Confidential Treatment Requested Exhibit 10.34
--------------------
CONFIDENTIAL
--------------------
BRAND, TECHNOLOGY AND CO-MARKETING AGREEMENT
THIS AGREEMENT dated as of June 30, 2000 ("Effective Date") between
TELUS Corporation ("TELUS"), Genuity Solutions Inc. ("Genuity") and Genuity
Inc. (the "Covenantor") witnesses that:
A. WHEREAS TELUS is a full-service telecommunications provider, and has and
will have substantial expertise in providing Telecommunications Services in
Canada;
B. WHEREAS Genuity is a global e-business network provider, and has and will
have substantial expertise in providing data Telecommunications Services in the
United States and elsewhere in the world;
C. WHEREAS TELUS seeks access to the Marks, Technology and services of Genuity
developed or acquired on or after the Effective Date with a view to TELUS using
the Marks, Technology and services of Genuity to provide Telecommunications
Services in Canada;
D. WHEREAS TELUS and Genuity have agreed to exploit the substantial benefits of
having TELUS and Genuity cooperate to provide coordinated and integrated
Telecommunications Services to their respective customers to the maximum extent
permitted by law and existing obligations;
E. WHEREAS the parties intend that TELUS shall be the vehicle for Genuity's
strategy for the provision of Telecommunications Services in Canada, and Genuity
shall be the vehicle for TELUS' strategy for the provision of data
Telecommunications Services in the United States;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the covenants
and agreements herein contained and other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the parties hereto
hereby covenant and agree as follows:
1. Definitions
-----------
For the purposes of this Agreement, the following terms shall have the
following meanings, respectively:
"Affiliate" shall mean, with respect to any person or entity, any other
person or entity Controlling, Controlled by or under common Control with such
person at the time in question.
"Xxxx Atlantic" shall mean Xxxx Atlantic Corporation and its Affiliates and
their successors and permitted assigns.
-2-
"Competitor" means a person or entity competing to provide
telecommunications services to customers of either TELUS or Genuity, as the case
may be, but in no event shall Verizon be considered to be a Competitor of
Genuity.
"Control" shall mean:
(a) in the case of a body corporate, where a person or entity holds
securities or have such securities held for its benefit (other than by
way of security only), to which are attached more than 50% of the
votes that may be cast to elect directors of the body corporate, and
the votes attached to those securities are sufficient, if exercised,
to elect a majority of directors of the body corporate; or
(b) in the case of an entity other than a body corporate, where a person
or entity holds an interest or have such interest held for its benefit
(other than by way of security only), that is sufficient, if
exercised, to elect a majority of the persons who provide direction
and control over the business and affairs of the entity.
"Covenantor" shall mean Genuity Inc., its successors and permitted assigns.
"Effective Date" shall mean the date set forth at the beginning of this
Agreement.
"Functional Services" shall mean the services provided by Genuity's
operational support systems, such as order processing, network management,
trouble ticket monitoring, customer support services and customer billing,
provided by Genuity to TELUS in support of the provision of Telecommunications
Services in Canada based on or using any Technology.
"Genuity" shall mean Genuity Solutions Inc. and its Affiliates, and their
successors and permitted assigns.
"GTE" shall mean GTE Corporation and its Affiliates, and their successors
and permitted assigns.
"GTE Agreement" shall mean the Heads of Agreement (Brand, Technology and
Co-Marketing) entered into on October 19, 1998 between BC TELECOM Inc. (now
TELUS) and GTE, as amended and replaced from time to time.
"Internet" shall mean a global collaboration of autonomous, interconnected
computer networks using the Internet protocols and their successors.
"Internet Services" shall mean services provided by telecommunications
providers to Internet users. They include dial access, dedicated access, web
hosting, content provision, content aggregation, private networks (intranets),
virtual private networks, network security, electronic commerce, consulting and
other value-added services.
-3-
"Marks" shall mean any and all trademarks and service marks now or
hereafter owned by Genuity (whether through use or registration or some other
manner) or licensed to Genuity with the authorization to sub-license such
trademarks and service marks to TELUS.
"Other Party's Home Territory" means, in respect of TELUS, Canada, and in
respect of Genuity, the United States.
"Technology" shall mean all present and future patents, copyrights, trade
secrets and know-how in systems, processes, hardware and software, including
source code to the extent provided for in Section 3.2 (and all supporting
documentation) owned by Genuity, and all third party patents, copyrights, trade
secrets and know-how licensed or made available to Genuity which Genuity is
authorized pursuant to its license to sub-license or otherwise make available to
TELUS, used in providing Telecommunications Services, including operating
support systems, customer care, billing, network management and intelligent
network capabilities, together with all upgrades, enhancements, additions and
modifications to any Technology developed from time to time during the Term by
Genuity or which it has the right to sub-license or otherwise make available to
TELUS for the provision of Telecommunications Services.
"TELUS" shall mean TELUS Corporation and its Affiliates, and its successors
and permitted assigns.
"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.
"Verizon" shall mean any one or more of GTE, Xxxx Atlantic, the entity
formed upon their merger, and their respective Affiliates, successors and
permitted assigns.
2. Brand
-----
2.1 Subject to the terms and conditions of this Agreement and to the rights and
licenses previously granted to third parties by Genuity of the type described in
connection with the Genuity Permitted Activities described in Exhibit A, from
and after the Effective Date, TELUS and its Affiliates shall and thereby have
the exclusive right and licence during the Term to use the Marks in connection
with the provision of Telecommunications Services in Canada, provided that such
Telecommunications Services are based on or use the Technology or are in lines
of business in which Genuity is or has been engaged at the time of use by TELUS.
Genuity agrees not to renew or extend such rights or licences after the
Effective Date unless permitted under Section 16.2.
2.2 Genuity warrants and represents that such rights and licenses to the Marks
previously granted to third parties will not prevent TELUS from (i) exclusively
using the Marks to represent
-4-
itself as the exclusive provider of Telecommunications Services in Canada using
the Technology, or (ii) exclusively using the Marks in connection with services
which provide a substantial competitive advantage to TELUS or materially
differentiate TELUS from its competitors in providing Telecommunications
Services. In view of the exclusive license granted to TELUS hereunder, Genuity
shall not renew or extend such rights or licenses after the Effective Date
unless permitted under Section 16.2.
2.3 Irrespective of the license granted to TELUS with respect to the Marks in
Section 2.1, Genuity acknowledges that TELUS has the exclusive right and license
to certain of the Marks pursuant to the GTE Agreement.
