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EXHIBIT 10.10
Execution Copy
TECHNICAL SERVICES AGREEMENT
Made and Entered Into as of
July 30, 0000
xxxxxxx
XXXX XXXXXX INTERNATIONAL INC.
and
MEGATEL DO BRASIL S.A.
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TABLE OF CONTENTS
1. DEFINITIONS.......................................................................................... 4
2. SUPPLY OF SERVICES................................................................................... 8
2.1 Supply of Services and Consultants............................................................... 8
2.2 RFS.............................................................................................. 8
2.3 BCI Proposal..................................................................................... 8
2.4 RFS Order........................................................................................ 8
2.5 Supply of Consultants............................................................................ 8
2.6 Cancellation of an RFS Order..................................................................... 9
2.7 Qualifications of Consultants.................................................................... 9
2.8 Authorized Representative........................................................................ 9
2.9 Employment Relationship.......................................................................... 9
2.10 Degree of Care................................................................................... 9
2.11 Right of Inspection and Recall...................................................................10
2.12 Discipline and Dismissal.........................................................................10
2.13 Costs to Date of Recall..........................................................................10
2.14 Substitute Consultant............................................................................10
2.15 Insurance........................................................................................11
2.16 Software and License Costs.......................................................................11
2.17 Deliverables.....................................................................................11
2.18 Third Party Services and Goods...................................................................11
2.19 Project Review Committee.........................................................................11
3. COSTS................................................................................................12
3.1 Costs............................................................................................12
3.2 Payment by Megatel...............................................................................12
3.3 Examination of Costs by Megatel..................................................................12
3.4 Prior Costs......................................................................................12
4. TAXES................................................................................................13
4.1 Payments Free and Clear of Taxes.................................................................13
4.2 Tax Payments by Megatel..........................................................................13
4.3 Reimbursement by Megatel.........................................................................13
4.4 Stamp Duties, Documentary Taxes and Levies.......................................................13
4.5 Tax Benefit......................................................................................13
4.6 Tax Structure....................................................................................14
5. PAYMENT TERMS........................................................................................14
5.1 Invoices.........................................................................................14
5.2 Interest.........................................................................................14
5.3 Currency.........................................................................................14
6. DELIVERABLES AND INTELLECTUAL PROPERTY...............................................................15
6.1 Ownership........................................................................................15
6.2 Enhancements.....................................................................................15
6.3 License to Use Deliverables and Enhancements.....................................................15
6.4 No Transfer of Rights............................................................................15
6.5 Provision of Similar Services by BCI.............................................................16
7. CONFIDENTIAL INFORMATION.............................................................................16
7.1 Confidentiality Obligation......................................................................16
7.2 Use of Confidential Information.................................................................16
7.3 Further Undertakings............................................................................16
7.4 Non-Confidential Information....................................................................16
7.5 Compelled Disclosure............................................................................17
7.6 Return of Information...........................................................................17
8. LIABILITY............................................................................................17
8.1 Degree of Care..................................................................................17
8.2 Indemnification.................................................................................18
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9. ADDITIONAL RESPONSIBILITIES OF THE PARTIES...........................................................18
9.1 Additional Responsibilities of Megatel..........................................................18
9.2 Additional Responsibilities of BCI..............................................................18
10. FORCE MAJEURE........................................................................................19
10.1 No Default or Liability.........................................................................19
10.2 Notice..........................................................................................19
11. TERM AND TERMINATION.................................................................................20
11.1 Term............................................................................................20
11.2 Termination by BCI..............................................................................20
11.3 Termination by Megatel..........................................................................21
11.4 Costs Incurred Prior to Termination.............................................................21
11.5 Termination Without Prejudice to Other Rights...................................................22
11.6 No Release of Liability.........................................................................22
12. ASSIGNMENT...........................................................................................22
13. WAIVER...............................................................................................22
13.1 Failure to Exercise not to Operate as Waiver....................................................22
13.2 Waiver in Writing...............................................................................22
13.3 No Deemed Waiver................................................................................22
14. NOTICES..............................................................................................22
15. GOVERNING LAW........................................................................................23
16. DISPUTE RESOLUTION...................................................................................23
16.1 Procedure.......................................................................................23
16.2 Arbitration.....................................................................................24
17. ORAL EXPLANATION: AMENDMENTS.........................................................................24
18. NON-SOLICITATION.....................................................................................25
19. SEVERABILITY.........................................................................................25
20. LANGUAGE.............................................................................................25
21. RELATIONSHIP OF THE PARTIES..........................................................................25
22. RIGHTS AND REMEDIES..................................................................................25
23. COUNTERPARTS.........................................................................................25
24. FURTHER ASSURANCES...................................................................................25
25. CONSENTS.............................................................................................26
26. EXPENSES.............................................................................................26
27. THIRD-PARTY BENEFICIARIES............................................................................26
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TECHNICAL SERVICES AGREEMENT made and entered into as of July 30, 1999 between
Xxxx Canada International Inc. ("BCI"), a corporation organized under the laws
of Canada, having its principal office at 1000, rue de La Gauchetiere Ouest,
Bureau 1100, Montreal (Quebec) Canada H3B 4Y8, and Megatel do Brasil S.A.
("MEGATEL"), a sociedade anonima organized under the laws of Brazil, having its
registered office at XX. Xxxx Xxxxxx Xxxxxxx, 000, 0xx Floor, suite 82, in the
city and state of Sao Paulo, Brazil, registered with the Brazilian Registry of
Legal Entities (CNPJ) n(deg) 02.629.188/0001-67 (each a "PARTY" and collectively
the "PARTIES").
WHEREAS Megatel has been awarded a regional operating license (the "LICENSE") to
provide fixed telephone services in the state of Sao Paulo, Brazil (the
"TERRITORY") and has entered into an agreement with the Brazilian Government
setting out the terms of authorization in respect thereof,
WHEREAS BCI has acquired certain experience, Know-How (as defined herein),
Intellectual Property (as defined herein), trained personnel and other
capabilities in respect of high technology telecommunications engineering,
information technology and other matters related to the implementation,
expansion, enhancement, operation and maintenance of telecommunications systems
and services; and
WHEREAS the Parties desire to enter into this Agreement for the purpose of
making available to Megatel and its employees the Consultants (as defined
herein) to render certain Services (as defined herein) to facilitate the
transfer of Know-How to Megatel.
NOW, THEREFORE, the Parties hereto agree as follows:
1. DEFINITIONS
In this Agreement, unless the context otherwise requires, the following terms
shall have the meaning set opposite, namely:
"AFFECTED PARTY" has the meaning ascribed thereto in Section 10.2;
"AGREEMENT" This Agreement, including its recitals and Schedules,
as amended from time to time;
BCI has the meaning ascribed thereto in the introductory
paragraph;
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"BCI GROUP COMPANY" includes, without limitation, any individual, firm,
corporation, company, joint venture, association,
trust, partnership or other entity, now or hereafter
existing, that directly or indirectly controls, is
controlled by or is under common control with, BCI.
For the purposes of this definition "CONTROL" shall
mean that one entity holds or is beneficially
entitled to, hold, directly or indirectly, other than
by way of security interest only, more than
twenty-five percent (25%) of the voting rights of
the other entity and "controlled" has a corresponding
meaning;
"BCI PROPRIETARY RIGHTS" has the meaning ascribed thereto in Section 6.1;
"BUSINESS" means the provision by Megatel of switched, fixed
telecommunications services in the Territory pursuant
to the License;
"BUSINESS DAY" Any day on which banks in Sao Paulo, Brazil, and
Montreal, Quebec, Canada, are authorized or required
by law to be open to transact business;
"COMMITTEE" has the meaning ascribed thereto in Section 2.19;
"CONFIDENTIAL Any information, material and data of a confidential
INFORMATION" nature furnished orally, in any written, graphic,
electronic, magnetic or other tangible form including
(but not limited to) technical, financial and
business information and models, names of customers
or partners (whether potential or existing), proposed
business deals, corporate strategies, reports, plans,
market and/or financial projections and other data,
of or relating to a Party, other than the information
listed in Section 7.4;
"CONSULTANT(S)" Person provided by BCI to render Services to Megatel
under this Agreement who is individually present in
Brazil for a period or periods not exceeding six (6)
months in any calendar year, provided that such
period or periods may be extended by Megatel with the
prior consent of the Consultant and BCI, which
consent shall not unreasonably be withheld or delayed
by BCI;
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"COSTS" has the meaning ascribed thereto in Section 3.1;
"DELIVERABLES" Any written summary of results or recommendations or
any other data or data files, information or
materials whether in written, electronic or magnetic
form, provided to Megatel pursuant to the Services
(as hereinafter defined) performed under this
Agreement, excluding all software or software
licenses, unless purchased by Megatel.
"ENHANCEMENTS" has the meaning ascribed thereto in Section 6.2;
"FORCE MAJEURE" has the meaning ascribed thereto in Section 10.1;
"INDEMNIFIED PERSON" has the meaning ascribed thereto in Section 8.2;
"INTELLECTUAL PROPERTY" means patents, copyrights, designs, know-how and
other intellectual property rights which are
protectable by law, whether registered or
unregistered and including applications for any of
the same;
"KNOW-HOW" means all technical knowledge, information and
expertise of BCI in respect of high technology
telecommunications engineering, information
technology and other matters related to the
implementation, expansion, enhancement, operation and
maintenance of telecommunications operations and
services, including but not limited to, processes,
techniques, methods, products, data and compositions;
"LICENSE" has the meaning ascribed thereto in the recitals;
"LOSSES" has the meaning ascribed thereto in Section 8.2;
"MEGATEL" has the meaning ascribed thereto in the introductory
paragraph;
"OVERHEAD RECOVERY COST" has the meaning ascribed thereto in Section 3.1;
"PARTY(IES)" has the meaning ascribed thereto in the introductory
paragraph;
"PERSON(S)" includes, without limitation, any individual, firm
company, association, partnership, joint venture,
trust, investment company, pension fund or investment
fund, or other entity, or any government or any
ministry, department or agency thereof;
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"PRIOR COSTS" has the meaning ascribed thereto in Section 3.4;
"RECEIVING PARTY" has the meaning ascribed thereto in Section 7.1;
"REPRESENTATIVE" means with respect to each Party, any authorized
director, officer, employee, consultant, advisor or
agent of such Party;
"RFS" has the meaning ascribed thereto in Section 2.2;
"RFS ORDER" has the meaning ascribed thereto in Section 2.4;
"RULES" has the meaning ascribed thereto in Section 16.1(b);
"SERVICES" means such services to be provided by BCI to Megatel
through the Consultants relating but not limited to:
(i) financial consulting and planning; (ii) strategic
and business planning; (iii) corporate development
activities including assistance in contract
negotiations; (iv) consulting assistance in
procurement and selection of system hardware; (v)
human resources consulting; (vi) regulatory matters;
(vii) sales and marketing strategy; (viii) customer
services; (xi) financial reporting and accounting
services; and (x) transfer to Megatel of Know-How and
Technical Data;
"SHAREHOLDERS" has the meaning ascribed thereto in Section 6.3;
"TAX BENEFIT" has the meaning ascribed thereto in Section 4.5;
"TAXES" has the meaning ascribed thereto in Section 4.1;
"TECHNICAL DATA" means technological developments, specifications,
documentation, instructions, technical reports and
similar information relating to the expansion,
enhancement, operation and maintenance of
telecommunications operations and services;
"TERM" has the meaning ascribed thereto in Section 11.1; and
"TERRITORY" has the meaning ascribed thereto in the recitals.
The singular includes the plural and vice versa. Reference to one gender
includes reference to the other gender.
References herein to Sections and Schedules shall be taken as referring to
Sections and Schedules to this Agreement. Headings to Sections are for ease of
reference only and shall not affect the construction or interpretation of this
Agreement.
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2. SUPPLY OF SERVICES
2.1 SUPPLY OF SERVICES AND CONSULTANTS
Subject to the terms and conditions of this Agreement, BCI shall
provide from time to time Services and Consultants as shall be
reasonably requested by Megatel by an authorized Representative
designated in accordance with Section 2.8.
2.2 RFS
To request Services and Consultants under this Agreement, Megatel shall
submit a request for services (an "RFS") substantially in the form of
Schedule A, specifying the Services required, estimating the number of
Consultants needed to perform such Services and including such other
information as set out in Schedule A. BCI agrees to use reasonable
efforts to meet any reasonable RFS submitted by Megatel.
2.3 BCI PROPOSAL
As soon as reasonably possible from the receipt by BCI of the RFS but
in no event later than fifteen (15) days from such receipt, BCI shall
provide Megatel with a proposal to supply the Consultants required to
perform the requested Services, along with an estimate of: (i) the
costs of supplying such Consultants; and (ii) the timeline for
providing such Consultants.
2.4 RFS ORDER
The Parties shall jointly determine and agree upon: (i) the name of
each Consultant to be provided by BCI to Megatel; (ii) the costs
associated to each Consultant in accordance with Schedule B; (iii) the
date of commencement of each Consultant; (iv) the duration of the
Services to be provided by such Consultant; (v) the location(s) in
which the Services are to be performed by such Consultant; and (vi) any
other terms and conditions relating to the Services and Consultants as
agreed to by the Parties. The above agreement shall be evidenced in an
RFS order ("RFS ORDER") substantially in the form of Schedule C. A
separate RFS Order shall be executed for each Consultant provided by
BCI to Megatel.
2.5 SUPPLY OF CONSULTANTS
BCI shall supply each Consultant in accordance with the relevant RFS
Order. In the event a Consultant is unable to commence providing
Services to Megatel in accordance with the time schedule set out in the
relevant RFS Order due to circumstances and/or events that are within
BCI's control, Megatel shall have the option to cancel, at no cost,
such RFS Order and BCI shall pay to Megatel any direct costs incurred
by Megatel as a direct result of BCI's failure to provide the
Consultant pursuant to the terms and conditions of the RFS Order.
Notwithstanding Section 2.6, Megatel may also cancel, at no cost, any
RFS Order in the event a Consultant is unable to commence providing
Services to Megatel in
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accordance with the time schedule set out in the relevant RFS Order due
to circumstances and/or events that are out of BCI's control.
2.6 CANCELLATION OF AN RFS ORDER
Megatel retains the right, upon written notice to BCI to cancel any RFS
Order (whether or not the Consultant has actually commenced providing
Services) in which case, Megatel shall pay for: (i) the Costs, if any,
associated to the Services actually performed by BCI up to the date of
cancellation; (ii) BCI's reasonably incurred demobilization costs, if
any, resulting from such cancellation; and (iii) any other direct costs
incurred by BCI as a direct result of the cancellation of the RFS Order
by Megatel.
2.7 QUALIFICATIONS OF CONSULTANTS
All Consultants supplied by BCI shall be qualified and shall have
substantial experience performing the tasks (or substantially similar
tasks) for which such Consultants would be engaged by BCI for Megatel.
BCI shall use its reasonable efforts to make available to Megatel the
best individuals available for the Services requested.
2.8 AUTHORIZED REPRESENTATIVE
BCI shall designate on the date hereof one or more of its senior
employees from its headquarters as the Representative(s) to whom all
inquiries are to be directed and with whom questions involving
Consultants and Services are to be coordinated. BCI may change its
designation(s) in this respect by notice in writing to Megatel at any
time. Megatel shall also designate on the date hereof, one or more of
its senior employees as its authorized Representative(s) to request and
coordinate Services from BCI. Megatel may change its designation(s) in
this respect by notice in writing to BCI at any time. Costs relating to
personnel designated under this Section 2.8 and their activities shall
be for the account of the designating Party.
2.9 EMPLOYMENT RELATIONSHIP
Each Consultant supplied to Megatel under this Agreement shall (as the
case may be) remain the consultant, agent, independent contractor or
employee of BCI (or any BCI Group Company or third party, as the case
may be), provided, however, that each individual shall receive and
follow instructions from Megatel, shall perform such duties and provide
the Services at such times and at such places as Megatel may from time
to time reasonably require, shall carry out such reasonable directions
as may be given from time to time by Megatel, and shall act in
accordance with and subject to the reasonable instructions of Megatel.
