Exhibit 10.16
INTERNET SERVICE AGREEMENT
By the present instrument IMPSAT COMUNICACOES LTDA., registered at the CNPJ/MF
under No. 72.843.212/0001-41, with registered office at ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇(▇▇▇▇▇▇) e 11(degree) andares, CEP 04571-000, Sao Paulo -
SP, hereby legally represented and hereinafter simply referred to as IMPSAT, and
MANDIC INTERNET LTDA. , registered in the CNPJ/MF under No. 02.889.879/0001-08,
with registered office at ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇, ▇▇(▇▇▇▇▇▇) floor, CEP
05419-OOO, Sao Paulo - SP, hereby legally represented and
hereinafter simply referred to as MANDIC, and both jointly hereinafter simply
referred to as THE PARTIES, and,
WHEREAS:
MANDIC is a company dedicated to marketing advertisement, providing on-line
content and services via Internet, such as chat rooms, news, games, electronic
mail, among other services;
IMPSAT is a company providing network connectivity services, among which
Internet access service to corporate and final users, via dial-up telephone
access, among others means;
MANDIC is willing to offer to its customers Internet access service and IMPSAT
is capable of providing equipment and infrastructure required for such purposes;
THE PARTIES hereto have entered the present Internet Service Agreement to be
governed by the following clauses and conditions:
1. OBJECT
The present Agreement will set the conditions on which IMPSAT will provide
to MANDIC the POP (Point of Presence) outsourcing services for
dial-up telephone access to the Internet, i.e., installation, management,
and infrastructure and equipment maintenance services required for MANDIC
to offer to its own customers the value-added services commonly called
"Internet," hereinafter simply referred to as the "Service".
1.1 The Service will be provided on a 24-hour, 365-day-a-year basis,
using equipment owned by IMPSAT, hereinafter simply referred to as
the "Equipment," as well as Internet and telephone network
connectivity infrastructure, as specified in Annex B.
1.2 The Equipment will be installed in the POP facilities of IMPSAT,
hereinafter simply referred to as "Service Access Points," within
the estimated time frame and in conformity with technical
specifications detailed in Annexes A and B, respectively.
1.3 MANDIC accepts that, according to the regulation in force, "It is
expressly forbidden to use the service provided for live voice
transmission (telephony). Any violation of the present disposition
will result in termination by MANDIC's default with notice
issued to ANATEL."
1.4 The documents described below are an integral part of this
Agreement, including the Annexes hereof: Annex A: "Existing Service
Access Points;" Annex B: "Technical and Service Specifications;"
Annex C: "Prices and Payment Conditions;" Annex D: "Maintenance
Service;" Annex E: "Installation/Service Activation Minute Form."
2. TERM OF THE AGREEMENT
2.1 The present Agreement will be effective as of the date of its
execution.
2.2 The term of the present Agreement will be thirty-six (36) months as
of the date of its execution, when the Services to be provided to
MANDIC customers shall be available.
2.3 The term of this Agreement will be automatically extended by equal
and successive periods of thirty-six (36) months, except upon notice
in contrary by the party deciding not to extend it to the other, in
sixty (60) days prior to the day this Agreement or its extensions
expire.
3. SERVICE AVAILABILITY
3.1 IMPSAT's existing Service Access Points, currently available for
immediate use by MANDIC, are described in Annex A.
3.2 For new Service Access Points and for expansion of the existing
Service Access Points, IMPSAT will provide and install the necessary
Equipment for the Service. The criteria and specifications in this
case are described in Annex B.
3.3 The Service will be considered technically operational when it
becomes possible to send IP control packages (PING command) between
a computer with dial-up access connected to the equipment at the
Service Access Points and any Name Server published by INTERNIC
(Root DNS).
3.4 The procedure for considering the Service operational at Service
Access Points, after commissioning tests are performed, will be
described in section 3.3, with minutes drawn to formalize such
events and signed by both PARTIES according to the minute form
presented in Annex E.