2.4 Genuity shall have the right to control the quality of any
Telecommunications Services described in section 2.1 and that TELUS advertises
and renders using the Marks, as more specifically described in Exhibit B hereto.
2.5 Subject to the restrictions in section 2.1 as to the right to use the
Marks, TELUS will have access to Genuity's existing creative, marketing,
advertising and other promotional materials for use in promoting
Telecommunications Services in Canada. TELUS will not pay for the development
of such promotional materials, but will be responsible for any costs for
Canadian rights for talent, music, usage of third party intellectual property
rights, etc. TELUS may not significantly alter such materials without Genuity's
approval, such approval not to be unreasonably delayed or withheld, and will not
alter such materials without any required third party approvals.
2.6 Genuity shall use, and shall cause its Affiliates to use, commercially
reasonable efforts when obtaining from third parties licenses of trademarks,
service marks or promotional materials ("Third Party Property Rights") for the
purpose of providing Telecommunication Services, to obtain the right to sub-
license such Third Party Property Rights to TELUS. Where Genuity obtains the
right to sub-license Third Party Property Rights to its Affiliates, Genuity
shall use commercially reasonable efforts to obtain the same for TELUS. If
additional compensation is payable by Genuity to obtain such Third Party
Property Rights for TELUS, TELUS, should it decide to deploy such Third Party
Property Rights, will be responsible for such additional compensation and
Genuity will use commercially reasonable efforts to assist TELUS to obtain
favourable pricing or Genuity Affiliate pricing, whichever is lower.
2.7 TELUS will be obligated to use the Marks where TELUS reasonably concludes
that such use will enhance TELUS shareholder value.
3. Technology
----------
3.1 License of Technology
---------------------
Subject to the terms and conditions of this Agreement and to the rights and
licenses previously granted to third parties by Genuity of the type contemplated
by the Genuity Permitted Activities described in Exhibit A, from and after the
Effective Date, TELUS and its Affiliates
-5-
shall have the exclusive right during the Term to use, copy and modify the
Technology to provide Telecommunications Services in Canada.
Genuity warrants and represents that such rights and licenses to the
Technology previously granted to third parties will not prevent TELUS from: (i)
being the exclusive provider of Telecommunications Services in Canada using the
Technology, or (ii) exclusively providing services which provide a substantial
competitive advantage to TELUS or materially differentiate TELUS from its
competitors in providing Telecommunications Services. In view of the exclusive
license granted to TELUS hereunder, Genuity shall not renew or extend such
rights or licenses after the Effective Date unless permitted under Section 16.2.
Irrespective of the license granted to TELUS with respect to the Technology
in this Section 3.1, Genuity acknowledges that TELUS has the exclusive right and
license to use certain of the Technology (including associated source code,
Third Party Technology and Third Party Property Rights) pursuant to the GTE
Agreement.
3.2 Source Code
-----------
Subject to the terms and conditions hereof, from and after the Effective
Date, Genuity shall make available and license to TELUS the right to use and
modify the source code for software which forms a part of the Technology.
Genuity shall not be required to sub-license or make available third party
source code for software which forms a part of the Technology to TELUS, except
to the extent that Genuity is authorized to sublicense or make available such
third party source code without payment of any additional compensation to any
third parties. Genuity shall inform TELUS that such third party source code is
used in the Technology, shall consult with TELUS respecting its need for access
to and the right to use and modify such source code, and if TELUS determines
that it requires such source code or a contingent right to such source code,
then Genuity shall use commercially reasonable efforts to obtain access to and
the right to use and modify such source code or a contingent right to such
source code, as the case may be, for TELUS, without additional compensation, and
failing that with the compensation to be paid to any third party for such right
to be paid by TELUS.
3.3 Third Party Technology
----------------------
(a) Notwithstanding any other provision of this Agreement, Genuity shall not be
required to sub-license rights from third parties to patents, copyrights,
trade secrets, know-how and supporting documentation or the right to use
the foregoing ("Third Party Technology") to TELUS if any additional
compensation is required to be paid to any third party for such right,
provided that Genuity shall use and shall cause its Affiliates to use
commercially reasonable efforts to obtain the right to sub-license such
Third Party Technology to TELUS without the payment of any additional
compensation to any such third parties, and failing that, to obtain the
right to sub-license such Third Party Technology to TELUS or assist TELUS
in obtaining the right directly, with any additional compensation to be
paid by TELUS.
-6-
If there are Third Party Property Rights generally included with the
license of any Third Party Technology, Genuity shall be required, subject to the
terms and conditions set out above in Section 3.3(a), to obtain the right to
sub-license such Third Party Property Rights to TELUS.
If Genuity obtains Third Party Technology on an exclusive basis, Genuity
shall use reasonable commercial efforts to obtain a sublicense for TELUS on an
exclusive basis, subject to the terms and conditions set out above in Section
3.3(a). If Genuity obtains Third Party Technology on a non-exclusive basis,
Genuity shall use reasonable commercial efforts to obtain a sublicense for TELUS
on a non-exclusive basis, subject to the terms and conditions set out above in
Section 3.3(a).
In each of the above instances where TELUS is responsible for payment of
compensation to a third party, Genuity will use commercially reasonable efforts
to assist TELUS to obtain favourable pricing or Genuity Affiliate pricing,
whichever is lower.
3.4 Non-Tangible Technology
-----------------------
To the extent that the Technology consists of know-how or other proprietary
information which is not available in tangible form, Genuity shall share such
know-how and other proprietary information with TELUS. In furtherance of this,
Genuity and TELUS shall jointly develop guidelines for providing TELUS with
access to Technology that consists of know-how and other non-tangible
proprietary information (which shall include the placement of TELUS
representatives with Genuity at TELUS' expense), provided that such access shall
be provided in a manner that minimizes the disruption to Genuity's business, as
determined by Genuity acting reasonably, and provided further that Genuity and
TELUS shall jointly determine when TELUS shall be required to compensate Genuity
for such access. In making such determination, the parties agree to balance (a)
the need of TELUS, as a payer for the Technology, to have reasonable access to
Genuity personnel to ensure a meaningful transfer and understanding of the
Technology and its capabilities without Genuity charging for every inquiry and
contact, against (b) the need of Genuity to ensure that such assistance does not
result in its subsidizing TELUS' operations or in substantial disruption of
Genuity's business.
