EXHIBIT 10.6
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AGREEMENT FOR SUPPLYING TELECOMMUNICATIONS INFRA-STRUCTURE AND OTHER COVENANTS
Entered into by:
TELECOMUNICACOES DE SAO PAULO S.A - TELESP; and
TELEFONICA EMPRESAS S.A.- TELEFONICA
WITH
AOL DO BRASIL LTDA. -AOL
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AGREEMENT FOR SUPPLYING TELECOMMUNICATIONS INFRA-STRUCTURE AND OTHER COVENANTS
By means of the present instrument, that among themselves they make:
TELECOMUNICACOES DE SAO PAULO S.A. - TELESP, a corporation with its headquarters
at Xxx Xxxxxxxxxx xx Xxxxxxxx, 000, in the City of Sao Paulo, State of Sao
Paulo, enrolled in the National Registry for Legal Entities under n(0)
02.558.157/0001-62, in this act duly represented in accordance to its Bylaws,
hereinafter simply called "TELESP";
TELEFONICA EMPRESAS S.A., a corporation with its headquarters at Xx. Xxxxxxx,
x(0)000/000, in the town of Barueri, State of Sao Paulo, enrolled in the
National Registry for Legal Entities under n(0)04.027.547/0001-31, in this act
duly represented in accordance to its Bylaws, hereinafter simply called
"TELEFONICA Empresas", and jointly with Telesp, as "TELEFONICA"; and
AOL BRASIL LTDA., a company, with its headquarters in the town of Xxxxx Xxxxx,
State of Sao Paulo, at Av. Industrial n(0) 600, 2(0) andar, enrolled in the
National Registry for Legal Entities under n(0) 03.032.579/0001-62, in this act
duly represented in accordance to its Articles of Association, hereinafter
simply called "AOL.";
each one hereinafter simply called "Party" and jointly "Parties",
WITNESSETH:
WHEREAS AOL has as its purpose, among others, the rendering of interactive
services (the "AOL Services", as herein defined);
WHEREAS AOL SERVICE is made available for consultation and use by its
subscribers or, partially, by visiting users anywhere in the planet through the
connection via Internet;
WHEREAS TELEFONICA has both the experience and the technical competence for
providing DIAL UP access service, being duly authorized by ANATEL to explore
telecommunication services;
WHEREAS AOL wishes to retain a big and representative volume of
telecommunications services with TELEFONICA, especially for providing AOL
Services for its subscribers, for a determined period of time, allowing for the
optimization of TELEFONICA's telephone network resources;
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WHEREAS the underlined expressions in the present Agreement and/or in its
Exhibits, which are initialed by the Parties, constitute an integrant part of
the Agreement (the "Exhibits"), in initial capital letters shall have the
meaning attributed to them in this Agreement and in the Exhibits;
In witness whereof the Parties execute the present Agreement for Supplying
Telecommunications Infra-Structure for Access to Internet Services and Other
Covenants ("Agreement"), that shall be governed by the following terms and
conditions:
1 - THE OBJECT
1.1. Through the present Agreement, in the best terms of the law, TELEFONICA
agrees to supply AOL with the telecommunications infra-structure which
is necessary for providing access to AOL Services via narrow band
(i.e., by means of the dialed services, also called "dial-up" or
Commuted "IP"), as well as with infra-structure for connection of the
AOL Network to the Internet with Web Channel (hereinafter simply called
" TLF Web Channel) under the conditions contained herein below and in
the Exhibits to this Agreement - (jointly called "Infra-Structure"), in
the localities of Region III of the General Plan of Grant - GPG,
approved by Decree n(0) 2.534 of April 2, 1998, assisted by the
TELESP's Commuted Fixed Telecommunications System where AOL has been
providing and shall eventually provide access to AOL Services.
1.2. TELEFONICA shall provide AOL Infra-Structure by means of its own
Internet Protocol (IP) network or through a network managed by it
("TELEFONICA Network"), so as to (1) provide the dial-up connection
that shall provide AOL's Subscribers and its visiting users with access
to the Internet and to AOL's Services, and (2) to make the rendering of
AOL's services viable to AOL, in the localities of Region III of the
GPG, assisted by TELEFONICA, where AOL provides its services on this
date, as listed in Exhibit G ("Lists of the Localities to Be
Assisted"), of this Agreement.
1.2.1. AOL's Subscribers, for the purposes of this Agreement are only
those situated in Region III of the GPG which use the
TELEFONICA Network, for Dial-up access to AOL Services (the
"AOL Subscribers).
1.2.2. The scope, the diversity and the amount of localities of
Region III whereto AOL is providing services on this date, as
listed in Exhibit G of this Agreement, are inherent conditions
to the present Agreement, as well as the eventual
amplifications requested by AOL.
1.3 The Infra-Structure to be supplied to AOL shall consist of the
installation and availability of the means that will allow (1) AOL's
interconnection (herein defined as AOL's Network servers which are
processing its services and products, and their respective equipment
for data communication), to the TELEFONICA network, (2) access of AOL's
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Subscribers to AOL Services via Access Modems, specified for each
location, and (3) change of traffic and band availability for Internet
access.
1.3.1. AOL Network's interconnection to the TELEFONICA Network shall
be made through a dedicated digital access and it shall be
shaped taking into consideration the IP traffic generated by
(2) and (3), as described herein below:
(a) For AOL Subscribers' access through the Access Modems, item 18
27 (2) above, the dimensioning shall take into consideration
the description of Exhibit C, item 1.1.
(b) For traffic change and band availability for Internet access,
item (3) above, the dimensioning shall comply with what has
been set forth in 2.11 below.
1.3.2. The number of Access Modems shall initially be the ones
contained in Exhibit G.
1.3.3. Being the provisions of the present instrument and in Exhibit
E complied with, the Parties will be able to agree on the
re-dimensioning of the amount of available modems.
1.4 When supplying Infra-Structure, TELEFONICA makes itself
responsible for the administration, configuration, security,
operation, maintenance and management of TELEFONICA's Access
Modems, so as to guarantee the availability of such Access
Modems, in accordance with the technical configurations
described in this Agreement and its Exhibits, so as to allow
the accesses set forth in 1.3 above.
1.5. The Parties agree that the prices and conditions of the
Services hereby hired apply to all [**], whether regional or
not, either existing or that may eventually be created by
ANATEL.
2- TELEFONICA'S OBLIGATIONS AND RESPONSIBILITIES
When supplying TELEFONICA Network's Infra-Structure to AOL, pursuant to the
terms of this Agreement, TELEFONICA shall have the following obligations and
responsibilities, with no impairment to the other obligations and
responsibilities established in the Exhibits:
2.1. To supply, install and configure the necessary equipment for
providing Infra-Structure in the localities where AOL performs
or shall eventually perform, within the parameters determined
in this Agreement and its Exhibits, so as to allow the
accesses established in 1.3. above.
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2.2. To supply the necessary equipment for the TELEFONICA Network's
connection to the AOL Network., as defined in Exhibit C.
2.3. To provide Infra-Structure for access to AOL Services pursuant
to the terms and conditions set forth in this Agreement and
its Exhibits.
2.4. To provide technical, preventive and corrective assistance and
maintenance and to solve problems or faults in TELEFONICA's
equipment which form the Infra-Structure, complying with
conditions and the terms set forth in Exhibits B and D to this
Agreement.
2.5. Concerning AOL Network, to comply with the specifications set
forth by AOL and provided for in Exhibit C.
2.5.1. TELEFONICA shall maintain the blockage of return
calls in all the access trunks which are a part of
the Infra-Structure, under the penalty of having to
solely bear all the costs of such calls, in case they
occur.
2.6. TELEFONICA agrees to keep working teams and technical
assistance, in accordance with what has been set forth in
Exhibit B to this Agreement.
2.7. Whenever there occur problems that make Infra-Structure
providing unviable and which result in suspension or
unavailability of access to TELEFONICA, TELEFONICA shall be
responsible for solving such problems within the maximum term
allowed in the Exhibits, so as to guarantee the standard of
availability and the compliance with Service Levels set forth
in Exhibit D.
2.8. TELEFONICA further agrees to comply with and fulfill all the
operational procedures described in Exhibit B - Objective of
the Services.
2.9. TELEFONICA agrees, on its own, on behalf of its employees,
representatives, service providers and advisors, on any
account, to never make use of information (such as: names,
commercial and home addresses, telephone numbers, log-ins,
e-mails, Web pages, used Internet Services, etc.) of AOL's
Subscribers or its visiting users who navigate through its
Infra-Structure, except for TELEFONICA's technical and
operational purposes, pursuant to this Agreement, being
expressly forbidden the commercial use of such information.
2.10. TELEFONICA shall adopt all the necessary measures (inclusive
through the implementation of adequate security measures) to
prevent third parties from having access to any information
which is in the TELEFONICA Network regarding AOL's Subscribers
or its visiting users.
2.11. TELEFONICA shall appoint a support team dedicated to AOL,
which will be responsible for supervising the rendering of
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Services, as defined in Exhibit A hereto, and the relationship
between the Parties. This support team will be formed by an
Accounts Manager and a Projects Manager who (i) shall be
responsible for the construction, maintenance and operation of
the network's infra-structure, (ii) shall have competence, in
the day-by-day routine, to adopt measures so as to assure
AOL's satisfaction with the Services, and (iii) shall be
responsible to assure TELEFONICA's performance regarding its
obligations, herein set forth. The persons who integrate such
a support team will be the first contact point to AOL.
2.12. The services will comply with, or exceed the performance
standards identified in Exhibit D, an integrant part to the
present Agreement (such performance standards are collectively
called "Service Levels"). In case TELEFONICA fails in the
attendance of any Service Level, then additionally to any
other rights that AOL may have, TELEFONICA shall, free of
additional costs to AOL, (i) investigate and report the causes
of the problem; (ii) advise AOL about the measures that are
being taken for the resolution of such problems; (iii) correct
the problem so that the Service Levels can be catered for as
soon as possible; and (iv) adopt adequate preventive measures
to avoid the re-incidence of the problem.
2.13. The dimensioning of the Web Channel will be carried out in the
following way: for downstream traffic (being thus defined the
traffic stemming from the TELEFONICA Network to the AOL
Network), which shall have as its base [**] kbps by Access
Modem; and (b) for the upstream traffic (being thus defined
the traffic stemming from AOL Network to TELEFONICA Network),
TELEFONICA shall make [**].
2.13.1. All traffic exceeding the parameters set forth in (a)
above shall [**] of a [**] between the Parties.
3- AOL'S OBLIGATIONS AND RESPONSIBILITIES
These are AOL's obligations and responsibilities:
3.1. AOL shall be exclusively responsible for certifying and
validating the access of its Subscribers and visiting users to
the Internet through the AOL Service.
3.2. AOL shall create and manage all the maintenance, password
creation and access codes systems necessary for its
Subscribers and visiting users to make use of the AOL
Services.
3.3. AOL shall be solely responsible for the relationship with AOL
Subscribers and visiting users, including all the interface of
hardware and software, marketing and sales, system and
subscription charges and any intermediation with AOL
Subscribers and visiting users (Service Central(s)), as well
as for part of the programming (content, programming,
services, information, entertainment, etc.), and shall exempt
TELEFONICA from any liability arisen from such activities,
pursuant to the provisions of Clause Nine below.
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3.4. As of January 1, 2003, AOL will adopt the necessary measures
to make sure that [**] the [**] from [**] will be [**] to
[**], binding itself to this effect for (i) just disclosing or
supplying AOL Subscribers with [**] corresponding to the [**]
of [**], and (ii) in the localities of Region III of the GPG
assisted by TELEFONICA, to [**] in [**].
