proportion than the review of the Special Unlimited Plan. However, in the event
AOL has launched into the market a plan equal to the Special Limited Plan, AOL
shall maintain the discount at a rate of eight and forty-five hundredths of one
percent (8.45%) on the standard special limited plan. For the effects of this
Paragraph, the Special Limited Plan offered to customers of AOL/Itau will not be
taken into account.
3.6.2.1.- The Special Limited Plan will be further reviewed or terminated by
AOL, at its sole discretion, in the event FSTS (Fixed Switched Telephony
Service)operators shall establish flat tariff plans for telephone connections to
the INTERNET, pursuant to the Public Consultation 417/2002 of the Brazilian
Telecommunications Agency (AGENCIA NACIONAL DE TELECOMUNICACOES - ANATEL).
4
3.6.3.- The trial period for the Special Unlimited Plan and the Special Limited
Plan will be a period of one (1) month from the registration of the NET SURFER
with the AOL SERVICE. AOL may only shorten the length of such trial period if
AOL shortens likewise AOL's standard offers on the market. Such trial period may
be extended, at AOL's discretion, for a period not to exceed two (2) months.
3.6.4.- For the effects of the preceding Paragraph, it is hereby agreed that
MCDONALD'S accepts, and will ensure, that the Special Unlimited Plan is the
default plan to be offered for the AOL SERVICE by the McHosts and McHostesses
(as these are defined hereinbelow) near the TERMINALS. Other plans, including
the Special Limited Plan, will only be offered after the Special Unlimited Plan
has been offered and rejected by the NET SURFER, or for purposes of securing
adherence to the AOL customer service.
IV.- RIGHTS AND OBLIGATIONS OF AOL
4.1.- In addition to other duties and obligations provided hereunder, AOL shall:
(i) Contribute the amounts determined by the parties as necessary for investment
in the PROJECT, pursuant to Section VI hereinbelow;
(ii) Furnish MCDONALD'S with accounts for access to the AOL SERVICE, duly
cleared as required for access to the INTERNET, at no additional cost to
MCDONALD'S. There shall be one account for each TERMINAL included in the
originally estimated three thousand and six hundred (3,600) accounts. In the
event that more than three thousand and six hundred (3,600) TERMINALS are
installed, AOL will furnish such additional accounts at no cost to MCDONALD'S;
(iii) At AOL's expense, make available as many CD-ROMs for installation of the
AOL Navigator as necessary to be distributed exclusively to customers who
register new accounts in the RESTAURANTS, it being hereby established that a
minimum annual number of two hundred thousands (200,000) CD-ROMs will be needed.
Such CD-ROMs shall be requested in advance by MCDONALD'S by the tenth (10th) day
of each month, and will be delivered, already packaged, by the twenty-fifth
(25th) day of the same month, to one sole distribution facility designated by
MCDONALD'S;
(iv) Accept express responsibility for any content hosted by AOL's servers. For
purposes of navigation through content located elsewhere in the World Wide Web,
AOL will always make available to MCDONALD'S all security tools used by AOL,
with a view to enabling MCDONALD'S to block any content MCDONALD'S deems
objectionable or inappropriate and, in such case, AOL will not be liable for any
such content. Likewise, AOL will have no liability where NET SURFERS have access
to such content through other means. MCDONALD'S acknowledges that the tool
currently available to block inappropriate sites is the PARENTAL CONTROL, and
that control will depend on the options made by MCDONALD'S, at MCDONALD'S sole
discretion, for use of such tool. Therefore, making use of the PARENTAL CONTROL
to block any content that MCDONALD'S deems objectionable or inappropriate
remains the sole responsibility of MCDONALD'S;
(v) Accept liability for all employment and social security obligations relating
to AOL's employees engaged in the implementation of the PROJECT, and hereby
undertakes to defend and hold MCDONALD'S harmless from and against any action,
claim or proceeding by any of AOL's employees, and to indemnify
5
MCDONALD'S from any direct or consequential damages MCDONALD'S may incur, which
arise from or relate to any such actions, claims or proceedings. In such events,
MCDONALD'S may file for AOL to be substituted in the action, whereupon AOL shall
immediately move for substitution of AOL as defendant in the place of
MCDONALD'S;
(vi) Accept liability for all obligations arising from any consumer-related
claims, actions or proceedings with regard to the AOL SERVICE, hereby
undertaking to immediately advise MCDONALD'S thereof, and to hold MCDONALD'S
harmless from and against any liability with respect to any action, claim or
proceeding that may be initiated, and to indemnify MCDONALD'S from any direct or
consequential damages MCDONALD'S may incur, which arise from or relate to any
such actions, claims or proceedings. In such events, MCDONALD'S may file for AOL
to be substituted in the action, whereupon AOL shall immediately move for
substitution of AOL as defendant in the place of MCDONALD'S. For the effects of
this Subsection, the parties agree that AOL will be liable for the AOL SERVICE
in the manner set forth in this agreement;
(vii) Associate the "McDonald's" trademark with any initiatives AOL may take in
marketing the PROJECT, subject to prior written authorization from MCDONALD'S;
(viii) Ensure exclusivity to MCDONALD'S in the implementation of the PROJECT,
expressly undertaking hereby not to enter into any other agreements the scope of
which may encompass any of the activities under the PROJECT provided for
hereunder, with any entities doing business primarily as bars, restaurants,
fast-food facilities, pizzerie, ice cream parlors, or cafes; and
(ix) Assure NET SURFERS free navigation through the INTERNET.
4.2.- In addition to other rights provided for under this agreement, AOL shall
be entitled:
(i) To be given the same exposure as the other PARTNERS, and will be assured the
display of the "AOL" logotype with the same dimensions as those of the other
PARTNERS in all TERMINALS, on the uniforms of MCDONALD'S employees' engaged in
the PROJECT, in the SPACES, in the MCINTERNET PORTAL ("AOL Icon for Internet
Access"), and in the respective screen savers;
(ii) To participate in and provide the content of the training to be given by
MCDONALD'S to MCDONALD'S employees who will be engaged solely in the PROJECT
("McHosts" and "McHostesses"), at no additional cost to AOL and in a manner to
be mutually agreed upon between the parties, with a view to qualify such
employees for demonstrating and selling the AOL SERVICE. AOL may request the
replacement of any McHosts and McHostesses, provided there actually are
objective and justifiable reasons therefor;
(iii) Allocate AOL's own supervisors to the RESTAURANTS, in order to cooperate
and assist MCDONALD'S employees engaged in the PROJECT in their activities. It
is hereby agreed that (a) circulation of such personnel will be mandatorily
limited to the SPACES, (b) the terms and conditions for the presence of such
supervisors in the RESTAURANTS will be established by mutual agreement, and (c)
all technical and operational aspects of the activities carried out within the
RESTAURANTS must necessarily be observed; and
6
(iv) Allocate AOL's own promoters to the RESTAURANTS, in order to cooperate and
assist MCDONALD'S employees engaged in the PROJECT, where necessary to achieve
the targets set forth under Subsection 6.2 hereinbelow. It is hereby agreed that
(a) circulation of such AOL's personnel will be mandatorily limited to the
SPACES, (b) the terms and conditions for the presence of such promoters in the
RESTAURANTS will be established by mutual agreement, and (c) all technical and
operational aspects of the activities carried out within the RESTAURANTS must
necessarily be observed.
