EXHIBIT 10.7
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AGREEMENT FOR THE ASSIGNMENT OF ADVERTISING SPACE
ENTERED INTO BY
TELECOMUNICACOES DE SAO PAULO S.A. -TELESP
WITH
AOL DO BRASIL LTDA. - AOL
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AGREEMENT FOR THE ASSIGNMENT OF ADVERTISING SPACE
By the present instrument, the parties: (a) TELECOMUNICACOES DE SAO PAULO S.A.
-TELESP, with its main place of business in the city of Sao Paulo, State of Sao
Paulo, at Xxx Xxxxxxxxxx xx Xxxxxxxx, 000, enrolled in the National Registry of
Legal Entities-CNPJ/MF under n(0) 02.558.157/0001-62, in this act represented
pursuant to its Bylaws, hereinafter simply called "TELESP" and (b) AOL DO BRASIL
LTDA., with its main place of business in the city of Sao Paulo, State of Sao
Paulo, at Avenida Industrial, n(0) 600, 2(0) andar, enrolled in the National
Registry of Legal Entities-CNPJ/MF under n(0) 03.032.579/001-62, in this act
represented pursuant to its Bylaws, hereinafter simply called "AOL" and
collectively with "TELESP", the "Parties",
WITNESSETH
WHEREAS AOL provides services related to the worldwide computer network
("Internet"), such as Internet access service and the provision of editorial,
commercial content as well as of other contents to the Internet through,
including but not limiting to, its home page on the Internet, accessible at the
address XXX.XXX.XXX.XX, simply called "AOL HOME PAGE";
WHEREAS AOL is a company in the market of access services and of availability of
content in the Internet ("AOL Services") and, in view of the big audience and
covering of AOL Services in the national territory, which provides great
visibility to the goods and services of its advertisers in general, being also
awarded with a significant basis of paying subscribers.
WHEREAS TELESP is interested in reaching the market of subscribers of AOL
Services of AOL in the State of Sao Paulo;
WHEREAS TELESP is interested in advertising its trademark in the AOL Services,
aiming at reaching the aforementioned "target public";
In witness whereof, the parties enter into the present agreement for the
assignment of Advertising Space ("Agreement"), that shall be governed by the
following clauses and conditions:
1-THE OBJECT
1.1. This Agreement has as its purpose the hiring, by TELESP, of advertising
space in AOL Services ("AOL HOME PAGE"), complying with the provisions of
Clause 2.1 herein below and its Sub-clauses, for a twelve-month term,
counted as of January 1, 2003, for the conveyance of advertising of the
trademarks of TELESP's or Telefonica Group's ownership.
2- AMOUNTS AND FORM OF PAYMENT
2.1. For the advertising space made available pursuant to the terms of this
Agreement, (independently of the actual use of such spaces by TELESP) TELESP
shall pay AOL, monthly, the amount calculated by the application of the price
list contained in Exhibit II, attached to the present instrument. In the amounts
contained in Exhibit II all the direct and indirect taxes and fees levied on the
services herein agreed upon are included, as well as the [**] by AOL.
2.1.1. The parties expressly agree that the monthly amount set forth in
Clause 2.1 above, shall be adjusted (higher or lower, as the case may
be) by means of prior notice, at least [**] ([**]) days in advance, in
the assumption of attested increase or reduction of the rates or yet of
the creation or cessation of any taxes, contributions or incidental
charges over the advertising conveyance, object of the present
Agreement, being assured, nonetheless, that such amounts shall not
undergo any increase by virtue of fact or act exclusively attributed to
AOL.
2.1.2. The monthly amount defined in clause 2.1 shall be adjusted, as
of the present date, at each [**]-month ([**]) term, or a lesser
period, if allowed by the legislation in force, based on the variation
of the General Price Index-Internal Availability - IGP-DI- conveyed by
Xxxxxxx Xxxxxx Foundation, or, in case such index is discontinued,
based on another index that shall eventually lawfully replace it.