3.5. The non-compliance with the provision of clause 3.4 above, by
virtue of AOL's voluntary act, shall imply a non-compensatory
fine to be paid by AOL to TELEFONICA, in the amount of [**]
REALS (R$[**]) with no loss of TELEFONICA 's power to
terminate the present instrument through written notification
to AOL, pursuant to Clause 7.2 (ii) below.
3.6. It is henceforth agreed that AOL will be automatically
exempted from the obligation aforementioned in 3.4 and 3.5 in
the localities where AOL provides AOL Services and provided
that TELEFONICA has refused or failed to supply
Infra-Structure during the term set forth in this Agreement
and/or its Exhibits.
3.7. In case AOL fails to comply with the provisions of Clause 3.4
above, exclusively by virtue of a Force Majeure Event, AOL
will be bound to assure to TELEFONICA the right of the direct
interconnection of the TELEFONICA Network to the AOL Network,
pursuant to the terms of the applicable regulation, aiming at
allowing TELEFONICA to [**] the [**] at [**] and [**] at the
[**] in the [**].
3.8. AOL shall inform TELEFONICA, in writing, about its interest in
performing in new localities of the Region of the GPG covered
by TELEFONICA, by sending an Application Form for New
Localities, pursuant to the draft that integrates this
Agreement under the form of Exhibit H. As of the receiving
date of the aforementioned Form, TELEFONICA shall inform AOL,
through the execution and return of the aforementioned Form,
not later than [**] ((**]) days counted as of the date it was
received. For the purposes of the present Agreement,
TELEFONICA's omission within the aforementioned term, shall
feature a waiver to the right to supply Infra-Structure in the
localities in question. The aforementioned Application Form
for New Localities, duly executed by the parties, shall
constitute an addendum to the present Agreement, so as to
include such new locality in its Exhibit G.
3.9. As of the date of the execution of this Agreement, AOL will
effect [**], herein understood exclusively as the national
traffic between AOL and the TELEFONICA Network.
3.9.1. AOL agrees [**] the [**] to another [**] or to a [**]
for (i) those that provide Dial Up access services
and/ or broad band (modality tunneling) outside the
State of Sao Paulo; (ii) AOL's Subscribers and/or
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America Online Latin America Inc.'s, as well as the
companies directly or indirectly controlled by AOL
Time Warner Inc. in Brasil; and (iii) the content
servers, in the cases when such third parties with
which it has entered into agreements related to the
supply of specific content and/or related to the
joint promotion, on any account, of AOL's Trademark
and Services, and provided that such connection has
as specific purpose the [**] and does not [**]. AOL
shall inform TELEFONICA about the [**] it [**].
3.9.2. The connections which are [**] on clause 3.9.1 above
shall be [**] by TELEFONICA, a [**] reasonably
denied, within a [**]-day ([**]) term counted as of
the written notification thereof.
4- PRICE AND FORMS OF PAYMENT
4.1. In consideration of the services and of the infra-structure
rendered by virtue of the performance of the present
Agreement, AOL agrees to pay to TELEFONICA, monthly, the
amount contained in the Price and Discount List contained in
Exhibit F hereto. TELEFONICA shall not charge AOL for any
Access Modem prior to its Final Acceptance by AOL.
4.2. The collection and contesting procedures of the amounts are
listed in Exhibit I- Collection and Contesting Procedures.
4.3 . Being the other provisions contained in this Agreement and
in its Exhibits complied with, besides the amounts
aforementioned, each Party shall bear their respective costs
related to the equipment and other means which are necessary
to allow the supply, on the part of TELEFONICA, and the
fruition, on the part of AOL of the Infra-Structure, and it
shall perform the necessary investments for complying with its
obligations, as set forth by or arisen from this Agreement.
5- BETTER CONDITIONS
5.1. Being the provisions contained in the Exhibits to this
Agreement complied with, TELEFONICA agrees to comply with the
provisions set forth in Exhibit F hereto.
6- VALIDITY
6.1. The present Agreement shall be in force on the date of its
execution and aims at straightening out service rendering by
TELEFONICA to AOL, from its very beginning, that is, on
January 1, 2003 (the "Effective Date") and this Agreement's
validity shall end on December 31, 2004 (being this period of
time called "Validity Term"), being, nevertheless affirmed
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that the providing, as well as its respective payments,
related to the supply of Services and Infra-Structure of the
TELEFONICA Network to AOL by TELEFONICA, retained previously
to the present date, shall be effected in full until January
31, 2003, pursuant to the Agreement of Telecommunications
Services and Other Covenants, entered into between AOL and
TELEFONICA on March 7, 2002. This Agreement will be
immediately revoked as of January 1, 2003, when this
Agreement's terms and conditions shall start to govern any
hiring of TELEFONICA's Services and Infra-Structure by AOL in
the localities of Region III, where AOL performs or shall
eventually perform.
6.1.1. The Parties, as of the present date, agree to ratify
all the necessary instruments for the formalization
of the agreements' revocation established in Clause
6.1 above (including the respective terms for
termination and expiration).
7- TERMINATION
7.1. AOL may legally terminate the present Agreement, with no lien
whatsoever, independently of any judicial or extra-judicial
procedure or notification and simply through a written
notification to TELEFONICA, in case TELEFONICA:
(i) sub-hires third parties or transfers to third parties, in
the whole or partially, its rights and obligations stemming
from this Agreement, without AOL's previous written
authorization.
(ii) fails to comply with the obligation established in this
Agreement, which fault is not corrected within the terms
defined by this Agreement or in the absence of express
provision, within a [**]-day ([**]) term, subsequent to AOL's
notification.
(iii) files Chapter 11 reorganization or has it ruled,
confesses or requests its bankruptcy or dissolution or yet, if
it eventually starts a process of judicial or extra-judicial
liquidation.
(iv) performs at least [**] ([**]) repeated infractions of
similar nature to this Agreement (even if remedied) and
provided that each infraction [**].
7.1.1. In the cases set forth in (i), (ii) and (iv)
TELEFONICA will be subject to the fine established in
7.3. below.
7.2. TELEFONICA will be able to legally terminate this present
Agreement, with no lien whatsoever, independently of any
judicial or extra-judicial procedure or notification, simply
through a written notification to AOL, in case AOL:
(i) transfers to third parties, in the whole or partially, its
rights and obligations stemming from this Agreement, without
TELEFONICA's previous written authorization.
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(ii) fails to comply with the obligation established in this
Agreement, which fault is not corrected within the terms set
forth in this Agreement, or, in the absence of any express
determination, within the [**]-day term, subsequent to
TELEFONICA's notification.
(iii) files Chapter 11 reorganization or has it ruled,
confesses or requests its bankruptcy or dissolution or yet, if
it eventually starts a process of judicial or extra-judicial
liquidation.
(iv) performs at least [**] ([**]) repeated infractions of
similar nature to this Agreement (even if remedied), and
provided that each [**].
7.2.1. In the cases set forth in (i), (ii) and (iv), AOL
will be subject to the fine determined in 7.3. below.
7.3. The advanced termination without cause of the present
Agreement by AOL or by TELEFONICA, or in any hypotheses
established in Clauses 7.1 and 7.2 above and 7.6 below, shall
subject the Party that has given cause for the termination of
the Agreement to the payment of compensatory fine to the other
Party, within a [**]-day ([**]) term, counted as of the
termination date, equivalent to [**]% ([**] percent) of the
remaining overall value of the present Agreement, calculated
on the grounds of the Price List established in Exhibit F
(without the granting of any discount). For the purposes of
the calculation of such a fine, the following formula shall
apply: F = [**] x [**] x [**] x [**], where:
F = fine to be paid by the Party that has terminated
the Agreement;
P = Price of the Price List per modem (with no discounts)
established in Exhibit F above.
NAM = number of Access Modems able to be used by AOL in the
month previous to the termination month;
NM = number of months still to go until the expiration of
the Agreement.
7.3.1. TELESP and TELEFONICA Empresas solidarily assume the
obligation of paying the fine arisen from the
termination of the Agreement by any of them, pursuant
to the provision of clause 7.3 above. AOL assumes the
obligation of paying the fine arisen from the
Agreement's termination, on the grounds of clause
7.3. above. The payment of the aforementioned fine
shall be always made to AOL or to TELESP, depending
on whether the Violating Party is respectively
TELEFONICA or AOL.
7.4. Whatever the case of advanced termination (with cause, on the
grounds of clause 7.2 or without cause, on the grounds of
clause 7.3), requested by TELEFONICA, it shall keep supplying
Infra-Structure to AOL, hired pursuant to the terms of this
Agreement, under the same conditions hereby agreed upon, and
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with the payment hereby established, for the term of up to
[**] ([**]) days, counted as of the date of the aforementioned
termination, without any loss to the obligation of fine
payment, as the case may be, in accordance to clause 7.3.
7.5. Except for the provisions of clauses 7.4 and 7.7, in case of
expiration or termination of this Agreement, AOL and
TELEFONICA agree to immediately stop the use and to give back
to the Party which has the ownership, the eventual Classified
Information (as defined herein below) related to this
Agreement, as well as any codes, accesses or addresses
supplied by both Parties.
7.6. In case of (i) acquisition of the Control of one of the
Parties or of any of its respective parent companies, either
directly or indirectly, in a single transaction or in a series
of correlated transactions, by a Competing Entity, (ii) all or
a significant part of all the assets of the one of the Parties
or of its respective parent companies are merged with a
Competing Entity (including a merger that gives rise to the
formation of a new entity), then, at any time, subsequent to
such an event, the opposing Party may, at its exclusive
discretion, terminate this Agreement through a notification to
the other Party. Such hypotheses shall be considered, for the
effects of this agreement, as "transference to third parties",
as set forth in 7.1 (i) and 7.2 (i).
7.7. Due to the expiration of the Validity Term, TELEFONICA shall
(i) provide AOL with reasonable assistance and consulting, so
as to assure a smooth transference, in proper time, of the
Services provided by TELEFONICA, and (ii) keep providing the
Services, then expiring or about to expire, to AOL (at prices
in force on the date of that expiration) and otherwise perform
all its obligations, pursuant to the provisions of this
Agreement for a period requested by AOL, which shall not
exceed [**] ([**]) days.
8-CONFIDENTIALITY AND INTELECTUAL PROPERTY
8.1. The parties acknowledge that, during the Validity Period
certain classified information can be disclosed to the other
party.
8.2. Through the present Agreement, the parties agree: (a) to take
all the necessary measures to prevent the reproduction or
disclosure of Classified Information of the other party,
similarly to the measures it takes to protect its own
classified information; (b) to keep the access to such
Classified Information of the other party restricted to the
least possible number of their employees; (c) not to disclose
such classified Information to any third party or to any
person besides those who, due to the nature of their
functions, need to know them; (d) not to use such information
for its own profit or for the profit of third parties; (e) to
stop using such Classified Information in case of termination,
resolution or expiration of this agreement and of the
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agreements arisen thereof, returning to the other party all
the lists, files and other materials comprising or relating to
the Classified Information, and informing all its managers,
employees, representatives, service providers and others
involved, that the Classified Information belonging to the
other party can no longer be used; and (f) not to use, except
by virtue of express previous written consent of the
respective holder, any name, trademark, logotype or symbol
belonging to the other party, and/or to the suppliers thereof,
neither make any statement or reference that shows the
existence of any bond or contractual or commercial
relationship with them, without having such reference or
statement been approved, in writing, by the opposing party
and/or the suppliers or users thereof, as the case may be.