V.- RIGHTS AND OBLIGATIONS OF MCDONALD'S
5.1.- In addition to other duties and obligations provided hereunder, MCDONALD'S
shall:
(i) Accept overall responsibility for the coordination, implementation and
management of the PROJECT, including, without limitation, solicit other PARTNERS
in a number not to exceed five (5), contract and maintain all the required
infrastructure (whether its own or outsourced infrastructure), hire and train
personnel, produce promotional material etc., subject to all rights and
obligations hereunder;
(ii) Install and maintain a minimum of three thousand and six hundred (3,600)
TERMINALS, at an average value of One Thousand Nine Hundred and Ninety Reals
(R$1,990.00), in a minimum of six hundred (600) RESTAURANTS, which will result
in an average of six (6) TERMINALS per RESTAURANT. Notwithstanding the
obligation to install and maintain three thousand and six hundred (3,600)
TERMINALS during the PERFORMANCE PERIOD, such number may be reduced, provided
that equipment at a market value equal to at least Seven Million, One Hundred
and Sixty-Four Thousand Reals (R$7,164,000.00) have been installed, and provided
that an average minimum number of four (4) TERMINALS are installed and
maintained per RESTAURANT. For the purposes of this Paragraph, MCDONALD'S will
furnish AOL, upon request, with a statement of the total number of TERMINALS
installed, as well as of the total value assigned thereto;
(iii) Perform maintenance within scheduled periods, which shall not exceed an
average of thirty (30) days in each year with respect to each TERMINAL;
(iv) Hire, and/or make available from among MCDONALD'S own employees, and give
training to at least two (2) persons per RESTAURANT, who shall be engaged
exclusively in the PROJECT as McHosts and McHostesses, and who will circulate
among the RESTAURANTS's patrons as monitors, demonstrating how the PROJECT works
and clarifying doubts, among other activities, during at least two (2) periods
of four (4) hours each, seven (7) days a week;
(v) Have the AOL SERVICE demonstrated to patrons by the McHosts and McHostesses,
in the manner agreed between the parties. The McHosts and McHostesses will talk
to patrons within the SPACES to demonstrate the AOL SERVICE and register new AOL
accounts, and MCDONALD'S shall always maintain at least one (1) TERMINAL enabled
for such registrations in each RESTAURANT in which the PROJECT is implemented;
(vi) Associate the "AOL" trademark with any initiatives MCDONALD'S may take in
marketing the PROJECT, subject to prior written authorization from AOL;
7
(vii) Analyze the possibility of implementing a program for registering PROJECT
users by means of an access card, which may eventually become a fidelity card
and, thus, make it possible for AOL to send direct mail and promotional
materials to and carry out other marketing activities designed for registered
users, subject to XxXxxxxx'x Corporation privacy rules and policies applicable
to such data. It is hereby understood, however, that currently such internal
policies expressly prohibit such practice;
(viii) Ensure exclusivity to AOL in the implementation of the PROJECT, in the
categories of INTERNET access provider and e-mail provider, whether among the
PARTNERS or in the MCINTERNET PORTAL, further expressly undertaking not to enter
into any other agreements the scope of which may encompass any of the activities
under the PROJECT provided hereunder, with any business engaged primarily in
providing access to the INTERNET and/or e-mail services, in addition to any
INTERNET portals offering their own or third parties' e-mail services. The
parties agree that MCDONALD'S will not make any offer of free e-mail services in
connection with the PROJECT;
(ix) Make promotional material directly available in each of the SPACES, under
terms and conditions to be mutually agreed upon between the parties;
(x) Accept liability for all employment and social security obligations relating
to MCDONALD'S employees, subcontractors and third parties engaged in the
implementation of the PROJECT, including, without limitation, all McHosts and
McHostesses, hereby undertaking to defend and hold AOL harmless from and against
any action, claim or proceeding by any of MCDONALD'S employees, subcontractors
or any third parties related to MCDONALD'S, as well as to indemnify AOL from any
direct or consequential damages AOL may incur, which arise from or relate to any
such actions, claims or proceedings. In such events, AOL may file for MCDONALD'S
to be substituted in the action, whereupon MCDONALD'S shall immediately move for
substitution of MCDONALD'S as defendant in the place of AOL;
(xi) Accept liability for all obligations arising from any consumer-related
claims, actions, claims or proceedings with regard to MCDONALD'S services and
products, hereby undertaking to immediately advise AOL thereof, and to hold AOL
harmless from and against any liability with respect to any action, claim or
proceeding that may be initiated, and to indemnify AOL from any direct or
consequential damages AOL may incur, which arise from or relate to any such
actions, claims or proceedings. In such events, AOL may file for MCDONALD'S to
be substituted in the action, whereupon MCDONALD'S shall immediately move for
substitution of MCDONALD'S as defendant in the place of AOL. For the effects of
this Subsection, the parties agree that MCDONALD'S will be liable to AOL for the
PROJECT, including, without limitation, for MCDONALD'S services and products, as
set forth in this agreement;
(xii) Purchase media time and space for the promotion of the PROJECT, in an
amount to be determined at MCDONALD'S sole discretion;
(xiii) Ensure the sole and exclusive use of the "AOL Navigator" to browse around
the INTERNET through the TERMINALS, use of any other programs for browsing the
Internet being forbidden;
(xiv) Provide appropriate conditions for MCDONALD'S patrons to attain a
satisfactory INTERNET access experience, at no additional cost to AOL. To that
8
effect, MCDONALD'S will install any and all equipment and other materials
required to implement and develop the PROJECT, with the minimum configurations
and according to all other specifications set forth under the SLA, which will
establish all MCDONALD'S obligations in regard to connectivity;
(xv) Accept responsibility for all the infrastructure needed for the PROJECT,
including, without limitation, hardware, connections, access network provided
with a broad-band connection, software and others, with the minimum
configurations and according to all other specifications set forth under the
SLA; and
(xvi) Use MCDONALD'S best efforts to make a partnership feasible between AOL and
XxXxxxxx'x Corporation for the implementation of the PROJECT in other countries.