4. Functional Services
-------------------
4.1 Genuity will make Functional Services available to TELUS during the Term
and the Extended Term, upon TELUS' reasonable request, so as to enable TELUS to
provide Telecommunications Services in Canada based on or using the Technology
or to provide Telecommunications Services in Canada in lines of business in
which Genuity has been or is engaged at the time of TELUS' request, provided
that such Functional Services can reasonably be provided by Genuity, given the
availability of Genuity's resources at the time of TELUS' request.
4.2 Genuity will provide such Functional Services exclusively to TELUS in
Canada, provided that Genuity may also provide such Functional Services:
-7-
(a) to third parties in Canada only to the extent that such Functional Services
are part of Genuity's Permitted Activities in Canada; and
(b) to third parties who are not providers of Telecommunications Services.
5. Consulting Services
-------------------
5.1 Subject to Section 7.1(b), Genuity will provide TELUS with consulting
services ("Consulting Services") reasonably requested by TELUS, during the Term
and the Extended Term including technical, marketing, training, support and
similar assistance to enable TELUS to provide Telecommunications Services in
Canada and to Canadian customers, based on or using the Technology or to provide
Telecommunications Services in Canada in lines of business in which Genuity is
engaged at the time of TELUS' request, including adapting the Technology for use
in Canada ("Canadianization"), provided that such Consulting Services can
reasonably be provided by Genuity, given the availability of Genuity's resources
at the time of TELUS' request.
6. Payments
--------
6.1 The parties agree that, in consideration for the rights granted to TELUS
under this Agreement, during the Initial Term, TELUS shall make payments to
Verizon in accordance with the terms of the GTE Agreement. Genuity acknowledges
that, in addition to other good and valuable consideration provided to it under
this Agreement, it will derive benefits from TELUS' payments to Verizon. The
parties further agree that such payments shall constitute sufficient
consideration to bind the parties to their obligations set forth in this
Agreement. For greater certainty, Genuity hereby agrees that any dispute
between Verizon and Genuity shall not in any way adversely impact TELUS under
this Agreement.
6.2 [INTENTIONALLY DELETED]
6.3 [INTENTIONALLY DELETED]
6.4 Overdue payments will be subject to interest at the prime rate posted by
TELUS' principal Canadian bank.
6.5 If the parties terminate this Agreement at the end of the Term, then during
the Extended Term, TELUS shall have no further payment obligations to Genuity,
except for any Functional Services or Consulting Services and payments earned
during the Term prior to termination.
6.6 Functional Services and Consulting Services are to be paid for by TELUS
based on agreed rates, which shall be usage-based, taking into account Genuity's
economies of scale, applicable laws and regulations, and the recovery of
Genuity's fully-loaded costs including, by way of example, reasonable
incremental costs experienced by Genuity (such as out-of-pocket costs such as
insurance, shipping or taxes, other than income taxes) not otherwise included by
Genuity in such internal pricing.
-8-
6.7 TELUS shall pay any travel, lodging, meals and related out-of-pocket
expenses reasonably incurred by Genuity to provide Functional Services and
Consulting Services in Canada.
7. Implementation and Support
--------------------------
7.1 From and after the Effective Date:
(a) Genuity and TELUS shall forthwith form a joint marketing working group
composed of representatives of each party. Such group shall meet regularly
to address marketing issues, exchange marketing plans and information, and
plan and develop joint marketing opportunities for the provision of
Telecommunications Services in and outside of Canada. In support thereof,
Genuity will provide the services set forth in this Agreement to TELUS to
assist in the timely introduction of Telecommunications Services in Canada
based on the Technology, in accordance with the principles set forth in
Section 3.4.
(b) Genuity will provide a reasonable level of Consulting Services to TELUS
necessary to implement a migration from TELUS' existing product and service
platforms in the event of a migration to Genuity Technology, in accordance
with the principles set forth in Section 3.4.
(c) Genuity and TELUS shall agree upon the nature, extent and a process for
TELUS' participation in the Genuity Technology planning process within the
first year of the relationship, with the understanding that TELUS will have
the opportunity to provide ongoing input into such Technology planning
process in connection with the proposed use of Technology to provide
Telecommunications Services in Canada, and such input shall be considered
by Genuity.
(d) Genuity shall provide to TELUS support services customarily provided by
Genuity to its own Affiliates in accordance with the principles set forth
in Section 3.4.
8. [INTENTIONALLY DELETED]
9. Ownership Rights
----------------
From and after the Effective Date:
(a) Without prejudice to TELUS' right of indemnity pursuant to Section 11,
TELUS agrees that it will not challenge or otherwise contest Genuity's
ownership of the Marks or Technology (including any Technology arising from
input provided by TELUS pursuant to Section 7.1(c)), but excluding any
Technology owned by TELUS referred to in Section 9(b).
-9-
(b) Subject to the prior ownership rights of Genuity in the Technology, TELUS
shall own TELUS-funded or TELUS-developed enhancements and modifications to
the Technology arising from Canadianization of the same. TELUS hereby
grants a non-exclusive, perpetual, irrevocable and royalty free license for
such enhancements and modifications: (i) to Genuity for the provision of
Telecommunications Services outside of Canada and to perform Genuity
Permitted Activities, and (ii) to permit Genuity to grant and sub-license
such enhancements and modifications to third parties for the provision of
Telecommunications Services outside of Canada, provided that, where Genuity
sub-licenses such enhancements and modifications to third parties, they
shall be on terms mutually agreed to between TELUS and Genuity, and TELUS
shall be compensated by Genuity for the use of such enhancements and
modifications by third parties. Genuity will own all other enhancements
and modifications to the Technology, but they shall be made available to
TELUS as part of the Technology under this Agreement. Nothing contained
herein shall require TELUS to license such enhancements or modifications to
third parties, or Genuity to license the Technology to third parties.
(c) Genuity will apply for, prosecute to registration and maintain
registrations in Canada for all intellectual property rights in the Marks,
to the extent such protection is reasonably and commercially available in
Canada, and Genuity will apply for, prosecute to issuance and maintain
statutory protection in Canada for intellectual property rights in the
Technology as Genuity reasonably determines to pursue. To the extent that
Genuity has not sought intellectual property protection in Canada for the
Marks or for the Technology and TELUS desires to seek such protection,
TELUS may request Genuity to seek such protection and, to the extent that
such protection is legally available in Canada, Genuity agrees to seek such
protection at TELUS' expense. TELUS and Genuity agree to cooperate with
respect to securing such intellectual property protection.