8.3. The term "Classified Information" as used in this Agreement,
means each and every information disclosed from one party to
the other, and particularly the terms of this Agreement, all
the knowledge and information including methods, processes,
costs spreadsheets, commercial offers, technological
information and about the parties' clients, besides
copyrights, trademarks and patents, secrets of trade and
industry and other intellectual property rights of the
Disclosing Party and/or of the suppliers and users thereof and
commercial secrets, accounting, financial, fiscal and other
information related to the parties' activities and which
constitute their exclusive ownership.
8.4. Notwithstanding what has been set forth in this Clause, the
parties can disclose Classified Information (1) by virtue of
public authority's determination or due to judicial order and
(2) due to legal duty, from time to time; (3) as requested by
the United States Securities and Exchange Commission. In such
cases, the party that discloses shall immediately inform the
other party about the effected disclosure.
8.5. The confidentiality commitment hereby agreed upon between the
parties shall be kept for a [**]-year ([**]) term counted as
of: (i) the date of the end of the Validity Term, or (ii) the
date of an eventual advanced termination hereof, independently
of its reason.
8.6. Violation of the duties set forth in this Clause 8 or the
non-compliance with the confidentiality duties established
herein, shall subject the Violating Party to reimbursement of
all the losses incurred by the party injured for such a
violation, being this obligation to indemnify exclusively
restricted to the direct damages duly evidenced that the
injured party shall eventually undergo by virtue of the
non-compliance with the CONFIDENTIALITY duties herein agreed
upon.
9-INDEMNIFICATIONS
9.1. Each Party agrees to indemnify and exempt the other Party from
liability regarding losses and damages incurred by the other
Party, as a result of any third party's claims on the grounds
of (a) violation by one of the Parties of any obligation,
statement or guarantee set forth in the present Agreement or
(b) damages caused by malice or fault on the part of its
employees and/ or hired staff, which damages are to be
verified in a proper judicial suit. This clause shall apply
solely to the cases for which there is no specific penalty
defined in this Agreement and in its Exhibits.
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9.2. AOL agrees to indemnify, defend and exempt TELEFONICA from
liability regarding the losses arisen from any third parties'
claims by violation of intellectual property rights concerning
any materials developed by AOL supplied to TELEFONICA for the
rendering of Services. Furthermore, TELEFONICA agrees to
indemnify, defend and exempt AOL from liability regarding the
losses arisen from any third parties' claims for violation of
intellectual property rights by virtue of the Services, from
any materials or services used for providing Services or from
any other developed materials.
9.3. By default of the provisions related to the services
availability, TELEFONICA shall be solely exclusively
responsible for the granting of the discounts set forth
herein, being not owed to AOL any additional amounts, on any
other account. Besides, the Parties agree that, in any event,
any damages that TELEFONICA shall eventually be condemned to
pay as damages shall never exceed the cumulated value paid by
AOL to TELEFONICA for the hired and provided services, in
accordance with the terms of this instrument and its Exhibits
in the last [**] ([**]) payments preceding the date of the
occurrence of the event which gave rise to such damages. The
cumulated value shall be calculated by adding the total
amounts paid in each invoice.
9.3.1. Notwithstanding the foregoing, such limitations shall
not apply to damages caused by violations of one of
the Parties of any obligation related to the
confidentiality set forth in this Agreement.
10-STATEMENTS AND GUARANTEES
10.1 TELEFONICA declares that the Services provided to AOL are in
full consonance with (a) the specifications presented in
Exhibit C, applicable to such Services and (b) the federal,
state and local applicable laws and regulations presently in
force.
10.2. The Parties declare that the Services shall not violate, and
that the other Party shall comply with its responsibilities
arisen from this Agreement, so as not to violate or establish
an infraction or undue misappropriation of any patent,
copyright, trademark or any other property rights of any third
party.
10.3. Each Party declares and guarantees that (i) it has the
necessary power and competence to hire and to comply with the
obligations and transactions set forth in the Agreement; and
(ii) the execution, delivery and compliance with the Agreement
and the accomplishment of the transactions established in the
Agreement have been duly authorized, in accordance with the
necessary procedures of the respective Party.
11- FORCE MAJEURE
11.1. None of the Parties shall be considered in default of its
obligations, pursuant to this Agreement, if its performance is
13
impaired or delayed, directly or indirectly, in the cases of
acts of God or force majeure events and/or act or omission,
alien to their will and which could not have been avoided by
the Violating Party through the use of alternative sources,
contingent plans or other means (any event, a Force Majeure
Event). Notwithstanding what has been detailed herein, a fault
on the part of a TELEFONICA's supplier or sub-hired in failing
to comply with its obligations assumed in its agreement with
TELEFONICA shall not constitute a Force Majeure Event for
TELEFONICA, unless such a fault on the part of such supplier
is caused by a Force Majeure Event.
11.2. Any Party, whose performance is either impaired or delayed
shall promptly notify the other Party through telephonic
contact (to be confirmed in writing in up to [**] ([**]) week
days as of the beginning of such delay) and shall describe,
with reasonable details, the circumstances which have caused
such delay. To the extent that a Party can reasonably foresee
that it will be affected by a Force Majeure Event, this Party
shall immediately notify the other Party of this foreseeable
delay and describe, with reasonable details, the circumstances
causing that eventual delay.
11.3. In case a Force Majeure Event impairs or delays TELEFONICA's
performance for more than [**] ([**]) calendar days, then AOL
shall have the option of (i) modify the affected party of a
request, or cancel the affected party in this Agreement, and
the amounts due by force of this Agreement shall be
re-adjusted so as to reflect such expiration or modification,
without AOL incurring the payment of any fines and/or
penalties TELEFONICA shall not be entitled to any additional
payment on the part of AOL for costs or expenses incurred by
TELEFONICA as a consequence of a Force Majeure Event.
12- FINAL PROVISIONS.
12.1. This Agreement binds and/or benefits the Parties and any
successors, buyers or entities to which any of the Parties has
merged or consolidated into or to which one Party has sold or
transferred its full assets or a substantial part of it, with
no loss to the provisions of item 7.6 above. It is hereby
expressly forbidden to any of the parties to transfer, in the
whole or in part, the rights, obligations and guarantees
arisen from the present instrument, without the previous
written consent of the other Party, which cannot refuse to
deliver such a consent without a justifiable reason.
12.2. The Clauses to this Agreement, as well as its Exhibits, that
have, by nature, a perennial character, specially those
clauses related to intellectual property rights and
confidentiality, shall survive for a [**]-year ([**]) term
subsequent to the expiration or termination of this Agreement.
12.3. Each Party shall appoint a representative who will be
authorized to represent it in all subject matters related to
this Agreement. In case one of the Parties eventually replaces
this representative, it must communicate such a fact to the
other Party, in writing.
14
12.4. In the assumption that any clause, term or provision of this
Agreement, conflicts with the law under which this Agreement
has been constituted or if any of the terms herein established
is considered invalid, unlawful or unenforceable by the
judiciary power, the validity, lawfulness or enforceability of
the other provisions will not be in any way affected or
impaired and the rest of this Agreement shall remain in full
force. In case the invalidity of such terms prevents the
compliance with the fundamental purpose of this Agreement, AOL
and TELEFONICA shall immediately start negotiations in good
faith to reimburse the affected Party for such fact in the
amount (cash or through services) equivalent to the amount
that such Party would have received in case such terms had not
been declared invalid.
12.5. Any omission or tolerance of any of the Parties in demanding
from the other Party the strict compliance with the
obligations hereby agreed upon or in performing any right
arisen from this Agreement will not feature renewal or waiver
of them, neither will it affect its right to perform them at
any time. The isolate or partial performance of any right,
resource, power or privilege arisen from this Agreement shall
not prevent another subsequent performance thereof or the
performance of any other right, resource, power or privilege.
12.6. The aforementioned Exhibits indicated below, initialed by the
Parties, integrate this Agreement for all the legal aims.
12.7. All the notices, requests, claims and determinations,
communications, and notifications stemming from the present
Agreement (except for the operational routine communications
or others specifically set forth herein) will be made in
writing, through correspondence, copied and docketed,
addressed to the addresses contained in the qualification of
the Parties or other addresses previously informed by them and
considered as having been duly delivered (i) when delivered in
person (ii) [**] ([**]) week day after they had been delivered
to an express mail service, with a trustful system of delivery
monitoring, or (iii) [**] ([**]) week days after the mailing
day when sent by mail, posted by registered mail, with
compulsory receipt and prepaid stamping. According to the
convenience of the Parties, the notifications and
communications arisen from the present Agreement can be made
via fac-simile, being, in this case, considered as validly
received if and when correctly sent. The parties hereupon
agree that the aforementioned addresses can be altered,
provided that one Party gives the other previous notice of
such new address and the date when it shall become effective.
12.7.1. The communications and notifications shall be
addressed to the addresses indicated in the
introduction and to the facsimile numbers of the
Parties' representatives herein below:
15
IF TO TELESP:
Attention: Internet Business Board
Xxx Xxxxxxxxxx xx Xxxxxxxx 000, 00(0)xxxxx SP/SP.
Fax: (00) 0000-0000
WITH A COPY TO:
Attention: Legal Director
Xxx Xxxxxxxxxx xx Xxxxxxxx 000, 00(0)xxxxx SP/SP.
Fax: (00) 0000-0000
IF TO TELEFONICA EMPRESAS;
Attention: Business Management
Av. Brigadeiro Xxxxx Lima, 1.188- 9(0)andar- SP/SP.
Fax: (00) 0000-0000
WITH A COPY TO:
Attention: Legal Director
Av. Brigadeiro Xxxxx Lima, 1.188- 13(0)andar- SP/SP.
Fax: (00) 0000-0000
IF TO AOL:
Attention: Legal Director
Xx. Xxxxxxxx xx Xxx Xxxxxxxxx, 0000 - Xx.
Xxxxxxxxxxxx - 0x. andar - CEP 05693-000 - Sao Paulo - SP -
Brasil
Fax: x00 (00) 0000 0000
WITH A COPY TO:
Attention: Operational Director
Xx. Xxxxxxxx xx Xxx Xxxxxxxxx, 0000 - Xx. Xxxxxxxxxxxx -
0x. andar - CEP 05693-000 - Sao Paulo - SP -
Brasil
Fax: x00 (00) 0000-0000
12.8. Each and every modification, alteration or addendum to the
present Agreement shall only be valid if made in writing,
signed by all the Parties.
12.9. The present Agreement constitutes the sole integral agreement
between the Parties concerning the hiring, object of this
instrument, and replaces all the other documents, letters or
memoranda between the Parties, as well as the oral
understandings carried out between them, prior to the present
date, except for the agreements already existing and in force,
which will remain in force only until December 31, 2002.
16
12.10. In case of any divergences between the present Agreement and
any of its Exhibits, the provisions of the Agreement shall
always entirely prevail.
12.10.1. The Parties agree that the present instrument shall
be governed by Brazilian law.
12.11. The present Agreement is irrevocably irreversibly executed,
binding the Parties and their successors, on any account. For
the purposes of the present Agreement, the successor shall be
the partnership arisen from a merger, purchase or
incorporation of any of the Parties, independently of its
having the same designation and/or corporate registration that
the Contracting Parties originally had.
12.12. Each Party agrees to continue to comply with their
obligations, in accordance with this Agreement while any
dispute is being settled, with the exception of the conditions
described in Exhibit 1.