3.5 No individual not authorized by IMPSAT will be allowed to repair or,
in any way, change the Equipment or modify its installation. MANDIC
will be responsible for any damage or loss to the Equipment
resulting from its fault or deceit.
4. COVERAGE
4.1 The area covered by the Services will comprise, initially, the
locations defined in Annex A, consisting of 19 cities and a total of
3,815 dial-up access ports.
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4.2 Without any prejudice to this initial coverage, THE PARTIES may
include, in the Agreement hereof, upon mutual consent, successively,
cities and areas in which IMPSAT already provides dial-up Internet
services.
4.3 IMPSAT will communicate to MANDIC the incorporation of new locations
for supply of the Service. At its own discretion, IMPSAT will decide
on the provision of services in each location.
5. IMPSAT'S LIABILITIES AND LIMITS OF RESPONSIBILITY
5.1 By the present Agreement, IMPSAT will provide to MANDIC
installation, management, and equipment and infrastructure services
required for exclusive dial-up access to the Internet, according to
conditions described in Annex B hereof, thus becoming responsible
for the operation and maintenance of the Service.
5.2 In case of Service unavailability or failure, IMPSAT's
responsibilities will be limited to providing maintenance service
described in Annex D hereof. In case of Service unavailability or
failure, IMPSAT will use its best efforts to reinstate the Service
as promptly as possible. MANDIC will be entitled to discounts from
Service payments to IMPSAT proportionally to the extent and to the
time of unavailability of the Service , according to the provisions
of Annex D.
5.3 IMPSAT's responsibilities before MANDIC will be limited to the
damages that IMPSAT may cause as a result of the installation,
management, and equipment and infrastructure services object of this
Agreement. Therefore, under no other conditions IMPSAT will be
responsible for other damages that MANDIC and/or third parties
may suffer, including loss of profits, loss of cash resources and/or
stored properties.
5.4 IMPSAT is liable for providing MANDIC with the Service specified in
the Agreement hereof, but in no case it will assure the possibility
of use or access availability to different services existing in the
Internet, to which the responsibility will be entirely of the
providers of each one of such services. IMPSAT will not assume any
responsibility for the contents, origin, or use of the
communications, of any type, received or transmitted via Internet.
5.5 Additionally, and since most of the services and systems comprising
the Internet are under the responsibility of third parties, IMPSAT
will not be responsible for transmission speed variations that may
occur when accessing different servers comprising the web.
6. CUSTOMER'S LIABILITIES
6.1 Without prejudice to other liabilities set forth in the present
Agreement, MANDIC will be liable for the following:
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a) Using the Service and the Equipment in conformity with what is
established herein. MANDIC will use the Service to provide
services to its customers via dial-up telephone access.
b) Should IMPSAT provide IP addresses necessary for operation of
MANDIC's internal network, the latter must inform IMPSAT what
use has been made of them, every time IMPSAT may so request.
c) MANDIC will exempt IMPSAT from any violation to intellectual
property laws, defamation, calumny, and/or any other acts or
omissions of MANDIC, or of any of its customers, which may
cause any damages to third parties, through the use of the
Service, resulting in liabilities imposed to IMPSAT by any
competent court seeking for compensation to such third
parties.
d) MANDIC will provide its customers with an adequate computing
structure for use of the Service and for its adequate
operation, including a personal computer, telephone line, and
modem. The customer will be solely responsible for the
maintenance of such computing structure essential for access
to the Service.
e) MANDIC will comply with all of the laws and regulations
applicable to the services under its responsibility, and for
obtaining all of the related permits and authorities.
7. INVOICING
7.1 During the term of this Agreement, and of its extensions, IMPSAT
will invoice MANDIC according to prices and payment conditions
set forth in Annex C hereof.
7.2 MANDIC will be the sole responsible for invoicing its customers for
the amounts corresponding to the services contracted by them.
8. APPLICABLE TAXES
8.1 According to the regulation in force, IMPSAT will invoice MANDIC for
applicable taxes on the agreed prices and sales. It will also
invoice the amount resulting from the application of any new tax
which may be incurred to this Agreement, as well as any existing tax
increase providing the same effect.
