Confidential Treatment Requested Exhibit 10.36
November 3, 2000
VIA FACSIMILE
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Xxxxxxx X. Xxxxx
Vice Chairman & President
GTE Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
RE: Agreement between Genuity Solutions Inc. and GTE Corporation regarding
TELUS Corporation
Dear Xx. Xxxxx:
As you know, GTE Corporation ("GTE") entered into a Heads of Agreement
(Brand, Technology and Co-Marketing) with TELUS Corporation (which, together
with its affiliates, successors and permitted assignees is referred to herein as
"TELUS") dated October 1998 ("GTE/TELUS Agreement", which term shall include the
Software and Related Technology and Services Agreement between GTE and TELUS).
Under this agreement, GTE licensed certain trademarks and technology to TELUS
for use in Canada, including the trademarks, software and know-how of its then
wholly-owned subsidiary Genuity Inc. (f/k/a GTE Internetworking Incorporated).
In connection with the separation of Genuity Inc. (and its subsidiaries)
from GTE as a result of the merger of GTE and Bell Atlantic Corporation, Genuity
Solutions Inc. ("Genuity"), a wholly-owned subsidiary of Genuity Inc., entered
into a Brand, Technology and Co-Marketing Agreement with TELUS dated as of
June 30, 2000 (which, as in effect as of the date hereof, is referred to as the
"Genuity/TELUS Agreement"). Under this agreement, Genuity licensed its
trademarks, software and know-how acquired or developed after June 30, 2000 to
TELUS for exclusive use in Canada, and entered into certain preferred supplier
and non-competition arrangements. In exchange, TELUS agreed to pay certain
amounts to GTE for the benefit of Genuity.
The purpose of this letter agreement is to memorialize the terms upon which
GTE will pay to Genuity a portion of the total fee that GTE receives from TELUS
as well as the terms upon which Genuity may act as a preferred supplier to TELUS
in the United States, all as more specifically described below:
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1. Payment. In consideration for Genuity having entered into the
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Genuity/TELUS Agreement, including the foregone business opportunities in
Canada as well as the license granted by Genuity to TELUS for Genuity's
trademarks, software and know-how acquired or developed after June 30,
2000, GTE shall, during the term of this agreement as defined in Section
3 below, pay to Genuity a portion of the fees that GTE receives from
TELUS under the GTE/TELUS Agreement as follows:
Year Payment Amount
---- --------------
2000 US$[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO
AN APPLICATION FOR CONFIDENTIAL TREATMENT]
2001 US$[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO
AN APPLICATION FOR CONFIDENTIAL TREATMENT]
2002 US$[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO
AN APPLICATION FOR CONFIDENTIAL TREATMENT]
2003 US$[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO
AN APPLICATION FOR CONFIDENTIAL TREATMENT]
2004 US$[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO
AN APPLICATION FOR CONFIDENTIAL TREATMENT]
The parties acknowledge and agree that the preceding amounts are fixed
and constitute the net amount due Genuity after any applicable
withholding or similar taxes. The preceding amounts shall not be subject
to further deduction, withholding or pro-ration (unless this letter
agreement is terminated prior to the end of a calendar year). The
parties further acknowledge and agree that GTE's payment of these fixed
annual amounts to Genuity shall not be credited towards the minimum
purchase commitments contained in the Purchase, Resale and Marketing
Agreement between Genuity and Telesector Resources Group, Inc. dated
June 27, 2000.
GTE shall pay Genuity the fixed annual amounts in arrears in equal
quarterly installments on or before the end of each calendar quarter.
For calendar year 2000, GTE shall pay Genuity the full US$[*MATERIAL
OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT] annual amount immediately upon the execution of this letter
agreement by the parties.
Prior to the termination of this letter agreement, GTE shall not withhold
payment of the preceding amounts to Genuity under any circumstances,
unless TELUS shall have
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withheld payment to GTE of a portion of the fees payable to GTE, and
attributable to Genuity, based on Genuity's default under the
Genuity/TELUS Agreement. In the event that TELUS withholds payment to GTE
of a portion of the fees payable to GTE based on Genuity's default, then
GTE may withhold from its payment to Genuity only an amount equal to the
amount withheld by TELUS from GTE based on Genuity's default.
Commencing on July 1, 2004, the parties shall negotiate in good faith and
exercise their best efforts to agree on a schedule of fixed annual
amounts that Genuity will receive from GTE during the period from
January 1, 2005 until the termination of this letter agreement. If the
parties are unable to agree on a payment schedule by June 30, 2005, GTE
shall have no further obligations to Genuity under this letter agreement.
2. Preferred Supplier. Pursuant to the GTE/TELUS Agreement, GTE is TELUS'
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preferred supplier of Telecommunications Services, including IP Services,
in the United States. The parties acknowledge that GTE has granted a
waiver limited as to scope and duration to permit Genuity to be, until
the earlier of the end of the term of this agreement or June 30, 2005,
TELUS' preferred supplier of IP Services in the United States. "IP
Services" shall have the meaning set forth in Exhibit A of this letter
agreement.
