TECHNICAL SERVICES AGREEMENT
This Agreement, made and entered into this 11th day of December 1996, by
and between PAGING NETWORK, INC., a Delaware corporation ("PageNet"), and PAGING
NETWORK DO BRASIL S.A., a Brazilian corporation (together with its wholly owned
subsidiaries, "PNB").
W I T N E S S E T H
- - - - - - - - - -
Whereas, PNB desires to develop, maintain and improve a system for
operating wireless voice (VoiceNow-Registered Trademark-) and data paging,
messaging and similar services (the "Telecommunications Services") throughout
Brazil (the "Territory") with PageNet's assistance;
Whereas, PNB desires to avail itself of the considerable expertise and
skill that PageNet has developed as a leading operator of Telecommunications
Services throughout the United States of America in order to assist PNB in the
operation of Telecommunications Services in the Territory; and
Whereas, in purchasing equipment to operate Telecommunications Services in
the Territory, PNB desires to partake in the benefits of the enhanced purchasing
power PageNet has acquired through its volume purchases of such equipment.
Now, therefore, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
Section 1. Definitions.
As used in this Agreement, the following terms shall have the following
meanings:
1.1. "Affiliate" of a party shall mean an entity that controls, is
controlled by or is under common control with such party.
1.2. "Agreement" shall mean this Technical Services Agreement, and the
exhibit(s) attached hereto.
1.3. "Brazilian Regulations" shall have the meaning set forth in Section 7.
1
1.4. "Brazilian Regulators" shall have the meaning set forth in Section 7.
1.5. "Charges" shall have the meaning set forth in Section 6.
1.6. "Confidential Information" shall mean any trade secret or any
information of a confidential and/or proprietary nature as to which PNB or
PageNet, as the Disclosing Party, has developed or acquired, or during the Term
of this Agreement develops or acquires including, without limitation, trade
"know-how," secrets, customer lists, pricing policies, operational methods,
marketing plans or strategies, product development techniques or plans, relating
to the conduct of business by either, which, prior to the date hereof, or during
the term of this Agreement, was or is disclosed to the other party, as the
Receiving Party, exclusive of data or information: (i) which has been published,
is in the public domain, or otherwise becomes a matter of public knowledge by
any means other than the Receiving Party's default in the observance or
performance of any term or provision contained in this Agreement on its part to
be observed or performed, or (ii) which was known to the Receiving Party at the
time of such disclosure, as evidenced by the Receiving Party's written business
records predating such disclosure and maintained in the ordinary course of
business, or (iii) which is, at any time, disclosed to the Receiving Party by
any person or entity not a party hereto who has the right to disclose the same.
1.7. "Disclosing Party" shall have the meaning set forth in Section 12.
1.8. "End-user" shall mean users and subscribers of the Telecommunications
Services.
1.9. "Equipment" shall have the meaning set forth in Section 4.1.
1.10 "License" shall have the meaning set forth in Section 3.1(a).
1.11 "Marks" shall have the meaning set forth in Section 3.1(a).
1.12."PageNet" shall have the meaning set forth in the preamble to this
Agreement.
1.13 "PageNet Intellectual Property" shall have the meaning set forth in
Section 3.1(a).
1.14."PageNet Services" shall have the meaning set forth in Section 2.1.
1.15."PNB" shall have the meaning set forth in the preamble to this
Agreement.
1.16."Receiving Party" shall have the meaning set forth in Section 12.
2
1.17 "Sublicense" shall have the meaning set forth in Section 3.1(e).
1.18."Telecommunications Services" shall have the meaning set forth in the
first Whereas clause of this Agreement.
1.19."Term" shall have the meaning set forth in Section 9.
1.20."Territory" shall have the meaning set forth in the first Whereas
clause of this Agreement.
Section 2. PageNet's Services.
2.1. PageNet Services. PageNet shall provide the following services (the
"PageNet Services") to PNB: (a) assist with the conversion, where necessary, of
PNB's current facilities and equipment and with the construction, where
necessary, of additional facilities and sites for the provision of
Telecommunications Services by PNB in the Territory, and (b) provide the
services listed on Exhibit A hereto from time to time upon the request of PNB.
PNB shall request PageNet Services either in writing or orally if confirmed in
writing within 24 hours. All PageNet Services will be supplied to PNB at the
earliest practicable time, with the understanding that although PageNet will
consider the provision of such services to PNB to be of the same importance as
the provision of such services by PageNet to its own operations, PageNet has
limited personnel resources that will have to be allocated by PageNet. PageNet
agrees to complete the requested PageNet Services as promptly as is reasonably
practicable in a professional manner, conforming to PageNet's standards. PageNet
shall have the sole and exclusive right to determine who shall perform the
PageNet Services (whether they be employees, subcontractors or others) and
PageNet shall have sole and complete authority for the direction of, and shall
remain responsible for, the PageNet Services to be performed.
2.2. Costs and Expenses. The provision of PageNet Services hereunder shall
be without charge by PageNet, except that PageNet shall invoice PNB, and PNB
shall reimburse PageNet, for any out-of-pocket costs and expenses incurred by
PageNet in connection with the provision of PageNet Services, including, but not
limited to: (i) expenses of PageNet in connection with providing the employees
listed on Exhibit A hereto (such expenses to include those paid pursuant to its
expatriate policy and those, such as stock options (valued at the time of grant
according to the Black-Scholes Formula), benefits and contributions to its
401(k) plan, paid by agreement with such employees), and (ii) expenses relating
to PageNet personnel travel to and from, and accommodations and transportation
within, Brazil. PageNet may request in writing to PNB that certain expenses in
connection with PageNet Services be paid directly by PNB to others.
3
2.3. Invoicing. PageNet shall submit to PNB an invoice for monthly payments
due under Section 2.2 on before the tenth (10th) business day after the close of
such month. PNB shall pay the full amount set forth in such invoice, without
offset, on or before the thirtieth (30th) day after the receipt of the invoice
and in accordance with Section 6.