10. Sub-licenses of Marks and Technology
------------------------------------
10.1 Sub-licensing to Joint Ventures and Alliances
From and after the Effective Date and subject to the restrictions and
limitations imposed on TELUS hereunder, TELUS may sub-license the Marks and
Technology to any Affiliate and to any third party with which TELUS forms a
joint venture or marketing or strategic alliance, in each instance for the
provision of Telecommunications Services in Canada, provided that:
(a) such sub-licenses shall be in writing and shall provide for a term not to
exceed the Term, and shall prohibit further sublicensing without Genuity's
consent;
(b) such sub-licenses shall contain terms for the benefit of TELUS and Genuity
no less favourable to TELUS and Genuity than the terms of Sections 2.4, 11,
12, 14, 16 and 28 hereof;
-10-
(c) where TELUS wishes to sub-license to a third party that is a material
Competitor of Genuity, TELUS shall have obtained Genuity's prior written
consent to such sub-license, provided that Genuity shall have first
consulted with TELUS and attempted to reconcile its interest with that of
TELUS regarding such licensee prior to deciding whether to provide its
consent; and
(d) such sublicense shall not include any Third Party Technology or Third Party
Property Rights unless permitted pursuant to the agreement with the third
party.
10.2 Sub-Licensing in Ordinary Course of Business:
In addition to the sub-licenses permitted pursuant to Section 10.1, TELUS
may (but subject to the terms and conditions of Section 10.1) sub-license in the
ordinary course of business, provided that such sub-license shall not include
any Third Party Technology or Third Party Property Rights unless permitted
pursuant to the agreement with the third party:
(a) any of the Technology to its customers to the extent required to enable
such customers to use the Telecommunications Services provided by TELUS in
Canada; and
(b) any of the Marks to its dealers, distributors or other marketing or sales
agents for the purpose of enabling them on behalf of TELUS to provide
Telecommunications Services that are based on or using the Technology or
are in lines of business in which Genuity has been or is engaged at the
time of TELUS' grant of sublicense in Canada.
11. Indemnification for Infringement
--------------------------------
(a) Subject to the terms hereof, in the event that use under this Agreement of
the Marks or the Technology in Canada (excluding Third Party Technology and
Third Party Property Rights) during the duration of this Agreement is the
subject of a claim by a third party against TELUS for misappropriation of a
third party trade secret or infringement of a patent, copyright, or other
intellectual property right, Genuity shall defend (and at its option,
settle), any legal proceeding brought against TELUS resulting from such
claim, and indemnify TELUS with respect to any settled claims and damages
finally awarded against TELUS as a result of such claim.
(b) In addition to Genuity's obligations in Section 11(a), in the event of any
such claim or in the event of a potential claim that would be reasonably
likely to result in a substantial indemnity obligation on the part of
Genuity, Genuity shall either:
(i) secure for TELUS the right to continue using the applicable Marks or
Technology;
-11-
(ii) modify such Technology to make it non-infringing without materially
changing functionality or performance; or
(iii) replace such Technology with non-infringing comparable Technology
without materially changing functionality or performance;
If the foregoing are not reasonably available after Genuity has exercised
diligent efforts to procure the same, upon the issuance of an injunction,
or a final judgement, terminating or prohibiting continued use of the Marks
or Technology as contemplated by this Agreement, Genuity may terminate the
license to TELUS for such infringing component of the Marks or Technology
and pay to TELUS a reasonable amount therefor, taking into account all
relevant factors, including past use, if any, by TELUS of the infringing
Marks/Technology.
(c) It is agreed that Genuity shall have no obligation pursuant to Section
11(a) to the extent that such claim would not have arisen but for:
(i) the use by TELUS of other marks or technology with the Marks or
Technology;
(ii) modifications made to the Marks or Technology other than by Genuity
or its suppliers; or
(iii) the unreasonable failure of TELUS to use a current release of the
Technology available to TELUS from Genuity after a reasonable
transition period, if such infringement would have been avoided by
the use of the current release, provided that Genuity offers such
release to TELUS and advises TELUS that such release avoids the
infringement.
(d) TELUS shall give Genuity written notice of any such claims promptly after
TELUS receives notice thereof; provided that the failure to give such
notice shall not affect the rights of TELUS, except to the extent that
Genuity shall have suffered actual damage by reason of such failure or such
failure prejudices Genuity's ability to settle or defend such claim.
(e) TELUS shall cooperate with and furnish reasonable assistance to Genuity in
defense of all such claims. TELUS may, at its own expense, have its own
counsel act reasonably in consultation with Genuity in any proceeding,
compromise or settlement which is under the direction of Genuity.
(f) Notwithstanding anything in this Section 11 to the contrary, Genuity shall
not, without TELUS' prior written consent, settle or compromise any claim
where there is any reasonable probability that such action may either: (i)
result in monetary damages in excess of the remaining balance available
under the maximum liability; or (ii) materially and adversely affect TELUS
by reason of the issuance of injunctive relief or a settlement that has the
effect thereof.
-12-
(g) Genuity shall keep TELUS informed of the status of the defense of all such
claims and furnish TELUS with all documents, instruments and information
that TELUS shall reasonably request.
(h) Notwithstanding anything in this Section 11 to the contrary, Genuity's
maximum aggregate liability to TELUS pursuant to Section 11(a) shall be
$15 Million during the Initial Term and a maximum of $7.5 Million during
any five year renewal of the Term; it being understood that TELUS shall be
responsible for damages against TELUS in respect of claims by a third party
in excess of the foregoing maximums and TELUS shall assume control of the
defense and settlement of such claims.
(i) With respect to Third Party Technology and Third Party Property Rights,
Genuity shall have no liability to TELUS for infringement and TELUS' sole
rights and recourse shall be as set forth in the agreement with the third
party (or in the instance of a sublicense by Genuity, as permitted in
Genuity's agreement with the third party).
(j) The foregoing sets forth Genuity's entire liability for intellectual
property infringement related to this Agreement.
12. Warranties
----------
Each of Genuity and TELUS has the requisite corporate power and authority
to execute and deliver this Agreement and to perform its obligations hereunder.
The execution and delivery by each of Genuity and TELUS of this Agreement
and the fulfilment of its obligations under this Agreement have been duly
authorized by all necessary corporate action.