VI.- CONTRIBUTIONS
6.1.- AOL's initial contribution for a minimum of six hundred (600) RESTAURANTS
will be Six Million and Four Hundred Thousand Reals (R$6,400,000.00), equal to
an amount of Ten Thousand, Six Hundred Sixty-Six Reals and Sixty-Six Centavos
(R$10,666.66) per RESTAURANT. Such contribution corresponds to a portion of the
estimated total initial contribution to the PROJECT. The balance thereof will be
contributed by the other PARTNERS or, if the case may be, by MCDONALD'S, at
MCDONALD'S sole discretion, and will be also used to purchase all the
infrastructure required for the PROJECT, including, without limitation,
hardware, software, furniture, promotional material, infrastructure for
connections pursuant to the SLA etc.
6.1.1.- The sum set forth in Subsection 6.1 above is applicable to the EFFECTIVE
PERIOD and will contributed in eight (8) monthly and consecutive installments in
an amount of Eight Hundred Thousand Reals (R$800,000.00) each, the first of
which being payable twenty (20) days as of the LAUNCHING DATE, and the remaining
on the same day of each subsequent month.
6.1.2.- It is expressly agreed between the parties that the amount of Six
Million and Four Hundred Thousand Reals (R$6,400,000.00), as established in 6.1
above, related to the initial investments, will be borne by AOL under the
following terms:
(i) Three Million and Two Hundred Thousand Reals [R$ 3.200.000,00] in favour of
MCDONALD'S for the exclusivity to AOL in the implementation of the PROJECT, in
the categories of INTERNET access provider and e-mail provider; (section 5.1);
(ii) One Million and Six Hundred Thousand Reals [R$ 1.600.000,00] directly in
favor of third parties service and product providers , including, without
limitation, providers of hardware, software, furniture, promotional material,
infrastructure for connections pursuant to the SLA etc., it being understood
that AOL accepts no liability to any such service providers and/or suppliers,
(iii) One Million and Six Hundred Thousand Reals [R$ 1.600.000,00] in favor of
MCDONALD'S for the right of first refusal, in equal conditions with third
parties, to renew this agreement and future projects.
6.1.3.- At least five hundred and fifty (550) RESTAURANTS shall be equipped by
the end of the first year of the PERFORMANCE PERIOD, and the remaining fifty
9
(50), thus reaching the total of six hundred (600) RESTAURANTS contemplated by
Subsection 2.3 above, shall be equipped by the end of the second year of the
PERFORMANCE PERIOD, all in accordance with to ANNEX II.
6.1.4.- Subject to the provisions under Subsection 6.5 below, as of the end of
the first month of the third year of the PERFORMANCE PERIOD the number of
actually equipped RESTAURANTS will be determined on the first business day of
each subsequent month. If the number thus determined shall vary as compared to
the number of RESTAURANTS equipped in the immediately preceding month, whether
by exceeding or being less than that number, any amounts that may be due from
any of the parties shall be contributed or reimbursed, as the case may be, by
the twentieth (20th) business day of the immediately following month, and shall
always be determined according to the following formula:
X = R$10,666.66 X Y X Z
-----------------------
60
In words: "X" is equal to Ten Thousand, Six Hundred Sixty-Six Reals and
Sixty-Six Centavos (R$10,666.66) multiplied by the number of months to elapse
until the expiration of the PERFORMANCE PERIOD and by such greater or lesser
number of RESTAURANTS, the product of such multiplication being divided by sixty
(60).
Where:
X = amount to be contributed or reimbursed
Y = number of months to elapse until the expiration of the PERFORMANCE PERIOD
Z = greater or lesser number of RESTAURANTS
6.2.- In addition to the contributions set forth under Subsection 6.1 above, AOL
shall annually share the operating expenses of the PROJECT. The amount to be
contributed by AOL will be considered according to (i) the number of RESTAURANTS
actually equipped, and (ii) the number of ACQUIRED ACCOUNTS (as per the
definition below), and wil be in an annual amount that is the lesser of either
"I" or "N", according to the following formula:
"I"
I = R$5,333.33 X IR- (R$10.666,66 x NI)
In words: "I" is equal to Five Thousand, Three Hundred Thirty-Three Reals and
Thirty-Three Centavos (R$5,333.33) multiplied by the number of restaurants
actually equipped, as defined below, minus the product of the multiplication of
Ten Thousand, Six Hundred and Sixty Six Reals and Sixty Six Cents [R$10.666,66]
for the number of non-equipped RESTAURANTS
IR: (i) with respect to the first year of the PERFORMANCE PERIOD, the number of
RESTAURANTS actually equipped as of the end of such period, and (ii) the average
number of RESTAURANTS actually equipped in the course of each year. Such average
number of RESTAURANTS will result from the division of the total number of
RESTAURANTS equipped as of the last day of each month of the relevant year by
twelve (12).
"NI": (i) with respect to the first year of the PERFORMANCE PERIOD, the number
of non-equipped RESTAURANTS, that it, the difference between 550 and "RI", as of
10
the end of such period, and (ii) for the remaining year, the average number of
non-equipped RESTAURANTS in the course of each year, that is 600 minus "RI" for
each such period. In the event of "I" being negative, then MCDONALD'S will
reimburse AOL such amount by the 20th business day immediately subsequent.
"N"
N = R$3,200,000.00 X ACQUIRED ACCOUNTS
------------------
ACQUISITION TARGET
In words: "N" is equal to Three Million an Two Hundred Thousand Reals
(R$3,200,000.00) multiplied by the quotient of the number of ACQUIRED ACCOUNTS
divided by the ACQUISITION TARGET.
Where:
"N": Amount to be annually disbursed by AOL, limited to the minimum and maximum
amounts set forth in the table below;
"ACQUIRED ACCOUNTS": number of AOL accounts acquired during each year of the
PERFORMANCE PERIOD, as determined with basis on the PROMOCODES, the holders of
which make payment of the first two (2) successive monthly fees;
"ACQUISITION TARGET": number of ACQUIRED ACCOUNTS, according to the following
table:
-------------------------- ------------------------ ----------------------------
MINIMUM AMOUNT OF N (R$) ACQUISITION TARGETS MAXIMUM AMOUNT OF N (R$)
-------------------------- ------------------------ ----------------------------
YEAR 1 R$ 2,784,000.00 [**] R$ 3,616,000.00
-------------------------- ------------------------ ----------------------------
YEAR 2 R$ 2,464,000.00 [**] R$ 3,936,000.00
-------------------------- ------------------------ ----------------------------
YEAR 3 R$ 2,304,000.00 [**] R$ 4,096,000.00
-------------------------- ------------------------ ----------------------------
YEAR 4 R$ 1,984,000.00 [**] R$ 4,416,000.00
-------------------------- ------------------------ ----------------------------
YEAR 5 R$ 1,984,000.00 [**] R$ 4,416,000.00
-------------------------- ------------------------ ----------------------------
TOTAL R$ 11,520,000.00 [**] R$ 20,480.000.00
-------------------------- ------------------------ ----------------------------
6.2.1.- The amount of the contributions set forth in Subsection 6.2 above, will
depend upon compliance with the terms of the SCHEDULE, to the extent that such
amount is tied to the number of RESTAURANTS actually equipped in the course of
the first year. Failure to comply with the SCHEDULE will entail the application
of the provisions under Subsection 10.7, provided, however, that AOL hereby
agrees that the monthly targets for installation in RESTAURANTS, as set forth in
the SCHEDULE, may remain unachieved by up to twenty percent (20%).