Section 3. License of PageNet Intellectual Property.
3.1. Grant of License.
(a) PageNet hereby grants to PNB, and PNB hereby accepts, during the term
of this Agreement and thereafter to the extent and as provided in Section 3.5
hereof, an exclusive, royalty-free, nontransferable (except as otherwise
provided in Section 3.4 hereof) license (the "License") to use and otherwise
exploit in the Territory the trade names, trademarks and service marks owned by
PageNet and set forth on Exhibit B hereto (as said Exhibit B may be amended from
time to time) (the "Marks") and any trade secrets, patents, copyrights or other
intellectual property included in the Confidential Information disclosed or
provided by PageNet to PNB in connection with this Agreement (all of the
foregoing, including the Marks, collectively referred to herein as the "PageNet
Intellectual Property"), in connection with (and limited solely to) PNB's
advertisement, promotion, marketing, sale, development and provision of the
Telecommunication Services and products and services related thereto (all such
Telecommunication Services and related products and services referred to as the
"Licensed Services") in the Territory. For purposes of this Agreement,
"exclusive" means that PageNet, (i) during the term of this Agreement, will
neither use itself nor grant to any third party a license to use the PageNet
Intellectual Property in connection with the advertising, promotion, marketing,
sale, development or provision of Licensed Services in the Territory, and
(ii) during the term of the License (and thereafter in accordance with and to
the extent provided in Section 3.5(e) hereof), will neither use itself nor grant
to any third party a license to use the Marks in connection with any products,
services or business activity in the Territory.
(b) The granting of the foregoing License shall in no manner whatsoever
limit the rights of PageNet, except as specifically provided in Sections 3.1(a)
and 3.5(e) hereof; and except as so provided PageNet hereby expressly reserves
full and unrestricted rights to use and exploit itself the PageNet Intellectual
Property, and to grant to others rights and licenses to use and exploit the
PageNet Intellectual Property, including without limitation the rights to use
and exploit itself and to grant to others licenses to use and exploit (i) the
PageNet Intellectual Property outside of the Territory in connection with any
products, services or business activities, and (ii) the PageNet Intellectual
Property (excluding the Marks) within the Territory other than for Licensed
Services.
4
(c) PNB acknowledges PageNet's sole and exclusive ownership of the PageNet
Intellectual Property and any and all registrations or applications with respect
thereto (whether issued by or filed with the relevant governmental authorities
in the Territory or otherwise), and that the provisions of this Agreement do not
convey to PNB and PNB shall not obtain any title to or ownership right or
interest in the PageNet Intellectual Property or any such registrations or
applications. All use of the Marks by PNB in connection with the
Telecommunications Services or otherwise hereunder shall inure to the exclusive
benefit of PageNet. Each party agrees, at the reasonable request of the other
party, to execute and deliver any and all instruments and documents deemed
necessary or desirable by the requesting party to develop, protect, preserve,
extend or enforce the parties' respective rights relating to the PageNet
Intellectual Property, including but not limited to any documents required by
the United States Patent and Trademark Office or the Brazilian National
Institute of Intellectual Property to show the relationship between PNB and
PageNet.
(d) It is the specific intent of the parties hereto that nothing contained
in this Agreement shall in any way endanger, jeopardize or adversely affect any
right of PageNet in and to the PageNet Intellectual Property. To that end,
should any provision or provisions of this Agreement be interpreted by a court
or other governmental authority so as to endanger, jeopardize or adversely
affect such right or rights, whether or not such interpretation is made at the
instance of PNB or another, the parties agree that such provision or provisions
shall be deemed deleted from this Agreement, and the parties shall negotiate in
good faith to replace such deleted provision(s) with substitute provision(s)
which do not endanger, jeopardize or adversely affect such right(s) but which,
to the extent practicable, implement the purposes and intent of the parties as
set forth in the deleted provision(s).
(e) Subject to the prior written consent of PageNet, which consent will
not be unreasonably withheld or delayed, PNB shall have the right under the
License to grant to any third party (a "Sublicensee") a sublicense (a
"Sublicense"), to use and otherwise exploit in the Territory, the PageNet
Intellectual Property in connection with PNB's and/or such Sublicensee's
advertisement, promotion, marketing, sale, development and provision of Licensed
Services in the Territory. The granting of any Sublicense by PNB pursuant to
this subsection (e) shall be subject to all of the following: (i) such
Sublicense shall be subject to the provisions of this Section 3, any Sublicensee
shall be subject to any and all of the obligations of PNB contained in this
Section 3, mutatis mutandis, and upon the request of PageNet any such
Sublicensee shall expressly acknowledge such obligations in a written instrument
delivered to PageNet; (ii) the granting of such Sublicense shall in no manner
whatsoever relieve, waive, or excuse the performance of, any of the obligations
5
and/or responsibilities of PNB with respect to the License or the provisions of
this Section 3; (iii) with respect to the granting of such Sublicense, PNB
covenants and agrees that it will take any and all steps, as may be necessary or
appropriate or as reasonably requested by PageNet, to ensure the full and
complete performance of, and compliance with, the obligations under such
Sublicense by such Sublicensee; (iv) any breach by such Sublicensee under such
Sublicense, which breach--if committed by PNB--would be a breach of the License,
shall be deemed a breach of the License and the provisions of this Section 3 by
PNB; and (v) any termination of the License hereunder (whether with respect to
the Marks, the PageNet Intellectual Property other than the Marks, or all of the
PageNet Intellectual Property) shall automatically terminate such Sublicense
with respect to the affected PageNet Intellectual Property.