2.10 DEGREE OF CARE
Megatel shall exercise the same degree of care in respect of each
Consultant as with employees of Megatel and, in any event, no less than
the degree of care required by
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any applicable laws of Brazil. Nothing is this Agreement shall require
Megatel to pay or provide any employee benefits or other payments
required to be paid by Megatel to its employees under applicable
Brazilian law.
2.11 RIGHT OF INSPECTION AND RECALL
BCI shall have the right, upon reasonable notice, to inspect during
normal business hours the working environment of any Consultant. BCI
may recall any Consultant after consultation and reasonable notice to
Megatel if it reasonably determines that the working environment of
such Consultant does not comply with Brazilian laws (including without
limitation health and safety laws) or reasonable business practices.
2.12 DISCIPLINE AND DISMISSAL
BCI shall retain the right to discipline and dismiss any Consultant for
cause (after consultation with Megatel; provided that such dismissal
does not adversely affect Megatel's business) and Megatel shall not and
shall not purport to exercise any such right, provided that at any time
Megatel may require BCI to discipline and/or recall, on a permanent or
temporary basis, any Consultant and, as an immediate measure pending
discussions with BCI and any recall, may require that a Consultant
leave any premises owned or occupied by Megatel if Megatel in its
reasonable discretion believes that the Consultant has committed any
act or omission which would entitle Megatel to dismiss such Consultant
had he or she been employed by Megatel (including the inability to
adequately perform his or her duties) or if Megatel, in its reasonable
discretion, believes that such Consultant has conducted himself or
herself in a manner which is contrary to or otherwise not in the best
interests of Megatel. Megatel shall provide BCI with all reasonable
assistance as is necessary to enable the disciplinary process of BCI to
operate in respect of any Consultant.
2.13 COSTS TO DATE OF RECALL
Costs accrued to the date of recall shall be payable in accordance with
Section 3.1 and Costs accrued after such date shall be for the account
of BCI except for any agreed upon portion of the Consultant's
reasonable de-mobilization costs assumed by Megatel.
2.14 SUBSTITUTE CONSULTANT
If any Consultant ceases to provide Services to Megatel prior to the
completion of the term provided for in the relevant RFS Order or if any
such Person is unable due to illness, accident or other incapacity to
perform his or her duties, or if BCI dismisses or recalls such
Consultant in accordance with Sections 2.11 or 2.12, BCI shall, if
requested by Megatel, at its sole cost and expense, provide a
substitute for such Person in accordance with the RFS procedures set
out in Section 2.2.
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2.15 INSURANCE
Megatel shall ensure that all Consultants are insured, to the extent
insurance is available at reasonable cost, in the same manner as its
own employees in comparable positions against property damage and
personal injury arising while any Consultant is attending at the
premises or other facilities of Megatel pursuant to this Agreement.
2.16 SOFTWARE AND LICENSE COSTS
The Consultants provided hereunder shall bring and use, at no cost to
Megatel, the analytical tools, including, analytical software (and
appropriate hardware when required), needed to perform the Services.
However, to the extent that software owned by Parties other than BCI,
including specialized software, is required by Megatel or any
Consultant (subject to Megatel's prior written approval) to provide the
Services and for which licenses need to be issued in the name of
Megatel, the cost for such licenses shall be paid directly by Megatel
to the software supplier.
2.17 DELIVERABLES
The Deliverables developed by the Consultants for Megatel shall be
memorialized in written, graphic, electronic, magnetic or other
tangible form to allow Megatel to use the Deliverables after the
departure of the Consultants, such use to be subject to the rights of
any Party other than BCI in any Deliverable or software which supports
any Deliverable with respect to which Megatel may need to acquire a
license and BCI undertakes to cooperate with Megatel with respect to
such acquisition (including the acquisition of software pursuant to the
foregoing paragraph). The Deliverables delivered under this Agreement
shall function prior to, during, and after the calendar year 2000
without any service-affecting problems.
2.18 THIRD PARTY SERVICES AND GOODS
In the event that Megatel believes that any specific technical
assistance, software or hardware should be provided by a Third party,
Megatel may request BCI's assistance in engaging, and monitoring such
Third party's services or provision of goods. In particular, BCI shall,
on Megatel's request, monitor the customization process of any third
party software.
2.19 PROJECT REVIEW COMMITTEE
A project review committee (the "COMMITTEE") composed of two designees
from BCI and two designees from Megatel shall be set up to review on a
monthly basis the resource needs of Megatel and any difficulties which
may arise under this Agreement. Meetings of the Committee may be held
in person or by conference call. Megatel shall ensure that BCI is given
through the Committee or otherwise, on a timely basis, any information
with respect to the business of Megatel which may be relevant to or
necessary for the performance of Services by BCI or the Consultants
hereunder.
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3. COSTS
3.1 COSTS
Megatel shall pay to BCI such amount as is equivalent to the reasonable
and documented costs agreed to in each RFS Order of providing the
Services and Consultants to Megatel plus overhead recovery costs (the
"OVERHEAD RECOVERY COSTS") of fifteen per cent (15%) of such costs
(collectively, the "COSTS"). Attached as Schedule D hereto is an
estimate by the Parties of the amount of the Costs to be incurred
throughout the Term.
3.2 PAYMENT BY MEGATEL
Megatel may at its option, upon notification to BCI, pay directly to
the Consultants or on behalf of the Consultants various local expenses
(in amounts not to exceed those which BCI would otherwise reimburse)
such as accommodation, travel or per-diem, in which case reimbursement
to BCI will not apply for such expenses paid directly by Megatel.
3.3 EXAMINATION OF COSTS BY MEGATEL
Megatel shall have the right at reasonable times on reasonable notice
during usual business hours, and at its sole cost and expense (except
that if discrepancies are found in any such audit that exceed 10% of
the total amount of Costs reimbursed during the period subject to such
audit, all costs and expenses of such audit shall be borne by BCI), to
audit, examine and make copies and extracts from the books and records
of BCI relating to all Costs for which reimbursement is sought under
this Agreement. Such right may be exercised by Megatel though any
agent, employee or independent auditor designated by Megatel. Such
information shall be treated in accordance with the provisions of
Section 7.
3.4 PRIOR COSTS
The Parties acknowledge that Costs (the "PRIOR COSTS") were incurred by
or on behalf of BCI for the benefit of Megatel prior to the date of
execution of this Agreement. Attached as Schedule E is an estimate of
all such Prior Costs incurred by or on behalf of BCI up to June 30,
1999. Megatel shall have the opportunity to review and approve all such
Prior Costs. The Parties shall agree to all such Prior Costs within
thirty (30) days of the execution of this Agreement.
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4. TAXES
4.1 PAYMENTS FREE AND CLEAR OF TAXES
All amounts payable hereunder by Megatel to BCI shall be paid by
Megatel free and clear of and without deduction for any and all present
or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding taxes imposed on
BCI's net income, assets or capital by the jurisdiction under the laws
of which it is organized or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "TAXES").
4.2 TAX PAYMENTS BY MEGATEL
Should any Taxes be levied on BCI by the Brazilian tax authorities,
payment for such Taxes shall be the responsibility of and be paid by
Megatel directly to the appropriate tax authority on behalf of BCI
unless contested in good faith by Megatel, and these payments by
Megatel shall not reduce the amounts payable to BCI pursuant to this
Agreement. Within thirty (30) days after the date of any payment of
Taxes, Megatel shall furnish to BCI, at its address referred to in
Section 14, the original receipt of payment thereof or a certified copy
of such receipt evidencing payment thereof.
4.3 REIMBURSEMENT BY MEGATEL
In the event that BCI is required by law to make such payments for
Taxes directly to the Brazilian tax authorities, Megatel shall, subject
to Brazilian law, reimburse BCI for such payments within thirty (30)
days from the date of BCI's invoice. Such reimbursement shall not be
reduced by any Taxes and shall not reduce the amounts otherwise payable
to BCI pursuant to this Agreement.
4.4 STAMP DUTIES, DOCUMENTARY TAXES AND LEVIES
Megatel shall pay all stamp duties, documentary taxes, charges or
similar levies imposed by the Brazilian tax authorities or any state or
subdivision thereof that arise from any payment made hereunder or from
the execution, delivery or registration of, or otherwise with respect
to, this Agreement.
4.5 TAX BENEFIT
If BCI is able to reasonably claim a tax benefit (a "TAX BENEFIT") in
computing its income tax liability under the Income Tax Act (Canada) or
under the tax statutes of any relevant provincial jurisdiction in
Canada or any other jurisdiction by reason of any Taxes withheld on any
payments made by Megatel to BCI pursuant to the terms of this
Agreement, BCI shall use reasonable efforts to obtain promptly such Tax
Benefit. BCI shall, within thirty (30) days of receiving the Tax
Benefit from a reduced final tax payment, pay to Megatel the amount of
the Tax Benefit received
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by BCI. Nothing in this Section shall interfere with the right of BCI
to arrange its tax affairs in whatever manner it deems fit.
4.6 TAX STRUCTURE
The Parties shall jointly determine the most tax-efficient means of
accomplishing the objectives of this Agreement. In the event that the
Parties determine that a more tax efficient structure may be
implemented, the Parties shall negotiate in good faith to amend this
Agreement to implement such new structure as promptly as practicable.
5. PAYMENT TERMS
5.1 INVOICES
BCI shall submit to Megatel on a monthly basis invoices for the Costs
in U.S. dollars. Such invoices shall describe the Services provided and
Costs incurred with supporting documentation as reasonably requested by
Megatel to comply with accounting procedures and other requirements of
Megatel as well as the place and manner of payment.
5.2 INTEREST
Unless disputed by Megatel in good faith, all Costs payable under this
Agreement, if not paid within fourty-five (45) Days of the date of the
invoice shall bear interest on the outstanding amount(s) from the date
of the invoice or their due date (whichever date is the latest) until
paid at a rate per annum, compounded annually, equal to LIBOR plus two
hundred (200) basis points.
5.3 CURRENCY
Unless otherwise agreed in writing between BCI and Megatel and except
for Costs paid directly by Megatel in accordance with Section 3.2, all
compensation and all amounts owing under this Agreement shall be paid
in full by Megatel in U.S. dollars to BCI. All Costs incurred in
currencies other than U.S. dollars shall he converted into U.S. dollars
using the average of the appropriate Bank of Canada closing exchange
rates for the month in which the Costs were incurred.
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6. DELIVERABLES AND INTELLECTUAL PROPERTY
6.1 OWNERSHIP
Megatel shall own all right, title and interest in and to any
Deliverable prepared by any Consultant and furnished to Megatel in
connection with the provision of Services; provided that the foregoing
right, title and interest shall not include: (i) methods, techniques
and concepts and all related Intellectual Property of BCI or any of the
BCI Group Companies and (ii) other materials previously created by BCI
or any BCI Group Company (the "BCI PROPRIETARY RIGHTS"), all of which
shall be owned by BCI or the relevant BCI Group Company and shall be
treated as confidential information pursuant to the provisions of
Section 7. BCI hereby grants Megatel a license to use such BCI
Proprietary Rights on a non-exclusive, perpetual and royalty free basis
for the purpose of carrying on the Business. Megatel shall not have the
right to assign this license to any other Person other than its
affiliates, in accordance with the provisions hereof and subject to
such affiliates being bound by the same undertaking not to assign this
right.
6.2 ENHANCEMENTS
Any processes, concepts, techniques, uses, designs, applications,
methods, improvements, enhancements and modifications directly based on
or directly created using the BCI Proprietary Rights (the
"ENHANCEMENTS"), that are discovered or developed by or on behalf of
Megatel shall be the exclusive property of Megatel.
6.3 LICENSE TO USE DELIVERABLES AND ENHANCEMENTS
Megatel hereby grants each of BCI, SLI Wireless S.A., Xxxxxxxx
Xxxxxxxxxxxx and VeloCom, Inc. (the "SHAREHOLDERS"), a license to use
the Deliverables and Enhancements on a non-exclusive and royalty free
basis for as long as such Shareholder is a shareholder (directly or
indirectly) of Megatel; provided, however that the use by a Shareholder
of the Deliverables and Enhancements may continue if such use began
prior to such Shareholder ceasing to be a shareholder (directly or
indirectly) of Megatel. The Shareholders shall not have the right to
assign this license to any other Person other than their affiliates, in
accordance with the provisions hereof and subject to such affiliates
being bound by the same undertaking not to assign this right. The
Shareholders further agree that they (and their affiliates) shall not
use the Deliverables and Enhancements in connection with a business
that competes with the Business.
6.4 NO TRANSFER OF RIGHTS
No term or condition in this Agreement shall be construed as involving
software development or to be a transfer by BCI, the BCI Group
Companies or Megatel of licenses, patents, trademarks or technology
which could give rise to royalty payments. Any software development
requested by BCI or Megatel or any transfer of Intellectual Property
rights shall be dealt with in separate agreements.
Page 15
16
6.5 PROVISION OF SIMILAR SERVICES BY BCI
Other than for such Persons competing directly with the Business,
nothing in this Agreement shall prevent BCI and/or any of the BCI Group
Companies from performing for others the same or similar Services as
those provided hereunder, including providing the same or similar
conclusions and recommendations.
7. CONFIDENTIAL INFORMATION
7.1 CONFIDENTIALITY OBLIGATION
Each Party (the "RECEIVING PARTY") shall for two (2) years from the
date of receipt of Confidential Information from the disclosing Party,
retain in confidence all such Confidential Information disclosed
pursuant to activities carried on in providing the Services under this
Agreement and shall treat such Confidential Information with the same
degree of care as it employs for the protection of its own Confidential
Information (and in any event, with reasonable care).
7.2 USE OF CONFIDENTIAL INFORMATION
The Receiving Party shall not, nor shall it permit any of its
Representatives to, without the written consent of the other Party, use
any Confidential Information of the other for any purpose other than
the provision of Services hereunder, or disclose any Confidential
Information of the other to any third party, except to its
Representatives with a need to know for purposes of this Agreement or
for the conduct of each Party's business, including any financing to
the extent necessary to obtain such financing, and after such
Representatives have been directed by the Receiving Party to treat such
Confidential Information in accordance with the terms of this Section 7
and provided further that no Party shall use any such Confidential
Information to the detriment of each other.
7.3 FURTHER UNDERTAKINGS
Each Party also agrees to enter into such further undertakings of
confidentiality as may reasonably be required by the other Party.
7.4 NON-CONFIDENTIAL INFORMATION
Confidential Information shall not include any information that:
(a) is or comes into the public domain other than as a result of a
disclosure directly or indirectly by the Receiving Party in
breach of this Agreement;
(b) the Receiving Party can demonstrate was known to it prior to
the disclosure thereof by the disclosing Party;
(c) is or becomes generally available to such Receiving Party on a
non-confidential basis from a source other than the
disclosing Party, provided
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17
that such source is not known by such Receiving Party to be
bound by any confidentiality obligation with respect to such
information;
7.5 COMPELLED DISCLOSURE
This Section 7 shall not restrict the disclosure of any Confidential
Information by either Party as required by law, the rules or orders of
any recognized securities exchange, any court of competent
jurisdiction, any governmental or regulatory authority, including any
taxation authority or broadcasting or telecommunications or securities
regulatory authority, but only after written notice of such disclosure
requirement has been given, to the extent practicable, by such Party to
the disclosing Party, (it being understood and agreed that only one
such notice shall be required in respect of continuous disclosure
requirements).
7.6 RETURN OF INFORMATION
Upon termination of this Agreement, each Party shall return all such
Confidential Information to the other Party unless such Confidential
Information is necessary for the conduct of the ongoing business of
either Party. Notwithstanding termination of this Agreement, the
confidentiality obligations of the Parties pursuant to this Section 7
shall continue for two (2) years after the disclosure of Confidential
Information.