12.13. Except for the cases where the previous release to the other
Party is impaired by law, none of the Parties shall issue any
press release, announcements and marketing material,
advertising or any other promotional materials referring to
the present Agreement or that make reference to the other
Party or to their commercial names, trademarks and service
marks, without the previous written approval of the other
Party, which cannot be denied or delayed without a justifiable
reason.
12.14. Nothing herein contained shall be construed as the creation of
any representation, partnership or any other type of company
formation between the Parties.
12.15. The Parties shall be responsible for the payment of their
respective salaries and other labor obligations, social
security and social contributions related to its employees,
concerning the Services to be provided, there being no bond
between the employees or the representatives of one party with
the other. The Parties agree to exempt from liability and to
defend the opposing party in any suit, claim or procedure
filed by its employees, as well as to indemnify it for direct
or indirect damages, which may incur by virtue of such suits,
claims or procedures. In such cases, each party shall be
responsible to denounce the Party which opposes the dispute,
and such opposing Party shall promptly request the withdrawal
of the Party from the suit.
12.16. Both the Parties shall act in accordance with all the laws and
regulations which are relevant to their respective
performance, under this Agreement. TELEFONICA shall not
collect, xxx, file or disclose any personal data concerning
AOL's members. Besides, TELEFONICA shall not monitor the
traffic content sent or transmitted to AOL's final consumers,
via Services.
12.17. The Parties elect the central court of the County of Sao Paulo
to settle any controversies arisen from this Agreement, with
the exclusion of any other, however privileged.
17
In witness whereof, the Parties execute this Agreement in 3 (three) counterparts
of equal form and content, in the presence of the witnesses hereinbelow.
Sao Paulo, February 28, 2003.
/s/ FABIO XXXXXXXXX XXXXXXX /s/ XXXX XXXXX PANSIN
--------------------------- ---------------------
Xxxxx Xxxxxxxxx Xxxxxxx Xxxx Xxxxx Xxxxxx
Vice President for Commercial and Residential Markets Network Vice President
TELECOMUNICACOES DE SAO PAULO S.A. - TELESP
/s/ XXXXXX XXXXXXXX XXXX /s/ XXXXXXX XXXXXXXX
--------------------------- ---------------------
Xxxxxx Xxxxxxxx Xxxx Xxxxxxx Xxxxxxxx
Sales Director Major Clients President
TELEFONICA EMPRESAS S.A.
/s/ XXXXXX XXXXXXX
---------------------------
XXXXXX XX XXXXX XXXXXXX
PRESIDENT
AOL BRASIL LTDA.
WITNESSES:
1. /s/ XXXXX E JEMS JR.
---------------------------
Name: Xxxxx E Jems Jr.
Identity Card: I
Enrollment in the National Taxpayers'Registry:
2. /s/ XXXXX XXXXX XXXXXXXX
---------------------------
Name: Xxxxx Xxxxx Xxxxxxxx
Identity Card: I
Enrollment in the National Taxpayers'Registry:
18
EXHIBIT A
DEFINITIONS
"ACCEPTANCE TEST PERIOD" has the meaning set forth in Section 3.1 of Exhibit E.
"ACCEPTED ORDER" has the meaning set forth in Section 1.3.1 of Exhibit E.
"ACCESS PORTS" mean each of the installed modems part of the infrastructure
required for the rendering of Services by Telefonica in each of the localities
listed in Exhibit G and in others localities, which may be requested by AOL
which are used for Dial Up access by AOL Subscribers.
"ADDITIONAL ACCESS PORTS" means Access Ports in addition to (but not including)
Finally Accepted Access Ports to be made available by Telefonica for AOL's use
in accordance with Section 1 of the Agreement; provided that under no
circumstances shall Additional Access Ports include (a) Finally Accepted Access
Ports, or (b) Access Ports Ports which (i) have been ordered by AOL, (ii) have
been delivered by Telefonica, and (iii) have not yet received Final Acceptance
by AOL.
"AFFILIATE" means, with respect to any entity, any other entity Controlling,
Controlled by or under common Control with such entity or belonging to the same
economic group. With respect to AOL, an "Affiliate" also means any entity which
operates or distributes, or is authorized to operate or distribute, an AOL
Information Service.
"AOL CONTENT" means information, materials, text, photos, resources, products,
services, advertisement, promotions, interconnections, cursors, technology and
software contained in the AOL Service, including those available at AOL portals
in the Internet.
"AOL INFORMATION SERVICE" means an Interactive Service containing branding owned
or controlled by AOL or an AOL Affiliate, or using all or a portion of AOL's or
an AOL Affiliate's network or backend systems.
"AOL SERVICE(S)" means all interactive services offered by AOL to final
consumers in Brazil, including access to Internet and the AOL portal in the
Internet, as well as any other products and services held, controlled,
distributed or authorized to be distributed by or through AOL, its Affiliate or
by any of its controled or controlling entity, or by any entity belonging to
AOL's economic group, at AOL's sole discretion
"AOL NETWORK" has the meaning set forth in item 1.3 of the Agreement.
"AOL SUBSCRIBERS" has the meaning set forth in Section 1.2.1 of the Agreement.
"BREACHING PARTY" has the meaning set forth in Section 6.1 of the Agreement.
"CIC ENTITY" means an (i) an entity which has as a significant line of business
an Interactive Service, or (ii) a significant competitor with one of AOL's
primary lines of business (including, pending merger approval, the primary lines
of business of the merged AOL/Time Warner entity), as such lines may evolve.
Further, a CiC Entity shall not include Terra Lycos unless (A) Telefonica or a
Telefonica-Controlled Affiliate acquires Control of Terra Lycos, (B) Terra Lycos
acquires Control of Telefonica or a Telefonica-Controlled Affiliate, or (C) some
or all of the senior management of Terra Lycos and Telefonica are the same
individuals; provided that the same individual serving on the board of directors
of both Terra Lycos and Telefonica shall not be deemed to be covered by subpart
(C) of this definition. CiC Entity shall not include Telefonica.
"COMPETING ENTITY" means (i) an entity which important share of its business is
interactive services, or (ii) an important competitor of one of AOL lines of
A-1
businesses (including the principal lines of businesses which result from the
merger AOL/Time Warner), and of the evolution of the referred lines of
businesses. Moreover, a Competing Entity shall not include Terra Lycos, except
if (a) Telefonica or any of its affiliates purchase the control of Terra Lycos,
(b) Terra Lycos purchase the control of Telefonica of any of its affiliates, or
(c) any or all of the principal businessmen of Terra Lycos and of Telefonica are
the same, provided that the persons who are members of the board of Terra Lycos
and Telefonica are not considered as related to item (c). The Competing Entity
do not include Telefonica.
"CONTROL" means, with regard to any entity, (a) the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such entity, or (b) the ownership, directly or indirectly, of more
than [**] percent ([**]%) of the capital stock (or other ownership interest, if
not a corporation) of such entity ordinarily having voting rights.
"DIAL-UP ACCESS" is the facility and associated end-to-end, managed services,
however provided in terms of technology, for receiving analog or ISDN in-bound
calls from the public switched telephone network on demand and converting those
signals to digital form for transmission over digital networks, where the
end-user has initiated the call.
"EFFECTIVE DATE" has the meaning set forth in Clause 6 of the Agreement.
"FINAL ACCEPTANCE" has the meaning set forth in Section 3.4 of Exhibit E.
"FINALLY ACCEPTED ACCESS PORTS" means Access Ports and related Services which
(a) have been ordered by AOL, (b) have been delivered Telefonica(c) have
received Final Acceptance by AOL, and (d) have not been cancelled by AOL, all in
accordance with Exhibit E.
"FORCE MAJEURE EVENT" has the meaning set forth in the Section 11 of the
Agreement.
"INCLUDE," "INCLUDES", and "INCLUDING", whether or not capitalized, mean
"include but are not limited to", "includes but is not limited to", and
"including but not limited to", respectively.
"INTERACTIVE SERVICE" means one or more of the following Internet or online
services: (i) online or Internet connectivity services; (ii) an interactive site
or service featuring, which can have a broad selection of aggregated third party
interactive content; (iii) e-commerce sites; or (iv) communications software
capable of serving as the principal means through which a user creates, sends or
receives electronic mail or real time or "instant" online messages (whether by
telephone, computer, wireless or other means).
"INTERNET" Group of independent webs, connected by rooters and by many
commutation and transmission vehicles, which use the protocol TCP/IP
(Transmission Control Protocol/Internet Protocol) and form one sole great world
wide web of computers.
"INTERNET TRAFFIC" communication flow among web equipments, using the protocol
TCP/IP, in order to reach other WEBS or CONTENTS which compose Internet.
"NON-COMPARABLE SERVICES" has the meaning set forth in Section 2.1 of Exhibit F.
"NONCONFORMITY" has the meaning set forth in Section 3.3 of Exhibit E.
"OUT-OF-POCKET EXPENSES" means, verifiable and actual direct expenses incurred
by a Party (including direct network and operations costs), but excluding that
Party's overhead costs (or allocations thereof), administrative expenses or
other xxxx-ups and excluding expenses which could reasonably have been avoided
or which could reasonably be recouped by that Party.
"REJECTION CRITERIA" has the meaning set forth in Section 3.2 of Exhibit E.
"SERVICES" means (a) the services, functions and responsibilities of Telefonica
as described in the Agreement (including its Exhibits), and (b) any services,
A-2
functions or responsibilities not specifically described in the Agreement that
are required for the proper performance and provision of the services described
in part (a) of this definition.
"SERVICE LEVELS" has the meaning set forth in Article 2.12 of the Agreement.
"SERVICE OF INTERNET TRAFFIC" company which rend services of Internet
connection, generator of content or not, and which utilizes addresses of
protocol TCP/IP to popularize its services at Internet with management of the
group of technical characteristics destined to assure the services providing by
webs and other backbones. It means the coexistence capacity, in a web, of
different technologies, equipments, softwares, applications and other
components, of different suppliers, keeping the safe and the functions of its
services.
"TERM" has the meaning set forth in Article of the Agreement.
A-3
EXHIBIT B
SCOPE OF SERVICES
Telefonica shall maintain any and all infrastructure required to rend the
services described in the Agreement. Services provided hereunder shall include
all associated fully managed, end-to-end network service functions included in
this Exhibit B.
1. OPERATIONS
Telefonica shall provision, staff, and operate a primary Network Operations
Center ("NOC") with support for AOL. The scope of this task shall include the
following Services:
1.1. Operation of the NOC and co-located systems with trained and qualified
personnel on a continuous, [**] hours per day, [**] days per week basis;
1.2. Performance of network surveillance and monitoring;
1.3. Operation of all NOC equipment, monitoring, and fault isolation functions;
1.4. Coordination of the dispatch of maintenance representatives for corrective
maintenance activities and recording information in a Problem Report ("PR").
Telefonica's responsibilities shall include:
1.4.1. Initiation of a corrective maintenance request, plus recording the time
that the call is received by the Telefonica maintenance representative;
1.4.2. Upon arrival of the maintenance representative at the site, confirmation
by the NOC of the reported problems and recording the site arrival time with the
representative;
1.4.3. Upon notification to the NOC by the on-site maintenance representative of
work stoppage, delay, denial of access to the equipment, Telefonica shall confer
with AOL representatives for advice or assistance; and
1.4.4. Upon restoration of Service by the maintenance representative, the NOC
shall confirm, with assistance from the maintenance representative, operation of
the equipment and record the time when Services are restored and the reason for
the problem outage.