3.2. Quality Control; Compliance with Laws.
(a) PNB will not use the Marks without PageNet's express prior written
consent to such use, which consent will not be unreasonably withheld or delayed;
provided, however, that this Agreement shall constitute such prior written
approval of PageNet unless PageNet notifies PNB in writing that PageNet has
determined, reasonably and in good faith, that (i) the Marks have been or are
proposed to be used incorrectly from a technical standpoint (i.e., proper
trademark usage) or otherwise not in compliance with the License, or (ii) PNB's
actual or proposed use of the Marks would materially adversely affect the value
of the Marks or materially adversely affect PageNet's ability to register,
protect, preserve or enforce its rights and interests in the Marks (whether
inside or outside the Territory). Copies or prototypes of all proposed Licensed
Services-related advertising, promotional, marketing, sales and operating
materials or items using and/or bearing the Marks will be submitted by PNB to
PageNet, a reasonable time prior to any use, sale or distribution of the same.
If at any time PageNet, reasonably and in good faith, determines that any use
and/or display of the Marks by PNB is not in compliance with the License or does
or may materially adversely affect the value of the Marks or materially
adversely affect PageNet's ability to register, protect, preserve or enforce its
rights and interests in the Marks (whether inside or outside the Territory),
PageNet may issue instructions to PNB concerning the manner in which PNB may
continue to use the Marks in compliance with the License, and PNB will promptly
comply with such instructions or the parties will negotiate in good faith to
reach agreement on an alternative use and/or display of the Marks that complies
with the License and is reasonably acceptable to both parties.
(b) PNB shall advertise, promote, market, sell and provide the Licensed
Services in accordance with the terms of this Agreement and in a high quality,
professional manner consistent with the quality of similar services and/or
products either (i) provided by PageNet or others under the Marks in the United
6
States or other countries outside the Territory, or (ii) provided by significant
competitors of PNB or other significant such service providers within the
Territory (taking into account the then-current commercial and technical
standards and capabilities then prevailing in the Territory), and, in either
case, consistent with the high quality, professional image of and goodwill
associated with the Marks and taking into consideration for a reasonable and
appropriate period the start-up nature of PNB's operations (all of the foregoing
referred to as the "Quality Standard").
(c) In order to ensure that the Licensed Services are provided in an
appropriate manner commensurate with the Quality Standard, PNB, upon reasonable
prior oral or written notice to PNB by PageNet, will allow representatives of
PageNet to make reasonable tests or inspections of the Licensed Services, and to
have access to PNB premises or facilities at any reasonable time during business
hours; provided, however, that PNB shall not be required to allow any such
tests, inspections or access more than twice in any one-year period. In
connection therewith, PNB shall make available to such representatives any
facilities, equipment, services or information reasonably requested and permit
such representatives to test or inspect the Licensed Services and to inspect its
premises and facilities and any and all items and/or materials provided to
customers or others in connection with the Licensed Services at any reasonable
time during business hours, and PNB shall otherwise cooperate with PageNet as
PageNet may reasonably request.
(d) If PageNet reasonably determines that the Licensed Services (or any
portion thereof) do not meet the Quality Standard, then PageNet will provide PNB
with written notice (the "Defect Notice") of such failure, specifying the
specific product or service and the particular deficiency, and (if applicable)
the relevant geographic region of the Territory, together with any reasonably
available supporting documentation of such deficiency. If PNB shall not have
met such Quality Standard for such specific product or service and does not
(i) take appropriate action to diligently commence to cure such deficiency
within sixty (60) days after receipt of the Defect Notice, and (ii) cure such
deficiency by causing such product or service to meet such Quality Standard and
provide documentation of such cure reasonably acceptable to PageNet within
ninety (90) days after receipt of the Defect Notice (or, if such deficiency is
not reasonably susceptible to cure within such 90-day period, within one hundred
eighty (180) days after the receipt of the Defect Notice), then PageNet may, by
written notice to PNB (the "Suspension Notice"), immediately suspend the License
of the Marks only with respect to the particular product or service (and the
relevant geographic region, if applicable) specified in the Defect Notice, and
PNB shall as promptly as possible cease all use of the Marks with respect to
such particular product or service (in such geographic region, if applicable).
As long as the License remains in effect hereunder with respect to the Marks, if
at any subsequent time PNB demonstrates, to PageNet's reasonable satisfaction,
7
that such particular product or service (with respect to which the License of
the Marks had been suspended) then meets the Quality Standard (in the relevant
geographic area, if applicable), then the License of the Marks shall be
reinstated and once again in effect with respect to such product or service (in
the relevant geographic area, if applicable). However, if PageNet sends more
than three (3) Suspension Notices in any period of twenty-four (24) months or
less with respect to separate violations of the Quality Standard, PageNet shall
have the right, by written notice to PNB, immediately to terminate the License
of the Marks (only) provided herein.
(e) In connection with its use of the Marks and its advertisement,
promotion, marketing, sale and provision of the Licensed Services, PNB shall, at
all times during the term of this Agreement and thereafter during the term of
the License, comply in all material respects with all applicable laws and
regulations, including, without limitation, the Brazilian Regulations and any
other terms or conditions that may be imposed by the Brazilian Regulators, any
of their successor departments or agencies, or any other departments or agencies
serving the same or similar function, and any state or local agencies.
3.3. Infringement and Adverse Governmental Action. Each of PageNet and PNB
will promptly notify the other party of any infringement or misappropriation and
of any adverse governmental action or the commencement of any legal action by a
third party relating to the PageNet Intellectual Property or the Licensed
Services within the Territory, of which it becomes aware. Each party shall also
notify the other party of any other factor of which it becomes aware that may
materially affect the PageNet Intellectual Property or the provision of the
Licensed Services. PNB shall have the right, exercisable at its option and with
notice to PageNet, (a) to prosecute any and all actions against alleged
infringers or misappropriators of the PageNet Intellectual Property and/or
defend the PageNet Intellectual Property against any and all claims or actions
made or brought by third parties with respect thereto within the Territory, and
(b) to seek to remedy governmental actions adversely affecting the PageNet
Intellectual Property or the provision of the Licensed Services in the
Territory; PageNet will cooperate in any action brought or defended against by
PNB within the Territory, at PNB's request and expense. If PNB does not
commence to prosecute, defend against or seek to remedy any of the foregoing
actions within ninety (90) days after PNB becomes aware thereof, then PageNet
shall have the right, exercisable at its option and with notice to PNB, to
prosecute, defend against or seek to remedy any such actions; PNB will cooperate
in any action brought or defended against by PageNet within the Territory, at
PageNet's request and expense. Each party will bear the costs of its own legal
expenses and other costs in connection with any actions taken, and the party
bearing the costs will be entitled to receive any amounts received in settlement
and/or damages awarded.