2.3. The amounts to be monthly paid by TELESP to AOL (as well as the respective
advertising space to be made available by AOL to TELESP), shall be verified
monthly pursuant to the strict terms of Exhibit II, so as to reflect the overall
number of AOL's subscribers exposed to the retained advertising ("Target
Public").
2.3.1. So as to comply with the provisions of Clause 2.3, the Parties
assume, as a rule for the verification of the Target Public (expressed
in the number of subscribers in the left column of the chart on Exhibit
II), throughout the validity of the present Agreement, the [**] of [**]
([**]) subscribers for each AOL's [**] in the Telefonica do Estado de
Sao Paulo's [**], independently of the effective occupation of the
aforementioned [**].
2.4. The monthly installments determined in Clause 2.1 above, shall be due on
the [**] week day of each month, subsequent to the conveyance month, thus being
the [**] one due on the [**] week day of [**].
2.4. AOL shall present to TELESP, at least [**] ([**]) days prior to the
aforementioned payment date, the respective collection documents, related to the
reference month services and TELESP shall make the respective payment through
credit to bank current accounts, to be subsequently informed by AOL.
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2.4.1. The deposit slip in AOL's favor, as the case may be, shall
be considered adequate for the verification of the acquittance of the
payments due by TELESP.
2.5. In the assumption that the payments set forth in this clause are not
effected on the date herein agreed upon, a [**] percent ([**] %) fine, besides a
[**] percent ([**] %) interest on arrears per month or month fraction, as well
as the price-level restatement verified by the variation of the General Index of
Prices- Market (IGP-M), conveyed by the Xxxxxxx Xxxxxx Foundation, shall be
levied on the amount of the installment due, as of the due date until the date
of the effective payment.
2.6. The amount set forth in Clause 2.1 does not include any costs related to
the creation of advertising material, neither does it include commissions by
chance owed to advertising and publicity agencies, which shall be TELESP's
responsibility.
3- ADVERTISING
3.1. The advertising spaces to be made available by AOL, for the display of
TELESP's trademark, shall comply with the following:
a) TELESP will request, through the Media Plans for each
campaign, the channels that will be used, according to the
specific needs, provided that the provisions of Exhibit I of
this Agreement are complied with and that the availability of
AOL's inventory is respected. The Parties agree that the
format, the intensity and the period of time for the
conveyance of the advertising pieces, contained in Exhibit I,
can be altered by mutual agreement of the Parties.
b) For the purposes of conveyance, the formats to be considered
as being advertising formats shall be the ones mentioned in
Exhibit I, as well as the new formats that may be developed,
conveying Telefonica Group's goods and services, provided that
they are previously approved, in writing, by the Parties.
c) TELESP, at its own exclusive discretion, shall define the
content of the advertising pieces, and can, inclusive, use the
space for the conveyance of advertising of any of the
Telefonica's Group's companies, except for the cases of
conveyance of advertising material of companies, the product
and/or service of which are direct competitors to AOL in the
segment of providing access to the Internet.
d) TELESP shall provide AOL, as the case may be, with the
material to be conveyed, up to the [**] ([**]) day of the
month previous to the intended conveyance, and TELESP can
replace the supplied material, at its own exclusive
discretion, provided that it informs AOL, as the case may be,
with at least [**] ([**]) days prior notice. In case of
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failure in the supply of the material, in accordance with what
has been herein agreed upon, AOL shall be released of the
obligation of conveying the aforementioned advertising.
e) The insertions will be bound to the compliance of AOL's rules
and policies for the other advertisers, to the conditions set
forth in this Agreement and shall further comply with the
specific terms and conditions set forth in the media plan,
monthly jointly devised by the Parties and which establishes
the conveyance prices, the conveyance period and the form and
place of the advertising display.
3.2. AOL agrees to make monthly available to TELESP, the retained spaces,
pursuant to the terms of the Agreement, equivalent to, at least, [**] percent
([**]%) of the monthly amount mentioned in Clause 2.2 above. In the assumption
that AOL, as the case may be, even if justifiably, fails to deliver the amounts
of imprints within the term agreed upon, the Parties agree that the positive
balance may eventually be used by TELESP within the maximum term of [**] ([**])
months.