1.5. Initiation of PRs, maintenance of a log of all PRs, coordination of PRs
with support personnel and tracking of problems until resolution using a
commercially available trouble reporting software system;
1.6. Utilization of SNMP facilities, for reading only and Telefonica diagnostic
software residentin the NOC for:
1.6.1. Daily testing of Access Ports and local access numbers;
1.6.2. Measurements of the usage of each Access Port at the frequency or at the
times requested by AOL;
1.6.3. Monitoring and recording the backbone and trunk availability and
utilization; and
1.6.4. Accounting for the disposition of each call placed to AOL (e.g., how many
calls were placed, how many calls were sent successfully to AOL, how many calls
were lost in the network due to routing problems, how many calls were sent to
AOL but which were not accepted by AOL, etc.);
1.7. Providing on-site analyst support Monday through Friday (excluding
holidays) during normal working hours. A dedicated access number shall be
B-1
maintained for AOL's use, which shall always be operational. Analyst support
shall include the following:
1.7.1. Supporting short-term and long-term problem identification, analysis, and
resolution;
1.7.2. Ensuring that proper steps are taken to resolve the problem;
1.7.3. Identifying and tracking all software, baseline and patches, deployed in
the Telefonica network and NOC platforms;
1.7.4. Supporting the deployment of new software to the Telefonica Network, AOL
and NOC equipment as coordinated with AOL;
1.7.5. Providing support to network provisioning requirements; and
1.7.6. Maintaining a technical library for the NOC.
1.8. Performing on-call analyst support of the Telefonica Network on a
continuous [**] hour per day, [**] days per week basis. Telefonica agrees to
provide AOL with a toll-free number available [**] hours per day, [**] days per
week, to report problems relating to network integrity. On-call analyst
personnel shall respond to urgent requests from the NOC in conjunction with the
on-site Telefonica personnel. Procedures for the conduct of network testing are
in accordance with those developed in conjunction with AOL representatives.
Telefonica shall provide an escalation list for AOL containing pager numbers,
cell phones and other necessary contact information of relevant and appropriate
Telefonica personnel (including Telefonica executives) for emergency response
should the Telefonica NOC fail to respond with adequate information regarding a
major Service outage within the first half hour of such an outage. Telefonica
shall update the list periodically as necessary or upon AOL's request.
1.9. Providing operational support to AOL in the area of network testing in
association with provisioning actions. Such testing shall be conducted from the
NOC in conjunction with the on-site Telefonica installation team personnel;
1.10. Maintaining and providing updates and changes to NOC maps;
1.11. Maintaining an authorized outage listing for NOC controller use;
1.12. Acting as AOL's agent in network security matters on a day-to-day basis as
directed by AOL in accordance with commercially reasonable practices, and making
recommendations for improvements;
1.13. Using commercial teleconferencing facilities in the resolution of network
problems, escalation of problems, and planning activities;
1.14. Providing electronic mail service support for the NOC via the e-mail;
1.15. Providing a facsimile service resident in the NOC equipment;
1.16. Delivering the following reports to AOL-designated representatives (or by
email if requested by AOL), whenever requested:
1.16.1. Usage Reports;
1.16.2. [**] on [**] by [**] by [**];
1.16.3. [**] on percentage of [**];
1.16.4. [**] on [**] and [**], including [**];
B-2
1.16.5. [**] access by AOL to [**] exclusively related to [**] and/or [**];
1.16.6. [**] and site [**];
1.16.7. [**] call [**] reports;
1.16.8. [**] summaries of the [**] of [**] required to [**];
1.16.9. [**] of [**] calls;
1.16.10. [**] statistics;
1.16.11. [**] network [**] and [**] statistics;
1.16.12. [**] data as required to [**] client and AOL network [**];
1.16.13. Peak simultaneous [**]; provided that such report shall comply with the
[**] standard;
1.16.14. Peak Simultaneous [**] (reported [**]); provided that such report shall
comply with the [**] standard; and
1.16.15. [**] used on [**], broken down by [**] (reporting provided [**] by
Telefonica within [**] days of the Effective Date);
1.16.16. AOL may request additional reports, and Telefonica shall provide these
additional reports, or the raw data, subject to technical reasonableness.
1.16.17. Telefonica shall aggregate routing information sent to AOL and shall
control the addition and withdrawal of routing information. Telefonica shall
announce AOL routing information at Telefonica interchange points as required by
AOL.
2. NETWORK ENGINEERING.
2.1. Telefonica agrees to provide network engineering to address operational and
long-term planning issues.
2.2. Telefonica shall continue to improve the network design in order to reduce
risks to AOL, improve robustness, and enhance the price/performance of the
transmission system. AOL shall be permitted to establish a route of last resort
on the network.
2.3. Telefonica shall maintain the facilities, equipment and software used to
provide the Services so that they operate in accordance with their
specifications (e.g., applicable Telefonica support release information),
including (a) maintaining equipment in good operating condition, (b) undertaking
repairs and preventive maintenance on equipment, including at a minimum in
accordance with the applicable equipment manufacturer's recommendations, and (c)
performing software maintenance, including at a minimum in accordance with the
applicable software documentation and software Telefonica's recommendations.
2.4. Telefonica agrees not to restrict traffic to and from AOL unless requested
to do so by AOL or required to do so by court order or applicable law. Before
restricting traffic as permitted under this Section, Telefonica shall provide
AOL with reasonable prior written notice of the timing, duration, scope and
reasons for such restriction.
2.5. Telefonica shall manage the backbone and interconnection points with other
Internet providers and customers to minimize loss and delay of AOL traffic. Such
management shall include creation of new interconnection points as required.
B-3
3. NETWORK SUPPORT ORGANIZATION
Telefonica shall structure the provision of Services in a manner that shall
enable Telefonica to rapidly build out its networks and deliver quality
Services.
3.1. Engineering: Telefonica shall maintain a network engineering group that
shall handle the technical aspects of the Services, resolution of problems
escalated by the NOC, planning for future network expansion, and improvement of
performance and process. Such engineering group shall interact directly with AOL
and the NOC.
3.2. Deployment: Telefonica shall maintain a deployment team consisting of field
engineers and technicians, as well as others who have experience dealing
directly with telcos, preparing sites, and installing equipment. Part of this
team shall be based at Telefonica's facilities to coordinate activities and
provide support for installers.
3.3. Operations: Telefonica's NOC shall handle the operation and maintenance of
the Telefonica Network. The NOC shall be connected to AOL's central facilities,
including a direct telephone link to the AOL operations center. The NOC's
monitoring capability shall be set up to detect and correct most network
problems before they are visible to AOL or its customers. The NOC shall direct
maintenance activities based on input from the monitoring systems and AOL.
Telefonica shall handle a large majority of repair tasks over the telephone with
technicians at the POPs by storing Dial-Up Access subsystems at the POPs,
establishing working agreements with the POPs and other service providers, and
by providing written procedures. When it is necessary to send technicians to
deal with problems, Telefonica shall use its existing infrastructure of
satellite offices and field engineers.
4. MISCELLANEOUS SERVICES
4.1. Telefonica shall provide, for each individual local calling area, a unique
set of source IP addresses such that member demographics can be identified
through such source IP addresses. AOL shall be provided the source IP addresses
at least [**] ([**]) weeks prior to use by Telefonica to provide the Services.
4.2. Telefonica shall acquire and manage IP addresses for all protocols to be
supported by Telefonica under this Agreement and as otherwise necessary for
Telefonica to fulfill its obligations to AOL under this Agreement. Without
limiting the generality of the foregoing, for each session of an end user of the
Services, Telefonica shall dynamically assign a unique IP address to such
session.
4.3. Telefonica shall provide DNS services contained in its network, including a
DNS requirement solution; provision of DNS for AOL; resolution of DNS queries to
AOL destinations; support of DNS for AOL domain and any zones resident on AOL
name servers; and maintenance of domain name service servers.
5. TELEPHONE NUMBERS
5.1. Telefonica will reserve agreed dedicated number ranges, for the sole use of
AOL, in each city in Services are provided. Such number ranges shall be
different in each locality.
5.2. As among the parties, to the extent that Telefonica is permitted to take
such action under the relevant regulatory regime, it is technically possible,
and after previous commercial negotiation AOL shall own the telephone numbers to
each of the dial-up points of presence, and Telefonica shall not provide such
telephone numbers to any third party without written permission from AOL.
5.3. In the event of any termination or expiration of this Agreement, or upon
the decommissioning of Services hereunder, to the extent that Telefonica is
permitted to take such action under the relevant regulatory regime, it is
technically possible and after previous negotiation, then upon AOL's request,
Telefonica will transfer, to AOL or its designee, ownership of the telephone
numbers in the network corresponding to the affected Services.
B-4
5.4. If a particular telephone number becomes unavailable through a Force
Majeure Event, Telefonica shall use all commercially reasonable efforts to make
alternative arrangements (through re-routing or other techniques and subject to
the availability of the necessary technology) that permit AOL subscribers to
continue to use the original telephone number.
5.5. Any changes with respect to telephone numbers used to provide the Services
shall require prior written notification to AOL. Telefonica shall not make any
changes to the telephone numbers used for the Managed Modem Services provided to
AOL unless it is required by regulation or technically necessary.
5.6. Whenever it is allowed under the relevant regulatory regime and it is
technically possible, Telefonica will provide AOL with a unique nationwide
number, that will be owned by AOL.
6. PREVENTIVE MANTAINANCE
6.1. The preventive mantainance shall occur every [**] and [**] (except [**])
from [**].
6.2. Telefonica shall notify AOL with at least [**] ([**]) days in advance the
locations and elements of the Telefonica Network which may be affected
(including Web Canal TLF). The Parties shall agree upon exceptions to the above
on a case-to-case basis.
B-5
EXHIBIT C
SPECIFICATIONS
1. SPECIFICATIONS
Services provided hereunder shall fully conform with the following
specifications:
1.1. Telefonica shall provision end-to-end backhaul capacity (i.e., from the
Access Port to the AOL network) such that available bandwidth for the Services
is no less than [**]Kbps per Access Port, as such available bandwidth may be
increased pursuant to Agreement by the Parties.
1.2. The Services shall fully support and be in conformance with AOL's access
methods, access technology, hub architecture, and other access methods that may
become available to AOL from time to time. Access methods shall include:
1.2.1. The proprietary AOL P3 protocol -- a proprietary AOL character-oriented
protocol using TCP clear or raw mode telnet. The NAS using a common user id and
password for each session;
1.2.2. PPP-- standard point to point protocol based on RFC 1661. Telefonica
provides a unique routable IP address for each session from a pool of IP
addresses dedicated to AOL. A common authentication is used for each session;
1.2.3. TCP/IP;
1.2.4. UDP;
1.2.5. L2TP -- Layer 2 tunneling protocol, based on XXX 0000 using a common
realm string to route traffic to AOL. AOL assigns the routable IP address;
1.2.6. Routing to a point of physical interconnect with AOL's facilities at an
AOL-designated meet point for each Service Area at which Dial-Up Access traffic
shall be exchanged by the Parties (each such point a "Meet Point"). The Meet
Point for the Initial Service Area is the AOL facility at Embratel Morumbi, Sao
Paulo, and may be changed upon AOL's request.
1.2.6.1. At a minimum, Telefonica shall provide redundant paths from its
backbone to the Meet Point in order to eliminate single points of failure on the
Telefonica backbone.
1.3. AOL may request changes beyond that described in Section 0 of this Section
to provisioned bandwidth, AOL access methods, access technology, and hub
architecture. Telefonica shall use commercially reasonable efforts to implement
such changes.