8
3.4 Assignment or Transfer of the License.
(a) Except as provided in Sections 3.4(b) and (c), PNB shall not have the
right to assign or transfer the License to any third party, whether by sale or
assignment of assets or stock, merger consolidation or otherwise.
(b) As long as this Agreement remains in full force and effect, PNB shall
have the right to assign or transfer the License in conjunction with any
permitted assignment or transfer of this Agreement pursuant to Section 13.1
hereof.
(c) At any time upon or subsequent to a termination of this Agreement
whereby the provisions of this Section 3 have survived such termination and
PageNet has not terminated the License (either with respect to the Marks only or
the entire License) pursuant to Section 3.5, then PNB shall have the right to
assign or transfer the License, with respect to the PageNet Intellectual
Property for which the License remains in effect at the time of such assignment
or transfer, to any third party to which PNB shall simultaneously assign or
transfer all or substantially all of PNB's assets (other than this Agreement)
associated with its Licensed Services business (however such assignment or
transfer is structured, e.g., as an assignment of assets, sale of stock, merger,
consolidation, or otherwise), provided that both of the following conditions are
satisfied prior to or at the time of such assignment or transfer: (i) such
assignee or transferee shall be subject to any and all of the obligations of PNB
contained in this Section 3, mutatis mutandis, and shall expressly acknowledge
such obligations in a written instrument delivered to PageNet; and (ii) such
assignee or transferee represents and warrants to PageNet, in writing, that it
is such party's intention itself to continue to carry on and conduct the
Licensed Services business being acquired by such party from PNB.
3.5. Effect of Termination.
(a) Notwithstanding anything in this Agreement to the contrary, the
provisions of this Section 3 shall survive termination of this Agreement, other
than: (i) a termination pursuant to Section 10.1; or (ii) a termination
initiated by PageNet pursuant to Section 10.2 where the relevant breach or
default by PNB is a breach or default under the terms of the License set forth
in this Section 3; or (iii) a termination pursuant to Section 10.3 if such
termination is on account of governmental action which requires a termination of
the License, provided, however, if such governmental action (with respect to its
required termination of the License) is reversed within the period up to and
including the first anniversary of the date of such termination pursuant to this
clause (iii), PNB shall have the right to reinstate the License by delivery to
PageNet of written notice of such reversal and reinstatement within such time
period or up to five (5) business days thereafter, whereupon the provisions of
this Section 3 shall be reinstated and revived and in full force and effect. In
the event of any post-termination survival and/or reinstatement of this Section
9
3, the License shall remain exclusive only with respect to the Marks and shall
become non-exclusive with respect to any and all other PageNet Intellectual
Property (as provided in Section 3.1(a)).
(b) At any time subsequent to a termination of this Agreement whereby the
provisions of this Section 3 have survived such termination (or been reinstated
pursuant to Section 3.5(a)(iii)) and remain in full force and effect pursuant to
Section 3.5(a), PageNet may thereafter (i) partially suspend or terminate the
License of the Marks (only) pursuant to Section 3.2(d), or (ii) terminate the
License if PNB commits any breach or default of any of the terms or conditions
of the License (other than a breach or default to which Section 3.2(d) applies)
and such breach or default has not been cured within ninety (90) days after
receipt by PNB of PageNet's notice of such breach or default (or, if such breach
or default is not reasonably susceptible to cure within such 90-day period,
within one hundred eighty (180) days after receipt by PNB of PageNet's notice of
such breach or default).
(c) Upon any termination of the License of the Marks, whether pursuant to
Section 3.2(d) or Section 3.5(b), then:
(i) all rights and licenses granted hereunder by PageNet to PNB
(including but not limited to the License) with respect to the Marks shall
terminate, and PNB shall have no claim against PageNet for losses or expenses
incurred or for lost profits or goodwill;
(ii) PNB shall promptly cease entirely the use of all of the Marks;
(iii) PNB shall promptly change its corporate name from "Paging
Network do Brasil S.A." to "Warburg Paging do Brasil S.A." or such other
corporate name as long as such name does not include, is not similar to or
likely to be confused with, and is not a colorable imitation of any of the
Marks, and PNB shall file with the appropriate Brazilian authorities the
necessary documentation in connection with such name change within thirty (30)
days following the date of any such termination;
(iv) in order to protect and preserve PageNet's rights in and the
identity of the Marks, PNB agrees that it will not use or register or apply to
register any trademark or trade name which is similar to or likely to be
confused with or is a colorable imitation of the Marks; and
(v) subsections (iii) and (iv) are intended to prevent confusion,
mistake or deception among purchasers of and users of the same or related
10
goods or services which might be caused by the same or similar corporate
names, trademarks or trade names.
(d) If the License (in its entirety) is terminated pursuant to Section
3.5(b), or if this Agreement is terminated pursuant to Section 10.1, pursuant to
Section 10.2 at the initiation of PageNet where the relevant breach or default
by PNB is a breach or default under the terms and conditions of the License set
forth in this Section 3, or pursuant to Section 10.3 if such termination is on
account of governmental action which requires a termination of the License and
PNB does not reinstate the License pursuant to Section 3.5(a)(iii), then in
addition to the application of clauses (i) - (v) of Section 3.5(c):
(i) all rights and licenses granted hereunder by PageNet to PNB
(including but not limited to the License) shall terminate, and PNB shall have
no claim against PageNet for losses or expenses incurred or for lost profits or
goodwill; and
(ii) PNB shall promptly cease entirely the use of all of the PageNet
Intellectual Property.