8. LIABILITY
8.1 DEGREE OF CARE
BCI shall provide, and shall cause the Consultants to provide, all
Services with reasonable care and skill and such Services shall be of a
standard comparable to providers of similar types of services and BCI
shall and shall cause the Consultants to use reasonable commercial
judgment and expertise provided that:
(a) BCI, the BCI Group Companies and the Consultants shall not be
liable on account of specific acts done or omitted to be done
by the Consultants, BCI or the BCI Group Companies and their
respective directors, officers, shareholders, employees,
agents or contractors in good faith in accordance with or
pursuant to the direction of Megatel; and
(b) none of BCI, any of BCI Group Companies or the Consultants
shall be liable to Megatel for any error of judgment or for
any Loss suffered by Megatel in connection with the subject
matter of this Agreement (howsoever any such Loss may have
occurred) unless such Loss arises from negligence, bad faith,
fraud, intentional misconduct or willful default in the
performance or non-performance by BCI (or any BCI Group
Company or the Consultants) of its obligations or duties under
or pursuant to the terms of this Agreement.
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18
8.2 INDEMNIFICATION
Megatel shall indemnify and hold harmless BCI and the BCI Group
Companies and their respective directors, officers, shareholders,
employees and agents (each an "INDEMNIFIED PERSON") against any claims,
actions, proceedings, costs, charges, losses, damages, demands,
liabilities and expenses (collectively "LOSSES") which may be brought
by third parties against, suffered or incurred by any of such
Indemnified Persons arising from or related to the performance of
BCI's, the BCI Group Companies' or the Consultant's obligations or
duties under or pursuant to the terms of this Agreement (including,
without limitation, all reasonable legal and professional fees and
other expenses incurred by such Indemnified Person in the defense of
any claim, action or proceeding) except claims arising from negligence,
bad faith, fraud, intentional misconduct or willful default in the
performance or non-performance by BCI of its obligations or duties
under or pursuant to the terms of this Agreement. BCI shall be entitled
to defend itself against any such claim with the involvement of Megatel
but shall not settle the same without the prior written consent of
Megatel, such consent not to be unreasonably withheld or delayed.
8.3 DIRECT DAMAGES
Each Party shall be liable hereunder only for direct Losses incurred by
the other and in no event shall either Party be liable for any
consequential or indirect Losses for any breach of this Agreement.
9. ADDITIONAL RESPONSIBILITIES OF THE PARTIES
9.1 ADDITIONAL RESPONSIBILITIES OF MEGATEL
In addition to its obligations under this Agreement, Megatel shall at
no cost to BCI:
(a) provide all secretarial, office, telecommunications, and other
business facilities reasonably required by the Consultants in Brazil
for the performance of the Services;
(b) use reasonable efforts to obtain, or assist BCI from time to time
in obtaining, the visas and/or work permits and such other necessary
Brazilian government permissions required to enable the Consultants and
their families to enter and work in Brazil and allow payment outside
Brazil of the fees in connection thereto; and
(c) register this Agreement and all of its subsequent amendments with
the appropriate authorities (if legally required) and advise BCI of the
date of registration. Megatel will seek and obtain (if necessary) the
approval of this Agreement by all relevant Brazilian authorities.
9.2 ADDITIONAL RESPONSIBILITIES OF BCI
In addition to its obligations under this Agreement, BCI shall:
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19
(a) cause the Consultants to perform the duties required under this
Agreement in the manner set forth herein; and
(b) use reasonable efforts to obtain, or assist the Consultants and
Megatel from time to time in obtaining, the visas and/or work permits
and such other necessary Brazilian government permissions required to
enable the Consultants and their families to enter and work in Brazil
and allow payment outside Brazil of the fees in connection thereto.
10. FORCE MAJEURE
10.1 NO DEFAULT OR LIABILITY
Neither Party shall be in default or liable for any Loss resulting from
delays in performance or from failure to perform or comply with terms
of this Agreement due to any event, which event is beyond its
reasonable control, was not caused by it and, which despite such
Party's reasonable efforts, will result in a delay in the performance
or compliance with any material term of this Agreement ("FORCE
MAJEURE"), including but not limited to:
(a) unusually severe weather, including lightning, storms, earthquakes,
landslides, floods, washouts, volcanic eruptions and other acts of God;
(b) fires, explosion and destruction, whether accidentally or
intentionally caused and whether partial or complete, lack or failure
of transportation facilities, epidemic, quarantine, labour disputes;
(c) war, declared or undeclared, revolution, civil commotion, acts of
public enemies, blockades, embargo, acts of civil disobedience, acts of
civil or military authorities, acts stemming from governmental bodies,
including courts and regulatory bodies; and
(d) acts of government, including the imposition or exchange controls
or currency restrictions.
provided that the Party affected by such event has exercised reasonable
measures, if feasible, to mitigate such delays or Losses.
10.2 NOTICE
The Party affected by such event (the "AFFECTED PARTY") shall within
twenty (20) Business Days of the onset of Force Majeure notify the
other Party setting out in reasonable details the nature of such event
of Force Majeure and its effect upon the obligations of the Affected
Party, a detailed description, if applicable, of work-around plans,
alternative sources or any other means such Party will or proposes to
utilize to make up for any such period of delay and to prevent any
further delay. Thereupon, the obligations of the Affected Party shall
be suspended during, but no longer than the continuance of the event of
Force Majeure, and the time for
Page 19
20
performance of any obligation hereunder shall be extended by the actual
time of delay caused by such event; provided, however) that unless an
Affected Party shall notify the other Party within the period (except
if such period cannot be met because of the event of Force Majeure) and
in the manner stated in this Section 10.2, such Party shall not be
entitled to and shall not claim an extension of time for that event of
Force Majeure, and shall not by reason of any delay arising from such
event of Force Majeure, be relieved in any way, or to any extent, from
its obligations to proceed with, execute and complete its performance
of, and compliance with, the terms of this Agreement.
11. TERM AND TERMINATION
11.1 TERM
This Agreement shall have a term (the "Term") of five (5) years from
the date hereof, unless otherwise mutually agreed, and may thereafter
be extended by mutual agreement of the Parties.
11.2 TERMINATION BY BCI
BCI may, at its OPTION, terminate this Agreement by giving written
notice to Megatel in any of the following events, namely:
(a) a material breach by Megatel of any material obligations contained
in this Agreement which has not been cured within thirty (30) Business
Days after written notice thereof to Megatel specifying the breach and
requiring such remedy;
(b) the insolvency or bankruptcy of Megatel or the making of an
assignment for the benefit of creditors) or the appointment of a
trustee or receiver and manager or liquidator for Megatel or for all or
a substantial part of its property, or the commencement of a
bankruptcy, reorganization, arrangement, insolvency or similar
proceedings by or against Megatel under the laws of any jurisdiction;
(c) Megatel ceases to conduct its business in the normal course;
(d) all or substantially all of Megatel's assets are sold, or
otherwise disposed of;
(e) the License is terminated for any reason; or
(f) Megatel has made or will make any payments, loans or gifts of any
money or anything of value, or has authorized, offered or promised to
do any of the foregoing, directly or indirectly to or for the use or
benefit of (i) any official or employee of the Government of Brazil or
any department agency or instrumentality thereof; (ii) any political
party or official or candidate thereof; or (iii) to any other Person
either for an advance or reimbursement knowing or having reason to
believe that any part of such payment, loan or
--------------------------------------------------------------------------------
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21
gift will be directly or indirectly given or paid by such other Person
to an individual mentioned in (i) or (ii).
11.3 TERMINATION BY MEGATEL
Megatel may at its option. terminate this Agreement, by giving written
notice to BCI in any of the following events, namely;
(a) a material breach by BCI of any material obligations contained in
this Agreement which has not been cured within thirty (30) Business
Days after written notice thereof by Megatel specifying the breach and
requiring such remedy;
(b) the insolvency or bankruptcy of BCI or the making of an assignment
for the benefit of creditors, or the appointment of a trustee or
receiver and manager or liquidator for BCI or for all or a substantial
part of its property, or the commencement of a bankruptcy,
reorganization, arrangement, insolvency or similar proceedings by or
against BCI under the laws of any jurisdiction;
(c) BCI ceases to conduct its business in the normal course;
(d) all or substantially all of BCI's assets are sold, or otherwise
disposed of;
(e) the License is terminated for any reason;
(f) BCI has made or will make any payments, loans or gifts of any
money or anything of value, or has authorized, offered or promised to
do any of the foregoing, directly or indirectly to or for the use or
benefit of: (i) any official or employee of the Government of Brazil or
any department agency or instrumentality thereof; (ii) any political
party or official or candidate thereof; or (iii) to any other Person
either for an advance or reimbursement knowing or having reason to
believe that any part of such payment, loan or gift will be directly or
indirectly given or paid by such other Person to an individual
mentioned in (i) or (ii); or
(g) BCI's consistent failure to provide Consultants to Megatel in
accordance with the terms and conditions of duly executed RFS Orders
due to circumstances and/or events that are within BCI's control.
11.4 COSTS INCURRED PRIOR TO TERMINATION
Notwithstanding any termination of this Agreement, Megatel's obligation
to pay the Costs incurred to the date of termination shall survive the
termination of this Agreement with respect to Megatel's obligations and
responsibilities hereunder incurred prior to the date of termination.
--------------------------------------------------------------------------------
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22
11.5 TERMINATION WITHOUT PREJUDICE TO OTHER RIGHTS
The termination of this Agreement regardless of its cause or its nature
shall be without prejudice to any other rights or remedies of either
Party without liability to the other Party (except as provided in this
Agreement) for any Loss occasioned thereby, and each Party shall remain
responsible for its obligations existing immediately prior to the
termination.
11.6 NO RELEASE OF LIABILITY
The termination of this Agreement for any cause shall not release
either Party hereto from any liability which at the time of termination
has already accrued to the other Party hereto or which thereafter may
accrue in respect of any act or omission prior to termination or from
any obligation which is expressly stated herein to survive termination.
12. ASSIGNMENT
No Party may assign its rights and obligations under this Agreement, in
whole or in part, except with the prior consent of the other Party,
which consent shall not be unreasonably withheld or delayed.
13. WAIVER
13.1 FAILURE TO EXERCISE NOT TO OPERATE AS WAIVER
Except as otherwise expressly provided in this Agreement, no failure or
delay by any Party in exercising any right, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single
or partial exercise by such Party of any right, power or privilege
preclude any further exercise thereof or the exercise of any other
right, power or privilege.
13.2 WAIVER IN WRITING
Except as otherwise expressly provided in this Agreement, no waiver of
any right hereunder or of any breach or failure to perform shall be
effective unless executed in writing.
13.3 NO DEEMED WAIVER
The waiver of any right hereunder or of any failure to perform or
breach hereof shall not constitute or be deemed as a waiver of any
other right hereunder or of any other failure to perform or other
breach hereof, whether of a similar or dissimilar nature thereto.
14. NOTICES
Any notice or communication which shall be given under this Agreement
shall be made in writing in the English language, and given by
telecopier, with an original sent by courier,
--------------------------------------------------------------------------------
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23
addressed to a Party at its telecopier number and address set forth
below, or such other telecopier number and/or address for such Party as
shall have been communicated by it to the other Party in accordance
with this Section 14. Any notice or other communication shall be deemed
to have been received on the date of transmission but only if a
confirmation of the receipt by the recipient of the telecopier appears
correctly at the end of the sender's telecopy.
IF TO BCI:
Xxxx Canada International Inc.
1000 de La Gauchetiere St. West
Suite 1100
Xxxxxxxx, Xxxxxx
X0X 0X0
Telecopier No.; (000) 000-0000
Attention: Vice-President, Law and Corporate Secretary
IF TO MEGATEL:
MEGATEL DO BRASIL S.A.
Avn. Xxxx Xxxxxx Xxxxxxx, 000, 0xx xxxxx, xxxxx 00,
Xxx Xxxxx, XX
Xxxxxx
Telecopier No.: 00-00-0000-0000
Attention: Chief Executive Officer
15. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of Brazil without giving effect to any choice of conflict of
law rules.
16. DISPUTE RESOLUTION
16.1 PROCEDURE
In the event of a dispute among BCI and Megatel arising under or in
connection with this Agreement, including a dispute over whether there
has been a material breach to this Agreement, the following shall
apply:
(a) They shall use their good faith efforts to settle such dispute. To
this end, each Party may notify the other Party of its desire to
initiate the procedure contemplated by this Section 16, whereupon the
Parties shall forthwith convene to attempt to resolve such disputes
through amicable and good faith discussions. Disputes which the Parties
are unable to resolve through such discussions within thirty (30) days
following receipt of the notice referred to in this Section 16.1(a),
shall upon the request of either Party, be submitted to a panel
consisting of designees from the chief executive officers of BCI and
--------------------------------------------------------------------------------
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24
Megatel. The designees shall consult and negotiate with each other in
good faith in an effort to reach a just and equitable solution.
(b) If the designees do not reach a solution within a period of thirty
(30) days following the beginning of their consultations and
negotiations, any Party may treat the same as an arbitrable dispute by
giving notice to the other Party, in which case the dispute shall be
submitted to a final and binding arbitration under the Rules of
Conciliation and Arbitration of the International Chamber of Commerce
excluding any such rules relating to the posting of security for costs
(the "Rules").
16.2 ARBITRATION
(a) The arbitral tribunal shall consist of three (3) arbitrators. One
arbitrator shall be appointed by each side and the third shall be
selected by the two party-appointed arbitrators or, failing agreement,
by the International Chamber of Commerce, in accordance with the Rules.
(b) The arbitration shall be held in the English language. The
proceedings shall be conducted, and any arbitral award shall be made,
in the city of New York, New York, in the United States. The Parties
agree that the obligations, herein are "commercial" and that the New
York Convention on Recognition and Enforcement of Foreign Arbitral
Awards is applicable or, if such convention has not then been ratified
by Brazil, the Inter-American Convention on International Commercial
Arbitration shall also apply. The prevailing Party shall be entitled to
recover from the other Party (as part of the arbitral award or order)
its reasonable attorneys' fees and other costs of arbitration.
(c) Any decision or award of the arbitral tribunal shall be final and
binding upon the Parties. The Parties hereby waive to the extent
permitted by law any rights to appeal or to review of such award by any
court or tribunal. The arbitral award may be enforced against the
Parties or their assets wherever they may be found and that a judgment
upon the arbitral award may be entered in any court having jurisdiction
thereof.
(d) To the extent that each Party has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process
(whether through service of notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to
itself or its property, it hereby irrevocably waives such immunity in
respect of its obligations under this Agreement.
17. ORAL EXPLANATION: AMENDMENTS
No oral explanation or oral information by any of the Parties shall
alter the meaning or interpretation of this Agreement. No amendment
hereto shall be effective or binding on
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25
any of the Parties unless reduced to writing with specific reference to
this Agreement, and executed by the respective duly authorized
representatives of each of such Parties.
18. NON-SOLICITATION
Megatel agrees not to enter into any employment or consulting agreement
or arrangement, directly or indirectly, written or verbal with any
Consultant, agent, employee or independent contractor of BCI or any BCI
Group Company who provides Services directly to Megatel hereunder for a
period of twelve (12) months following his or her completion of such
Services, unless authorized in advance by BCI in writing which
authorization shall not be unreasonably withheld or delayed.
19. SEVERABILITY
The invalidity or unenforceability of any provision, in whole or in
part, of this Agreement shall not in any way affect the validity or
enforceability of any other parts or provisions thereof, provided,
however, that the Parties hereto shall use their reasonable efforts to
achieve the purpose of the invalid or unenforceable provision or part
thereof by a new valid and enforceable stipulation.
20. LANGUAGE
The English version of this Agreement is the only authentic version
thereof and it shall determine the construction, interpretation,
application and performance of this Agreement.
21. RELATIONSHIP OF THE PARTIES
No Party has the power or authority to legally bind the other Party.
Nothing herein shall be construed as authorizing any Party to act as an
agent or representative of the other Parties and nothing herein shall
be taken to constitute or create a partnership, an agency or a joint
venture among any of the Parties.
22. RIGHTS AND REMEDIES
All rights and remedies provided for in this Agreement are in addition
to, and not exclusive of, any other rights or remedies otherwise
available at law or in equity.
23. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which when so executed shall be deemed to be an original, but all of
which taken together shall constitute one and the same complete and
executed agreement.
24. FURTHER ASSURANCES
Each of the Parties hereto shall cooperate with the other and execute
and deliver to the other such instruments and documents and take such
other actions as may reasonably be
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26
requested from time to time in order to carry out, evidence and confirm
their respective rights and the intended purpose of this Agreement.