6.2.2.- Such contributions for which AOL shall be liable correspond to a portion
of the amount estimated for annual maintenance of the PROJECT, the difference
thereof to be contributed by the other PARTNERS or, if the case may be, by
MCDONALD'S, at MCDONALD'S sole discretion, and shall be used for, but not
limited to, the maintenance of the TERMINALS, the costs for the McHosts and
11
McHostesses, advertising campaigns, and all other expenses, whether actually
incurred or potential, in connection with the PROJECT.
6.2.3.- Such amounts will be due and payable on a yearly basis on the twentieth
(20th) business day immediately following each ANNIVERSARY DATE, and may be
increased contingent upon a determination of the final number of accounts
acquired in each year, as set forth in ANNEX IV.
6.2.4.- Pursuant to a procedure to be mutually agreed upon between the parties,
the amounts set forth in Subsection 6.2 above will be contributed to MCDONALD'S,
or anyone whom MCDONALD'S shall designate, such as service providers and/or
suppliers. It is hereby agreed between the parties that (i) AOL accepts no
liability to any such service providers and/or suppliers, and (ii) said
procedure shall be oriented toward a solution imposing a less onerous tax/fiscal
burden on the parties.
6.3.- To the extent that one of the principal reasons for the execution of this
instrument is the soliciting by AOL of new subscribers, as provided under
Subsection 2.5 hereinabove, it is hereby expressly agreed between the parties
that, once the performance targets are achieved within a given period, as set
forth in the table contained in Subsection 6.2 above, regardless of the number
of RESTAURANTS and/or TERMINALS installed, no reimbursement will be applicable.
6.3.1.- The parties expressly agree hereby that, in the event the number of
annually ACQUIRED ACCOUNTS exceeds the ACQUISITION TARGETS, as such have been
set forth in Subsection 6.2 above, such exceeding ACQUIRED ACCOUNTS may be used,
at MCDONALD'S sole discretion, to assist in achieving the targets for subsequent
years. In such event, that portion of the "N" amount relating to the number of
ACQUIRED ACCOUNTS that exceeds the ACQUISITION TARGET, which is carried forward
to the following year, will not become due.
6.4.- All amounts denominated in Reals in this Section VI will be annually
adjusted in accordance with the IGP-M/FGV, as of the date of execution hereof.
In addition, any reimbursable amount owing from MCDONALD'S, which is not
reimbursed on the agreed dates, will be subject to a two percent (2%) penalty on
the unpaid amount plus interest at a rate of one percent (1%) per month, and
will be adjusted for inflation in accordance with the IGP-M/FGV, regardless of
notice or notification.
6.5.- The amounts set forth in Subsections 6.1 and 6.2 above will not be
reviewed and AOL will not be subject to any additional contribution, where
TERMINALS are installed in more than six hundred (600) RESTAURANTS, or more than
three thousand and six hundred (3,600) TERMINALS are installed during the
PERFORMANCE PERIOD. In such event, all of the terms and conditions of this
agreement will be applicable, including, without limitation, its provisions
relating to exclusivity.
6.6.- Out of the amounts received from each new AOL subscriber solicited through
the PROJECT, AOL will pay:
(a) [**] of an amount equal to [**] to the Xxxxxx XxXxxxxx Institute, after
having received payment of the first monthly fee subsequent to any grace period
that may have been granted;
(b) [**] of an amount equal to [**] to MCDONALD'S, pursuant to an incentive
program to be agreed upon between the parties for the employees of each
12
RESTAURANT engaged in the PROJECT, after having received payment for the 2nd
monthly fee; and
(c) [**] of an amount equal to [**] for marketing initiatives and events in
connection with the PROJECT, to be mutually defined by the parties, after having
received payment for the 2nd monthly fee.
6.7.- For the effects of Subsection 6.6 above, such compensation will only be
payable with respect to the accounts established through the PROMOCODES, use of
any accounts established under other codes in connection with this promotion
being hereby forbidden. The mechanism for computing accounts established through
the PROMOCODES is described in ANNEX IV, made an integral part hereof.
VII.- DURATION
7.1.- This instrument is subject to the following conditions precedent, the
fulfillment of which shall be cumulative: (i) assurance shall be given that a
minimum amount equal to approximately Twenty Million United States Dollars
(US$20,000,000.00) will be contributed, in accordance with the terms and
conditions provided under Subsection 2.6 hereinabove, and (ii) the parties shall
agree as to the manner in which the contributions set forth under Section VI
will be made by AOL, as established under Paragraphs 6.1.2 and 6.2.4.
7.1.1.- In the event such conditions are not cumulatively fulfilled within (a)
sixty (60) days from the execution hereof, or (b) by the LAUNCHING DATE,
whichever occurs first, it will be the exclusive right of MCDONALD'S, at
MCDONALD'S sole discretion, with respect to the conditions under clauses (i) and
(ii) above, and of AOL, at AOL's sole discretion, solely with respect to the
condition under clause (ii) above, to terminate this agreement without incurring
any penalty, liability, charges and/or reimbursements.
7.1.2.- Mutual agreement as required under Subsection 7.1.(ii) above shall be
evidenced by an instrument in writing signed by the authorized representatives
of both parties.
7.2.- The parties agree that, in no event, shall AOL be required to contribute
any amounts exceeding those set forth under Section VI hereof.
7.3.- Upon the fulfillment of both the conditions precedent set forth under
Subsection 7.1 above, this agreement will be effective from the execution hereof
until the expiration of the PERFORMANCE PERIOD.
7.4.- Within one hundred and eighty (180) days prior to the expiration of the
PERFORMANCE PERIOD, the Operating Committee referred to under Paragraph 12.1.1
shall meet to establish the terms and conditions for terminating the PROJECT
and, where of interest to the parties, the continuation thereof, which will be
subject to the execution of a contractual amendment.