The execution and delivery of this Agreement by each of Genuity and TELUS
does not, and the fulfilment by Genuity and TELUS of its obligations under this
Agreement will not, conflict with or violate any provision of its certificate of
incorporation or bylaws or conflict with, violate or result in the breach of any
provision of any material contract other than any such conflict, violation or
breach that would not have a material adverse effect.
The use of the Technology and Marks is not the subject of current
litigation and is not the subject of a written charge of infringement received
by Genuity as of the date hereof.
For a period of 6 months commencing on the date that any element of
Technology is installed at TELUS, or such longer warranty period as is
customarily provided by Genuity without the payment of additional compensation
to Genuity on the sale of such element of Technology to any third party, Genuity
shall warrant that such element of Technology, when properly installed and/or
used as designed for use by Genuity, shall materially conform to the then
current applicable specifications therefor, provided that (i) TELUS shall have
exercised
-13-
commercially reasonable efforts to remedy the problem itself before requesting
the assistance of Genuity and (ii) in the event that it is determined that the
problem was caused by the improper installation and/or use of the relevant
Technology by TELUS, then Genuity shall have the right to charge TELUS for its
services under Section 5 (Consulting Services). Notwithstanding the foregoing,
Genuity is not required to provide any warranty in respect of Technology
developed by it and which is (i) insignificant, and (ii) not generally made
available for commercial use or offered for sale to any person including third
parties, Affiliates or Genuity's own business units or divisions.
Genuity makes no other warranties, either express or implied, as to the
condition of the Technology, their merchantability, their fitness for any
particular purpose, their non-infringement of third party rights, that any
Technology is error-free or that operation of any technology will be secure or
uninterrupted.
13. Term, Termination and Post-Termination Rights/Obligations
---------------------------------------------------------
(a) Unless there is early termination pursuant to this Section 13 during the
Term, there shall be an initial term (the "Initial Term") starting from the
Effective Date and ending at midnight (PST) on January 31, 2009. The
Initial Term and any renewed term thereafter (the "Term") shall be
automatically renewed for five years at the end of such Term, unless a
party gives written notice to the other party two years prior to the end of
the Term that it wishes to renegotiate, provided that any such
renegotiation shall not be based solely on those matters set out in Section
6. Any renegotiation shall be concluded at least one year prior to the end
of the Term, and if such re-negotiation cannot be concluded successfully,
either party may at anytime at least one year prior to the end of the Term
provide written notice to the other party that there shall be no renewal at
the end of that Term. If no such notice is received, the Term shall be
automatically renewed as stated above.
(b) Following the end of any Term without any renewal, or the termination of
this Agreement for any reason, as the case may be, there shall be a two-
year period (the "Extended Term") during which TELUS and Genuity will co-
operate with each other to facilitate an orderly transition from the use of
the Technology, and/or to alternate service providers, but TELUS shall not
be entitled to use the Marks during the Extended Term.
(c) Following the end of the Term or earlier termination of this Agreement (and
the Extended Term), except as set forth below, TELUS will continue to
retain the right to use, on a perpetual, irrevocable and royalty-free but
non-exclusive basis, the Technology, including source codes, used by TELUS
prior to the end of the Term or termination (including the Technology
resident in and used by Genuity to provide Functional Services to TELUS) to
provide Telecommunications Services in Canada.
-14-
Following the termination of this Agreement by Genuity under Sections (f),
(h) or (i), TELUS shall have the right to use the Technology (including
source codes and the Technology resident in and used by Genuity to provide
Functional Services to TELUS), on a royalty-free but non-exclusive basis,
during the Extended Term only.
Following the termination of this Agreement by Genuity under Section (l),
TELUS shall have the following rights:
(i) where TELUS is acquired by a party or parties who do not fall within
subsection (ii) below, TELUS shall have the rights set forth in the
first paragraph of this Section 13(c) with respect to the Technology;
or
(ii) where TELUS is acquired by a party who is a material Competitor of
Genuity, or is acquired by parties any one of whom is a material
Competitor of Genuity and such material Competitor controls the
acquiror, TELUS shall have the rights set forth in the second
paragraph of this Section 13(c) with respect to the Technology, except
that the term for the Extended Term shall be three (3) years.
(d) Throughout the Extended Term, Genuity will continue to provide (and TELUS
shall pay the prices in effect at the end of the Term for) Functional
Services and will also provide such Consulting Services as requested by
TELUS to assist it in its efforts to migrate from the Technology used by
TELUS at the end of the Term or upon termination of this Agreement.
Further, Genuity will provide limited Consulting Services for up to four
years from the end of the Term or termination of this Agreement required
for disaster recovery so as to maintain TELUS operations as at the end of
the Term or termination of this Agreement and for source code changes to
conform to exogenous factors (e.g. regulatory changes, change in industry
standards, etc.)
(e) [INTENTIONALLY DELETED]
(f) [INTENTIONALLY DELETED]
(g) TELUS shall have the right to terminate this Agreement (i) if Genuity fails
(without cause) to provide TELUS with the rights to use the Marks or the
Technology as provided herein after providing Genuity with notice and an
opportunity to cure in accordance with Section 13(h), (ii) upon the
termination of the GTE Agreement for any reason whatsoever, provided that
TELUS shall provide Genuity with at least six months' prior written notice
of such termination, or (iii) upon Genuity becoming an Affiliate of Verizon
as a result of Verizon's conversion of Genuity's Class B common stock into
Class C common stock or upon Genuity becoming an Affiliate of Verizon in
any other manner.
-15-
(h) Either TELUS or Genuity shall have the right to terminate this Agreement if
the other party is in material breach of Section 15 or 16, and Genuity
shall have the right to terminate this Agreement if TELUS is in material
breach of Section 10, or if the sublicensee is in material breach of its
sublicense from TELUS and TELUS fails to use commercially reasonable
efforts to cause such sublicensee to cure the breach or, failing that,
TELUS fails to terminate the sublicense, unless in any of such cases such
breach is cured within 90 days after such party has received written notice
of such breach. Notwithstanding the foregoing, if the nature of the breach
is such that it cannot reasonably be cured within such period, the party in
breach shall have such longer period to cure such breach as may be
reasonably necessary, provided that the party in breach diligently pursues
such cure.
(i) Should TELUS become bankrupt, or file a petition in bankruptcy, or if the
business of TELUS should be placed in the hands of a receiver, assignee or
trustee for the benefit of creditors, whether by the voluntary act of TELUS
or otherwise, all licenses and rights granted herein to TELUS shall
terminate/cancel automatically, unless stated otherwise in this Agreement.