4. LINKS
4.1. AOL will be able to, at its own exclusive discretion, keep links in the
home page and in the AOL Service for direct access to the "TELEFONICA" Home
Page, accessible through the address: XXX.XXXXXXXXXX.XXX.XX, by means of the
inclusion of banners or any other form of active advertising conveyance.
5. RESPONSIBILITIES OF THE PARTIES
5.1. The Parties shall appoint their respective, duly qualified representatives
for the purposes of this Agreement, who will be responsible for the technical
information interchange between the Parties regarding the conveyance of the
advertising pieces.
5.2. TELESP shall not be responsible for the services rendered by AOL, being
each one of them responsible for complying with the legislation in force and for
answering before consumers, public agencies and third parties.
5.3. AOL has no responsibility whatsoever for the services rendered by TELESP,
which shall be the sole responsible for complying with the legislation in force,
answering before consumers, public agencies and third parties. The content of
the advertising to be conveyed in the HOME PAGE shall also be TELESP's
responsibility, especially on whatever refers to the compliance with the
pertinent legislation, particularly, but not exclusively, the Consumer Defense
Code, the Standard Norms of the Advertising Activity -CENP- and the Advertising
Self-Regulation Code -CONAR, agreeing to indemnify and defend AOL in any
lawsuit, claim or procedure filed by consumers, who may eventually complain
about the services provided by TELESP, as well as to indemnify AOL for whatever
direct or indirect losses and damages, which they may incur by virtue of
providing such service, of claims or procedures.
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6. VALIDITY
6.1. The present Agreement shall remain valid and in force for a twelve-month
(12) period, counted as of January 1, 2003, the date when the advertising
conveyance hereby retained shall start.
6.1.1. This agreement shall be automatically renewed, a single time for
an equal period, in case the same provisions in force are kept for the
payment for the use of networks for the traffic of data.
7-TERMINATION
7.1. Any of the Parties can terminate the present agreement of its own right,
with no lien whatsoever, independently of any procedure or judicial or
extra-judicial notification, merely by means of a simple notice, in case the
other Party:
(i) sub-hires third parties or transfers to third parties, in the
whole or in part, its rights and obligations arisen from this
Agreement, without the prior written consent of the other
Party/ Parties.
(ii) files for Chapter 11 reorganization or has a petition in
bankruptcy ruled or confesses and requests its bankruptcy,
liquidation or dissolution.
7.2 The advanced termination, unilateral and without cause of the present
Agreement (thus understood any advanced termination which fails to have as
a reason any of the assumptions described in clause 7.1 above) by any of
the Parties, shall subject that Party that has terminated the agreement to
the payment, on the pretence of a fine, losses and damages, loss of profits
and incidental damages, all of which pre-fixed, to the other party,
equivalent to the totality of the amount then coming due of the present
Agreement (i.e. the result of the multiplication of the total amount
monthly paid by TELESP to AOL in the month previous to that of the
termination by the number of months still missing for the agreement to
expire).
7.2.1. The Parties expressly agree that, failing to punctually effect
the full payment of at least [**] ([**]) monthly installments
consecutively to AOL, shall be considered an advanced unilateral
termination without cause called by TELESP (which, therefore, shall give
rise to the payment of the fine above arbitrated by TELESP).
7.3. The Agreement's advanced expiration by any of the Parties, for whatever
reason, shall imply the Agreement's expiration for all the Parties of the
Agreement, except in case there is a different written arrangement between the
remaining Parties.
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8-CONFIDENTIALITY
8.1. Each of the Parties, by virtue of the access they have had and that they
will have to privileged or classified information from the other parties,
reciprocally accept the commitment of, except in the cases set forth in item 8.2
below:
a) not to convey totally or partially the existence, the object
and/or the content of this Agreement to any third parties, who
are not their respective administrators, representatives,
employees and advisors, from whom they will demand, under
their exclusive responsibility, equal obligations of
confidentiality and to take the necessary measures to prevent
the reproduction or disclosure of the confidential information
of the other Party, at least in equivalent form to that which
they adopt to protect their own information of their exclusive
ownership, throughout the validity of this agreement and for a
period of [**] ([**]) years subsequent to its expiration or
termination;
b) not to allow third party's access to classified information of
the other Party, who are not their respective administrators,
representatives, employees and advisors, and to these, only in
the necessary extent to allow the attainment of this
Agreement's objective;
c) not to use any information, except for the purposes set forth
in this Agreement; and
d) to keep full confidentiality regarding the received
information, including watching over them rigorously, so that
there shall not be circulation of copies, e-mails, facsimiles
and other forms of communication of private and public
information, besides those which are strictly necessary for
this Agreement's compliance.
