This excerpt taken from the TMB 20-F filed Apr 30, 2007.
Request of license reports
Telemig may at any time employ methods and procedures necessary to check and verify the reports of software copies reproduced or distributed with use purposes by subscribers. Telemig shall send Ericsson, the following information on a monthly basis.
6. ADJUSTMENT CONDITIONS
For one hundred percent (100%) of the prices of all items and severance pays, the adjustment frequency shall be one (01) year as from the delivery of the operation in Phase 2. The amounts shall be adjusted according to the IGP-M, column 7, disclosed by Conjuntura Econômica magazine of the Getulio Vargas Foundation (FGV) and according to the following formula:AP = BP x I / Io, where:
AP = Adjusted Price;
If during the effectiveness of the AGREEMENT, new taxes, charges and social security contributions are created, except for those assessed on or modified herein and, provided that such fact adversely affect the prices contracted herein, such prices shall be adjusted (increased and decreased), so as to reflect such alterations, except for any differences arising therefrom.7. LATE PAYMENT FINE
In the event of payment delay, the amounts due may be updated at one hundred and three percent (103%) of the Inter-banking Deposit Certificate (CDI), as of the due date thereof until its actual payment. The payments related to such charges shall be made within ten (10) days as of the issuance of the respective NF/Invoice.8. CONTRACTUAL TERMINATION
Regardless of the term provided for in item 4 hereof, Telemig Celular, at its sole discretion, may, on an unjustified and unilateral basis, and provided that it is not in default or in delay with its contract obligations, terminate this AGREEMENT, upon written notice sent within sixty (60) days in advance. In such event, CONTRACTING PARTY shall pay CONTRACTED PARTY, as compensation for the financial losses arising from such termination, as well as compensation for the investment made, the amount of three hundred and fifty thousand reais (R$ 350,000.00), which shall be reduced, on a pro rata basis, up to the end of the second year, to one hundred and ninety-nine thousand reais (R$ 199,000.00) . During the third year, the amount to be paid by CONTRACTING PARTY, in the event of termination, shall be one hundred and ninety-nine thousand reais(R$ 199,000.00), to be reduced, on a pro rata basis, up to the end of the effectiveness hereof to zero reais (R$ 0.00) . We provided the table below, for exemplification purposes:
The amounts mentioned above (expressed in R$) shall be paid within 30 business days as from the written notice of the contract termination.9. TERMS
The terms for implementation of the solution are provided for in the schedule, Attachment II.
10. PROPOSAL VALIDITY
This proposal shall be valid for six (6) days. If the purchaser order or the agreement executed is not received until such date, the delivery term shall be renegotiated by the parties.
André M. Fonseca