25. CONSENTS
Megatel shall obtain at its own cost all licenses, permits or consents
which may be required by Megatel in order for BCI to be free to provide
or make available the Services.
26. EXPENSES
Each Party shall bear its own costs and expenses incurred in connection
with the negotiation, preparation and execution of this Agreement.
27. THIRD-PARTY BENEFICIARIES
It is the intention of the Parties to confer third-party beneficiary
rights to the Shareholders pursuant to Section 6.3 and to the
Indemnified Persons pursuant to Section 8.2.
IN WITNESS WHEREOF, the Parties have signed and delivered this Agreement on the
day and year set forth above.
XXXX CANADA INTERNATIONAL INC. MEGATEL DO BRASIL S.A.
By: /s/ Xxxx X. Xxxxxxxxx By: /s/ XXXXXXXX FRGIRE
----------------------------------- --------------------------------
Name: Xxxx X. Xxxxxxxxx Name: Xxxxxxxx Frgire
Title: Executive Vice-President and Title: Director Presidente
Chief Financial Officer
By: /s/ XXXX ROCHIURA
--------------------------------
Name: Xxxx Rochiura
Title: Director Financeiro
Witness: /s/ XXXX XXXX XXXXXXX JUNIOR Witness: XXXXXXX XXXXXXXX
-------------------------------- ---------------------------
Xxxx Xxxx Xxxxxxx Junior Xxxxxxx Xxxxxxxx
[STAMP] [SEAL] [STAMP]
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Schedule "A"
--------------------------------------------------------------------------------
REQUEST FOR SERVICES
--------------------------------------------------------------------------------
1. Description of Expertise Required and Approximate Number of Consultants
Requested
-----------------------------------------------------------------------
-----------------------------------------------------------------------
2. Expected Duration
-----------------------------------------------------------------------
3. Date of Commencement
-----------------------------------------------------------------------
4. Location
-----------------------------------------------------------------------
5. Contact Person at Megatel do Brasil S.A.
Name:
--------------------------------
Address:
--------------------------------
--------------------------------
Telephone:
--------------------------------
Fax:
--------------------------------
------------------------------------------
Authorized Megatel do Brasil S.A. Signatory
Date:
-------------------------------------
--------------------------------------------------------------------------------
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28
SCHEDULE "B"
A. If the Consultant is an employee of BCI or a BCI Group Company, the
documented costs to be agreed to in an EPS Order shall be:
-Daily Rate;
-Per-diem;
-Lodging expenses;
-Travel expenses;
-Any other direct related expenses.
B. If the Consultant is employed by a third party, the documented costs to be
agreed to in an RFS Order shall be:
-Actual consulting fee charged by Consultant to BCI;
-Per-diem;
-Lodging expenses at Megatel designated hotels;
-Travel expenses reimbursable under BCI policy; and
-Any other direct related expenses.
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29
Schedule "C"
--------------------------------------------------------------------------------
RFS ORDER
(Please prepare one order for each consultant)
--------------------------------------------------------------------------------
1. Name of Consultant
-----------------------------------------------------------------------
2. Daily Rate and Expense Reimbursement Policy
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
3. Date of Commencement of Services
-----------------------------------------------------------------------
4. Duration of Services
-----------------------------------------------------------------------
5. Locations(s)
-----------------------------------------------------------------------
6. Other Terms and Conditions of RFS Order
-----------------------------------------------------------------------
---------------------------------------------------------
Authorized Megatel do Brasil S.A. Signatory
Date:
-------------------------------------
---------------------------------------------------------
Authorized BCI Signatory
(only sign once Megatel do Brasil S.A. has signed)
Date:
-------------------------------------
--------------------------------------------------------------------------------
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30
MEGATEL DO BRASIL
Human Resources
SCHEDULE "D"
MEGATEL TELEFONICA S/A
SCHEDULE FOR BCI SHORT TERM EXPATRIATES
------------------------------------------------------------------------------------------------------------------
Number Duration
Departments Area of Expertise of persons in days Daily Rate US$(*) Total Rate US$
------------------------------------------------------------------------------------------------------------------
Telecom Operations Sr Expert 900
Implementation Team Telecom Project Management 1 312 900 294,840
Telecom Major Contracts Negot. 900
------------------------------------------------------------------------------------------------------------------
Switching 1 234 850 202,215
Fixed Wireless Access 2 468 850 417,690
Micro Wave 1 234 850 208,845
Fiber Access 1 234 850 208,845
Network Engineering Civil/Structure 850
Mechanical 850
Electrical 850
Power 850
Geographic Info System 850
------------------------------------------------------------------------------------------------------------------
Implementation 1 234 800 190,320
NW Management Centre 3 624 800 517,920
Network Operations Installation & Repair 3 624 800 517,920
Control Centre 1 312 800 255,840
Logistics 2 468 800 386,880
Contracts 1 234 800 190,320
------------------------------------------------------------------------------------------------------------------
Implementation 1 156 800 124,800
Long Distance & Calling Card 800
Centrex & PABX 800
Marketing & Sales Broadband & Data 1 78 800 65,520
Wholesale & co-Marketing 800
Basic Access Services 800
Large Business Segment 1 234 800 196,560
------------------------------------------------------------------------------------------------------------------
Workforce Managt/Forecastg 2 1092 700 819,000
Customer Service 3 1872 700 1,386,840
Customer Care Billing & Collection 1 624 700 469,560
Operators Services/Directory 1 234 700 171,990
Repair Answer 4 1092 700 788,970
------------------------------------------------------------------------------------------------------------------
Service Delivery 1 234 850 208,845
Customer Care 1 234 850 208,845
ERP Implementation 1 234 850 208,845
Info Technology Cust Care & Billing Implement. 1 234 850 208,845
Operations 1 624 850 570,180
Network Management Centre 1 468 850 424,320
Overall Systems Implementation 1 156 850 132,600
------------------------------------------------------------------------------------------------------------------
700
700
700
700
700
700
700
700
700
------------------------------------------------------------------------------------------------------------------
TOTAL 38 11,544 $9,377,355
--------------------------------------------------------------------------------
SCHEDULE (days/persons)
Departments 1999 2000 2001 2002 2003 2004
--------------------------------------------------------------------------------
Implmentation Team 312
--------------------------------------------------------------------------------
156 78
468
234
234
Network Engineering
--------------------------------------------------------------------------------
156 78
156 468
Network Operations 156 468
156 156
156 312
156 78
--------------------------------------------------------------------------------
156
Marketing & Sales 78
234
--------------------------------------------------------------------------------
624 468
312 936 624
Customer Care 312 312
234
390 702
--------------------------------------------------------------------------------
234
234
234
Info Technology 234
312 312
312 156
156
--------------------------------------------------------------------------------
TOTAL 2,106 7,566 1,872
31
Schedule "E"
Prior Costs to June 30, 1999
Consulting fee US$64,583.37
Consulting expenses (per diem) US$19,244.72
Medical exam expenses US$108.73
Travelling expenses US$2,403.73
Airfare US$23,365.36
Sub Total US$109,705.91
Overhead Recovery Costs US$16,455.88
Total Prior Costs US$126,161.79
=============
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EXECUTION COPY
KNOW-HOW TRANSFER AND TECHNICAL SERVICES AGREEMENT
Made and Entered Into as of
, 1999
------------
between
XXXX CANADA INTERNATIONAL INC.
and
MEGATEL DO BRASIL S.A.
33
TABLE OF CONTENTS
1. DEFINITIONS ............................................................ 4
2. KNOW-HOW AND TECHNICAL DATA ............................................ 7
2.1 License of Know-How and Technical Data ........................... 7
2.2 Confidentiality of Know-How and Technical Data ................... 7
2.3 Transfer of Know-How ............................................. 7
2.4 Training ......................................................... 8
2.5 Consultants and Secondees ........................................ 8
3. ROYALTY FEES ........................................................... 8
3.1 Royalty Fees ..................................................... 8
3.2 EBITDA Information ............................................... 9
4. TAXES .................................................................. 10
4.1 Payments Free and Clear of Taxes ................................. 10
4.2 Tax Payments by Megatel .......................................... 10
4.3 Reimbursement by Megatel ......................................... 10
4.4 Stamp Duties, Documentary Taxes and Levies ....................... 10
4.5 Tax Benefit ...................................................... 10
4.6 Tax Structure .................................................... 11
5. PAYMENT TERMS .......................................................... 11
5.1 Invoices ......................................................... 11
5.2 Interest on Royalty Fees ......................................... 11
5.3 Currency ......................................................... 11
6. OWNERSHIP OF KNOW-HOW, INTELLECTUAL PROPERTY AND TECHNICAL DATA ........ 12
6.1 Ownership ........................................................ 12
6.2 No Transfer of Rights ............................................ 12
7. CONFIDENTIAL INFORMATION ............................................... 12
7.1 Confidentiality Obligation ....................................... 12
7.2 Use of Confidential Information .................................. 12
7.3 Further Undertakings ............................................. 13
7.4 Non-Confidential Information ..................................... 13
7.5 Compelled Disclosure ............................................. 13
7.6 Return of Information ............................................ 13
8. TERM AND TERMINATION ................................................... 13
8.1 Term ............................................................. 13
8.2 Termination by BCI ............................................... 14
8.3 Termination by Megatel ........................................... 14
8.4 Royalty Fees Incurred Prior to Termination ....................... 15
8.5 Termination Without Prejudice to Other Rights .................... 15
8.6 No Release of Liability .......................................... 15
9. ASSIGNMENT ............................................................. 16
10. WAIVER ................................................................. 16
10.1 Failure to Exercise not to Operate as Waiver ..................... 16
10.2 Waiver in Writing ................................................ 16
10.3 No Deemed Waiver ................................................. 16
11. NOTICES ................................................................ 16
12. GOVERNING LAW .......................................................... 17
13. DISPUTE RESOLUTION ..................................................... 17
13.1 Procedure ........................................................ 17
13.2 Arbitration ...................................................... 18
14. ENTIRE AGREEMENT; ORAL EXPLANATION: AMENDMENTS ......................... 19
15. SEVERABILITY ........................................................... 19
16. LANGUAGE ............................................................... 19
17. RELATIONSHIP OF THE PARTIES ............................................ 19
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18. RIGHTS AND REMEDIES .................................................... 19
19. COUNTERPARTS ........................................................... 19
20. FURTHER ASSURANCES ..................................................... 19
21. CONSENTS ............................................................... 20
22. EXPENSES ............................................................... 20
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KNOW-HOW TRANSFER AND TECHNICAL SERVICES AGREEMENT made and entered into as of
_____________, 1999 between Xxxx Canada International Inc. ("BCI"), a
corporation organized under the laws of Canada, having its principal office at
1000; rue de La Gauchetiere Ouest, Bureau 1100, Montreal (Quebec) Canada H3B
4Y8, Megatel do Brasil S.A. ("MEGATEL"), a sociedade anonima organized under the
laws of Brazil, having its registered office at XX. Xxxx Xxxxxx Xxxxxxx, 000,
0xx Floor, suite 82, in the city and state of Sao Paulo, Brazil, registered with
the Brazilian Registry of Legal Entities (CNPJ) n(O) 02.629.188/0001-67 (each a
"PARTY" and collectively the "PARTIES").
WHEREAS Megatel has been awarded a regional operating license (the "LICENSE") to
provide fixed telephone services in the state of Sao Paulo, Brazil (the
"TERRITORY") and has entered into an agreement with the Brazilian Government
setting out the terms of authorization in respect thereof;
WHEREAS BCI has acquired certain experience, Know-How (as defined herein),
Intellectual Property (as defined herein), trained personnel and other
capabilities in respect of high technology telecommunications engineering,
information technology and other matters related to the implementation,
expansion, enhancement, operation and maintenance of telecommunications systems
and services;
WHEREAS the Parties desire to enter into this Agreement to provide Megatel with
a competitive advantage over other telecommunications operators in the
Territory; and
WHEREAS to facilitate the transfer of the Know-How to Megatel, the Parties have
also entered into: (i) a technical services agreement (the "TECHNICAL SERVICES
AGREEMENT") relating to the provision of Consultants (as defined herein) by BCI;
and (ii) a secondment agreement (the "SECONDMENT AGREEMENT") relating to the
provision of Secondees (as defined herein) by BCI.
NOW, THEREFORE, the Parties hereto agree as follows:
1. DEFINITIONS
In this Agreement, unless the context otherwise requires, the following terms
shall have the meaning set opposite, namely;
"ADDITIONAL FEES" has the meaning ascribed thereto in
Section 3.1.2;
"AGREEMENT" This Agreement, including its recitals
and Schedules, as amended from time to
time;
"BCI" has the meaning ascribed thereto in the
introductory paragraph;
"BCI GROUP COMPANY" includes, without limitation, any
individual, firm, corporation, company,
joint venture, association, trust,
partnership or other entity, now or
hereafter existing,
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that directly or indirectly controls, is
controlled by or is under common
control with, BCI. For the purposes of
this definition "CONTROL" shall mean
that one entity holds or is beneficially
entitled to, hold, directly or
indirectly, other than by way of
security interest only, more than
twenty-five percent (25%) of the voting
rights of the other entity and
"CONTROLLED" has a corresponding
meaning;
"BUSINESS" means the provision by Megatel of
switched, fixed telecommunications
services in the Territory pursuant to
the License;
"BUSINESS DAY" Any day on which banks in Sao Paulo,
Brazil, and Montreal, Quebec, Canada,
are authorized or required by law to be
open to transact business;
"CONFIDENTIAL INFORMATION" Any information, material and data of a
confidential nature furnished orally, in
any written, graphic, electronic,
magnetic or other tangible form
including (but not limited to)
technical, financial and business
information and models, names of
customers or partners (whether potential
or existing), proposed business deals,
corporate strategies, reports, plans,
market and/or financial projections and
other data, of or relating to a Party,
other than the information listed in
Section 7.4;
"CONSULTANT(S)" has the meaning ascribed thereto in the
Technical Services Agreement;
"EBITDA" means such amount for a fiscal year
certified by the auditors of Megatel
which represents earnings before
interest and financial charges, income
taxes, depreciation and amortization
using financial statement information
approved by the shareholders (after
deduction of all amounts accrued and
payable under the Technical Services
Agreement, the Secondment Agreement and
this Agreement);
"FIXED FEE" has the meaning ascribed thereto in
Section 3.1.1;
"INTELLECTUAL PROPERTY" means patents, copyrights, designs,
know-how and other intellectual property
rights which are protectable by law,
whether registered or unregistered and
including applications for any of the
same;
"KNOW-HOW" means all technical knowledge,
information and
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expertise of BCI in respect of high
technology telecommunications
engineering, information technology and
other matters related to the
implementation, expansion. enhancement,
operation and maintenance of
telecommunications operations and
services as set out in Schedule A,
including but not limited to processes,
techniques, methods, products, data and
compositions;
"LICENSE" has the meaning ascribed thereto in the
recitals;
"MEGATEL" has the meaning ascribed thereto in the
introductory paragraph;
"PARTY(IES)" has the meaning ascribed thereto in the
introductory paragraph;
"PERSON(S)" includes, without limitation, any
individual, firm, company, association,
partnership, joint venture, trust,
investment company, pension fund or
investment fund, or other entity, or any
government or any ministry, department
or agency thereof;
"RECEIVING PARTY" has the meaning ascribed thereto in
Section 7.1;
"REPRESENTATIVE" means with respect to each Party, any
authorized director, officer, employee,
consultant, advisor or agent of such
Party;
"RFS ORDER" has the meaning ascribed thereto in the
Technical Services Agreement;
"ROYALTY FEES" has the meaning ascribed thereto in
Section 3.1;
"RULES" has the meaning ascribed thereto in
Section 13.1;
"SECONDEE(S)" has the meaning ascribed thereto in the
Secondment Agreement;
"SECONDMENT AGREEMENT" has the meaning ascribed thereto in the
recitals;
"SERVICE LAUNCH" means the date when commercial telephone
service is first offered by Megatel and
is generally and commercially available,
otherwise than on a trial basis, to
households in a city of Brazil in the
geographic region covered by the License
with a population of at least 200,000
Persons;
"TAX BENEFIT" has the meaning ascribed thereto in
Section 4.5;
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"TAXES" has the meaning ascribed thereto in
Section 4.1;
"TECHNICAL DATA" means technological developments,
specifications, documentation,
instructions, technical reports and
similar information relating to the
expansion, enhancement, operation and
maintenance of telecommunications
operations and services;
"TECHNICAL SERVICES has the meaning ascribed thereto in the
AGREEMENT" recitals; and
"TERRITORY" has the meaning ascribed thereto in the
recitals.