1.4. Telefonica, in its network design and topology, shall comply with IETF
approved and adopted standards applicable to the access methods described in
Subsection 0 of this Section.
1.5. Telefonica agrees that, at no additional charge to AOL, all Access Ports
provided hereunder shall continue to support the V.90 protocol, and within
commercially reasonable timeframes, all successors, upgrades and enhancements to
such protocol.
2. TECHNOLOGY
2.1. The Parties shall mutually agree upon the technology and Telefonica of
choice for the Access Ports and related equipment used for the Services.
Telefonica will provide AOL with at least [**] ([**]) days' prior written notice
of any changes with respect to the Access Ports component providers prior to
C-1
implementing such changes. Telefonica may not implement any such changes without
prior written approval from AOL, which may not be unreasonably denied. In the
event of a platform change as permitted under this Section, Telefonica shall not
simultaneously utilize different access platforms for any given telephone
number.
2.2. Telefonica agrees to use all commercially reasonable efforts to implement,
at no additional charge to AOL, any new technology (including any hardware or
software upgrades) (a) within [**] ([**]) months of such technology becoming a
reasonably-accepted industry standard, and (b) on an expedited basis if
requested by AOL; provided, however, that if Telefonica is unable to implement
any material new technology requested by AOL, despite using such reasonable
efforts within a commercially reasonable period of time, then, notwithstanding
anything herein to the contrary, AOL may cancel upon [**] ([**]) days' prior
notice to Telefonica any or all Dial-Up Access Services provided by Telefonica
without penalty or liability. If Telefonica has implemented a new technology
[**], and such new technology has not been introduced by Telefonica as a result
of Telefonica's obligation under subpart (a) of the preceding sentence, then if
there are [**] associated with such new technology implementation, [**] among
all beneficiaries. In case AOL is the only beneficiary, then AOL [**]. [**] will
not result in reduction or exemption of monthly charges related to the
provisioning of services using such new technology.
3. ARCHITECTURAL INDEPENDENCE
Telefonica shall provide the Services in a manner that is consistent with AOL's
goal of achieving architectural independence in order to minimize the
possibility that a single failure could impact more than one AOL service
provider (or more than one network of a single service provider, as applicable).
Without limiting Telefonica's obligations as described above in this Section 3,
Telefonica shall design and engineer the network used to provide Services to AOL
under this Agreement such that there shall be no single point of failure in such
network that may result in a material adverse effect upon the Services.
4. ACCESS PORTS E IP ADDRESSMENT
Access Ports shall be preferably digital (E1) supporting V.90 and V.92 standards
(whereby V.92 is in process of being implemented). Telefonica shall allow the
use of unique and rotable IP addresses, from CIDR block to AOL, according to
necessities and to the number of installed ports. The implementation of the
service shall occur pursuant to L2TP protocol with AOL tunnel terminators (LNS).
Telefonica shall use different IP addresses folr alternative pricing plans
offered in the STFC access to Internet.
5. REMOTE ACCESS SERVERS
The remote access servers shall be furnished by top of the line recognized
providers in the market and preferably compatible with digital conections (STMx,
E1/3, others). Such equipment shall serve the authentication specification a
billing inmplemented by AOL e shall block collect and international calls.
6. ROOTERS AND SWITCHER
Such equipments shall be provided by top of the line providers, serve to
specific configuration needs of each location (POP) and shall be flexible as to
accept, including but not limited, to QoS, CoS and filters.
At the AOL network the equipment such as rooters and tunnel terminators (LNS)
are AOLs property.
7. INTERCONNECTION OF AOL'S NETWORK WITH TELEFONICA'S NETWORK
Telefonica agrees to provide data circuits between AOL's Network and
Telefonica's Network without any additional cost or charges to AOL, and
through which mandatory all traffic from and to AOL's content shall pass,
and whereby such traffic is required by AOL Subscribers or visiting users served
by Telefonica.
C-2
8. MONITORING SERVICES OF TELEFONICA'S NETWORK
Telefonica shall make available to AOL devices, which permit the supervision of
occupation (in absolut and percentage terms) regarding ports an data circuits,
in real and historic time.
C-3
EXHIBIT D
SERVICE LEVELS
1. AOLNET AVERAGES
Telefonica shall meet or exceed the [**] with [**] for each of the areas below:
Despite the foregoing, [**] of [**] shall be, [**]% ([**] percent).
1.1. Connection Success (getting connected to the AOL service)
1.1.1. War Dialer Percentages (excluding busies) (reporting provided daily by
AOL)
1.1.2. Call Blocking (reporting provided daily by AOL)
1.1.3. Training (reporting provided daily by Telefonica)
1.1.4. Ineffective (reporting provided daily by Telefonica)
1.1.5. AOL Member-Reported Problems (reporting provided weekly by AOL)
1.2. Connection Quality (staying connected)
1.2.1 Percentage of Abnormal Disconnects (reporting provided daily by AOL)
1.2.2. Packet Loss (reporting provided daily by AOL)
1.2.3. Latency (reporting provided when available by AOL)
1.3. Problem Resolution
1.3.1. Access Port Availability (reporting provided monthly by AOL)
1.3.2. Trouble Tickets (reporting provided monthly by AOL)
1.3.3. Service Down Time (reporting provided monthly by AOL)
1.4. Ability to satisfy provisioning requirements
1.4.1. Access PortPlan (including detailed installation plans within two weeks
of each Access Portorder)
1.4.2. Backbone and Backhaul Capacity Plan (reporting provided daily by
Telefonica pursuant to the corresponding Section of Exhibit B)
2. OTHER
2.1. In case busy signals are identified in any locations (according to usage
report provided by Telefonica) as a result of technical inavailabiluty of
Acepted Access Ports, than Telefonica shall reestablish such call block within
24 (twenty four) hours from AOL's requestes at NOC.
2.2. Without limiting the foregoing, Telefonica shall ensure that the Services
in each city are available for [**]% of each calendar month, calculated for each
city in which Telefonica provides services to AOL, excluding PTFC.
D-1
3. PENALTIES
3.1. If Telefonica fails to meet any of the service levels described above
during the term of the Agreement:
3.1.1. Telefonica shall indemnify AOL for damages incurred due to failure by
Telefonica to meet the service level. Notwithstanding any other provisions of
this agreement, Telefonica shall not be responsible for any indirect or
consequential damages or claims arising from any failure, interruption, or
malfunction of AOL's technology, or for any loss of profits, incidental or
consequential damages or personal injury to any third party, caused by AOL or
its employees, representatives, agents or subcontractors; and
3.1.2. if Telefonica does not cure the failure over the course of the following
two months after identification of the failure to meet the service levels, such
that the particular service level is satisfied when taken as an average over the
three month period (including the month in which the service level was missed),
then AOL may, at its sole option, claim a pro-rata credit for each hour (or
partial hour) during which busies or service outages occurred, according to the
following formula:
D = [**]
Where:
D = value of the discount
N = number of 30 minute periods of interruption and/or busy signal. After the
first 30 minute period of interruption and/or busy signal, the last fraction of
the interruption period and/or busy signal shall be considered as a 30 minute
interruption period and/or busy signal.
MV = value to be paid by the service.
3.1.3. With respect to items 2.1 above, in case Telefonica does not solve the
problem within 24 (twenty four) hours from the date in which a request is made,
than Telefonica shall discount from the amounts due by AOL regarding the
Services the amounts corresponding to the period in which the Access Ports were
not available, calculated in a pro rata manner.
3.2. In case Telefonica does not present Service Levels improvements within [**]
([**]) months after which the Service Levels agreed herein are not complied,
than AOL may, at its sole discretion, terminate this agreement.
SERVICE LEVELS FOR THE WEB CHANNEL
4.1. The TLF Web Channel shall have
4.1.1. an availability of [**]% and may have a maximum interruption of [**]
([**]) hours a year, a maximum interruption of [**] ([**]) hour per month and
isolated interruptions shall not exceed the limit of [**] minutes - whereby
preventive maintenance shall not count as interruptions; and
4.1.2. maximum occupation of [**]% of its installed capacity. Whenever the
amount of [**]% of the occupation is reached, Telefonica shall provide the
expansions of the installed capacity.
D-2
EXHIBIT E
PROVISIONING AND ACCEPTANCE
1. SERVICE PROVISIONING AND IMPLEMENTATION
1.1. AOL orders ant Telefonica's respective acceptance, was well as the
acceptance of Access Ports by AOL shall occur pursuant to the provisions of this
Exhibit.
1.2. ORDER PLACEMENT
1.2.1. To order Services, AOL shall submit to Telefonica an order for Services
setting forth:
(a) The total number of Access Ports that must be installed for each location;
(b) The requested delivery date(s) for such Access Ports, and
(c) Each order shall be clearly marked as such, and shall be delivered by AOL
via electronic mail to such individuals designated in writing from time to time
by Telefonica.
1.3. TELEFONICA ACCEPTANCE OF ORDERS.
1.3.1. Within [**] after receipt of an Other Order from AOL, Telefonica shall
notify AOL of its acceptance or rejection of such order. If Telefonica fails to
provide AOL with an acceptance notice within such ten-day period, then such
order shall be deemed accepted by Telefonica as of the last day of such ten-day
period. Telefonica may not reject any orders relating to locations at which it
is already rendering Services.
1.4. CANCELLATION OR MODIFICATION OF ORDERS.
1.4.1. Before acceptance or rejection of any order by Telefonica, AOL may
rescind or modify, in whole or in part in its sole discretion, such order.
1.4.2. After acceptance of an order by Telefonica, AOL may cancel or modify such
order in whole or in part at any time before the delivery date; provided that
AOL shall reimburse Telefonica any incremental Out-of-Pocket Expenses actually
incurred as a result of such cancellation or modification.
2. DELIVERY
2.1. Telefonica shall deliver Access Ports corresponding to an order that is
accepted by Telefonica (in accordance with the applicable Delivery Criteria and
the terms of this Agreement)
2.2. Telefonica shall deliver such Access Ports ratably during the 30-day period
preceding the requested delivery date specified by AOL in such Accepted Order.
To the extent Telefonica is able to deliver any Access Port prior to its
designated delivery date, then Telefonica will notify AOL and at AOL's request,
the delivery date (and the order notice date, as applicable) for such Access
PortPort will be shortened, and AOL may (or not) accept such prior delivery
date, at its sole discretion. However, with respect to new locations, the
delivery date shall not be less than ninety (90) days.
2.3. If Telefonica fails to deliver Access Ports corresponding to an Accepted
Order by the designated delivery date, then, in addition to AOL's other rights
and remedies AOL may elect to cancel, at no cost or liability to AOL, the
unfilled portion of the order for such Access Ports. If non-delivery of any
Access Ports persists more than [**] ([**]) days after a designated delivery
date, Telefonica will provide AOL with an ongoing daily credit equal to [**]
percent ([**]%) of the pro-rated daily Access Port charges that would have
applied to such Access Ports, which credit will cease when such Access Ports are
delivered. If non-delivery of any Access Ports exceeds [**] percent ([**]%) of
any order and persists more than [**] ([**]) days after a designated delivery
E-1
date, then, in addition to AOL's other rights and remedies, AOL may, at no cost
or liability to AOL, terminate the Agreement upon written notice to Telefonica.
Telefonica shall remain obligated to perform its obligations hereunder
notwithstanding the remedies available to AOL under this Section.
2.4. In the event of the termination described in Subsection 2.1 of this
Section, Telefonica will immediately repay AOL all amounts paid by AOL until
this moment under the clause 4.1 of Access Ports Agreement not used by AOL in
each one of the stages.