(e) Upon any termination of the License with respect to the Marks (whether
alone or as part of a termination of the License with respect to all the PageNet
Intellectual Property), PageNet shall not, for a period of two (2) years
immediately following such termination, either directly itself or indirectly
through a licensee, use the Marks in the Territory for or in association with
any Licensed Services.
Section 4. Equipment Purchase Option.
4.1. Procurement of Equipment. PageNet agrees to use its commercially
reasonable efforts to arrange with vendors to furnish to PNB equipment relating
to the operation of the Telecommunications Services in the Territory (the
"Equipment"), as and when requested by PNB to PageNet in writing from time to
time, at prices and terms (including but not limited to financing and
cooperative advertising) as favorable to PNB as PageNet is able to obtain for
such Equipment for itself. If such favorable prices and terms cannot be secured,
PageNet shall use its commercially reasonable efforts to order such Equipment
from vendors on PNB's behalf with the vendors directly billing PNB therefor. At
PNB's request, PageNet shall use its commercially reasonable efforts to have
vendors extend credit to PNB for Equipment purchased either directly by PNB or
by PageNet on behalf of PNB; provided, however, that under no circumstances
shall PageNet be obligated to use its own credit with vendors to procure
Equipment for or on behalf of PNB. If Equipment ordered by PageNet for or on
behalf of PNB is actually invoiced by vendors to PageNet, PageNet shall
immediately forward such invoice to PNB and PNB shall directly pay such
11
invoice in accordance with its terms. If, for any reason, PageNet, in its
sole discretion (a) pays vendors with its own funds, or (b) uses its own
credit with vendors to obtain Equipment for or on behalf of PNB, PageNet
shall advise PNB in writing of such payment or credit arrangement along with
appropriate documentation and PNB shall reimburse PageNet for the price
actually paid or to be paid by PageNet for such Equipment, including all
shipping, handling, insurance, taxes, duties and other charges, in accordance
with the provisions of Sections 4.2 and 6.
4.2. Invoicing. PageNet shall submit to PNB an invoice for Equipment
purchased or procured by PageNet for or on behalf of PNB under Section 4.1 on or
before the tenth (10th) business day after the close of the month during which
such Equipment was ordered. PNB shall pay the full amount set forth in such
invoice, without offset, on or before the fifth (5th) business day prior to the
date that the vendor of the Equipment has required payment and in accordance
with Section 6. If the vendor has other requirements for payment, such as
C.O.D., PNB shall comply with such payment terms as if it were the direct
purchaser of the Equipment.
4.3 Warranties. If PageNet shall purchase any Equipment on behalf of PNB,
PageNet shall, to the extent possible, pass through to PNB all warranties
provided by the vendor of such Equipment, and, if the vendor does not permit
PageNet's pass through of such warranties, PageNet will use its best efforts to
enforce such warranties on behalf of PNB. PageNet and PNB shall work together to
preserve any benefits that PageNet would receive from the vendor as the
purchaser of the Equipment.
4.4. Shipping. To the extent possible, the Equipment shall be shipped and
delivered in accordance with PNB's instructions. If for any reason PageNet must
take delivery of and reship Equipment to PNB, any additional expenses in
connection therewith shall be invoiced by PageNet to PNB, and PNB shall pay such
invoices in the manner set forth in Section 6. PageNet shall use commercially
reasonable efforts to arrange shipping, delivery and title transfers so as to
minimize duties and other import levies.
4.5. Relationship between PageNet and PNB. As between PageNet and PNB, it
is intended by the parties that PageNet's role as a facilitator of purchases of
the Equipment by PNB is ministerial and that PNB is to be considered the
purchaser of the Equipment even if PageNet must purchase the Equipment in its
name for and on behalf of PNB. Therefore, PageNet assumes no risk by acting in
this capacity. Consistent with the foregoing, but not in limitation thereof, all
risk of loss on all Equipment shipped by any vendor or PageNet shall be borne by
PNB and not PageNet (even if delivered to PageNet).
12
Section 5. Disclaimer: Limitation of Liability and Damages.
ALL EQUIPMENT PROCURED, PURCHASED, SUPPLIED OR INSTALLED BY PAGENET FOR PNB
IS PROVIDED TO PNB ON AN "AS IS" BASIS, WITHOUT ANY REPRESENTATION OR WARRANTY
OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. PageNet
shall not be liable for any delay in the performance of orders or contracts for
Equipment, or for any delay in the shipment or delivery thereof, or for any
direct or indirect damages suffered by PNB by reason of such delays.
Section 6. Payments, Taxes and Exchange Control.
All payments by PNB hereunder shall be made in United States Dollars (or,
if requested by PageNet, in Brazilian Reais at the prevailing exchange rate on
the date of payment) in immediately available funds. Payments to PageNet shall
be made to the address set forth in Section 13.2 or at such other address as
PageNet may specify from time to time. PNB shall, at its own expense, be solely
responsible for obtaining all governmental and non-governmental approvals
required or necessary for the prompt and complete remittance of payments under
this Agreement. All payments shall be made in the full and actual amounts
invoiced and no deductions shall be made for of any direct or indirect taxes,
duties, fees, costs, expenses, commissions, contributions, surcharges or other
amounts of any kind that may be imposed or required on such payments by any
third party (including but not limited to governmental authorities or financial
institutions) (all of such amounts, the "Charges"). PNB shall be solely
responsible for the prompt and complete payment of all Charges. PageNet shall
assess a late charge of one and one-half percent (1.5%) per month, or at
PageNet's sole discretion, the highest applicable rate permitted under
prevailing law, on any amount due from PNB to PageNet which is not received when
due for payment.
Section 7. Regulations.