The singular includes the plural and vice versa. Reference to one gender
includes reference to the other gender.
References herein to Sections and Schedules shall be taken as referring to
Sections and Schedules to this Agreement. Headings to Sections are for ease of
reference only and shall not affect the construction or interpretation of this
Agreement.
2. KNOW-HOW AND TECHNICAL DATA
2.1 LICENSE OF KNOW-HOW AND TECHNICAL DATA
Subject to the terms and conditions of this Agreement and for the sole
purpose of the Business, BCI hereby grants to Megatel a non-exclusive right
and license to use the Know-How and Technical Data.
2.2 CONFIDENTIALITY OF KNOW-HOW AND TECHNICAL DATA
Megatel acknowledges that the Know-How and Technical Data have been developed
over the years by BCI at considerable expense and effort and constitute a
trade secret and valuable property to BCI. Megatel hereby agrees to preserve
the confidentiality and secrecy of the Know-How and Technical Data in
accordance with the provisions of Section 7 hereof.
2.3 TRANSFER OF KNOW-HOW
In consideration of the payment of the Royalty Fees, BCI shall transfer to
Megatel the Know-How and Technical Data through the development and supply of
training programs, systems for project implementation, network/engineering
and operational processes, access to qualified, competent personnel
(including the Consultants and Secondees pursuant to the Technical Services
Agreement and the Secondment Agreement) to help implement such systems and
processes and provision of information and materials as agreed by the
Parties.
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2.4 TRAINING
BCI shall from time to time, as necessary, make available to Megatel free of
charge training manuals and educational seminars and other instruction with
respect to the matters described in Schedule A and such other training
programs reasonably requested by Megatel including, without limitation,
visits to the installations of BCI and the BCI Group Companies, internship
programs with BCI or the BCI Group Companies, which are within the
capabilities of BCI. BCI will provide Megatel with information, at least
annually, on the training programs relevant to Megatel which are expected to
be available within BCI or the BCI Group Companies. Such information may be
provided to Megatel more frequently as relevant training programs are
published or offered from time to time by BCI and the BCI Group Companies.
2.5 CONSULTANTS AND SECONDEES
To facilitate the transfer of the Know-How and related Technical Data to
Megatel, BCI shall make available to Megatel Consultants and Secondees
pursuant to the terms and conditions of the Technical Services Agreement and
Secondment Agreement.
3. ROYALTY FEES
3.1 ROYALTY FEES
In general consideration of the granting of the license and the transfer of
Know-How and Technical Data under this Agreement, Megatel shall pay to BCI
the following royalty fees (the "ROYALTY FEES"):
3.1.1 An annual fixed fee (the "FIXED FEE") of US$2.0 million per year during
the first three (3) years commencing with respect to the calendar year
during which Service Launch occurs; provided that if Megatel and Mirror
S.A. are combined into a single entity or are operated as a single
entity, no Fixed Fee shall be payable effective from the date of
commencement of common operation of the two companies.
The payment of annual installments of the Fixed Fee (even though
reflected in the periodic financial statements of Megatel) shall be
deferred until such time as Megatel attains positive EBITDA for two
(2) consecutive quarters at which point all deferred annual
installments of the Fixed Fee shall become immediately payable.
Following the payment of the deferred annual installments of the Fixed
Fee, all future Fixed Fee installment payments shall be due and payable
within thirty (30) days from the end of each calendar year in respect
of which the annual installments of the Fixed Fee are payable.
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3.1.2 (a) Annual variable fees (the "ADDITIONAL FEES") for a period of
five (5) years commencing with respect to the first of the
following to occur:
(i) the end of the calendar year 2001; or
(ii) the fiscal year of Megatel following the first fiscal
year during which Megatel generates positive EBITDA for two
(2) consecutive quarters.
(b) The Additional Fees shall be calculated as follows:
Year 1: 10% of EBITDA in excess of the expected EBITDA in the
Business Plan for such year less any portion of the
Fixed Fee accrued for such year up to a maximum of
one percent (1%) of Megatel's gross revenues for the
year.
Year 2: 9% of EBITDA in excess of the expected EBITDA in the
Business Plan for such year less any portion of the
Fixed Fee accrued for such year up to a maximum of
one percent (1%) of Megatel's gross revenues for the
year.
Year 3: 8% of EBITDA in excess of the expected EBITDA in the
Business Plan for such year less any portion of the
Fixed Fee accrued for such year up to a maximum of
one percent (1%) of Megatel's gross revenues for the
year.
Year 4: 7% of EBITDA in excess of the expected EBITDA in the
Business Plan for such year less any portion of the
Fixed Fee accrued for such year up to a maximum of
one percent (1%) of Megatel's gross revenues for the
year.
Year 5: 6% of EB1TDA in excess of the expected EBITDA in the
Business Plan for such year less any portion of the
Fixed Fee accrued for such year up to a maximum of
one percent (1%) of Megatel's gross revenues for the
year.
The payment of the Additional Fees shall be made by Megatel to BCI
in U.S. dollars ten (10) Business Days following the approval of
the audited financial statements by the Shareholders of Megatel for
the year for which the Additional Fees are payable.
3.2 EBITDA INFORMATION
Until full and final payment of the Royalty Fees, Megatel shall
furnish BCI such information with respect to EBITDA as may be
reasonably required from time to time by BCI, including such
information developed by Megatel in connection with the preparation
of any income or financial statements. BCI shall have the right at
all reasonable times on reasonable notice during usual business
hours and at its
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sole cost and expense to audit, examine and make copies of extracts from
the books and records of Megatel. Such right may be exercised by BCI
through any agent of BCI, employee or independent auditor designated by
BCI. Such information shall be treated by BCI in accordance with the
provisions of Section 7.
4. TAXES
4.1 PAYMENTS FREE AND CLEAR OF TAXES
All amounts payable hereunder by Megatel to BCI shall be paid by Megatel
free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding taxes imposed on BCI's net
income, assets or capital by the jurisdiction under the laws of which it IS
organized or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities
being hereinafter referred to as "TAXES").
4.2 TAX PAYMENTS BY MEGATEL
Should any Taxes be levied on BCI by the Brazilian tax authorities, payment
for such Taxes shall be the responsibility of and be paid by Megatel
directly to the appropriate tax authority on behalf of BCI unless contested
in good faith by Megatel, and these payments by Megatel shall not reduce
the amounts payable to BCI pursuant to this Agreement. Within thirty (30)
days after the date of any payment of Taxes, Megatel shall furnish to BCI,
at its address referred to in Section 11, the original receipt of payment
thereof or a certified copy of such receipt evidencing payment thereof.
4.3 REIMBURSEMENT BY MEGATEL
In the event that BCI is required by law to make such payments for Taxes
directly to the Brazilian tax authorities, Megatel shall, subject to
Brazilian law, reimburse BCI for such payments within thirty (30) days from
the date of BCI's invoice. Such reimbursement shall not be reduced by any
Taxes and shall not reduce the amounts otherwise payable to BCI pursuant to
this Agreement.
4.4 STAMP DUTIES, DOCUMENTARY TAXES AND LEVIES
Megatel shall pay all stamp duties, documentary taxes, charges or similar
levies imposed by the Brazilian tax authorities or any state or subdivision
thereof that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement.
4.5 TAX BENEFIT
If BCI is able to reasonably claim a tax benefit (a "TAX BENEFIT") in
computing its income tax liability under the Income Tax Act (Canada) or
under the tax statutes of any relevant provincial jurisdiction in Canada or
any other jurisdiction by reason of
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any Taxes withheld on any payments made by Megatel to BCI pursuant to the
terms of this Agreement, BCI shall use reasonable efforts to obtain
promptly such Tax Benefit. BCI shall, within thirty (30) days of receiving
the Tax Benefit from a reduced final tax payment, pay to Megatel the amount
of the Tax Benefit received by BCI. Nothing in this Section shall interfere
with the right of BCI to arrange its tax affairs in whatever manner it
deems fit.
4.6 TAX STRUCTURE
The Parties shall jointly determine the most tax-efficient means of
accomplishing the objectives of this Agreement. In the event that the
Parties determine that a more tax efficient structure may be implemented,
the Parties shall negotiate in good faith to amend this Agreement to
implement such new structure as promptly as practicable.
5. PAYMENT TERMS
5.1 INVOICES
BCI shall submit to Megatel invoices for the Royalty Fees in U.S. dollars
in accordance with the terms and payment schedules set out in Sections
3.1.1 and 3.1.2.
5.2 INTEREST ON ROYALTY FEES
The Royalty Fees, if not paid within fourty-five (45) Days of the date of
the invoice, shall bear interest on the outstanding amount(s) from the date
of the invoice or their due date (whichever date is the latest) until paid
at a rate per annum, compounded annually, equal to LIBOR plus two hundred
(200) basis points.
5.3 CURRENCY
Unless otherwise agreed in writing between BCI and Megatel, all
compensation and all amounts owing under this Agreement shall be paid in
full by Megatel in U.S. dollars to BCI.
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6. OWNERSHIP OF KNOW-HOW, INTELLECTUAL PROPERTY AND
TECHNICAL DATA
6.1 OWNERSHIP
BCI shall own all right, title and interest in the Know-How and Technical
Data transferred hereby and in any Intellectual Property embodied therein
or related thereto. However, in consideration of the Royalty Fees, Megatel
shall have a non-exclusive and perpetual license and right to use any
such Know-How, Technical Data and Intellectual Property for purposes of
carrying on its Business. Megatel shall not have the right to assign this
right to any Person other than its subsidiaries, in accordance with the
provisions hereof and subject to such subsidiaries being bound by the same
undertaking not to assign this right.
6.2 NO TRANSFER OF RIGHTS
Nothing contained herein shall transfer or be deemed to transfer or
contemplate the transfer of any rights in or to the Intellectual Property,
Technical Data and the Know-How other than those rights specifically
granted herein. For greater certainty, no term or condition in this
Agreement shall be construed as involving software development or to be a
transfer by BCI or the BCI Group Companies of licenses, patents or
trademarks unless specifically provided in writing. Any software
development requested by Megatel shall be dealt with in separate agreements
7. CONFIDENTIAL INFORMATION
7.1 CONFIDENTIALITY OBLIGATION
Each Party (the "Receiving Party") shall for two (2) years from the date of
receipt of Confidential Information from the disclosing Party, retain in
confidence all such Confidential Information disclosed pursuant to
activities carried on in providing the services under this Agreement and
shall treat such Confidential Information with the same degree of care as
it employs for the protection of its own Confidential Information (and in
any event, with reasonable care).
7.2 USE OF CONFIDENTIAL INFORMATION
The Receiving Party shall not, nor shall it permit any of its
Representatives to, without the written consent of the other use any
Confidential Information of the other for any purpose other than the
provision of services hereunder, or disclose any Confidential Information
of the other to any third party, except to its Representatives with a need
to know for purposes of this Agreement or for the conduct of each Party's
business, including any financing to the extent necessary to obtain such
financing, and after such Representatives have been directed by the
Receiving Party to treat such Confidential Information in accordance with
the terms of this Section 7 and provided further that no Party shall use
any such Confidential Information to the detriment of each other.
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7.3 FURTHER UNDERTAKINGS
Each Party also agrees to enter into such further undertakings of
confidentiality as may reasonably be required by the other Party.
7.4 NON-CONFIDENTIAL INFORMATION
Confidential Information shall not include any information that:
(a) is or comes into the public domain other than as a result of a
disclosure directly or indirectly by the Receiving Party in breach of
this Agreement;
(b) the Receiving Party can demonstrate was known to it prior to the
disclosure thereof by the disclosing Party;
(c) is or becomes generally available to such Receiving Party on a
non-confidential basis from a source other than the disclosing Party,
provided that such source is not known by such Receiving Party to be
bound by any confidentiality obligation with respect to such
information.
7.5 COMPELLED DISCLOSURE
This Section 7 shall not restrict the disclosure of any Confidential
Information by either Party as required by law, the rules of any recognized
securities exchange, any court of competent jurisdiction, any governmental
or regulatory authority, including any taxation authority or broadcasting
or telecommunications or securities regulatory authority, but only after
written notice of such disclosure requirement has been given, to the extent
practicable, by such Party to the disclosing Party, (it being understood
and agreed that only one such notice shall be required in respect of
continuous disclosure requirements).
7.6 RETURN OF INFORMATION
Upon termination of this Agreement, each Party shall return all such
Confidential Information to the other Party unless such Confidential
Information is necessary for the conduct of the ongoing business of either
Party. Notwithstanding termination of this Agreement, the confidentiality
obligations of the Parties pursuant to this Section 7 shall continue for
two (2) years after the disclosure of Confidential Information.
8. TERM AND TERMINATION
8.1 TERM
This Agreement shall have a term of five (5) years from the date hereof,
unless otherwise mutually agreed, and may thereafter be extended by mutual
agreement of the Parties. Megatel's obligation to pay the Royalty Fees
shall survive the expiration of the term of this Agreement.
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8.2 TERMINATION BY BCI
BCI may, at its option, terminate this Agreement by giving written notice
to Megatel in any of the following events, namely:
(a) a material breach by Megatel of any material obligations contained in
this Agreement which has not been cured within thirty (30) Business
Days after written notice thereof to Megatel specifying the breach and
requiring such remedy;
(b) the insolvency or bankruptcy of Megatel or the making of an assignment
for the benefit of creditors, or the appointment of a trustee or
receiver and manager or liquidator for Megatel or for all or a
substantial part of its property, or the commencement of a bankruptcy,
reorganization, arrangement, insolvency or similar proceedings by or
against Megatel under the laws of any jurisdiction;
(c) Megatel ceases to conduct its business in the normal course;
(d) all or substantially all of Megatel's assets are sold, or otherwise
disposed of;
(e) the License is terminated for any reason; or
(f) Megatel has made or will make any payments, loans or gifts of any
money or anything of value, or has authorized, offered or promised to
do any of the foregoing, directly or indirectly to or for the use or
benefit of: (i) any official or employee of the Government of Brazil
or any department agency or instrumentality thereof; (ii) any
political party or official or candidate thereof; or (iii) to any
other Person either for an advance or reimbursement knowing or having
reason to believe that any part of such payment, loan or gift will be
directly or indirectly given or paid by such other person to an
individual mentioned in (i) or (ii).
8.3 TERMINATION BY MEGATEL
Megatel may, at its option, terminate this Agreement, by giving written
notice to BCI in any of the following events, namely:
(a) a material breach by BCI of any material obligations contained in this
Agreement which has not been cured within thirty (30) Business Days
after written notice thereof by Megatel specifying the breach and
requiring such remedy;
(b) the insolvency or bankruptcy of BCI or the making of an assignment for
the benefit of creditors, or the appointment of a trustee or receiver
and manager or liquidator for BCI or for all or a substantial part of
its property, or the commencement of a bankruptcy, reorganization,
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arrangement, insolvency or similar proceedings by or against BCI
under the laws of any jurisdiction;
(c) BCI ceases to conduct its business in the normal course;
(d) all or substantially all of BCI's assets are sold, or otherwise
disposed of;
(e) the License is terminated for any reason;
(f) BCI has made or will make any payments, loans or gifts of any money or
anything of value, or has authorized, offered or promised to do any of
the foregoing, directly or indirectly to or for the use or benefit of:
(i) any official or employee of the Government of Brazil or any
department agency or intrumentality thereof; (ii) any political party
or official or candidate thereof; or (iii) to any other Person either
for an advance or reimbursement knowing or having reason to believe
that any part of such payment, loan or gift will be directly or
indirectly given or paid by such other Person to an individual
mentioned in (i) or (ii); or
(g) BCI's consistent failure to provide Consultants to Megatel in
accordance with the terms and conditions of duly executed RFS Orders
due to circumstances and/or events that are within BCI's control.