2.5. Upon delivery of any Access Port (but no sooner than such delivery),
Telefonica shall provide to AOL notification of such delivery by e-mail to
designee of AOL. For the purposes of this Agreement, delivery of any Access Port
shall be deemed made upon AOL's receipt of such e-mail from Telefonica.
Notwithstanding the deemed delivery date described in this Section 0, if any
Access Port delivered during a calendar month does not receive Final Acceptance
prior to the [**] day of the next calendar month, then such Access Port shall be
deemed not to have been delivered during the first calendar month but, instead,
shall be deemed to have been delivered in the month in which such Access Port
does receive Final Acceptance.
3. ACCEPTANCE
3.1 AOL shall have a period of no longer than [**] ([**]) business days after
delivery of an Access Port or related Service (the "ACCEPTANCE TEST PERIOD")
within which to test such Access Port or related Service. AOL may test Access
Port or related Service by any method AOL deems appropriate in order to
determine whether such Access Port meet or exceed any of the Rejection Criteria.
3.2 AOL shall have the option of rejecting a Access Port if any one or more of
the following performance thresholds are met or exceeded (such thresholds
collectively the "REJECTION CRITERIA"):
3.2.1. greater than [**]% of user sessions terminate without a user-initiated
logoff sequence;
3.2.2. greater than [**]% of user calls fail to connect (data demonstrating
compliance with this criterion shall be provided by Telefonica on a daily basis,
and notwithstanding the foregoing, the Acceptance Test Period shall be extended
one business day for each day that AOL does not receive such data commencing
with a Access Port activation or move, as applicable); and
3.2.3. greater than [**]% of user calls which successfully connect to the Access
Port fail to connect to the AOL front end.
3.3. If an Access Port meets or exceeds any of the Rejection Criteria (each such
failure a "Nonconformity"), AOL shall notify Telefonica within the Acceptance
Test Period (by electronic mail), specifying the nature of the failure in
reasonable detail. Telefonica shall remove rejected Access Port from service
pending further troubleshooting and corrective action. At no additional charge
to AOL, Telefonica shall repair, replace or otherwise correct the Nonconformity
as soon as reasonably practicable after receiving notice from AOL so that the
Access Ports do not meet or exceed the Rejection Criteria. Upon completion of
such efforts and Telefonica's re-release of a Access Port to AOL, AOL shall have
an additional Acceptance Test Period to retest the re-delivered Access Port to
determine whether any previously reported Nonconformities have been corrected
and if such Access Port otherwise then does not meet or exceed any of the
Rejection Criteria. This process shall be repeated as necessary until all
Nonconformities are corrected and such Access Port do not meet or exceed the
Rejection Criteria. Notwithstanding the foregoing, if after [**] ([**]) attempts
for curing a Nonconformity, Telefonica has not delivered an Access Port that
does not meet or exceed the applicable Rejection Criteria, then AOL may (a)
cancel, in whole or in part, at no cost or liability to AOL the portion of the
corresponding order that does not conform as of a date specified in a written
notice of cancellation issued by AOL, and (b) Contract such ports or services
from any other providers or service renderer. AOL shall have no payment
obligations to Telefonica with respect to any cancelled portion of an order.
3.4. Access Ports ordered by AOL shall be deemed to be accepted (such acceptance
the "FINAL ACCEPTANCE") only upon the earlier of: (i) receipt by Telefonica of
written notice by AOL certifying that such Access Ports do not meet or exceed
E-2
the applicable Rejection Criteria; or (ii) the expiration of the Acceptance Test
Period for such Access Ports without notice of rejection by AOL. Notwithstanding
anything to the contrary herein, Final Acceptance of Access Ports shall only
occur in accordance with the terms of this Section.
4. MOVE OF CAPACITY
Telefonica shall de-install Access Port capacity within [**] ([**]) days
following AOL's request.
5. NEW SERVICES
5.1. If Telefonica is able to offer any new services that would permit AOL to
provide services to its customers in a manner similar to that utilized in
conjunction with AOL's use of the Services, but (a) at a lower overall cost to
AOL, or (b) at the same cost to AOL but with increased or enhanced capacity,
features or functionality relative to the Services (each of (a) and (b), a "NEW
SERVICE"), then (i) Telefonica shall promptly notify AOL and, before Telefonica
uses such New Service or offers such New Service to any of its customers,
Telefonica shall offer to provide such New Service to AOL at such lower or same
cost to AOL; and (ii) Telefonica shall permit AOL to transition all or a portion
of the Services, at AOL's discretion but only to the extent that Telefonica is
able to make such New Service available to AOL, to such New Service at no
additional charge and AOL will reimburse Telefonica for Telefonica's incremental
Out-of-Pocket Expenses actually incurred as a result of such transition;
provided that such expenses are distributed equitably among Telefonica's
customers utilizing such New Service.
6. RESALE RESTRICTIONS
6.1. AOL agrees that it shall not resell a Service purchased under the
Agreement. For the avoidance of doubt, AOL's provision of a Service purchased
from Telefonica or a Telefonica-Controlled Affiliate to a customer, which
Service is ancillary to, or bundled with, some other product or service provided
to such customer, shall not be considered to be reselling such Service.
7. SCOPE OF USE AND PROVISIONING
7.1. Services provided under this Agreement may be utilized for any lawful
purpose, including in connection with any service or product offering made
available by AOL, its Affiliates, partners or designees, providing access to an
AOL information service, providing the delivery of Internet access, and
providing subscriber-related services to end-users.
Telefonica agrees to provide the Services on a priority provisioning basis to
AOL, its partners, Affiliates and designees; provided, however, that (i)
Services provided to such entities pursuant to this Agreement shall be deemed to
be Services provided to AOL, (ii) AOL shall remain the single point-of-contact
with Telefonica, and (iii) AOL shall remain obligated to perform and comply with
all obligations under the Agreement including payment obligations with respect
to any Services provided by Telefonica to such entities pursuant to this
Agreement.
E-3
EXHIBIT F
COMMERCIAL CONDITIONS
1. PRICES AND DISCOUNTS
PRICES AND DISCOUNTS
R$ per month - taxes included
-------------------
LIST PRICE [**]
-------------------
VOLUME CUMULATIVE DISCOUNTS PRICE R$
--------------------------------------------------------------------------------------
< [**] ports [**]% [**]
--------------------------------------------------------------------------------------
> [**] ports [**]% [**]
--------------------------------------------------------------------------------------
The geographic coverage discount can be applied only if the volume discount is [**]%
GEOGRAPHIC COVERAGE* CUMULATIVE DISCOUNTS PRICE R$
--------------------------------------------------------------------------------------
< [**]% at Sao Paulo City [**]% [**]
--------------------------------------------------------------------------------------
> [**]% na Sao Paulo City [**]% [**]
--------------------------------------------------------------------------------------
The contract time frame discount can be applied only if (i) the volume discount is
[**]%, Tnd (ii) the geographic coverage discount is [**]%
CONTRACT TIME FRAME CUMULATIVE DISCOUNTS PRICE R$
--------------------------------------------------------------------------------------
Less than [**] years [**]% [**]
--------------------------------------------------------------------------------------
Up or equal to [**] years [**]% [**]
--------------------------------------------------------------------------------------
----------
* The geographic coverage will be determined by the sum of the contracted
switched Access Ports at the localities of Sao Paulo City (which includes Sao
Paulo; Xxxxx Xxxxx; Sao Xxxxxxxx; Sao Xxxxxxx; Diadema; and Guarulhos),
regarding the sum of all switched Access Ports contracted to all localities of
circuit III of GPG served by Telefonica.
F-1
2. MOST FAVORED CUSTOMER
2.1. Neither Telefonica nor Telefonica-Controlled Affiliates will offer or
provide services [**] to the Services provided hereunder ("COMPARABLE SERVICES")
to any customer, (i) at [**]0, (ii) [**], (iii) [**], (vi) the [**] of [**] at
[**] than the one agreed with AOL (considering that [**] to the table of item 1
of this Exhibit), (a) at prices (net of value added taxes) that are lower than
those charged to AOL, or (b) pursuant to any terms and conditions that are more
favorable to such customer than AOL's terms and conditions (each of (a) or (b),
"MORE FAVORABLE TERMS"). If Telefonica or any Telefonica-Controlled Affiliate
offers or provides Comparable Services on More Favorable Terms to any customer,
Telefonica will offer to provide to AOL such services on the pricing and terms
and conditions applicable to such customer. If Telefonica or any
Telefonica-Controlled Affiliate offers or provides Services to a customer that
do NOT constitute "comparable services" (any such services "NON-COMPARABLE
SERVICES"), then within [**] ([**]) days following such offer or provision of
such services, Telefonica will offer to provide to AOL such services at the
prices available to, and upon the terms and conditions applicable to, such
customer. If applicable law or regulation changes such that this most favored
customer provision requires Telefonica to act in a manner that is not permitted
under such changed law or regulation, then this provision shall be deemed to be
restated to reflect as nearly as possible the original intentions of the parties
in accordance with applicable law and regulation. Upon the request of AOL (which
requests shall not be made more frequently than [**]), Telefonica's Chief
Financial Officer will certify in writing whether Telefonica has satisfied its
obligations under this section. If, with respect to Non-Comparable Services,
AOL's service requirements would necessitate changes to such terms and
conditions, then the Parties shall work in good faith to adjust such terms and
conditions as mutually agreed to satisfy such requirements. To the extent that
AOL accepts such offer from Telefonica, any such dial-up access services shall
be deemed to be Services to which this Agreement applies, and AOL may replace
any then-unfulfilled portion of the Purchase Commitment with an equivalent
commitment to order such services.
2.2. In the event that Telefonica violates an obligation described in Subsection
2.1 of this Section, then, in addition to any other rights or remedies available
to AOL, pricing under this Agreement shall be adjusted such that they are equal
to or less than corresponding prices offered to any other customer and,
considering the payments carried out by AOL regarding this Agreement since
Telefonica started to offer its services to this costumer, the amounts due by
Telefonica will be adjusted by AOL, at its discretion, as credit for future
payments or as an sole payment to be performed in the [**] days after the notice
of AOL of the infringement of the abovementioned obligation.
3. MARKET PRICE
3.1. From time to time, but no more frequently than [**] every [**] months, AOL
will be entitled to notify Telefonica of a required adjustment to pricing for
the services provided hereunder in order to reflect changes in the relevant
Market Price in the service area to which this agreement applies.
3.1.1. "MARKET PRICE" means, in each Service Area, the price (net of value added
taxes) offered to AOL by a vendor of Comparable Services, to Internet services
providers whose [**], [**] and [**] are [**] or [**] to those offered to AOL
under this Agreement.
3.1.2. However, the Market Price will not be considered valid if the price
offered to AOL by a vendor of Comparable Services is:
(i) a price that is [**] for providing such Comparable Services,
(ii) [**] which is [**] for providing such Comparable Services, or
(iii) [**] which is intended to [**] for Telefonica to enter the market and is
[**] for providing such Comparable Services, then such lowest price shall not be
deemed a valid Market Price.
3.2. Telefonica will be entitled to confirm the validity of a proposed new
Market Price within the [**] ([**]) day period following AOL's notice of the new
Market Price.
3.3. After validation of the market prices proposed by AOL, the Parties shall
amend the Agreement in order to adequate the prices contained herein to the new
values.
3.3.1. If Telefonica does not agree to market prices proposed by AOL, [**] in
the [**] shall [**].