7.5.- AOL will have a right of first refusal to renew the agreement in the event
MCDONALD'S decides to continue with the PROJECT upon expiration of the stated
term of this agreement.
13
7.6.- The conditions precedent set forth under Subsection 7.1 above will not be
applicable to the following conditions of this instrument: 4.1.(viii) and
5.1(viii), and to Sections VIII and IX as well.
VIII.- TRADEMARKS
8.1.- Within not more than twenty (20) days, each party will submit to the prior
written approval of the Marketing representative(s) of the other party, which
approval shall not be unreasonably withheld or delayed, any marketing,
advertising materials and all other promotional materials relating to the
PROJECT, including the terms and conditions thereof, and/or relating to the
other party and/or such other party's trade names, registered trademarks and
service marks (the "Promotional Materials").
8.2.- AOL and MCDONALD'S: (a) shall not create any unified xxxx involving any
Trademark of the other party, without the prior written approval of such other
party; (b) shall display signs and notices that clearly and sufficiently
indicate the registered trademark status of the Trademarks owned by the other
party, in accordance with the legislation and the uses applicable to registered
trademarks; and (c) shall not use the Trademarks out of the scope of the
PROJECT.
8.3.- AOL and MCDONALD'S acknowledge that no right, title or interest in or to
or in connection with any Trademarks of the other Party shall be created or
transferred to AOL or MCDONALD'S by the use of any such Trademarks other than
any licenses expressly granted herein. Each party agrees that it will not take
any action that may contest or impair the registered trademark rights of the
other party.
8.4.- Each party agrees to promptly give written notice to the other party of
any unauthorized use of such other party's Trademarks where the notifying party
has actual knowledge of the violation. Each party will have an exclusive right
and discretion to initiate any judicial proceeding for a violation of its
Trademark rights or unfair competition in connection with such Trademarks;
provided, however, that each party agrees to provide the other party, at such
other party's expense, with reasonable cooperation and assistance with respect
to any judicial proceeding for a violation of any Trademark rights.
IX.- NON-DISCLOSURE AND CONFIDENTIALITY
9.1.- The parties acknowledge that, during the EFFECTIVE PERIOD, certain
confidential information may be disclosed to the other party.
9.2.- Each of the parties hereby agree (a) to take all action required to
prevent the reproduction or disclosure of confidential information of the other
party, as normally taken to protect its own confidential information; (b) to
restrict access to such confidential information of the other party to as few of
its employees as possible; (c) not to reveal such information to any third party
or anyone other than those persons who have a need to know it to perform their
duties; (d) not to use such information to gain personal advantage or advantage
for others; (e) to promptly cease to use such information upon cancellation,
expiration or termination of this agreement and any ancillary agreements
relating thereto, and to immediately return to the other party all lists, files
and other materials containing or relating to such confidential information,
advising all of its managers, employees,
14
agents, subcontractors and anyone else concerned that confidential information
of the other party shall no longer be used.
9.3.- The term "Confidential Information", as used in this agreement, means any
and all information disclosed by one party to the other, especially all
knowledge and information, including methods, processes, cost spreadsheets,
business proposals, technological information, Intellectual Property, trade
secrets, accounting, financial, tax and other information relating to the
activities of and proprietary to the parties.
9.4.- The parties further agree not to disclose the existence of the PROJECT and
the negotiations that are taking place between the parties until the time of the
launching of the PROJECT, and any disclosure thereof in any media whatsoever
before such event may take place is hereby forbidden.
9.5.- Within forty-eight (48) hours from execution hereof, as well as where the
LAUNCHING DATE is about to occur, the parties shall jointly prepare all the
material, including, without limitation, any press releases and "Questions &
Answers" for purposes of promoting the PROJECT immediately after the occurrence
of any such event.
9.6.- Notwithstanding the provisions under this Section, the parties may
disclose Confidential Information where (1) they are required to do so by any
public authority or by a court order, and (2) they have a legal duty to do so
from time to time. In such cases, the disclosing party shall immediately advise
the other party of the disclosure so made.
9.7.- The confidentiality obligation herein undertaken by the parties will
continue for a period of three (3) years beyond (i) the date of expiration of
the EFFECTIVE PERIOD, or (ii) the date of any prior termination of this
instrument, regardless of the cause.
9.8.- Subject to the provisions under Subsections 9.5 and 9.6 above, AOL shall
not, without the prior express authorization in writing of MCDONALD'S, disclose
the contents of this instrument to any of the other PARTNERS.
X.- PENALTIES AND TERMINATION
10.1.- In the event AOL fails to perform its obligation to contribute funds to
the PROJECT, in the manner set forth under Section VI of this instrument, a two
percent (2%) penalty will be imposed on the unpaid portion thereof, in addition
to interest at a rate of one percent (1%) per month and adjustment for inflation
in accordance with the IGPM-FGV, regardless of notice or notification.
10.1.1.- In the event of any failure by AOL, as provided under Subsection 10.1
above, MCDONALD'S shall notify AOL to make the outstanding contribution,
including all delinquency charges, within not more than sixty (60) days as of
the date of receipt of such communication, such time period not to be extended.
Should AOL fail to cure the breach within the stated time period, MCDONALD'S
may, at MCDONALD'S sole discretion, terminate this instrument, regardless of any
further notice and/or communication. In such event, the remedies provided under
Paragraph 10.2.1 below will further be applicable.
10.2.- In the event that any of the parties shall, at any time, violate the
covenant of exclusivity set forth under Subsections 4.1(viii) and 5.1(viii)
hereinabove, or shall
15
terminate the agreement herein contained without cause, the terminated party
may, at its sole and exclusive discretion, terminate this instrument regardless
of notice and/or communication, whereupon such party will be released of its
obligations. In such event, the following remedies will be applicable:
10.2.1.- If AOL gives rise to the termination, AOL: (i) will not be entitled to
be reimbursed for any contribution already made pursuant to this instrument, (2)
will pay such portion of the annual operating expenses as provided under
Subsection 6.2, on a pro rata tempore basis; and (3) will pay a contractual
penalty in an amount equal to (a) Three Million and Two Hundred Thousand Reals
(R$3,200,000.00), in the event such termination occurs by the end of the third
year of the PERFORMANCE PERIOD, or (b) Two Hundred Sixty-Six Thousand, Six
Hundred Sixty-Six Reals and Sixty-Six Centavos (R$266,666.66) for each month to
elapse until the expiration of the PERFORMANCE PERIOD, in the event such
termination occurs as of the fourth year of the PERFORMANCE PERIOD.