PageNet and PNB acknowledge that the activities of PNB and/or its
Affiliates in connection with the operation of Telecommunications Services in
the Territory hereunder are subject to the Brazilian Telecommunications Code and
other applicable laws (all of such laws, statutes, orders, rules and
regulations, together the "Brazilian Regulations") and are regulated by the
Ministry of Communications of Brazil and other Brazilian regulatory agencies and
governmental authorities (all such regulatory entities or authorities, together
the "Brazilian Regulators"). Accordingly, PageNet and PNB mutually agree as
follows:
13
7.1. Consents. The execution, delivery and performance of this Agreement
and the transactions contemplated hereby may be subject to the receipt of any
necessary prior approvals or authorizations by or from the Brazilian Regulators
or any other governmental authority. PageNet and PNB agree to use their best
efforts to promptly obtain any such approvals or authorizations applicable to
them. PNB shall, at its own expense, be responsible for obtaining all Brazilian
approvals for the importation of Equipment or relocation of persons necessary to
perform the PageNet Services into the Territory.
7.2. Compliance. PageNet and PNB shall each comply, in all material
respects, with all Brazilian Regulations and all applicable laws and regulations
of the United States of America. In the event Brazilian Regulators or any
governmental authority shall require any material additions, deletions, or
modifications to the terms or conditions of this Agreement, PNB and PageNet
shall use commercially reasonable efforts to reconstitute this Agreement to
comply with such requirements.
7.3. Records. Each of PNB and PageNet shall maintain complete and accurate
records regarding its business activities, showing the information required (i)
to permit calculation of all amounts owed hereunder by PNB to PageNet, (ii) to
permit the verification of costs and expenses referred to in Section 2.2, and
(iii) to compile any information required by the Brazilian Regulators or any
other governmental authority. Each of PNB and PageNet shall have the right, at
its own expense, to examine (or to have its duly authorized agent examine) on a
confidential basis and upon at least ten (10) days prior notice thereof such
records and books of account with respect to operation of the Telecommunications
Services in the Territory of the other during regular business hours.
7.4. Control of Radio Facilities. PageNet acknowledges that PNB has, or has
entered into agreements with others to obtain, the rights to operate the
frequencies and facilities necessary to re-sell Telecommunications Services in
the Territory. PNB shall ensure that the frequencies and facilities are
operated in compliance with the Brazilian Regulations. No provision of this
Agreement shall be construed as vesting in PageNet any control over legal
entities holding concessions or licenses for the operation of frequencies or
facilities utilized to re-sell Telecommunication Services in the Territory by
PNB. PNB shall take all actions necessary to ensure that all of the terms and
conditions of the licenses are complied with and fulfilled and the frequencies
remain available for the operation of Telecommunication Services in the
Territory by PNB. PNB shall maintain full responsibility for the control,
supervision, maintenance, and expense of such operation of frequencies and
facilities. PNB shall promptly notify PageNet of any complaints received from
End-users relating to the
14
operation of Telecommunications Services in the Territory and shall confirm
such complaints to PageNet in writing.
Section 8. Representations and Warranties.
8.1. Representations and Warranties of PNB. PNB represents and warrants to
PageNet as follows:
(a) It is a corporation duly organized and validly existing under the laws
of Brazil, with full power to conduct its affairs as currently conducted and
contemplated hereunder. All necessary corporate action has been taken to enable
it to execute and deliver this Agreement and perform its obligations hereunder.
(b) No governmental or other third party consent is required in connection
with its execution, delivery or performance of this Agreement, except such
regulatory approvals as may be contemplated under Sections 6 and 7.
(c) This Agreement is PNB's valid and binding obligation enforceable in
accordance with its terms, except insofar as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, or by principles governing the
availability of equitable remedies. PNB has the unencumbered right to enter into
this Agreement and to fulfill its duties hereunder. It is not and will not
become party to any agreement in conflict herewith.
8.2. PageNet Representations and Warranties. PageNet represents and
warrants to PNB as follows:
(a) It is a corporation duly organized and validly existing under the laws
of Delaware, with full power to conduct its affairs as currently conducted and
contemplated hereunder. All necessary corporate action has been taken to enable
it to execute and deliver this Agreement and perform its obligations hereunder.
(b) No governmental or other third party consent is required in connection
with its execution, delivery or performance of this Agreement, except such
regulatory approvals as may be contemplated under Sections 6 and 7.
(c) This Agreement is PageNet's valid and binding obligation enforceable
in accordance with its terms, except insofar as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, or by principles governing the
availability of equitable remedies. PageNet has the unencumbered right to enter
into this Agreement and to fulfill its duties hereunder. It is not and will not
become party to any agreement in conflict herewith.
15
Section 9. Term.
9.1. Initial Term. The initial term of this Agreement shall commence on
the date hereof and shall continue until the fifth (5th) anniversary of the date
hereof. The initial term shall be extended for successive three (3) year terms
unless either party gives notice of its intent not to so extend at least one (1)
year prior to the end of the initial term or any additional term.
9.2. Termination Under Certain Circumstances.
(a) Notwithstanding the provisions of Section 9.1, this Agreement shall
terminate, at PageNet's election, six (6) months after PageNet's ceasing to own
at least 5% (on a fully diluted basis) of PNB common stock and/or subscription
bonds to purchase such common stock, or anyone other than Warburg, Xxxxxx
Ventures, L.P. owns 50% or more (on a fully diluted basis) of PNB common stock
and/or subscription bonds to purchase such common stock.
(b) Notwithstanding the provisions of Section 9.1, this Agreement shall
terminate immediately upon the consummation or closing of any transaction for
which PageNet's consent is required (but has not been given) pursuant to Section
13.1 hereof.
Section 10. Termination.
Anything set forth herein to the contrary notwithstanding, this Agreement
may be terminated by PNB or PageNet as provided below by the giving of written
notice of such termination by the terminating party at least thirty (30) days in
advance:
10.1. Non-Payment. PageNet may terminate this Agreement if PNB has
failed to pay any amounts due under Sections 2 and 4, and such failure continues
for a period of thirty (30) days after the receipt by PNB of notice of
non-payment from PageNet; provided, however, that any such termination by
PageNet shall not terminate the License pursuant to Section 3 hereof, if PNB
reasonably and in good faith disputes its obligation to pay PageNet the amount
not paid (as evidenced by written notice given by PNB to PageNet within such
30-day period setting forth the amount in dispute and PNB's reasonable and good
faith basis for disputing such obligation), unless and until such dispute is
resolved (whether by agreement, settlement, mediation, arbitration decision,
court decision or otherwise) and PNB shall not have paid PageNet the amount (if
any) which PNB is obligated to pay pursuant to such resolution within thirty
(30) days after the effective date of such resolution.