8.4 ROYALTY FEES INCURRED PRIOR TO TERMINATION
Notwithstanding any termination of this Agreement pursuant to Sections 8.2
and 8.3., Megatel's obligation to pay the Royalty Fees shall survive the
termination of this Agreement with respect to amounts of such fees accrued
prior to the date of termination.
8.5 TERMINATION WITHOUT PREJUDICE TO OTHER RIGHTS
The termination of this Agreement regardless of its cause or its nature
shall be without prejudice to any other rights or remedies of either Party
without liability to the other Party (except as provided in this Agreement)
for any claims, actions, proceedings, costs, charges, losses, damages,
demands, liabilities and expenses (collectively "LOSSES") occasioned
thereby, and each Party shall remain responsible for its obligations
existing immediately prior to the termination.
8.6 NO RELEASE OF LIABILITY
The termination of this Agreement for any cause shall not release either
Party hereto from any liability which at the time of termination has
already accrued to the other Party hereto or which thereafter may accrue in
respect of any act or omission prior to termination or from any obligation
which is expressly stated herein to survive termination.
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9. ASSIGNMENT
No Party may assign its rights and obligations under this Agreement, in whole or
in part, except with the prior consent of the other Party, which consent shall
not be unreasonably withheld or delayed.
10. WAIVER
10.1 FAILURE TO EXERCISE NOT TO OPERATE AS WAIVER.
Except as otherwise expressly provided in this Agreement, no failure or
delay by any Party in exercising any right, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise by such Party of any right, power or privilege preclude
any further exercise thereof or the exercise of any other right, power or
privilege.
10.2 WAIVER IN WRITING
Except as otherwise expressly provided in this Agreement, no waiver of any
right hereunder or of any breach or failure to perform shall be effective
unless executed in writing.
10.3 NO DEEMED WAIVER
The waiver of any right hereunder or of any failure to perform or breach
hereof shall not constitute or be deemed as a waiver of any other right
hereunder or of any other failure to perform or other breach hereof,
whether of a similar or dissimilar nature thereto.
11. NOTICES
Any notice or communication which shall be given under this Agreement shall be
made in writing in the English language, and given by telecopier, with an
original sent by courier, addressed to a Party at its telecopier number and
address set forth below, or such other telecopier number and/or address for such
Party as shall have been communicated by it to the other Party in accordance
with this Section 11. Any notice or other communication shall be deemed to have
been received on the date of transmission but only if a confirmation of the
receipt by the recipient of the telecopier appears correctly at the end of the
sender's telecopy.
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If to BCI:
Xxxx Canada International Inc.
1000 de La Gauchetiere St. West
Suite 1100
Xxxxxxxx, Xxxxxx
X0X 0X0
Telecopier No.: (000) 000-0000
Attention: Vice-President, Law and Corporate Secretary
If to MEGATEL:
MEGATEL DO BRASIL S.A.
Avn. Xxxx Xxxxxx Xxxxxxx, 000, 0xx xxxxx, xxxxx 00,
Xxx Xxxxx, XX
Xxxxxx
Telecopier No.: 00-00-0000-0000
Attention: Chief Executive Officer
12. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of Brazil without giving effect to any choice of conflict of law
rules.
13. DISPUTE RESOLUTION
13.1 PROCEDURE
In the event of a dispute among BCI and Megatel arising under or in
connection with this Agreement, including a dispute over whether there has
been a material breach to this Agreement, the following shall apply;
(a) They shall use their good faith efforts to settle such dispute. To
this end, each Party may notify the other Party of its desire to
initiate the procedure contemplated by this Section 18, whereupon the
other Party shall forthwith convene to attempt to resolve such
disputes through amicable and good faith discussions. Disputes which
the Parties are unable to resolve through such discussions within
thirty (30) days following receipt of the notice referred to in this
Section 13.1(a), shall upon the request of either Party, be submitted
to a panel consisting of designees from the chief executive officers
of BCI and Megatel. The designees shall consult and negotiate with
each other in good faith in an effort to reach a just and equitable
solution.
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(b) If the designees do not reach a solution within a period of thirty
(30) days following the beginning of their consultations and
negotiations, any Party may treat the same as an arbitrable dispute by
giving notice to the other Party, in which case the dispute shall be
submitted to a final and binding arbitration under the Rules of
Conciliation and Arbitration of the International Chamber of Commerce
excluding any such rules relating to the posting of security for costs
(the "RULES").
13.2 ARBITRATION
(a) The arbitral tribunal shall consist of three (3) arbitrators. One
arbitrator shall be appointed by each side and the third shall be
selected by the two party-appointed arbitrators or, failing agreement,
by the International Chamber of Commerce, in accordance with the
Rules.
(b) The arbitration shall be held in the English language. The proceedings
shall be conducted, and any arbitral award shall be made, in the city
of New York, New York, in the United States. The Parties agree that
the obligations, herein are "commercial" and that the New York
Convention on Recognition and Enforcement of Foreign Arbitral Awards
is applicable or, if such convention has not then been ratified by
Brazil, the Inter-American Convention on International Commercial
Arbitration shall also apply. The prevailing Party shall be entitled
to recover from the other Party (as part of the arbitral award or
order) its reasonable attorneys' fees and other costs of arbitration.
(c) Any decision or award of the arbitral tribunal shall be final and
binding upon the Parties. The Parties hereby waive to the extent
permitted by law any rights to appeal or to review of such award by
any court or tribunal. The arbitral award may be enforced against the
Parties or their assets wherever they may be found and that a judgment
upon the arbitral award may be entered in any court having
jurisdiction thereof.
(d) To the extent that each Party has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process
(whether through service of notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect
to itself or its property, it hereby irrevocably waives such immunity
in respect of its obligations under this Agreement.
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14. ENTIRE AGREEMENT; ORAL EXPLANATION AMENDMENTS
This Agreement and its Schedules together with the Technical Services
Agreement, the Secondment Agreement and the Shareholders' Agreement
constitute the entire agreement of the Parties hereto with respect to the
subject matter covered herein and supersedes all prior understandings, and
agreements. No oral explanation or oral information by any of the Parties
shall alter the meaning or interpretation of this Agreement. No amendment
hereto shall be effective or binding on any of the Parties unless reduced
to writing with specific reference to this Agreement, and executed by the
respective duly authorized representatives of each of such Parties.
15. SEVERABLITY
The invalidity or unenforceability of any provision, in whole or in part,
of this Agreement shall not in any way affect the validity or
enforceability of any other parts or provisions thereof, provided, however,
that the Parties hereto shall use their reasonable efforts to achieve the
purpose of the invalid or unenforceable provision or part thereof by a new
valid and enforceable stipulation.
16. LANGUAGE
The English version of this Agreement is the only authentic version thereof
and it shall determine the construction, interpretation, application and
performance of this Agreement.
17. RELATIONSHIP OF THE PARTIES
No Party has the power or authority to legally bind the other Party.
Nothing herein shall be construed as authorizing any Party to act as an
agent or representative of the other Parties and nothing herein shall be
taken to constitute or create a partnership, an agency or a joint venture
among any of the Parties.
18. RIGHTS AND REMEDIES
All rights and remedies provided for in this Agreement are in addition to,
and not exclusive of, any other rights or remedies otherwise available at
law or in equity.
19. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which
when so executed shall be deemed to be an original, but all of which taken
together shall constitute one and the same complete and executed agreement.
20. FURTHER ASSURANCES
Each of the Parties hereto shall cooperate with the other and execute and
deliver to the other such instruments and documents and take such other
actions as may reasonably be requested from time to time in order to carry
out, evidence and confirm their respective rights and the intended purpose
of this Agreement.
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21. CONSENTS
Megatel shall obtain at its own cost all licenses, permits or consents
which may be required by Megatel in order for BCI to be free to provide or
make available the Services.
22. EXPENSE
Each Party shall bear its own costs and expenses incurred in connection
with the negotiation, preparation and execution of this Agreement.
IN WITNESS WHEREOF, the Parties have signed and delivered this Agreement on
the day and year set forth above.
XXXX CANADA INTERNATIONAL INC. MEGATEL DO BRAZIL S.A.
BY: BY:
----------------------- -----------------------
NAME: NAME:
TITLE: TITLE:
BY:
-----------------------
NAME:
TITLE:
WITNESS: WITNESS:
----------------------- -----------------------
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SCHEDULE A
Know-How and Technical Data to be provided by BCI shall relate to the
following matters:
A) NETWORK PLAN
(i) Network planning and design
o Identification of network evolution plans (multimedia,
broadband services, etc.);
o Preparation of long term network architecture;
o Preparation of on-going requirements for switch, access,
transport;
o Analysis of evolution of operations support systems;
o Preparation of request for quotations for new network
requirements (multimedia, broadband services, etc.);
o Analysis of supplier responses;
o Input in negotiation of supplier contracts;
o Preparation of network design;
o Release of equipment orders;
o Analysis of overall network and systems survivability;
o Development of emergency procedures (network & systems);
(ii) Radio Frequency Plan
o Analysis and Recommendation of spectrum requirements;
o Identify potential cellSite locations;
o Negotiation of leases;
o Monitoring of civil work;
(iii) Switch Sites
o Finalization of specific switch sites leases;
o Negotiation of lease arrangements;
o Development of site modification plans;
o Solicitation of bids for modifications;
o Monitoring of site modifications;
(iv) Transport
o Identification of multimedia and broadband service needs
o Identification of transport route plans for cable/ fiber
facilities, if any;
o Acquisition of rights-of-way;
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v) Network Acceptance Process
o Development of acceptance process;
o Implementation of acceptance procedures;
vi) Project Management
o Establishment of the project implementation program;
o Provision of guidance on project management;
o Coordination of the training program;
B) INFORMATION TECHNOLOGY
o Evaluation of long term requirements to incorporate
multimedia and broadband service;
o Preparation of corporate management information systems
plan;
o Evaluation of business support systems;
o Evaluation of billing application;
o Evaluation of customer care application;
o Evaluation of network management systems;
o Preparation and evaluation of request for quotations;
o Review of installation & acceptance.
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EXECUTION COPY
SECONDMENT AGREEMENT
MADE AND ENTERED INTO AS OF
, 1999
---------
BETWEEN
XXXX CANADA INERNATIONAL INC.
AND
MEGATEL DO BRASIL S.A.
55
TABLE OF CONTENTS
1. DEFINITIONS ..............................................................4
2. SUPPLY OF SECONDEES ......................................................6
2.1 Supply of Secondees .........................................6
2.2 RFS .........................................................6
2.3 BCI Response ................................................7
2.4 Selection of Secondees ......................................7
2.5 Compensation Payable to Secondees ...........................7
2.6 Employment Offers ...........................................7
2.7 Employment Contract .........................................7
2.8 Benefits Programs ...........................................7
2.9 Currency Exchange Fluctation Protection .....................7
2.10 Tax Equalization Policy .....................................8
2.11 Service Term ................................................8
2.12 Qualifications of Secondees .................................8
2.13 Employment Relationship .....................................8
2.14 Management of Secondees .....................................8
2.15 Consultant Status ...........................................8
2.16 Degree of Care ..............................................8
2.17 Discipline and Dismissal ....................................9
2.18 Compensation upon Termination ...............................9
2.19 Substitution ................................................9
3. COSTS .....................................................................9
3.1 Out of Pocket Costs .........................................9
3.2 Examination of Out of Poct Costs ............................9
4. TAXES ....................................................................10
4.1 Payments Free and Clear of Taxes ...........................10
4.2 Tax Payments by Megatel ....................................10
4.3 Reimbursement by Megatel ...................................10
4.4 Stamp Duties, Documentary Taxes and Levies .................10
4.5 Tax Benefit ................................................10
4.6 Tax Structure ..............................................11
5. PAYMENT TERMS ............................................................11
5.1 Invoices ...................................................11
5.2 Interest ...................................................11
5.3 Currency ...................................................11
6. DELIVERABLES AND INTELLECTUAL PROPERTY ...................................11
6.1 Ownership ..................................................11
6.2 Enhancements ...............................................12
6.3 License to Use Deliverables and Enhancements ...............12
6.4 No Transfer of Rights ......................................12
7. CONFIDENTIAL INFORMATION .................................................12
7.1 Confidentiality Obligation .................................12
7.2 Use of Confidential Information ............................12
7.3 Further Undertakings .......................................13
7.4 Non-Confidential Information ...............................13
7.5 Compelled Disclosure .......................................13
7.6 Return of Information ......................................13
8. ADDITIONAL RESPONSIBILITIES OF MEGATEL ...................................13
9. TERM AND TERMINATION .....................................................14
9.1 Term .......................................................14
9.2 Termination by BCI .........................................14
9.3 Termination by Megatel .....................................15
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9.4 Out of Pocket Costs Incurred Prior to Termination ............. 15
9.5 Termination Without Prejudice to Other Rights ................. 15
9.6 No Release of Liability ....................................... 16
10. ASSIGNMENT ........................................................... 16
11. WAIVER ............................................................... 16
11.1 Failure to Exercise not to Operate as Waiver................... 16
11:2 Waiver in Writing.............................................. 16
11.3 No Deemed Waiver............................................... 16
12. NOTICES .............................................................. 16
13. GOVERNING LAW ........................................................ 17
14. DISPUTE RESOLUTION ................................................... 17
14.1 Procedure ..................................................... 17
14.2 Arbitration ................................................... 18
15. ENTIRE AGREEMENT, ORAL EXPLANATION, AMENDMENTS ....................... 18
16. NON-SOLICITATION ..................................................... 19
17. SEVERABILITY ......................................................... 19
18. LANGUAGE ............................................................. 19
19. RELATIONSHIP OF THE PARTIES .......................................... 19
20. RIGHTS AND REMEDIES .................................................. 19
21. COUNTERPARTS ......................................................... 19
22. FURTHER ASSURANCES ................................................... 19
23. CONSENTS ............................................................. 19
24. EXPENSES ............................................................. 20
25. THIRD-PARTY BENEFICIARY RIGHTS ....................................... 20
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SECONDMENT AGREEMENT made and entered into as of ________, 1999 between Xxxx
Canada International Inc. ("BCI"), a corporation organized under the laws of
Canada, having its principal office at 1000, rue de La Gauchetiere Ouest, Bureau
1100, Montreal (Quebec) Canada H3B 4Y8, and Megatel do Brasil S.A. ("Megatel"),
a sociedade anonima organized under the laws of Brazil, having its registered
office at XX. Xxxx Xxxxxx Xxxxxxx, 000, 0xx Floor, suite 82, in the city and
state of Sao Paulo, Brazil, registered with the Brazilian Registry of Legal
Entities (CNPJ) no 02.629.188/0001-67 (each a "Party" and collectively the
"Parties").
WHEREAS Megatel has been awarded a regional operating license (the "License") to
provide fixed telephone services in the state of Sao Paulo, Brazil (the
"Territory") and has entered into an agreement with the Brazilian Government
setting out the terms of authorization in respect thereof;
WHEREAS BCI has acquired certain experience, Know-How (as defined herein),
Intellectual Property (as defined herein), trained personnel and other
capabilities in respect of high technology telecommunications engineering,
information technology and other matters related to the implementation,
expansion, enhancement, operation and maintenance of telecommunications
systems and services;
WHEREAS the Parties will concurrently enter into as of the date hereof a
Know-How Transfer and Technical Services Agreement (the "Know-How Agreement")
pursuant to which BCI will, among other things, transfer to Megatel Know-How to
provide Megatel with a competitive advantage over other telecommunications
operators in the Territory;
WHEREAS the Parties have entered into a Technical Services Agreement pursuant to
which BCI has and will make available to Megatel consultants to provide services
to Megatel to facilitate the transfer of Know-How to Megatel; and
WHEREAS the Parties desire to enter into this Agreement for the purpose of
making available to Megatel and its employees, Secondees (as defined herein) to
facilitate the transfer of Know-How to Megatel.