10.2.2.- If MCDONALD'S gives rise to the termination, MCDONALD'S: (i) will pay a
contractual penalty in an amount equal to (a) Three Million and Two Hundred
Thousand Reals (R$3,200,000.00), in the event such termination occurs by the end
of the third year of the PERFORMANCE PERIOD, or (b) Two Hundred Sixty-Six
Thousand, Six Hundred Sixty-Six Reals and Sixty-Six Centavos (R$266,666.66) for
each month to elapse until the expiration of the PERFORMANCE PERIOD, in the
event such termination occurs as of the fourth year of the PERFORMANCE PERIOD,
and (2) will reimburse AOL for the amount contributed by AOL on account of
investment as set forth under Subsection 6.1..
10.3.- In the event MCDONALD'S fails to perform the obligation of installing and
maintaining a minimum number of three thousand and six hundred (3,600)
TERMINALS, where such number has not been reduced as provided under Subsection
5.1(ii) hereinabove and subject further to the provisions under Subsection 6.3
hereinabove, AOL shall notify MCDONALD'S to cure the stated failure within not
more thirty (30) days, such time period not to be extended. Should MCDONALD'S
fail to cure the failure within the stated time period, AOL may, at AOL's sole
discretion, terminate this instrument, regardless of any further notice and/or
communication. In such event, the remedies provided under Paragraph 10.2.2 above
will be applicable.
10.4.- This agreement will be deemed automatically terminated, regardless of any
notice and/or notification, in the event any of the parties is adjudged bankrupt
or files for reorganization, subject, however, to the provisions under
Subsection 10.5 below.
10.5.- If any of the parties voluntarily ceases to operate its business in
Brazil, this instrument will be deemed automatically terminated, regardless of
any notice and/or notification. In such event, the following remedies will be
applicable:
10.5.1.- If AOL gives rise to the termination, then the provisions under
Paragraph 10.2.1. will be applicable, whereas, if MCDONALD'S gives rise to the
termination, the provisions under Paragraph 10.2.2. will be applicable.
10.6.- Either party agrees to indemnify and hold the other party harmless from
and against any loss or damage or liabilities incurred by the other party in
result of any third-party claims on grounds of (a) a violation by any of the
parties of any obligation, representation or warranty provided for under this
agreement, or (b) any damage caused by acts of their employees and/or
subcontractors.
16
10.7.- Except as provided under Subsection 6.3 hereinabove and for any acts of
God or FORCE MAJEURE, MCDONALD'S will be liable to pay a penalty for failure to
comply with the SCHEDULE. Such penalty will be payable on the twentieth (20th)
business day following the end of the first year of the PERFORMANCE PERIOD, and
will be calculated by reference to the total monthly penalties, according to the
following formula:
"M" = R$444.44 X (MA-IR)
In words: M results from the multiplication of Four Hundred Forty-Four Reals and
Forty-Four Centavos (R$444.44) by the result from subtracting the ACCEPTABLE
ACCUMULATED MONTHLY TARGET (pursuant to ANNEX II) and the number of RESTAURANTS
equipped as of the last day of the month.
Where:
M = amount of monthly penalty
MA = Acceptable Accumulated Monthly Target (pursuant to ANNEX II)
IR = number of RESTAURANTS actually equipped as of the last business day of each
month.
10.7.1.- A delay in the payment of the penalty set forth under Subsection 10.7
will entail the payment of interest at a rate of one percent (1%) per month and
adjustment to inflation, according to the IGPM-FGV, as of the stated date,
regardless of notice or notification.
10.8.- In the event of a default by any of the parties of any of the provisions
regarding use of any trademarks of the other party, as provided under Section
VIII hereinabove, the non-defaulting party shall notify the defaulting party to
cease default hereunder within not more than thirty (30) days, such time period
not to be extended. In the event the alleged failure shall not cease within such
time period, the non-defaulting party may, at its sole discretion, terminate
this instrument regardless of any further notice and/or communication. In such
event, the remedies provided under Subsections 10.2.1 or 10.2.2, as the case may
be, will be applicable.
10.9.- With regard to other events not contemplated by this Section, should any
of the parties, at any time, infringe or fail to perform any of its obligations
hereunder and/or under any appropriate amendment hereto, and not cure such
infringement or failure with thirty (30) days after notice being given by the
other party, then the infringing or defaulting party will be subject to a
contractual penalty in an amount of Ten Thousand Reals (R$10,000.00).
10.10.- All amounts denominated in Reals in this Section X will be annually
adjusted according to the IGPM-FGV, as of the date of execution hereof.
XI.- COMMUNICATIONS
11.1.- All notices to be given by one party to the other with respect to this
agreement or any other ancillary instrument relating thereto shall be made in
writing, at the addresses of the parties set out in the preamble of this
instrument, either by registered mail, facsimile transmission or letter
delivered by personal
17
receipted delivery, with a copy to the respective Executive Legal Counsel, as
indicated below:
(a) MCDONALD'S:
Attn: Financial Vice President
Alameda Amazonas, 253, Alphaville
CEP 00000-000
Barueri - SP
Fax: (00) 0000-0000
With a copy to:
Attn: Executive Legal Counsel
Alameda Amazonas, 253, Alphaville
CEP 00000-000
Barueri - SP
Fax: (00) 0000-0000
(b) AOL
Attn: Business Executive Officer
Av. Marginal do Rio Pinheiros, 5,200
Ed. Philadelphia - 2nd floor
CEP 05693-000
Sao Paulo - SP
Fax: (00) 0000-0000
With a copy to:
Executive Legal Counsel
Av. Marginal do Rio Pinheiros, 5,200
Ed. Philadelphia - 1st floor
CEP 05693-000
Sao Paulo - SP
Fax: (00) 0000-0000
XII.- VERIFICATIONS
12.1.- The parties hereby agree that they shall meet at least monthly, on dates
to be timely set, to verify and control the results of the PROJECT, as well as
to discuss any problems that may have arisen and their solutions.
12.1.1.- For the purposes of Subsection 12.1 above, within thirty (30) days of
the execution hereof, the parties will appoint an operating committee composed
of at three (3) representatives of each party. The operating committee will have
authority over all day-to-day matters relating to the PROJECT, and deliberations
may take place whenever at least one representative of each party is present.
The members of the committee may be replaced, at any time, by the parties upon
prior communication. It is hereby agreed that such committee will only have
operating authority and that any modification, including any waiver of rights
provided for under this agreement, will be dependent upon a written amendment to
this agreement.
18
12.2.- The parties acknowledge that the execution of this instrument does not
entail, in any manner whatsoever, any license, authorization, concession,
assignment, transfer, whether express, tacit or implicit, of any copyright,
intellectual property, idea, concept, trademark, patent or other rights owned by
the parties.