9. RELATION BETWEEN THE PARTIES
9.1 MANDIC is an independent contracting party and not a representative
or agent of IMPSAT for any purposes. MANDIC's liabilities set forth
herein will be met by the individuals having exclusive dependency
relation with MANDIC. There is no dependency relation and/or
subordination between MANDIC's and IMPSAT's personnel. As a
result, MANDIC will be the sole and exclusive responsible for
compliance with the legal and fiscal liabilities, including those
related to labor and social security, as well as any other
responsibilities in relation to its personnel during
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the entire term of this Agreement. At any moment IMPSAT is allowed
to require from MANDIC a proof of effective compliance with its
liabilities in view of this liability condition.
9.2 MANDIC will be the sole and exclusive responsible before IMPSAT, its
customers, and/or third parties, for the acts and omissions of its
personnel, or personnel of its subcontractors, in this case derived
from the execution of the present Agreement, and it shall be liable
before IMPSAT for any infringement and/or violation to any rules or
legal dispositions to which they may incur. MANDIC is hereafter
committed to immediately reimburse IMPSAT for any sum of money that
the latter may be required to pay to a third party as a result of
any of MANDIC's liabilities under this Agreement.
10. GENERAL
10.1 The entire responsibility related to the services provided by MANDIC
to its customers will be of its own liability. MANDIC will also be
the sole responsible before its customers in relation to providing
its services. MANDIC is forbidden to make any statement and/or
grant warranties in relation to the services on behalf of IMPSAT.
10.2 THE PARTIES hereby state, in compliance with their contractual
liabilities, that they will have access to confidential information
from the other party, such as, but not limiting to working methods,
marketing plans, prices, list of customers, costs, etc. THE PARTIES
are committed to maintain this information, or any other to which
access is provided, under strict confidentiality and using the
information solely for the purposes of compliance with this
Agreement. The confidentiality commitment will be maintained for a
period of two year after the termination of this Agreement, no
matter what may have caused the termination.
10.3 IMPSAT agrees to respect and recognize MANDIC's customers as
belonging to the latter, thus avoiding any type of business contact
with them, except in case of written indication or authority for
such.
10.4 MANDIC must not assign rights and liabilities resulting hereof,
without prior written consent from IMPSAT.
10.5 MANDIC will give preference to IMPSAT in contracting the services
object hereof, according to the following procedures:
a) MANDIC will notify IMPSAT about services to be contracted,
specifying the terms and conditions required to prepare an
offer (proposal). IMPSAT will submit to MANDIC the offer
within 10 days as of the reception of such notice.
b) Should MANDIC receive an offer from a third party more
favorable than that of IMPSAT, MANDIC will immediately notify
IMPSAT of the terms and conditions contained in such offer.
IMPSAT will have the right to match the offer and MANDIC will
then contract the services from IMPSAT.
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10.6 Price adjustment, according to market conditions, may be effected
after the twelve first months of this Agreement. After twelve
months, and should MANDIC receive an offer from a third party with
more favorable conditions than IMPSAT's, MANDIC will immediately
notify IMPSAT about the terms and conditions contained in such
offer. IMPSAT will have the right to match this offer and MANDIC
will then contract or continue to contract the services from IMPSAT.
Should IMPSAT fail to match or exceed the offer, MANDIC will have
the right to terminate this Agreement without any penalties.
10.7 In order to maintain the economic-financial balance of the
Agreement, MANDIC expressly agrees, hereafter, to revise the prices
for the Service to be paid to IMPSAT by the customer, should there
occur any significant change in the current economic situation of
the country, or in case of any economic measure that may devaluate
or outdate the agreed prices.
10.8 THE PARTIES shall not assign, transfer or subcontract this Agreement
or the Services, without the express written authorization of the
other parties.