TELUS shall include in each sublicense equivalent provisions to this
Section 13(i).
(j) No waiver of any breach of, or default under, this Agreement shall
constitute a waiver of any other breach of, or default under, this
Agreement, and no waiver shall be effective unless made in writing and
signed by an authorized representative of the party waiving the breach or
default.
(k) Termination/cancellation of this Agreement or the licenses and rights
granted herein shall not relieve either party from any obligations that
matured prior to the effective date of such termination/cancellation. The
termination/cancellation rights of each party provided herein are in
addition to all other rights and remedies available to such party.
(l) Either TELUS or Genuity shall have the right to terminate this Agreement if
any person or any two or more persons (excluding Verizon, Genuity and any
of their Affiliates) acting jointly or in concert shall acquire beneficial
ownership, directly or indirectly, of more than 50% of the voting capital
stock, or acquire all or substantially all of the assets, of TELUS.
(m) Nothing contained in this Agreement (including the Exhibits) shall,
following the termination or expiry thereof, be interpreted in any way to
prejudice, limit or in any way derogate from, any rights which TELUS has or
may have pursuant to the GTE Agreement, including without limitation any
rights to the Marks and Technology.
14. Confidentiality
---------------
(a) Subject to Section 14(c), TELUS shall not use (except to the extent
expressly permitted hereunder) and shall take reasonable precautions to
prevent the
-16-
disclosure of the Technology and all non-public documentation and
information of Genuity, whether in written, electronic or other tangible
form (the "Genuity Information") obtained by TELUS in the course of
exploiting its rights or performing its obligations under, or in connection
with entering into, this Agreement.
(b) Subject to Section 14(c), Genuity shall not use (except to the extent
expressly permitted hereunder) and shall take reasonable precautions to
prevent the disclosure of all non-public documentation and information of
TELUS, whether in written, electronic or other tangible form (the "TELUS
Information") obtained by Genuity in the course of exploiting its rights or
performing its obligations under, or in connection with entering into, this
Agreement.
(c) If either party is requested to disclose the Genuity Information or the
TELUS Information as a legal requirement or as part of a legal or
regulatory process, the party may make such disclosure provided that it has
given prompt notice (to the extent that it is able to do so) to the other
party so that the other party can seek a protective order or other
appropriate remedy prior to such disclosure.
15. Joint Marketing
---------------
(a) The parties agree that it is their intention that TELUS shall be the
vehicle for Genuity's strategy for the provision of Telecommunications
Services in Canada. Subject to existing obligations, the parties will use
reasonable efforts to appear to their respective customers as a single
network with common user interfaces, and to provide products and services
that are seamless with each other.
(b) Each party shall negotiate in good faith and make reasonable efforts to
agree to purchase Telecommunications Services for itself and its customers
in the Other Party's Home Territory from the other party to the fullest
extent practicable except to the extent otherwise required by law and
subject to existing contracts at the Effective Date, Capability and
commercial reasonableness, or where a customer specifically requests to use
another service provider. In the event of any such exceptions, provided
that the purchasing party has given the provisioning party the first
opportunity to provide the required services, the purchasing party may make
alternate arrangements to provide the Telecommunications Service in the
Other Party's Home Territory, for that customer in those locations where
the other party is unable to provide the services as required.
For clarification purposes:
(i) "Capability" means the ability of the provisioning party to meet the
purchasing party's availability and coverage requirements,
requirements for commercially reasonable pricing and service delivery
and performance standards, provided that such requirements and
standards are commercially reasonable in the circumstances, and are
no more onerous
-17-
than the requirements and standards generally used by the purchasing
party in its home territory for the provisioning of such
Telecommunications Services. Such requirements and standards shall be
reciprocal and the purchasing party shall be required to fulfil the
same requirements and perform at the same standards when selling its
equivalent services to the provisioning party.
(ii) Where TELUS is the purchasing party, it shall be entitled to terms
and pricing from Genuity that are no less favourable than those
offered by Genuity to its most favoured customers, including Verizon,
but specifically excluding America Online.
(iii) A party may use subcontractors to provide in whole or in part the
Telecommunications Services that the other party seeks to purchase,
provided that the provisioning party shall ensure that any such
subcontractors perform in accordance with the requirements and
standards of the purchasing party.
(iv) Where a purchasing party is entitled, after compliance with Section
15(b), to make alternate arrangements for the provision of the
required Telecommunications Services to a specific customer in the
Other Party's Home Territory, by reason of the provisioning party not
having the capability to meet the standard/general technical service
delivery and performance standards of the purchasing party for the
required Telecommunications Services, and not by reason of pricing or
the requirements of the specific customer, in addition to its rights
under Section 15(b), the purchasing party shall then be entitled to
make alternate arrangements to meet such standard/general service
requirements, but only on terms (including without limitation, scope
and type of service, geographical coverage, customer and market
segments), for a duration and at pricing no more favourable than
those offered to the provisioning party, and provided that, prior to
making such alternate arrangements, the purchasing party has
consulted with the other party to determine whether the specific
customer or general service requirements can be met in a manner that
benefits both parties. If the provisioning party provides to the
purchasing party a time period after which the provisioning party
reasonably expects to be able to meet the standard/general technical
service delivery and performance standards of the purchasing party,
the purchasing party shall make alternate arrangements that may be
ended at such time and shall use reasonable commercial efforts to
migrate the services to the provisioning party after such time.
(v) The parties acknowledge and agree that Genuity shall provide
Telecommunications Services to TELUS under Section 15(b) without any
adjustment for TELUS' rights to use and modify the Technology.
-18-
(c) In any negotiations of Genuity for an [*MATERIAL OMITTED AND SEPARATELY
FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] for [*MATERIAL
OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT] of Telecommunications Services which ought reasonably to include
a [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT] for [*MATERIAL OMITTED AND SEPARATELY FILED
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT], Genuity shall use
commercially reasonable efforts and negotiate in good faith to obtain for
[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT] the opportunity to [*MATERIAL OMITTED AND
SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] in
such [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT] as [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] of Telecommunications
Services [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION
FOR CONFIDENTIAL TREATMENT] on substantially the same terms offered to
other[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT].
16. Non-Compete
-----------
From and after the Effective Date and during the Term:
16.1 Exclusivity of Licences in Canada
---------------------------------
Except as specifically permitted in this Section 16 (provided however that
none of the following limitations shall prevent Genuity from engaging in the
Genuity Permitted Activities to the extent not prohibited by Section 16.2(c)),
Genuity will not, during the Term, sell, license or make available any of the
Marks or Technology, in each instance for the provision of Telecommunications
Services in Canada to any person other than TELUS.