12.3.- The parties agree (i) to advise each other in writing of any claims that
may result in indemnification, and to give each other an opportunity to defend
or negotiate a settlement of such claim, at the defending or negotiating party's
own expense, and (ii) to cooperate fully with the party claimed to be liable, at
such party's expense, in the defense or settlement of said claim through counsel
of its own choice.
12.4.- Neither party will make any warranties or representations, or will assume
or create any obligations on behalf of the other party, unless expressly
permitted in accordance with the terms of this instrument or authorized in
writing by the other party. Each of the parties will be solely liable for the
acts of all of its respective employees, agents and representatives.
12.5.- This instrument and any other contracts ancillary thereto are binding on
the parties, their subsidiaries and respective successors on any account.
12.6.- Each of the parties is directly liable, pursuant to applicable
legislation, for the payment of all taxes and charges incident to this
agreement, as well as for any obligations of a social security, employment and
civil nature that are incident to the hiring of delegates, employees and/or
third parties. Each of the parties will be further liable for any civil and
criminal damage caused by its representatives and agents to any third parties.
12.7.- The waiver by any of the parties of an infringement of any obligation
under this agreement by the other party will be construed as mere forbearance,
and will not entail novation or a waiver of the right of any of the parties to
insist upon full performance of the other party's obligations as required
herein.
12.8.- This instrument and/or the rights and obligations arising out of this
instrument shall not be assigned by either party to any third parties without
the prior and express authorization in writing of the other party.
12.9.- The parties will act as independent contractors and neither party may
assume any obligations on behalf of the other, or act for the other party as
agent, employee, delegate or representative, except where expressly authorized
in writing by the other party.
12.10.- This instrument will entail no employment relationship between the
employees or subcontractors of any of the parties and the other party, and each
of the parties shall be solely and exclusively liable for the employment
contracts and relating obligations, charges and/or taxes and employment claims
of its own employees.
12.11.- The execution of this instrument implies the cancellation of any
agreements, whether written or oral, previously entered into between the parties
with respect to the subject matter hereof.
19
12.12.- Except as provided under Subsection 7.1 hereinabove, this instrument is
irrevocably and unconditionally executed, and is binding upon the parties in
accordance with all of its terms and conditions.
12.13.- The Parties mutually agree that any and all controversies arising out of
this Agreement shall be settled in the Central Courts of the Capital City of the
State of Sao Paulo, and hereby expressly waive any other venue, however
privileged it may be.
Intending to be legally bound, the parties execute this instrument in two (2)
counterparts, each of which to be deemed an original, in the presence of the two
undersigned witnesses.
Sao Paulo, January 9, 2003
/s/ Xxxxxx Xxxxxxxxxxx
--------------------------------------
MCDONALD'S COMERCIO DE ALIMENTOS LTDA.
/s/ Xxxxxx Xxxxxxx Xxx Xxxxx Trostli
---------------------------------------
AOL BRASIL LTDA.
Witnesses:
1) /s/ Xxxxxx Xxxxxxxx Name:
CPF:
2) Name:
CPF:
20
ANNEX I
SLA
"SERVICE LEVEL AGREEMENT"
1. HARDWARE:
The TERMINALS shall be equipped with at least one of the following operating
systems: Window 98, Windows ME, Windows 2000 or Windows XP; 0.8 Ghz Pentium or
Celeron Processors, or compatible; RAM memory of 128 Mb; Hard Disk of 10Gb with
at least 500 Mb free space; 10/100 Mbps Ethernet network card or other
appropriate card for wireless connection; 15" Monitor with a resolution set at
800 x 600 pixels, 256 colors (at least); Standard ABNT keyboard, Mouse and
CD-ROM (for installation of the AOL Software only).
AOL shall be entitled, at AOL's expense, where shown to be necessary, to make
all upgrades required to run the AOL Software properly on the TERMINALS.
2. CONNECTIONS:
a. The TERMINALS shall be equipped with broad-band access facility with a
dedicated line and a minimum bandwidth of 64 Kbps for transport between
the store and the IP access provider per RESTAURANT.
b. The IP access provider shall be directly connected to or shall have not
more than one intermediary backbone (transit) to connect with one of
the principal backbones of Brazil (Embratel, Telemar, Brasil Telecom,
Telefonica, Fapesp).
c. The TCP/UDP ports required for the operation of the AOL Software shall
be available, including the ports required for registration of new
users.
d. The IP address ranges to be used shall be informed to AOL in not less
than 10 days from the commencement of use thereof, in order that AOL
may enable them to accept the registration of new accounts.
e. The parties may discuss, as of the beginning of the second year of the
PERFORMANCE PERIOD, the possibility of any upgrades in the connections
set forth herein, provided that it is economically feasible.
3. SERVICE LEVEL
With a view to maintaining good navigation conditions, MCDONALD'S will use its
best efforts in order that the following metrics may be observed:
a. The loss of IP packets between each of the PCs installed in
the stores and the AOL data center in Sao Paulo shall be less
than 2%, measured as a daily average.
21
b. Average latency, or time interval required for data to be
transported between each of the PCs installed in the stores
and the AOL data center in Sao Paulo, shall be less than 50ms.
c. The monthly mean unavailability of service shall be less than
or equal to 10 minutes.
d. The IP access provider shall keep a support center operating
on a 24hours x 7days basis to register calls in the event of
failure in such connection.
e. The maximum time for the solution of IP access problems shall
not exceed 2 hours, as of the registration of a trouble
ticket.
f. After resolution of the problem, the IP access provider, or an
employee of MCDONALD'S shall contact the NOC (Network
Operation Center) of AOL Brasil (+ 00-00-0000-0000) to close
the trouble ticket.
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ANNEX II
SCHEDULE
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MONTH EQUIPPED RESTAURANTS ACCUMULATED TARGET ACCEPTABLE ACCUMULATED
TARGET MONTHLY TARGET
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1 50 50 40
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2 50 100 80
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3 50 150 120
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4 50 200 160
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5 50 250 200
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6 50 300 240
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7 50 350 280
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8 50 400 320
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9 50 450 360
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10 50 500 400
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11 50 550 440
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12 50 600 480
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The ACCEPTABLE ACCUMULATED MONTHLY TARGET means the minimum number of
RESTAURANTS per month, including the 20% unachieved target provided under
Paragraph 6.2.1, that is, forty (40) further RESTAURANTS per month.