e) to take all the necessary measures to prevent the reproduction
or disclosure of the confidential information of the other
Party, at least in equivalent form to that which they adopt to
protect their own information of their exclusive ownership,
throughout the validity of this agreement and for a period of
[**] ([**]) years subsequent to its expiration or termination;
and
f) to immediately quit using such information in case of
termination, resolution or expiration of this Agreement and of
the agreements stemming herefrom, informing all their
managers, employees, representatives, service providers and
others involved, that such confidential information can no
longer be used.
8.2. The Parties hereby declare that assumptions herein below do not feature a
violation to the provisions of this Clause 8:
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a) if the information becomes available to the public in general
by a means that does not stem from the disclosure by the
Parties or their representatives, their parent companies,
their controlled companies or companies which, either directly
or indirectly, are subject to the same control that this Party
is subject to.
b) if the revelation is required by a governmental authority or
order of the court with jurisdiction, under the penalty of
being featured as non-compliance or other penalty. In these
assumptions, the material to be disclosed shall be object of
all applicable governmental or judicial protection, and the
Party shall be compelled to disclose such information and to
notify the other Party previously to its disclosure; or
c) if the disclosure is previously authorized by the other Party,
in writing.
8.3. The Parties acknowledge that all the classified information provided
constitute exclusive property of the Party that has supplied it and that its
disclosure or the fact of entering into this Agreement does not feature, in any
circumstances, license, authorization, granting, assignment, transference,
either express, tacit or implicit, of any copyright, intellectual property,
idea, concept, trademark, patent or any other ownership right of the Parties.
8.4. For the purposes of the present Agreement, it is understood as confidential
or privileged information all information whatsoever and documents of all kinds
that are delivered to one of the Parties by the other Party, or by its advisors,
auditors, accountants, attorneys, representatives and employees, which relate to
the Parties' businesses or their clients' businesses, to suppliers and
associates, including but with no limitation whatsoever, management data,
financial data and market strategies. The Parties shall advise all those who
supply access to classified information of the other Party about the
confidentiality obligation and about the non-disclosure of the information
presently assumed.
8.5. The Parties shall remain compelled to keep and maintain the strictest
confidentiality regarding classified or privileged information, obtained by
virtue of this Agreement's performance, for a ([**]) [**]-year term, counted as
of its expiration.
8.6. Violation to the duties set forth in this Clause 8 or failing to comply
with the confidentiality duties determined in this instrument, will subject the
violating Party to reimbursement for all the losses incurred by the damaged
Party due to such violation, being such obligation limited to an indemnification
related exclusively to the direct damages, duly verified, that such injured
Party may eventually undergo by virtue of the non-compliance with the
CONFIDENTIALITY duties herein agreed upon.
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9- OTHER CONTRACTUAL CONDITIONS
9.1. The present Agreement cannot be assigned or in any other way transferred to
third parties by any of the Parties, without the previous express consent of the
other Party/Parties.
9.2. The responsible management for this Agreement are, as follows:
at AOL:
Interactive Marketing Department
Xx. Xxxxxxxx xx Xxx Xxxxxxxxx, 0000 - Ed. Philadelphia - Bloco B 2o
andar Sao Paulo - SP
CEP: 00000-000
Tel: (00) 0000-0000
Fax: (00) 0000-0000
at TELESP:
Mr. :____________________________________________
Xxx Xxxxxxxxxx xx Xxxxxxxx, 000, 00(0)xxxxx-Xxx Xxxxx
Tel:
e-mail: __________________________________________
9.4. All the understandings between the Parties regarding the performance of the
present Agreement shall be performed in writing, except for eventual oral
guidelines arisen due to emergencies, guidelines which shall have to be
formalized by the parties, in the maximum of [**] ([**]) days subsequent to the
occurrence of such a fact.