11. SUSPENSION
11.1 Without any prejudice to any of its other rights, IMPSAT will have
the right to automatically suspend the Service should MANDIC fail to
meet any of its liabilities before the present Agreement, upon at
least 10 days prior written notice requesting the performance of
such obligation.
11.2 Without any prejudice to any of its other rights, MANDIC will have
the right to suspend the payment of any amount, under the present
Agreement, in face of any contractual default by IMPSAT, upon at
least 10 days prior written notice requesting the performance of
such obligation.
12. ACTS OF GOD OR FORCE MAJEURE
12.1 Any default or delay in its responsibilities regarding equipment
installation, beginning or continuation of services provided by
IMPSAT will not generate any liabilities against IMPSAT if such
default or delay should result from acts of God or force majeure,
being these understood as acts or facts of the government, natural
phenomena, or any other circumstances outside IMPSAT's control,
including, but not limiting to adverse conditions, whether
meteorological or astronomical, communication provider going out of
service for whatever reason, either partially or totally,
temporarily or definitely, earthquakes, epidemics, civil riots,
fires, strikes, war, acts or omissions of the satellite owner.
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13. TERMINATION
13.1 After 12 months of effect, MANDIC may terminate the present
Agreement, without a reason, upon at least 60 days prior written
notice to IMPSAT, and upon previous payment to IMPSAT of an amount
in cash corresponding to 12% of the remaining sum (provisioned) up
to end of the Agreement.
13.2 Additionally, both IMPSAT and MANDIC will have the right to
terminate this Agreement, after a notice is given to the other party
requiring the compliance of the obligations within 20 days
(except in the case of a termination pursuant to Section 13.2 (b)
and (c), which shall require no prior notice), if any of the
following causes should occur:
a) A default by the other party of any contractual obligation.
b) A default by the other party of any legal and regulating
dispositions, current or future, governing the use of the
Service or which are directly or indirectly binding, and whose
omission or encroachment may generate consequences of any
nature to the complying party or to the object hereof.
c) If the other party applies for its own failure, or if this
process is requested by third parties, or if a preventive
arrangement with creditors is submitted.
d) Execution of clause 10.6.
14. INDEMNIFICATION
14.1 If any of the parties to this Agreement fails to comply with an
obligation or not fulfill it in the appropriate manner and within
the established time frame provided in this Agreement, it shall
answer for such losses and damages and will indemnify and hold
harmless the other party for such losses and damages in accordance
with the provisions of Article 1056 of the Brazilian Civil Code as
well as with other provisions of such Code in connection with civil
and contractual liability.
15. FORUM AND OTHER DISPOSITIONS
15.1 No behavior, habit, or usage shall modify the terms and liabilities
agreed in the present Agreement.
15.2 Any modification to this Agreement must be formulated upon written
consent and executed by both parties.
15.3 This Agreement constitutes the complete and exclusive expression of
the rights and liabilities of the parties, making null every
communication, proposals, verbal or written offers which may have
been made between the parties relative to the object of the
Agreement before its execution.
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15.4 For all effects of this Agreement, THE PARTIES constitute the
addresses contained in the heading hereof as valid for all notices
that may result.
15.5 Renouncing all others, not matter how privileged they may be, the
parties hereto elect the Forum of the City of Sao Paulo, State of
Sao Paulo, for resolution of any doubts or disputes resulting from
this Agreement.
15.6 The Parties hereto have executed this Agreement, in Portuguese and
English versions. For the resolution of any disputes between the
parties, the Portuguese will prevail.
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IN WITNESS WHEREOF, the parties hereto have set their hands and seal to this
Agreement, in two copies of equal content, in the presence of the witnesses
below.
Sao Paulo, October 6, 1999
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ Aranha
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IMPSAT COMUNICACOES LTDA. MANDIC INTERNET LTDA.
WITNESSES:
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ da ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ da ▇▇▇▇▇ ▇▇▇▇▇▇
5 676 931-5 SSP/PR
CPF ▇▇▇-▇▇▇-▇▇▇-▇▇
/s/ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇
▇.▇. 13 613 498-2
CP.F. 171 253 708-37
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