In furtherance of the foregoing, the parties agree to develop and
implement, in consultation with TELUS, an operational model for
coordinating GTE's and Genuity's preferred supplier rights in a manner
that is consistent with the parties' agreements and protects the rights
and business interests of all three parties. In this regard, GTE and
Genuity agree to appoint, prior to December 31, 2000, appropriate
personnel and to use commercially reasonable efforts to develop and
implement an operational model for coordinating the parties' preferred
supplier relationships with TELUS. The parties agree that the
development and implementation of this operational model shall be
consistent with the preferred supplier principles set forth in this
Section 2 and shall not modify or amend these principles in any manner.
3. Term. The rights and obligations of the parties under this letter
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agreement shall commence as of the Effective Date and shall terminate on
the earliest of:
. the date that GTE (or any of its affiliated companies or successors)
sells or transfers all or a majority of its interest in Genuity Inc.
to a third party; or
. the date of termination of the GTE/TELUS Agreement; or
. the date of termination of the Genuity/TELUS Agreement; or
. June 30, 2005 (unless the Federal Communications Commission grants GTE
(or any of its affiliated companies, including Verizon Communications
Inc.) an extension of time to satisfy the conditions for acquiring
control of Genuity Inc., in which case the end date of the extension
period will be referenced in lieu of June 30, 2005).
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If GTE (or any of its affiliated companies) sells or transfers all or a
majority of its interest in Genuity Inc. to a third party, and, as a
consequence, the Genuity/TELUS agreement is terminated, then GTE's
obligations under Section 2 shall continue for a period of six (6) months
from the date of termination of the Genuity/TELUS Agreement or until
June 30, 2005, whichever shall occur first.
4. General. The parties agree that upon execution of a Verizon/TELUS
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Branding and Technology Agreement, they will use their best efforts to
amend this letter agreement solely for the purpose of replacing GTE with
Verizon as the contracting party. This letter agreement is the complete
and final agreement between GTE and Genuity on the subject matter hereof
and supersedes any and all prior communications or agreements, whether
written or oral, with respect to such subject matter. This letter
agreement may not be modified or amended, nor any right granted hereunder
waived, unless both parties execute a written amendment to this letter
agreement or the party waiving its rights has agreed to do so in writing.
This letter agreement shall be binding upon and inure to the benefit of
the duly authorized representatives, successors and permitted assigns of
the parties. This letter agreement shall be governed by, and construed in
accordance, with the laws of the State of New York.
5. Effective Date. The parties agree that the Effective Date of this letter
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agreement is September 30, 2000.
6. Compliance with FCC Order. The parties agree that this letter agreement
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shall be interpreted and implemented in a manner that is consistent with
the terms and conditions set forth in the memorandum opinion and order
adopted by the Federal Communications Commission on June 16, 2000
approving the merger of GTE and Bell Atlantic Corporation ("FCC Order").
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If the foregoing provisions are consistent with your understanding of the
subject matter of this letter, please indicate GTE's agreement to these terms by
signing below and returning a copy of this letter to us via facsimile at +781-
262-3408.
Sincerely,
GENUITY SOLUTIONS INC.
By: /s/ Xxx X. Xxxxxx
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Name: Xxx X. Xxxxxx
Title: Senior Vice President &
General Counsel
Accepted and agreed by Genuity Inc. as guarantor of the obligations of Genuity
Solutions Inc.:
GENUITY INC.
By: /s/ Xxx X. Xxxxxx
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Name: Xxx X. Xxxxxx
Title: Senior Vice President & General Counsel
Date: November 3, 2000
Accepted and agreed:
GTE CORPORATION
By: /s/ GTE Corporation
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Name:
Title:
Date:
By:
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Name:
Title:
Date:
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Exhibit A
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"IP Services" shall mean Telecommunications Services that utilize the IP
(Internet Protocol) protocol as defined by the Internet Engineering Task Force
(IETF) and the International Organization for Standardization (ISO).
Examples of IP Services:
- Managed IP backbone access (e.g. Internet Advantage)
- Managed Internet Access for ISPs (e.g. ISP Direct, IISP)
- IP access through dial in (Dialinx)
- IP access through xDSL
- Managed Virtual Private Networks for IP (e.g. VPN Advantage)
- IP managed security services (e.g. Site Patrol)
- IP infrastructure, ISP and ASP consulting services
- Web and eCommerce hosting services
- Voice over IP
- IP internet solutions associated with wireless technologies
- Direct IP circuits from Telus to the Genuity backbone network
"Telecommunications Services" shall mean voice, data, Internet services,
wireless (mobile and fixed), broadcasting, video, cable, services which are
value-added and provided in relation to any of the foregoing, services
introduced after the date hereof which evolve to provide, replace or substitute
for the foregoing services, any combination of the foregoing and services
incidental to the foregoing. Telecommunications Services shall not include the
provision of content for broadcasting, video, cable or Internet services, or the
sale, publication or provision of directories in any form.
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