9.5. Except for any express provision to the contrary, all the terms and
conditions of this Agreement are due independently of judicial or extra-judicial
notification or summons.
9.6. Tolerance to eventual infractions of the other Party to the conditions set
forth in this Agreement shall not be valid as a precedent or renewal, or even as
waiver to the rights that the legislation and the agreement assure to each
party.
9.7. This agreement compels the parties and their successors, on any account.
9.8. Parties immediately agree that there being reciprocal credits,
independently of their origin and their binding to the object of this Agreement,
they can be cleared until their respective limits, being such clearance
processed by means of a notification and consequent concord between the Parties.
Said notification and concord shall be formalized in writing, in detailed
specific way, indicating the credits to be cleared.
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10- VENUE
10.1. It is hereby appointed the Central Court of the Sao Paulo County -SP,
which shall have jurisdiction to settle any issues arisen from the performance
of the present agreement, being any other excluded, however privileged.
In witness whereof, the Parties enter into the present Agreement of
Availability of Advertising Space, in three (3) counterparts of equal form and
content, each one to be deemed as an original, in the presence of the two (2)
undersigned witnesses.
Sao Paulo, December 3, 2002.
TELECOMUNICACOES DE SAO PAULO S.A - TELESP
/s/ FABIO XXXXXXXXX XXXXXXX /s/ XXXX XXXXX PANSIN
--------------------------- ---------------------
Xxxxx Xxxxxxxxx Xxxxxxx XXXX XXXXX XXXXXX
Vice President for Commercial and Residential Markets Network Vice President
AOL
/s/ XXXXXX XX XXXXX XXXXXXX
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XXXXXX XX XXXXX XXXXXXX
President
AOL Brasil Ltda.
WITNESSES:
1. /s/ XXXXX E JEMS JR.
-------------------------
Name XXXXX E JEMS JR.
Identity Card n(0):
Enrollment in the Individual Taxpayers'Registry:
2. /s/ XXXXX XXXXX XXXXXXXX
-------------------------
Name XXXXX XXXXX XXXXXXXX
Identity Card n(0):
Enrollment in the Individual Taxpayers'Registry:
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EXHIBIT I
AOL BRASIL'S PRICE LIST
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Product Format Price
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banner/botoes
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CPM AOL Full banner 468X60 [**]
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CPM AOL Half banner 234X60 [**]
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CPM Chat 120 X60 [**]
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CPM Sponsorship 88X31 [**]
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CPM AIM 120 X60 [**]
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CPM ICQ 468X60 [**]
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Editorial Links text [**]
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Pop Ups
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Pop Up for the basis 320X205 [**]
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Regionalized Pop Up 320X205 [**]
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Pop Up channel 200X200 [**]
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Pop Up web 320X205 [**]
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Newsletters AOL
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Banner 468X60 [**]
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Sponsor button 120 X60 [**]
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Editorial Links text [**]
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AOL Busca
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5 terms in AOL Search 468X60 [**]
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5 terms in AOL Search + recommended sites 468X60 [**]
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other products
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Online Research [**]
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Customized webcards 2 cards [**]
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Hot site 1 to3 pages [**]
in rainman
Slide-show [**]
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Key word (for two months) [**]
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Chat Tool [**]
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Messages Board [**]
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Photographs Gallery [**]
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Easy Map
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CPM 468X60 [**]
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CPM 468X60 segmented [**]
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Layer (one month) [**]
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EXHIBIT II
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AMOUNT OF AOL'S MONTHLY AMOUNT DUE
SUBSCRIBERS (R$)
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[**] [**]
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Intermediate amounts will be calculated through a linear interpolation between
the immediately previous amount and the immediately subsequent amount of the
list above.
Amounts higher than [**] subscribers will be linearly extrapolated, as of the
[**] amounts in the list.
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