NOW, THEREFORE, the Parties hereto agree as follows:
1. DEFINITIONS
In this Agreement, unless the context otherwise requires, the following terms
shall have the meaning set opposite, namely:
"Agreement" This Agreement, including its recitals and
schedules, as amended from time to time;
"BCI" has the meaning ascribed thereto in the
introductory paragraph;
"BCI GROUP COMPANY" includes, without limitation, any individual,
firm, corporation, company, joint venture,
association, trust, partnership or other
entity, now or hereafter existing, that
directly or indirectly
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controls, is controlled by or is under common
control with, BCI. For the purposes of this
definition "Control" shall mean that one
entity holds or is beneficially entitled to,
hold, directly or indirectly, other than by
way of security interest only, more than
twenty-five percent (25%) of the voting
rights of the other entity and "controlled"
has a corresponding meaning;
"BCI PROPRIETARY RIGHTS" has the meaning ascribed thereto in Section
6.1;
"BUSINESS DAY" Any day on which banks in Rio de Janeiro,
Brazil, and Montreal; Quebec, Canada, are
authorized or required by law to be open to
transact business;
"CONFIDENTIAL Any information, material and data of a
INFORMATION" confidential nature furnished orally, in any
written, graphic, electronic, magnetic or
other tangible form including (but not
limited to) technical, financial and business
information and models, names of customers or
partners (whether potential or existing),
proposed business deals, corporate
strategies, reports, plans, market and/or
financial projections and other data, of or
relating to a Party other than the
information listed in Section 7.4;
"DELIVERABLES" Any written summary of results or
recommendations or any other data or data
files, information or materials whether in
written, electronic or magnetic form,
provided to Megatel pursuant to the services
performed by the Secondees under this
Agreement, excluding all software or software
licenses, unless purchased by Megatel;
"ENHANCEMENT" has the meaning ascribed thereto in Section
6.2;
"INTELLECTUAL PROPERTY" has the meaning ascribed thereto in the
Know-How Agreement;
"Know-How" has the meaning ascribed thereto in the
Know-How Agreement;
"KNOW-HOW has the meaning ascribed thereto in the
AGREEMENT" recitals;
"LICENSE" has the meaning ascribed thereto in the
recitals;
"MEGATEL" has the meaning ascribed thereto in the
introductory paragraph;
"OUT OF POCKET COSTS" has the meaning ascribed thereto in Section
3.1;
"Party" has the meaning ascribed thereto in the
introductory paragraph;
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"PERSON" includes, without limitation, any individual,
firm, company, association, partnership,
joint venture, trust, investment company,
pension fund or investment fund, or other
entity, or any government or any ministry,
department or agency thereof;
"RECEIVING' PARTY" has the meaning ascribed thereto in Section
7.1;
"REPRESENTATIVE" means with respect to each Party, any
authorized director, officer, employee,
consultant, advisor or agent of such Party;
"RFS" has the meaning ascribed thereto in Section
2.2;
"RULES" has the meaning ascribed thereto in Section
14.1;
"SECONDEE(S)" Person(s) who are hired by Megatel under this
Agreement to work in Brazil for a period or
period(s) exceeding six (6) months in any
calendar year;
"SHAREHOLDERS" has the meaning ascribed thereto in Section
6.3;
"TAX BENEFIT" has the meaning ascribed thereto in Section
4.5;
"TAX EQUALIZATION has the meaning ascribed thereto in Section
POLICY" 2.10;
"TAXES" has the meaning ascribed thereto in Section
4.1; and
"TERRITORY" has the meaning ascribed thereto in the
recitals.
The singular includes the plural and vice versa. Reference to one gender
includes reference to the other gender.
References herein to sections and schedules shall be taken as referring to
sections and schedules to this Agreement. Headings to sections are for ease of
reference only and shall not affect the construction or interpretation of this
Agreement.
2. SUPPLY OF SECONDEES
2.1 SUPPLY OF SECONDEES
Subject to the terms and conditions of this Agreement, BCI shall provide from
time to time Secondees as shall be reasonably requested by Megatel by its Chief
Executive Officer (or any other authorized Representative).
2.2 RFS
To request a Secondee under this Agreement, Megatel shall submit a request for
services (an "RFS") substantially in the form of Schedule A, specifying the
required experience and
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skills of such Secondee, and such other information as set out in Schedule A
Megatel shall complete a specific RFS for each Secondee requested. BCI agrees to
use reasonable efforts to meet any reasonable RFS submitted by Megatel.
2.3 BCI RESPONSE
As soon as reasonably possible from the receipt by BCI of the RFS but in no
event later than fifteen (15) days from such receipt, BCI shall provide Megatel
with a list of potential candidates to fill the RFS along with such candidates'
qualifications and availability.
2.4 SELECTION OF SECONDEES
Megatel shall participate in the selection of all Secondees and shall approve
the engagement of each Secondee.
2.5 COMPENSATION PAYABLE TO SECONDEES
The compensation to be paid to the Secondees shall be as agreed between Megatel,
BCI and the Secondee and may include the elements described in the Expatriate
Compensation Guidelines approved by Megatel's Board of Directors.
2.6 EMPLOYMENT OFFERS
Once the terms and conditions of a Secondee's employment with Megatel have been
agreed to by the Parties, BCI will be mandated to make employment offers to the
Secondees within such terms and conditions.
2.7 EMPLOYMENT CONTRACT
The Secondee's compensation, date of commencement and other terms and conditions
of employment shall be reflected in an employment contract between Megatel and
each Secondee.
2.8 BENEFITS PROGRAMS
For certain administrative purposes relating to the participation in certain
benefits programs administered by BCI and/or the BCI Group Companies, each
Secondee will maintain a contractual relationship with BCI. To the extent any
Secondee is covered by the benefits programs referred to in the preceding
sentence, BCI shall identify to Megatel such programs and Megatel shall not be
required to provide such or substantially similar benefits to such Secondee.
2.9 CURRENCY EXCHANGE FLUCTUATION PROTECTION
Megatel agrees that it will provide Secondees with some measure of protection
against currency exchange fluctuations in the event employment income paid in
Brazil cannot be repatriated on a regular basis.
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2.10 TAX EQUALIZATION POLICY
Secondees supplied to Megatel will be covered by the BCI tax equalization policy
(the "TAX EQUALIZATION POLICY") a copy of which has been provided to Megatel and
which Megatel hereby agrees to adopt. Megatel will be responsible to deduct the
Canadian-based hypothetical taxes, to administer the sums withheld and to remit
taxes on a timely basis to the Brazilian and the Canadian tax authorities. BCI
will provide guidance and support to Megatel, interpret the Tax Equalization
Policy, communicate the impact of the Tax Equalization Policy to Secondees,
calculate the Canadian-based hypothetical tax and coordinate the filing of the
Canadian income tax returns.
2.11 SERVICE TERM
The service term of each Secondee shall be for more than six (6) consecutive
months in any calendar year up to a maximum of three (3) years, unless agreed
otherwise, which term may be renewed by mutual agreement.
2.12 QUALIFICATIONS OF SECONDEES
All Secondees supplied by BCI shall be qualified and shall have substantial
experience performing the tasks (or substantially similar tasks) for which such
Secondees are engaged by Megatel. BCI shall use its reasonable efforts to make
available to Megatel the best individuals available for the positions requested.
2.13 EMPLOYMENT RELATIONSHIP
Each Secondee shall become an employee of Megatel and his or her compensation
shall be paid by Megatel directly in Reais unless otherwise agreed. Megatel
shall provide BCI, on a monthly basis, with payroll information regarding each
Secondee.
2.14 MANAGEMENT OF SECONDEES
Each Secondee shall be managed by Megatel, shall perform such duties at such
times and at such places as Megatel may from time to time reasonably require,
shall carry out such reasonable directions as may be given to him or her from
time to time by Megatel and shall act in accordance with and subject to the
reasonable instructions of Megatel.
2.15 CONSULTANT STATUS
Until such time as the requisite visas have been issued and employment contracts
have been executed, any Person seconded to Brazil by BCI to render services
under this Agreement shall be considered a Consultant as such term is defined in
the Technical Services Agreement executed of even date herewith.
2.16 DEGREE OF CARE
Megatel shall exercise the same degree of care in respect of each Secondee as
with other employees of Megatel and, in any event, no less than the degree of
care required by any applicable laws of Brazil. Megatel shall ensure that the
working environment of each
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Secondee complies with applicable Brazilian laws (including without limitation
health and safety laws) and reasonable business practices.
2.17 DISCIPLINE AND DISMISSAL
Subject to applicable Brazilian laws, Megatel may at any time dismiss any
Secondee for cause and may require that a Secondee leave any premises owned or
occupied by it.
2.18 COMPENSATION UPON TERMINATION
In the event Megatel terminates the employment of a Secondee pursuant to Section
2.17, Megatel shall be responsible for all compensation up to the date
of termination, including, as the case may be, any relevant portion of agreed
upon performance and completion bonuses as well as any severance payment
required by applicable law. In addition, Megatel shall be responsible for all
reasonable out of pocket expenses necessary for the Secondee to return to his or
her point of origin.
2.19 SUBSTITUTION
If any Secondee ceases to provide services to Megatel during the duration of the
secondment in accordance with Section 2.17, or if any such Person is unable due
to illness, accident or other incapacity to perform his duties, BCI shall, if
requested by Megatel, provide a substitute for such Person in accordance with
the terms hereof.
3. COSTS
3.1 OUT OF POCKET COSTS
Megatel shall reimburse BCI for any pre-authorized business expenses incurred by
BCI in procuring Secondees on behalf of Megatel, and for the cost of any
benefits paid by BCI in accordance with Section 2.8 of this Agreement plus
overhead recovery costs equal to fifteen percent (15%) of such costs and
expenses (collectively the "OUT OF POCKET COSTS").
3.2 EXAMINATION OF OUT OF POCKET COSTS
Megatel shall have the right at reasonable times on reasonable notice during
usual business hours, and at its sole cost and expense (except that if
discrepancies are found in any such audit that exceed 10% of the total amount of
Out of Pocket Costs reimbursed during the period subject to such audit, all
costs and expenses of such audit shall be borne by BCI), to audit, examine and
make copies and extracts from the books and records of BCI relating to all Out
of Pocket Costs for which reimbursement is sought under this Agreement. Such
right may be exercised by Megatel though any agent, employee or independent
auditor designated by Megatel. Such information shall be treated in accordance
with the provisions of Section 7.
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4. TAXES
4.1 PAYMENTS FREE AND CLEAR OF TAXES
All amounts payable hereunder by Megatel to BCI shall be paid by Megatel free
and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding taxes imposed on BCI's net income, assets or capital
by the jurisdiction under the laws of which it is organized or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
4.2 TAX PAYMENTS BY MEGATEL
Should any Taxes be levied on BCI by the Brazilian tax authorities, payment for
such Taxes shall be the responsibility of and be paid by Megatel directly to the
appropriate tax authority on behalf of BCI unless contested in good faith by
Megatel, and these payments by Megatel shall not reduce the amounts payable to
BCI pursuant to this Agreement. Within thirty (30) days after the date of any
payment of Taxes, Megatel shall furnish to BCI, at its address referred to in
Section 12, the original receipt of payment thereof or a certified copy of such
receipt evidencing payment thereof.
4.3 REIMBURSEMENT BY MEGATEL
In the event that BCI is required by law to make such payments for Taxes
directly to the Brazilian tax authorities, Megatel shall, subject to Brazilian
law, reimburse BCI for such payments within thirty (30) days from the date of
BCI's invoice. Such reimbursement shall not be reduced by any Taxes and shall
not reduce the amounts otherwise payable to BCI pursuant to this Agreement.
4.4 STAMP DUTIES, DOCUMENTARY TAXES AND LEVIES
Megatel shall pay all stamp duties, documentary taxes, charges or similar levies
imposed by the Brazilian tax authorities or any state or subdivision thereof
that arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement.
4.5 TAX BENEFIT
If BCI is able to reasonably claim a tax benefit (a "TAX BENEFIT") in computing
its income tax liability under the Income Tax Act (Canada) or under the tax
statutes of any relevant provincial jurisdiction in Canada or any other
jurisdiction by reason of any Taxes withheld on any payments made by Megatel to
BCI pursuant to the terms of this Agreement, BCI shall use reasonable efforts to
obtain promptly such Tax Benefit. BCI shall, within thirty (30) days of
receiving the Tax Benefit from a reduced final tax payment, pay to Megatel the
amount of the Tax Benefit received by BCI. Nothing in this Section shall
interfere with the right of BCI to arrange its tax affairs in whatever manner it
deems fit.
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4.6 TAX STRUCTURE
The Parties shall jointly determine the most tax-efficient means of
accomplishing the objectives of this Agreement. In the event that the Parties
determine that a more tax efficient structure may be implemented, the Parties
shall negotiate in good faith to amend this Agreement to implement such new
structure as promptly as practicable.
5. PAYMENT TERMS
5.1 INVOICES
BCI shall submit to Megatel on a monthly basis invoices for the Out of Pocket
Costs in U.S. dollars. Such invoices shall describe the Out of Pocket Costs
incurred with supporting documentation as reasonably requested by Megatel to
comply with accounting procedures and other requirements of Megatel as well as
the place and manner of payment.
5.2 INTEREST
Unless disputed in good faith, all Out of Pocket Costs payable under this
Agreement, if not paid within forty (45) Days of the date of the invoice, shall
bear interest on the outstanding amount(s) from the date of the invoice or their
due date (whichever date is the latest) until paid at a rate per annum,
compounded annually, equal to LIBOR plus two hundred (200) basis points.
5.3 CURRENCY
Unless otherwise agreed in writing between BCI and Megatel, the compensation
with respect to the Out of Pocket Costs shall be paid in full by Megatel to BCI
in U.S. dollars. All Out of Pocket Costs incurred in currencies other than U.S.
dollars shall be converted into U.S. dollars using the average of the
appropriate Bank of Canada closing exchange rates for the month in which the
Out of Pocket Costs were incurred.
6. DELIVERABLES AND INTELLECTUAL PROPERTY
6.1 OWNERSHIP
Megatel shall own all right, title and interest in and to any Deliverable
prepared by any Secondee and furnished to Megatel in connection with the
provision of Services; provided that the foregoing right, title and interest
shall not include: (i) methods, techniques and concepts and all related
Intellectual Property of BCI or any of the BCI Group Companies and (ii) other
materials previously created by BCI or any BCI Group Company (the "BCI
Proprietary Rights"), all of which shall be owned by BCI or the relevant BCI
Group Company and shall be treated as confidential information pursuant to the
Provisions of Section 7. BCI hereby grants Megatel a license to use such BCI
Proprietary Rights on a non-exclusive, perpetual and royalty free basis for the
purpose of carrying on the Business. Megatel shall not have the right to assign
this license to any other Person other than its affiliates, in accordance with
the provisions hereof and subject to such affiliates being bound by the same
undertaking not to assign this right.
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6.2 ENHANCEMENTS
Any processes, concepts, techniques, uses, designs, applications, methods,
improvements, enhancements and modifications directly based on or directly
created using the BCI Proprietary Rights (the "ENHANCEMENTS"), that are
discovered or developed by or on behalf of Megatel shall be the exclusive
property of Megatel.
6.3 LICENSE TO USE DELIVERABLES AND ENHANCEMENTS
Megatel hereby grants each of BCI, SLI Wireless S.A., Xxxxxxxx Xxxxxxxxxxxx and
VeloCom, Inc. (the "Shareholders"), a license to use the Deliverables and
Enhancements on a non-exclusive and royalty free basis for as long as such
Shareholder is a shareholder (directly or indirectly) of Megatel; provided,
however that the use by a Shareholder of the Deliverables and Enhancements may
continue if such use began prior to such Shareholder ceasing to be a shareholder
(directly or indirectly) of Megatel. The Shareholders shall not have the right
to assign this license to any other Person other than their affiliates, in
accordance with the provisions hereof and subject to such affiliates being bound
by the same undertaking not to assign this right. The Shareholders further agree
that they (and their affiliates) shall not use the Deliverables and Enhancements
in connection with a business that competes with the Business.