10.2. Breach. Either party may terminate this Agreement if the other
party commits a material breach or default of any of the provisions of this
Agreement (other than actual or potential material breaches or defaults to
16
which Section 3.2(d) hereof applies) and such breach or default has not been
cured within thirty (30) days after receipt by the breaching party of the
non-breaching party's notice of such breach or default. Either party may
terminate this Agreement if the other party commits any other breach or
default of any of the provisions of this Agreement (other than actual or
potential other breaches or defaults to which Section 3.2(d) hereof applies)
and such breach or default has not been cured within sixty (60) days after
receipt by the breaching party of the non-breaching party's notice of such
breach or default.
10.3. Government Restrictions. Either party may terminate this
Agreement if the performance of this Agreement pursuant to the terms hereof has
been prohibited or made illegal by any Brazilian Regulator, court, governmental
authority or regulatory body, by a final, nonappealable rule, decision, order or
law and the parties are unable to reconstitute this Agreement pursuant to
Section 13.4.
10.4. Consequences of Termination. The termination of this Agreement
pursuant to this Section 10 shall not relieve the parties of any obligations
incurred hereunder up to and including the date of termination.
Section 11. Indemnification.
11.1. PageNet Indemnity. Subject to any limitations in Section 5 and any
other terms of this Agreement, PageNet shall indemnify and hold harmless PNB,
its Affiliates, their respective directors, officers, employees, agents,
subsidiaries, affiliates, subcontractors and assignees, or any of them, from and
against all claims, damages and liabilities resulting from the failure by
PageNet to perform its obligations hereunder. Notwithstanding any provision of
this Agreement, in no event shall PageNet nor its directors, officers, employees
or agents be liable for any loss of profits, loss of business, loss of goodwill,
indirect, special, exemplary, consequential or punitive damages that may be
suffered by PNB, its directors, officers, employees' agents or End-users arising
from the performance or non-performance of the provisions of this Agreement or
any acts or omissions associated therewith, including, without limitation, all
activities related to the use of any Equipment furnished hereunder or to the
provision of PageNet Services hereunder, whether the basis of the liability is
breach of contract, tort (including negligence and strict liability), statutes,
or any legal theory.
11.2. PNB Indemnity. PNB shall indemnify and hold harmless PageNet, its
Affiliates, their respective directors, officers, employees, agents,
subsidiaries, affiliates, subcontractors and assignees, or any of them, from and
against all claims, damages and liabilities resulting from PageNet's performance
of its obligations hereunder and from the acts or omissions of PNB or the
17
failure by PNB to perform its obligations hereunder or any acts or omissions
associated therewith.
Section 12. Confidentiality.
All Confidential Information made available by one party (the "Disclosing
Party") to the other party (the "Receiving Party") in connection with this
Agreement shall be held in strict confidence by the Receiving Party for a period
extending through the date five (5) years from the expiration or termination of
this Agreement, provided that such Confidential Information continues to be
"Confidential Information" as defined hereunder, during such five-year period.
Such Confidential Information shall not be disclosed or used by the Receiving
Party except as expressly contemplated in this Agreement. Each party shall
require its employees, officers, directors and agents to whom Confidential
Information is disclosed to keep such Confidential Information in strict
confidence and to disclose the same to no one except those (i) authorized in
writing by the Disclosing Party and (ii) entering into an appropriate agreement
to keep the Confidential Information confidential. Nothing in this Agreement
shall be construed as a grant by either party to the other of rights in
Confidential Information belonging to the Disclosing Party, except the right to
use Confidential Information for the purposes and to the extent set forth in
this Agreement. Each party shall, upon termination of this Agreement or request
of the other party, either (A) promptly return to the other all writings,
drawings, diagrams, tapes, records, discs, other forms of data storage, other
documents or materials constituting originals or copies of Confidential
Information furnished by the other party, or (B) destroy or erase such originals
and copies. If at any time either party has acknowledged or becomes aware of any
potential or actual unauthorized use, transfer or disclosure of Confidential
Information belonging to the other party, such party shall promptly notify the
other party and the other party shall have the exclusive right to take whatever
action it deems appropriate with respect thereto. In the event that any action
or proceeding is brought as a result of such unauthorized use, transfer or
disclosure, the other party shall fully cooperate with the party owning the
Confidential Information involved. Any Confidential Information reasonably
classifiable as a trade secret shall, as between the parties and their
employees, remain a trade secret and be fully protected as such in spite of any
failure by the Disclosing Party to constantly admonish the Receiving Party of
the trade secret nature of the information disclosed or because of any failure
of the Disclosing Party to pursue an active course of conduct designed to inform
the Receiving Party or its employees that the secrets and information are to
remain confidential.
Section 13. Miscellaneous.
13.1. Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns; provided,
18
however, that this Agreement may not be assigned by either party in any manner,
including in connection with the acquisition of the stock or assets of such
party, without the prior written consent of the other; provided, however, that
PNB shall also have the right to assign or transfer the License pursuant to and
in accordance with Section 3.4(c) hereof.
13.2. Notices.
(i) All communications under this Agreement shall be in writing and shall
be delivered by hand, internationally recognized air courier or facsimile
transmission, charges prepaid:
(1) if to PageNet, at 0000 Xxxxxxx Xxxx Xxxxxxxxx, Xxxxx, Xxxxx
00000, facsimile number (000) 000-0000 marked for attention of Xxxxx X.