F-2
VIA DE ASSINATURA
EXHIBIT G
INITIAL FRAMEWORK
1 - STATE OF SAO PAULO LOCALITIES
---------------------------------------------- -------------------------
NUMBER OF
CITY UF PORTS
---------------------------------------------- -------------------------
1ADAMANTINA SP [**]
---------------------------------------------- -------------------------
2AGUAI SP [**]
---------------------------------------------- -------------------------
3AGUAS DE LINDOIA SP [**]
---------------------------------------------- -------------------------
4AMERICANA SP [**]
---------------------------------------------- -------------------------
5AMPARO SP [**]
---------------------------------------------- -------------------------
6ANDRADINA SP [**]
---------------------------------------------- -------------------------
7APARECIDA SP [**]
---------------------------------------------- -------------------------
8ARACATUBA SP [**]
---------------------------------------------- -------------------------
9ARARAQUARA SP [**]
---------------------------------------------- -------------------------
10ARARAS SP [**]
---------------------------------------------- -------------------------
11ARTUR NOGUEIRA SP [**]
---------------------------------------------- -------------------------
12ARUJA SP [**]
---------------------------------------------- -------------------------
13ASSIS SP [**]
---------------------------------------------- -------------------------
14ATIBAIA SP [**]
---------------------------------------------- -------------------------
15AVARE SP [**]
---------------------------------------------- -------------------------
16BARRA XXXXXX SP [**]
---------------------------------------------- -------------------------
17BARRETOS SP [**]
---------------------------------------------- -------------------------
18BARUERI SP [**]
---------------------------------------------- -------------------------
19BAURU SP [**]
---------------------------------------------- -------------------------
20BEBEDOURO SP [**]
---------------------------------------------- -------------------------
21BERTIOGA SP [**]
---------------------------------------------- -------------------------
22BIRIGUI SP [**]
---------------------------------------------- -------------------------
23BOM XXXXX DOS PERDOES SP [**]
---------------------------------------------- -------------------------
24BOTUCATU SP [**]
---------------------------------------------- -------------------------
25BRAGANCA PAULISTA SP [**]
---------------------------------------------- -------------------------
26CACAPAVA SP [**]
---------------------------------------------- -------------------------
27CACHOEIRA PAULISTA SP [**]
---------------------------------------------- -------------------------
28CAIEIRAS SP [**]
---------------------------------------------- -------------------------
29CAMPINAS SP [**]
---------------------------------------------- -------------------------
30CAMPO LIMPO PAULISTA SP [**]
---------------------------------------------- -------------------------
31CAMPOS DO JORDAO SP [**]
---------------------------------------------- -------------------------
32CANANEIA SP [**]
---------------------------------------------- -------------------------
33CAPIVARI SP [**]
---------------------------------------------- -------------------------
34CARAGUATATUBA SP [**]
---------------------------------------------- -------------------------
VIA DE ASSINATURA
---------------------------------------------- -------------------------
35CARAPICUIBA SP [**]
---------------------------------------------- -------------------------
36CASA XXXXXX XX [**]
---------------------------------------------- -------------------------
37CATANDUVA SP [**]
---------------------------------------------- -------------------------
38COLINA SP [**]
---------------------------------------------- -------------------------
39CONCHAL SP [**]
---------------------------------------------- -------------------------
40COSMOPOLIS SP [**]
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41COTIA SP [**]
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42CRUZEIRO SP [**]
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43CUBATAO SP [**]
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44DIADEMA SP [**]
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45DRACENA SP [**]
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46EMBU SP [**]
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47ENGENHEIRO XXXXXX XX [**]
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48ESPIRITO SANTO DO PINHAL SP [**]
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49FERNANDOPOLIS SP [**]
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50FERRAZ DE VASCONCELOS SP [**]
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51FRANCISCO MORATO SP [**]
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52FRANCO DA XXXXX XX [**]
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53GARCA SP [**]
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54GUARARAPES SP [**]
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55GUARATINGUETA SP [**]
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56GUARUJA SP [**]
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57GUARULHOS SP [**]
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58HOLAMBRA SP [**]
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59HORTOLANDIA SP [**]
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60IBITINGA SP [**]
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61IBIUNA SP [**]
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62INDAIATUBA SP [**]
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63IRACEMAPOLIS SP [**]
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64ITANHAEM SP [**]
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65ITAPETININGA SP [**]
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66ITAPEVA SP [**]
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67ITAPIRA SP [**]
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68ITAPOLIS SP [**]
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69ITAQUAQUECETUBA SP [**]
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70ITATIBA SP [**]
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71ITATINGA SP [**]
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72ITU SP [**]
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73JABOTICABAL SP [**]
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74JACAREI SP [**]
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75JAGUARIUNA SP [**]
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76JAU SP [**]
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77JUNDIAI SP [**]
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78LEME SP [**]
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VIA DE ASSINATURA
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79LENCOIS PAULISTA SP [**]
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80LIMEIRA SP [**]
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81LINS SP [**]
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82LORENA SP [**]
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83LUCELIA SP [**]
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84MAIRIPORA SP [**]
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85MARILIA SP [**]
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86MATAO SP [**]
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87MAUA SP [**]
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88MIRASSOL SP [**]
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89MOCOCA SP [**]
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90MOGI DAS CRUZES SP [**]
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91MOGI GUACU SP [**]
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92MOGI MIRIM SP [**]
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93MONGAGUA SP [**]
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94MONTE ALTO SP [**]
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00XXXX XXXXXX SP [**]
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96OLIMPIA SP [**]
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97OSASCO SP [**]
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98OSVALDO XXXX XX [**]
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99OURINHOS SP [**]
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100PAULINIA SP [**]
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101PEDREIRA SP [**]
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102PENAPOLIS SP [**]
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103PERUIBE SP [**]
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104PINDAMONHANGABA SP [**]
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105PIQUETE SP [**]
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106PIRACICABA SP [**]
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107PIRAJU SP [**]
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108PIRASSUNUNGA SP [**]
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109POA SP [**]
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110POMPEIA SP [**]
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111PORTO FELIZ SP [**]
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000XXXXX XXXXXXXX XX [**]
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113PRAIA GRANDE SP [**]
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114PRESIDENTE EPITACIO SP [**]
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115PRESIDENTE XXXXXXXX XX [**]
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116PRESIDENTE VENCESLAU SP [**]
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117RAFARD SP [**]
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118REGISTRO SP [**]
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119RIBEIRAO XXXXX XX [**]
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120RIBEIRAO PRETO SP [**]
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121RIO CLARO SP [**]
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122SALESOPOLIS SP [**]
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VIA DE ASSINATURA
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123SALTO SP [**]
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124SANTA XXXXXXX X'XXXXX SP [**]
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125SANTA XXXX DOS PALMEIRAS SP [**]
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126SANTANA DO PARNAIBA SP [**]
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127SANTO XXXXXXXXX XX [**]
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128SANTO ANDRE SP [**]
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129SANTOS SP [**]
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000XXX XXXXXXXX DO XXXXX XX [**]
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131SAO CAETANO DO SUL SP [**]
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132SAO XXXXXX SP [**]
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133SAO JOAO DA BOA VISTA SP [**]
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134SAO XXXX DO RIO XXXXX XX [**]
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135SAO XXXX DO RIO PRETO SP [**]
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136SAO XXXX DOS XXXXXX XX [**]
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137SAO MANUEL SP [**]
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138SAO PAULO SP [**]
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139SAO XXXXX SP [**]
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140SAO XXXXX XX [**]
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000XXX XXXXXXXXX SP [**]
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142SAO VICENTE SP [**]
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143SERRA NEGRA SP [**]
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144SERTAOZINHO SP [**]
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145SOROCABA SP [**]
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146SUMARE SP [**]
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147SUZANO SP [**]
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148TABOAO DA SERRA SP [**]
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149TAQUARITINGA SP [**]
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150TATUI SP [**]
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151TAUBATE SP [**]
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152TIETE SP [**]
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153TREMEMBE SP [**]
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154TUPA SP [**]
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155UBATUBA SP [**]
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156VALINHOS SP [**]
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157VARGEM GRANDE DO SUL SP [**]
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158VARZEA PAULISTA SP [**]
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159VINHEDO SP [**]
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160VOTORANTIM SP [**]
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161VOTUPORANGA SP [**]
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SUM [**]
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2 - WEB CHANNEL INSTALLATION
VIA DE ASSINATURA
a. [**] channels IP of [**] Mbps ([**] x [**]);
b. Telefonica will be responsible to rebuild the structure in order to guarantee
the availability of IP Band in compliance with the demand of traffic of AOL as
set forth herein.
VIA DE ASSINATURA
EXHIBIT H
NEW LOCALITIES FORM DEMAND
EXHIBIT H
REQUIREMENT FORM FOR NEW LOCALITIES
------------------------------------------------------------------
Agreement No.
REQUIREMENT FORM FOR NEW LOCALITIES
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Request no.
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Date of remittance:
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Date of receipt:
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Requested locality:
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Amount ports:
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Sent by (including stamp of the company):
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Received by (including stamp of the company):
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------------------------------------------------------------------
VIA DE ASSINATURA
EXHIBIT I
COLLECTION AND ANSWER PROCEDURES.
4.2 All prices due herein will be collected in Reals (R$) by Telecommunications
Services Xxxx of Sale ("TSBS"). Telefonica will send the bills related to its
services to:
Director of Operations
XXX Xxxxxx
Xx. Xxxxxxxxxx, 000 - 0x. andar
Xxxxx Xxxxx - SP
CEP 09080-500
4.2.1. All not called into question payments must be paid upon [**] ([**]) days
after the receipt. The payments due by AOL can be withheld by AOL and called
into question by written notice upon the referred [**]-day period. By this
notice, AOL and Telefonica, using good faith, will try to settle the collections
called into question in a meeting.
4.2.1.1 As the case may be, during the mentioned [**]-day time frame, if the
parties do not agree on a basis, a meeting among the attorneys of the operating
areas of the parties will be called upon [**] days after the due date of the
xxxx in order to settle the grindlock.
4.2.1.2. In the event of the abovementioned meeting is not sufficient for settle
the impasse, the parties will be liberated to the guardianship of its rights.
4.2.2. The unquestionable default of TSBS, related to a rendered service, at its
due date, binds AOL, without any call or notice, to pay a fine of [**]% per
month on the due value, added to interests of [**]% per month. Those amounts
must be included in the afterall TSBS(s).
4.2.3 When the delay is greater than 1 month, besides the fine and the
interests, a monetary restatement based on General Index of Intern Available
Prices "pro-rata-die" have to be added to the due amount until the date of the
payment.
4.2.4 After the abovementioned [**]-day period, if the TSBS(s) remain unpaid and
not called into question by AOL, Telefonica can toll the corresponding service
agreement, and its continue will be conditioned to the payment of the TSBS(s) in
arrears, added with fine and interests.
4.2.5 If, [**] days after the due date, AOL does not paid any TSBS issued upon
this Agreement and not called into question as referred before, Telefonica can
terminate the corresponding service agreement and remove its equipments, without
any call or notice.
4.3 All the taxes, contributions and related charges and fees, specific of
telecommunications services or not, effective during the execution of this
Agreement and related, directly or indirectly to the services agreement
described herein, are included in price.
VIA DE ASSINATURA
4.3.2. AOL will have the right to withhold any taxes, related to services
mentioned herein, in which AOL is considered, by the laws and regulations, the
responsible for the payment.
4.3.3. Any changing regarding the taxes related to the services offered herein
will modify its prices, as mentioned in the corresponding exhibits.