16.2 Genuity Non-Compete in Canada
-----------------------------
Genuity will not directly or indirectly compete with TELUS in the provision
of Telecommunications Services in Canada, except that:
(a) Genuity may offer Telecommunications Services (including the use of any of
its Marks and Technology) in Canada to a non-American business customer who
requires Telecommunications Services in Canada, if and only to the extent
that (i) such services are specifically requested by that business customer
without solicitation by Genuity as to the Telecommunications Services in
Canada; (ii) such services are to be provided by Genuity to that customer
ancillary to other Genuity Telecommunications Services outside of Canada to
that customer or its Affiliates; and (iii) Genuity is unsuccessful in
providing the Telecommunications Services in question through TELUS in
accordance with Section 15(b);
-19-
(b) Genuity may offer Telecommunications Services (including the use of any of
its Marks and Technology) in Canada to an American business customer who
requires Telecommunications Services in Canada if Genuity is unsuccessful
in providing TELUS' Telecommunications Services to that customer in
accordance with Section 15(b); and
(c) Genuity may carry on in Canada the activities described in paragraphs 1 to
6 inclusive in Exhibit A (the "Genuity Permitted Activities") including
licensing Marks and Technology, provided that such activities do not
prevent TELUS from (i) being the exclusive provider of Telecommunications
Services in Canada using the Technology, or (ii) exclusively providing
services which provide a substantial competitive advantage to TELUS or
materially differentiate TELUS from its Competitors in providing
Telecommunications Services in Canada (and for greater certainty, the sale
or license or offering by Genuity of customer support, back office or
similar services offered generally by Genuity to providers of
Telecommunications Services in the U.S. which are Genuity's Competitors
shall be conclusive evidence that such activities do not create any such
prejudice.)
16.3 TELUS Non-Compete
-----------------
TELUS will not directly or indirectly compete with Genuity in the provision
of Telecommunications Services:
(a) in the U.S.; or
(b) outside Canada and the U.S. using any of the Marks or Technology, except
for insignificant competition arising from and incidental to the provision
of Telecommunications Services in Canada by TELUS.
Notwithstanding the foregoing, TELUS may:
(i) carry on in the U.S. the activities described in Exhibit C (the
"TELUS Permitted Activities");
(ii) offer Telecommunications Services (including the use of any of the
Technology) in the U.S. to a non-Canadian business customer who
requires Telecommunications Services in the U.S., if and only to the
extent that (i) such services are specifically requested by that
business customer without solicitation by TELUS as to the
Telecommunications Services in the U.S.; (ii) such services are to be
provided by TELUS to that customer ancillary to other TELUS
Telecommunications Services outside of the United States to that
customer or its Affiliates; and (iii) subject to the waiver in
Section 17, TELUS is unsuccessful in providing the Telecommunications
Services in question through Genuity in accordance with
Section 15(b); and
-20-
(iii) subject to the waiver in Section 17, offer Telecommunications
Services (including the use of any of the Technology) in the U.S. to
a Canadian business customer who requires Telecommunications Services
in the U.S. if TELUS is unsuccessful in providing Genuity's
Telecommunications Services to that customer in accordance with
Section 15(b).
16.4 Subsequent Acquisitions
------------------------
(a) The foregoing provisions do not prohibit the acquisition by a party or any
of its Affiliates of an interest in any person or entity that would cause
such party to be in breach of Section 16 if (i) such breach is [*MATERIAL
OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT]by the other party or (ii) promptly after the consummation of
such acquisition, such party or Affiliate provides the other party with
a[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT] to [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] to the other party the
portion of the [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT] or [*MATERIAL OMITTED AND
SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT]
relating to the [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT] for the portion of the [*MATERIAL
OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT] by the [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT] or [*MATERIAL OMITTED AND
SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT],
fairly allocated to such [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] (including any [*MATERIAL
OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT] or [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT] to[*MATERIAL OMITTED AND SEPARATELY
FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] such
[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT].
(b) Subject in all instances to the [*MATERIAL OMITTED AND SEPARATELY FILED
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] party's obligations
under Section 15(b), if the[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] party does not [*MATERIAL
OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT] an [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT] within [*MATERIAL OMITTED AND
SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT],the
[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT] party may (i) [*MATERIAL OMITTED AND SEPARATELY
FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] of the
[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO
-21-
AN APPLICATION FOR CONFIDENTIAL TREATMENT] to an [*MATERIAL OMITTED AND
SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT]
party, but only on terms no more[*MATERIAL OMITTED AND SEPARATELY FILED
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] than the [*MATERIAL
OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT] provided to the [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] party, or (ii) [*MATERIAL
OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT] and [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT] the [*MATERIAL OMITTED AND
SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT]
under [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION
FOR CONFIDENTIAL TREATMENT] from that relating to the [*MATERIAL OMITTED
AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT]
party and without [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT] any[*MATERIAL OMITTED AND
SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] of
the [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT] party with the [*MATERIAL OMITTED AND SEPARATELY
FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] or (iii)
[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT] and [*MATERIAL OMITTED AND SEPARATELY FILED
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] the [*MATERIAL
OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT] under the [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT]of the[*MATERIAL OMITTED AND
SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT]
party unless (with respect to this Section 16.4(b)(iii) only):
(1) the [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION
FOR CONFIDENTIAL TREATMENT] constitutes a [*MATERIAL OMITTED AND
SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT] portion of the [*MATERIAL OMITTED AND SEPARATELY FILED
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] in terms
of[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION
FOR CONFIDENTIAL TREATMENT] or [*MATERIAL OMITTED AND SEPARATELY FILED
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT]or is not
[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT] to the focus of the [*MATERIAL OMITTED AND
SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT]; or
(2) the [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION
FOR CONFIDENTIAL TREATMENT] party[*MATERIAL OMITTED AND SEPARATELY
FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT], within
[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT] of the [*MATERIAL OMITTED AND SEPARATELY FILED
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] of the
[*MATERIAL OMITTED AND SEPARATELY
-22-
FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] of the
[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT], to [*MATERIAL OMITTED AND SEPARATELY FILED
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] the [*MATERIAL
OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT] and [*MATERIAL OMITTED AND SEPARATELY FILED
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] of the
[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT] in a [*MATERIAL OMITTED AND SEPARATELY FILED
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] and [*MATERIAL
OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT], or thereafter fails to proceed to do so in a
[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT] and [*MATERIAL OMITTED AND SEPARATELY FILED
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT]; or
(3) (a) the [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT] party, within [*MATERIAL
OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT] of the [*MATERIAL OMITTED AND SEPARATELY FILED
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT]
party's[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT] [*MATERIAL OMITTED AND
SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT] in [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT] that it currently is able, or
will be able within [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] of the [*MATERIAL
OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT] of its [*MATERIAL OMITTED AND SEPARATELY FILED
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT], to satisfy
the[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION
FOR CONFIDENTIAL TREATMENT] requirements of [*MATERIAL OMITTED AND
SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT] of the [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO
AN APPLICATION FOR CONFIDENTIAL TREATMENT] of the [*MATERIAL OMITTED
AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT] at the time of [*MATERIAL OMITTED AND SEPARATELY FILED
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT]; or
(b) the [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION
FOR CONFIDENTIAL TREATMENT] party fails to [*MATERIAL OMITTED AND
SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT] such [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT] within
-23-
[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT] after the earlier of the end of the [*MATERIAL
OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT] period referenced above or the[*MATERIAL
OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT] referenced in Section 16.4(a).