Xxxxxxxx (with a copy to Xxxxxxx, Xxxx & Xxxxx LLP, 000 Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000-0000, facsimile number (000) 000-0000 Attn:
Xxxxx X. Xxxxxxx), or at such other address as PageNet may have furnished
in writing to PNB,
(2) if to PNB, at Xxxxxxx xxx Xxxxxx Xxxxxx, 00,000 World Trade
Center, 17th Floor, Suite 26, Sao Paulo, Brazil, facsimile number
_______________, marked for the attention of the President (with a copy to
Xavier, Bernardes, Braganca, Xx. Xxxxxx 0000, Xxx Xxxxx, Xxxxxx, facsimile
number 011-55-11-282-5580, Attn: M. Xxxxxx Xxxxx), or at such other address
as it may have furnished in writing to the Investors.
(ii) Any notice so addressed shall be deemed to be given: if delivered by
hand, on the date of such delivery; if sent by courier, on the third
business day following the date of such mailing; and if mailed by
registered or certified airmail, on the sixth business day after the date
of such mailing.
13.3. Relationship of the Parties. PageNet's relationship to PNB is
that of an independent contractor and no other relationship is intended or
created between the parties hereto. Nothing in this Agreement shall be construed
to make PageNet an agent or partner of PNB.
13.4. Severability. If any provision of this Agreement is declared or
found to be illegal, unenforceable, or void, the parties shall negotiate in good
faith to agree on a substitute provision that is legal and enforceable and is as
nearly as possible consistent with the intentions underlying the original
provision. If the remainder of this Agreement is not materially affected by such
declaration or finding and is capable of substantial performance, then the
remainder shall be enforced to the extent permitted by law.
19
13.5. No Waiver. No delay or omission by either party to exercise any
right or power shall impair any such right or power or be construed to be a
waiver thereof. A waiver by any party of any of the covenants, conditions or
contracts to be performed by the other or any breach thereof shall not be
construed to be a waiver of any succeeding breach thereof, or of any other
covenant, condition or contract herein contained. No change, waiver or discharge
hereof shall be valid unless it is in writing, and signed by an authorized
representative of the party against which such change, waiver or discharge is
sought to be enforced.
13.6. Counterparts. This Agreement may be executed by the parties in
counterpart copies which together shall constitute the entire agreement between
the parties hereto. When executed, this Agreement shall supersede all prior and
contemporaneous agreements, written or oral, of the parties with respect to the
subject matter hereof and this Agreement may not be amended except by a writing
signed by the authorized representative of each party.
13.7. Sections and Section Headings. The headings of sections and
subsections are for reference only and shall not limit or control the meaning
thereof.
13.8. No Implied Rights or Remedies. Except as otherwise expressly
provided herein, nothing herein expressed or implied is intended or shall be
construed to confer upon or to give any person, firm or corporation, except PNB
and PageNet, any rights or remedies under or by reason of this Agreement.
13.9. Force Majeure. Subject to Sections 10.3 and 10.4, no party hereto
shall be liable to any other party for failure or delay in the performance of
any obligation required by this Agreement, if that failure or delay is due in
whole or in part to any cause beyond the reasonable control of that party,
including, but not limited to, strikes, work stoppages, fires, accidents, acts
of government, whether legal or otherwise, or acts of God provided notice
thereof is given to the other party. The period of time within which any party
hereto is required to fulfill its obligations under this Agreement shall be
extended by the period of the delay resulting from any of the foregoing events.
13.10. Governing Law. This Agreement shall be governed by and construed in
accordance with the substantive law of the State of New York, excluding its
conflicts of law rules.
13.11. Arbitration. All disputes and differences arising from or in
connection with this Agreement, and in all relations between the Parties with
respect to the subject matter hereof, shall be finally settled by binding
arbitration in accordance with the International Arbitration Rules of the
American Arbitration Association. The number of arbitrators shall be three, the
20
place of arbitration shall be New York, New York, and the arbitration
proceedings shall be conducted in English.
13.12. Construction. The authoritative text of this Agreement shall be
the English text.
[Rest of Page Intentionally Left Blank]
21
In witness whereof, the parties hereto have executed this Agreement the day
and year first above written.
PAGING NETWORK DO BRASIL S.A.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
PAGING NETWORK, INC.
By: /s/ Xxxx Xxxxxxx Xxxxx
-------------------------------
Name: Xxxx Xxxxxxx Xxxxx
Title: Attorney-in-fact
22
Exhibit A
PageNet Services
1. PageNet has identified Messrs. Xxxxxx Xxxxxx, Xxxxx Fregenel and [-] to act
as on-site senior management of PNB.
2. Management supervision of PNB will be supplied by PageNet designated senior
management as may be deemed necessary or appropriate by PageNet to its
performance of its obligations under this Agreement.
3. Participation of other PageNet designated employees with particular skills
on an as-needed basis, as may be deemed necessary or appropriate by PageNet to
its performance of its obligations under this Agreement.
4. Training, both in the United States of America and Brazil, of key PNB
employees, as shall be agreed to by PNB and PageNet.
5. PageNet will provide PNB, on an exclusive basis in the Territory, such
technology, software, new product development, systems design, etc. as PageNet
determines shall be necessary and appropriate, subject to the provisions of the
Agreement.
6. Interface with vendors to seek favorable prices and services, comparable to
those obtained by PageNet for itself.
7. Provide, at PNB's request, marketing, advertising and public relations
material on a pass-through basis (i.e. PNB will not pay any fee for use of such
materials but will pay for incremental costs, such as translation).
8. PageNet will use its information systems expertise to select an appropriate
billing and information system for PNB and PageNet's information systems
personnel will assist in implementation of such billing and information systems.
9. PNB will have access to all VoiceNow-Registered Trademark- technology and
other personal communications services product developments and other paging
technologies to which PageNet has access.
10. Appropriate persons from the PNB management team shall be invited to all
PageNet company-wide meetings of their counterparts in the United States
operations.
11. Such other services as shall be agreed to in writing by PNB and PageNet
from time to time.
23
Exhibit B
Marks
PAGENET
VOICENOW
Trade Names
PAGING NETWORK