6.4 NO TRANSFER OF RIGHTS
No term or condition in this Agreement shall be construed as involving software
development or to be a transfer by BCI, the BCI Group Companies or Megatel of
licenses, patents, trademarks or technology which could give rise to royalty
payments. Any software development requested by BCI or Megatel or any transfer
of Intellectual Property rights shall be dealt with in separate agreements.
7. CONFIDENTIAL INFORMATION
7.1 CONFIDENTIALITY OBLIGATION
Each Party (the "RECEIVING PARTY") shall for two (2) years from the date of
receipt of Confidential Information from the disclosing Party, retain in
confidence all such Confidential Information disclosed pursuant to activities
carried on in providing the Secondees under this Agreement and shall treat such
Confidential Information with the same degree of care as it employs for the
protection of its own Confidential Information (and in any event, with
reasonable care).
7.2 USE OF CONFIDENTIAL INFORMATION
The Receiving Party shall not, nor shall it permit any of its Representatives
to, without the written consent of the other, which consent shall not
unreasonably be withheld or delayed, use any Confidential Information of the
other for any purpose other than the purposes contemplated hereunder, or
disclose any Confidential Information of the other to any third party, except to
its Representatives with a need to know for purposes of this Agreement or for
the conduct of each Party's Business, including any financing to the extent
necessary to obtain such financing, and after such Representatives have been
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directed by the Receiving Party to treat such Confidential Information in
accordance with the terms of this Section 7 and provided further that no Party
shall use any such Confidential Information to the detriment of each other.
7.3 FURTHER UNDERTAKINGS
Each Party also agrees to enter into such further undertakings of
confidentiality as may reasonably be required by the other Party.
7.4 NON-CONFIDENTIAL INFORMATION
Confidential Information shall not include any information that:
(a) is or comes into the public domain other than as a result of a disclosure
directly or indirectly by the Receiving Party in breach of this Agreement;
(b) the Receiving Party can demonstrate was known to it prior to the
disclosure thereof by the disclosing Party;
(c) or becomes generally available to such Receiving Party on a
non-confidential basis from a source other than the disclosing Party,
provided that such source is not known by such Receiving Party to be bound
by any confidentiality obligation with respect to such information.
7.5 COMPELLED DISCLOSURE
This Section 7 shall not restrict the disclosure of any Confidential Information
by either Party as required by law, the rules of any recognized securities
exchange, any court of competent jurisdiction, any governmental or regulatory
authority, including any taxation authority or broadcasting or securities
regulatory authority, but only after written notice of such disclosure
requirement has been given, to the extent practicable, by such Party to the
disclosing Party, (it being understood and agreed that only one such notice
shall be required in respect of continuous disclosure requirements).
7.6 RETURN OF INFORMATION
Upon the expiration or early termination of this Agreement, each Party shall
return all such Confidential Information to the other Party unless such
Confidential Information is necessary for the conduct of the on-going business
of either Party. Notwithstanding termination of this Agreement, the
confidentiality obligations of the Parties pursuant to this Section 7 shall
continue for two (2) years after the disclosure of Confidential Information.
8. ADDITIONAL RESPONSIBILITIES OF MEGATEL
In addition to its obligations under this Agreement, Megatel shall at no cost to
BCI:
(a) provide all reasonable secretarial, office, telecommunications, and other
business facilities required by the Secondees for the performance of their
duties under this Agreement;
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(b) obtain, or assist BCI from time to time in obtaining, the visas and/or
work permits and such other necessary Brazilian government permissions
required to enable the Secondees and their families to enter and work in
Brazil and allow payment outside Brazil of the fees in connection thereto;
(c) use reasonable efforts to assist the Secondees and their families, if
requested, in satisfying the documentary requirements that may arise from
importing and exporting their Personal effects. Megatel shall also provide
general assistance to the Secondees and their families in settling in
Brazil; and
(d) register this Agreement and all of its subsequent amendments with the
appropriate authorities (if legally required) and advise BCI of the date
of registration. Megatel will seek and obtain (as applicable) the approval
of this Agreement by all relevant Brazilian authorities.
9. TERM AND TERMINATION
9.1 TERM
This Agreement shall have a term of five (5) years from the date hereof unless
otherwise mutually agreed, and may thereafter be extended by mutual agreement of
the Parties.
9.2 TERMINATION BY BCI
BCI may, at its option, terminate this Agreement by giving written notice to
Megatel in any of the following events, namely:
(a) a material breach by Megatel of any material obligations contained in this
Agreement which has not been cured within thirty (30) Business Days after
written notice thereof to Megatel specifying the breach and requiring such
remedy;
(b) the insolvency or bankruptcy of Megatel or the making of an assignment for
the benefit of creditors, or the appointment of a trustee or receiver and
manager or liquidator for Megatel or for all or a substantial part of its
property, or the commencement of a bankruptcy, reorganization,
arrangement, insolvency or similar proceedings by or against Megatel under
the laws of any jurisdiction;
(c) Megatel ceases to conduct its business in the normal course;
(d) all or substantially all of Megatel's assets are sold, or otherwise
disposed of
(e) the License is terminated for any reason; or
(f) Megatel has made or will make any payments, loans or gifts of any money or
anything of value, or has authorized, offered or promised to do any of the
foregoing, directly or indirectly to or for the use or benefit of: (i) any
official or employee of the Government of Brazil or any department agency
or intrumentality thereof; (ii) any political party or official or
candidate thereof; or (iii) to any other Person either for an advance or
reimbursement knowing or having reason to believe that any part of
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such payment, loan or gift will be directly or indirectly given or paid by
such other Person to an individual mentioned in (i) or (ii).
9.3 TERMINATION BY MEGATEL
Megatel may at its option, terminate this Agreement, by giving written notice to
BCI in any of the following events, namely:
(a) a material breach by BCI of any material obligations contained in this
Agreement which has not been cured within thirty (30) Business Days after
written notice thereof by Megatel specifying the breach and requiring such
remedy;
(b) the insolvency or bankruptcy of BCI or the making of an assignment for the
benefit of creditors, or the appointment of a trustee or receiver and
manager or liquidator for BCI or for all or a substantial part of its
property, or the commencement of a bankruptcy, reorganization,
arrangement, insolvency or similar proceedings by or against BCI under the
laws of any jurisdiction;
(c) BCI ceases to conduct its business in the normal course;
(d) all or substantially all of BCI's assets are sold, or otherwise disposed
of;
(e) the License is terminated for any reason; or
(f) BCI has made or will make any payments, loans or gifts of any money or
anything of value, or has authorized, offered or promised to do any of the
foregoing, directly or indirectly to or for the use or benefit of: (i) any
official or employee of the Government of Brazil or any department agency
or intrumentality thereof; (ii) any political party or official or
candidate thereof; or (iii) to any other Person either for an advance or
reimbursement knowing or having reason to believe that any part of such
payment, loan or gift will be directly or indirectly given or paid by such
other Person to an individual mentioned in (i) or (ii); or
9.4 OUT OF POCKET COSTS INCURRED PRIOR TO TERMINATION
Notwithstanding any termination of this Agreement, Megatel's obligation to pay
the Out of Pocket Costs incurred to the date of termination shall survive the
termination of this Agreement with respect to Megatel's obligations and
responsibilities hereunder incurred prior to the date of termination.
9.5 TERMINATION WITHOUT PREJUDICE TO OTHER RIGHTS
The termination of this Agreement regardless of its cause or its nature shall be
without prejudice to any other rights or remedies of either Party without
liability to the other Party (except as provided in this Agreement) for any
claims, actions, proceedings, costs, charges, losses, damages, demands,
liabilities and expenses (collectively "LOSSES") occasioned thereby, and each
Party shall remain responsible for its obligations existing immediately prior to
the termination.
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9.6 NO RELEASE OF LIABILITY
The termination of this Agreement for any cause shall not release either Party
hereto from any liability which at the time of termination has already accrued
to the other Party hereto or which thereafter may accrue in respect of any act
or omission prior to termination or from any obligation which is expressly
stated herein to survive termination.
10. ASSIGNMENT
No Party may assign its rights and obligations under this Agreement, in whole or
in part, except with the prior consent of the other Party, which consent shall
not be unreasonably withheld or delayed.
11. WAIVER
11.1 FAILURE TO EXERCISE NOT TO OPERATE AS WAIVER
Except as otherwise expressly provided in this Agreement, no failure or delay BY
any Party in exercising any right, power or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise by such
Party of any right, power or privilege preclude any further exercise thereof or
the exercise of any other right, power or privilege.
11.2 WAIVER IN WRITING
Except as otherwise expressly provided in this Agreement, no waiver of any right
hereunder or of any breach or failure to perform shall be effective unless
executed in writing.
11.3 NO DEEMED WAIVER
The waiver of any right hereunder or of any failure to perform or breach hereof
shall not constitute or be deemed as a waiver of any other right hereunder or of
any other failure to perform or other breach hereof, whether of a similar or
dissimilar nature thereto.
12. NOTICES
Any notice or communication which shall be given under this Agreement shall be
made in writing in the English language, and given by telecopier, with an
original sent by courier, addressed to a Party at its telecopier number and
address set forth below, or such other telecopier number and/or address for such
Party as shall have been communicated by it to the other Party in accordance
with this Section 12. Any notice or other communication shall be deemed to have
been received on the date of transmission but only if a confirmation of the
receipt by the recipient of the telecopier appears correctly at the end of the
sender's telecopy.
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If to BCI:
Xxxx Canada International Inc.
1000 de La Gauchetiere St. West
Suite 1100
Xxxxxxxx, Xxxxxx
X0X 0X0
Telecopier No.: (000)000-0000
Attention Vice-President, Law and Corporate Secretary
If to MEGATEL:
MEGATEL DO BRASIL S.A.
Avn. Xxxx Xxxxxx Xxxxxxx, 000, 0xx xxxxx, xxxxx 00,
Xxx Xxxxx, XX
Xxxxxx
Telecopier No.: 00-00-0000-0000
Attention: Chief Executive Officer
13. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of
Brazil without giving effect to any choice of conflict of law rules.
14. DISPUTE RESOLUTION
14.1 Procedure
In the event of a dispute among BCI and Megatel arising under or in connection
with this Agreement, including a dispute over whether there has been a material
breach to this Agreement, the following shall apply:
(a) They shall use their good faith efforts to settle such dispute. To this end,
either Party may notify the other Party of its desire to initiate the
procedure contemplated by this Section 14, whereupon the Parties shall
forthwith convene to attempt to resolve such disputes through amicable and
good faith discussions. Disputes which the Parties are unable to resolve
through such discussions within thirty (30) days following receipt of the
notice referred to in this Section 14.1(a), shall upon the request of either
Party to the dispute, be submitted to a panel consisting of designees from
the chief executive officers of BCI and Megatel. The designees shall consult
and negotiate with each other in good faith in an effort to reach a just and
equitable solution.
(b) If the designees do not reach a solution within a period of thirty (30) days
following the beginning of their consultations and negotiations, any Party
may treat the same
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as an arbitrable dispute by giving notice to the other Party, in which case the
dispute shall be submitted to a final and binding arbitration under the Rules of
Conciliation and Arbitration of the International Chamber of Commerce excluding
any such rules relating to the posting of security for costs (the "RULES").
14.2 ARBITRATION
(a) The arbitral tribunal shall consist of three (3) arbitrators. One arbitrator
shall be appointed by each side and the third shall be selected by the two
party-appointed arbitrators or, failing agreement, by the International
Chamber of Commerce, in accordance with the Rules.
(b) The arbitration shall be held in the English language. The proceedings shall
be conducted, and any arbitral award shall be made, in the city of New York,
New York, in the United States. The Parties agree that the obligations,
herein are "commercial" and that the New York Convention on Recognition and
Enforcement of Foreign Arbitral Awards is applicable or, if such convention
has not then been ratified by Brazil, the Inter-American Convention on
International Commercial Arbitration shall also apply. The prevailing Party
shall be entitled to recover from the other Party (as part of the arbitral
award or order) its reasonable attorneys' fees and other costs of
arbitration.
(c) Any decision or award of the arbitral tribunal shall be final and binding
upon the Parties. The Parties hereby waive to the extent permitted by law
any rights to appeal or to review of such award BY any court or tribunal.
The arbitral award may be enforced against the Parties or their assets
wherever they may be found and that a judgment upon the arbitral award may
be entered in any court having jurisdiction thereof.
(d) To the extent that each Party has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service
of notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to itself or its property, it hereby
irrevocably waives such immunity in respect of its obligations under this
Agreement.
15. ENTIRE AGREEMENT, ORAL EXPLANATION, AMENDMENTS
This Agreement and its Schedules together with the Know-How Transfer and
Technical Services Agreement, the Technical Services Agreement and the
Shareholders' Agreement constitute the entire agreement of the Parties hereto
with respect to the subject matter covered herein and supersedes all prior
understandings, and agreements. No oral explanation or oral information by any
of the Parties shall alter the meaning or interpretation of this Agreement. No
amendment hereto shall be effective or binding on any of the Parties unless
reduced to writing with specific reference to this Agreement, and executed by
the respective duly authorized representatives of each of such Parties.
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16. NON-SOLICITATION
Megatel agrees not to enter into any employment or consulting agreement or
arrangement, directly or indirectly, written or verbal with any Secondee
hereunder for a period of twelve (12) months following his completion of the
secondment, unless authorized in advance by BCI in writing which authorization
shall not be unreasonably withheld or delayed.
17. SEVERABILITY
The invalidity or unenforceability of any provision, in whole or in part, of
this Agreement shall not in any way affect the validity or enforceability of any
other parts or provisions thereof, provided, however, that the Parties hereto
shall use their reasonable efforts to achieve the purpose of the invalid or
unenforceable provision or part thereof by a new valid and enforceable
stipulation.
18. LANGUAGE
The English version of this Agreement is the only authentic version thereof and
it shall determine the construction, interpretation, application and performance
of this Agreement.
19. RELATIONSHIP OF THE PARTIES
No Party has the power or authority to legally bind any of the other Parties.
Nothing herein shall be construed as authorizing any Party to act as an agent or
representative of the other Parties and nothing herein shall be taken to
constitute or create a partnership, an agency or a joint venture among any of
the Parties.
20. RIGHTS AND REMEDIES
All rights and remedies provided for in this Agreement are in addition to, and
not exclusive of, any other or remedies otherwise available at law or in equity.
21. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which when
so executed shall be deemed to be an original but all of which taken together
shall constitute one and the same complete and executed agreement.
22. FURTHER ASSURANCES
Each of the Parties hereto shall cooperate with the other and execute and
deliver to the other such instruments and documents and take such other actions
as may reasonably be requested from time to time in order to carry out, evidence
and confirm their respective rights and the intended purpose of this Agreement.
28. CONSENTS
Megatel shall obtain at its own cost all licenses, permits or consents which may
be required by Megatel in order for BCI to be free to provide or make available
the Secondees.
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24. EXPENSES
Each Party shall bear its own costs and expenses incurred in connection with the
negotiation, preparation and execution of this Agreement.
25. THIRD-PARTY BENEFICIARY RIGHTS
It is the intention of the Parties to confer third-party beneficiary rights to
the Shareholders as provided for in Section 6.3.
IN WITNESS WHEREOF, the Parties have signed and delivered this Agreement on the
day and year set forth above.
XXXX CANADA INTERNATIONAL INC. MEGATEL DO BRASIL S.A.
By: By:
----------------------------- ----------------------------
Name: Name:
Title: Title:
By:
----------------------------
Name:
Title:
WITNESS: Witness:
------------------------ -----------------------
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SCHEDULE A
REQUEST FOR SERVICES
Job Title:
----------------------------
Reporting to:
--------------------------- --------------------------
Name Title
Brief Description of the Position (or Attach Job Description):
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
Work Location:
---------------------------------------
Expected Secondment Start Date: ___\___\___
Duration of Secondment:
-------------------------------
Required Experience and Skills:
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
Name of Potential Candidates Requested (If Applicable):
--------------------------------------------------------------
--------------------------------------------------------------
Date:
-----------------------------------
By:
-------------------------------------
Chief Executive Officer
(or Other Authorized Representative)
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