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ANNEX III
LIST OF CITIES
ACRE Contagem Petropolis
Rio Xxxxxx Divinopolis Rezende
ALAGOAS Governador Valadares Rio de Janeiro
Maceio Juiz de Fora Sao Goncalo
AMAZONAS Xxxxxx Xxxxxx Sao Joao do Meriti
Manaus Uberaba Volta Redonda
AMAPA Uberlandia RIO GRANDE DO SUL
Macapa Varginha Bento Xxxxxxxxx
BAHIA PARA Caxias do Sul
Camacari Belem Novo Hamburgo
Feira xx Xxxxxxx Ananindeua Farroupilha
Salvador Santarem Passo Fundo
Ilheus PARANA Porto Alegre
Vitoria da Conquista Araucaria Pelotas
CEARA Apucarana Rio Grande
Fortaleza Cascavel Santa Xxxxx
DISTRITO FEDERAL Curitiba Xxxxxxx do Livramento
Brasilia Foz do Iguacu Xxxxx Xxxxxx
ESPIRITO SANTO Londrina Sao Xxxxxxxx
Cachoeiro do Itapemirim Maringa Uruguaiana
Vitoria Sao Xxxx dos Pinhais RIO GRANDE DO NORTE
Sao Mateus Ponta Grossa Mossoro
GOIAS Umuarama Natal
Anapolis PERNAMBUCO RORAIMA
Aparecida de Goiania Caruaru Boa Vista
Goiania Jaboatao dos Guararapes RONDONIA
Luziania Olinda Ji-Parana
Rio Verde Recife Porto Velho
MARANHAO Paulista SAO PAULO
Sao Xxxx Xxxxxxxxx Adamantina
MATO XXXXXX PIAUI Americana
Xxxxxxx Xxxxxxxx Xxxxxx
Cuiaba PARAIBA Araras
Sinop Xxxx Xxxxxx Aracatuba
Rondonopolis Campina Grande Araraquara
Varzea Grande RIO DE JANEIRO Aruja
MATO XXXXXX DO SUL Xxxxxxx Roxo Assis
Campo Grande Barra Mansa Avare
Corumba Xxxxxx dos Goytacases Atibaia
Dourados Niteroi Andradina
MINAS GERAIS Nilopolis Barra Xxxxxx
Xxxx Horizonte Nova Iguacu Barretos
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Barueri Jaguariuna Sao Joao da Boa Vista
Bauru Jundiai Sao Xxxxxx
Xxxxxxxx Paulista Lencois Paulista Xxxxx Xxxxx
Bebedouro Leme Sorocaba
Botucatu Lins Sao Xxxxx
Birigui Limeira Sao Paulo
Caieiras Lorena Sao Xxxx do Rio Preto
Cachoeira Paulista Lucelia Sao Sebastiao
Capivari Matao Sao Xxxxxxx
Cacapava Marilia Sertaozinho
Campinas Mairipora Xxxxxx
Xxxxx Limpo Paulista Mirassol Santa Xxxxxxx do Oeste
Xxxxxx do Xxxxxx Xxxxx Alto Xxxxxxx do Parnaiba
Cananeia Mogi das Cruzes Suzano
Conchal Mogi Guacu Sumare
Cotia Mogi Mirim Tatui
Cubatao Mococa Taubate
Catanduva Osasco Taquaritinga
Carapicuiba Xxxxxxx Xxxx Tiete
Caraguatatuba Xxxxxxx Xxxx
Cruzeiro Ourinhos Ubatuba
Embu Paulinia Valinhos
Franco xx Xxxxx Presidente Xxxxxxxx Varzea Paulista
Francisco Morato Penapolis Vinhedo
Ferraz de Vanconcelos Piraju Votorantim
Guaruja Piquete Votuporanga
Guararapes Piracicaba SANTA CATARINA
Guaratingueta Pirassununga Balneario de Camboriu
Holambra Pindamonhangaba Blumenau
Ibiuna Praia Grande Crisciuma
Indaiatuba Porto Feliz Chapeco
Itapolis Porto Xxxxxxxx Itajai
Itatiba Xxxxxx Xxxxx
Itatinga Registro Florianopolis
Itapira Rio Xxxxx Xxxxxxxxx
Itapeva Ribeirao Preto Tubarao
Itapetininga Salto SERGIPE
Itaquaquecetuba Santa Xxxx xxx Palmeiras Aracaju
Itu Sao Xxxxxxxx do Xxxxx TOCANTINS
Jau Sao Caetano do Sul Gurupi
Jaboticabal Sao Xxxx dos Xxxxxx Palmas
Jacarei Sao Xxxx do Rio Xxxxx
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ANNEX IV
PROMOCODES AND PROCEDURE TO VERIFY ACQUIRED ACCOUNTS
A) Procedure to verify ACQUIRED ACCOUNTS and contributions for annual
maintenance (Subsection 6.2 of the agreement)
1. On the second business day after each ANNIVERSARY DATE, AOL will submit to
MCDONALD'S a report on the number of ACQUIRED ACCOUNTS during the previous year
and the amount to be contributed by AOL to MCDONALD'S under Subsection 6.2 of
the Agreement.
2. Such contribution will be made in accordance with terms to be agreed upon,
subject to the provisions under Paragraph 6.2.4 of the agreement.
3. On a date that is two (2) business days after one hundred and twenty (120)
days following each ANNIVERSARY DATE, AOL will submit to MCDONALD'S a further
report on the new number of ACQUIRED ACCOUNTS during the previous year,
including subscribers who have registered in the previous year, but who have
only paid their 2nd successive monthly fee between that ANNIVERSARY DATE and the
expiration of the period of one hundred and twenty (120) days referred to above.
The parties agree that subscribers who make payment after such period of one
hundred and twenty (120) days will no longer be computed for the effects of
Subsection 6.2. Together with such report, AOL will submit the amount to be
contributed by AOL to MCDONALD'S on account of the difference, if any, with
basis on the new number of ACQUIRED ACCOUNTS computed, all in accordance with
terms to be agreed upon, subject to the provisions under Paragraph 6.2.4.
B) Procedure for the payments to be made under Subsection 6.6 of the Agreement
1. On the second business day of each month, AOL will submit to MCDONALD'S a
report on the amounts payable by AOL to MCDONALD'S with respect to the previous
month (reference month), as provided under Subsection 6.6 of the Agreement.
2. The amounts payable as referred to above will be made on a monthly basis up
to the twentieth (20th) business day of the immediately following month,
according to a procedure to be agreed upon between the parties concurrently with
the procedures to be established as provided under Paragraphs 6.1.2 and 6.2.4.
3. The payments set forth herein will continue to be made for a period of only
four (4) months after the expiration of the EFFECTIVE PERIOD, in order that all
ACQUIRED ACCOUNTS may be computed with respect to the period until the
expiration of the EFFECTIVE PERIOD. Nevertheless, in the event that this
Agreement is terminated for breach of any of the provisions hereunder by
MCDONALD'S, AOL will not be required to make the payments referred to above as
of such termination.
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