In the event that an [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT] party is not [*MATERIAL OMITTED AND
SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] to
[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT] a [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT] under Section 16.4(b)(iii), such party
shall [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT] of the [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] in accordance with, at its
election, either Section 16.4(b)(i) or Section 16.4(b)(ii). In the event that an
[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT] is not [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] to [*MATERIAL OMITTED AND
SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] a
[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT] due to Section 16.4(b)(iii)(3), the [*MATERIAL OMITTED
AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT]
party, if necessary and subject to its obligations under Section 15(b), may make
[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT] to [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO
AN APPLICATION FOR CONFIDENTIAL TREATMENT] the [*MATERIAL OMITTED AND SEPARATELY
FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] of the [*MATERIAL
OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT] of the [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT] until the [*MATERIAL OMITTED AND
SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] party is
able to [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT] those [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT]. As and when the[*MATERIAL OMITTED
AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT]
party is able to[*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT] the [*MATERIAL OMITTED AND SEPARATELY
FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] of [*MATERIAL
OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL
TREATMENT] of the [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT], the [*MATERIAL OMITTED AND SEPARATELY
FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] party shall
promptly [*MATERIAL OMITTED AND SEPARATELY FILED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT] of the portions of the [*MATERIAL OMITTED AND SEPARATELY
FILED PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT] which support such
requirements in accordance with, at its election, either Section 16.4(b)(i) or
Section 16.4(b)(ii).
-24-
(c) Prior to making any acquisition, a prospective offering party shall consult
with the prospective offered party so that such party may provide input on
the value of the Competing Business, its customers and assets, future
business plans regarding the Competing Business and the service
requirements of the customers of the Competing Business.
(d) If, during the Term, Genuity enters into any business combination which
materially increases the size and scope of Genuity's (or its successors')
business or the marks or technology available to Genuity in connection with
Telecommunications Services, Genuity will use commercially reasonable
efforts to cause the other parties to such combination to grant to TELUS
licences to such parties' marks and technology as part of the Marks and
Technology, to the extent that they are not otherwise included in the Marks
and Technology, without additional payment by TELUS.
16.5 Passive Ownership
-----------------
The foregoing provisions do not prohibit the ownership by any party for
passive investment purposes of less than 10% of the capital stock of any entity
providing Telecommunications Services in the Other Party's Home Territory.
16.6 Specific Performance
--------------------
The parties acknowledge and agree that the foregoing restrictions are
reasonable and necessary to protect the legitimate business interests of the
parties and that any violation of such restrictions would result in irreparable
harm to the parties and that the remedy for breach of this Section 16 shall
include, in addition to damages and any other remedy available at law or in
equity, the right to seek an order that the defaulting party and its Affiliates
shall immediately cease the prohibited activity.
17. Conditions Subsequent
---------------------
The parties acknowledge and agree that this Agreement shall be effective
and binding on the parties as of the Effective Date, unless on or before
October 15, 2000:
(a) the parties fail to conclude a definitive amendment to this Agreement
with respect to the following matters:
(i) resolution of TELUS' potentially conflicting obligations to
Verizon and Genuity for the duration of this Agreement;
(ii) TELUS' right to cure any defaults in payment that may occur
between Verizon and Genuity;
(iii) assurance that TELUS is not limited in the recourse and remedies
that would otherwise be available to it if not for the payment
mechanism in Section 6 in the event of any default by Genuity
under this Agreement or
-25-
default by Verizon under the GTE Agreement and assurance that
such default under one agreement will not adversely affect TELUS
under the other agreement, and assurance that Genuity is not
limited in the recourse and remedies that would otherwise be
available to it if not for the payment mechanism in Section 6 in
the event of any default by TELUS or Verizon under the GTE
Agreement which adversely affects Genuity under this Agreement;
(iv) clarification of Genuity's right to re-negotiate the payment
mechanism in this Agreement in the event that the Genuity-Verizon
arrangement as to payment ends by reason of Verizon selling or
being unable to exercise its conversion rights with respect to
Genuity's common stock, or in the event that the GTE Agreement
terminates prior to the termination or expiry of this Agreement;
and
(v) agreement on an updated version of Genuity Existing Contracts in
Exhibit A; or
(b) TELUS and Verizon fail to conclude a definitive amendment to or
replacement of the GTE Agreement, where such failure is not waived by
TELUS at its sole discretion; or
(c) TELUS and Verizon conclude a definitive amendment to or replacement of
the GTE Agreement in a manner that results in a strategic relationship
between TELUS and Verizon that fundamentally deviates from the
relationship set forth in the GTE Agreement as it existed on the
Effective Date.
In the event that (1) the parties fail to conclude a definitive amendment
with respect to the matters described in subparagraph (a) above, or (2) TELUS
and Verizon fail to conclude a definitive amendment to or replacement of the GTE
Agreement and such failure is not waived by TELUS, or (3) TELUS and Verizon
conclude a definitive amendment to or replacement of the GTE Agreement that has
the effect described in subparagraph (c) above and such condition (c) is not
waived by each of TELUS and Genuity, in each case on or before October 15, 2000,
this Agreement shall terminate automatically, and the parties shall be fully
released from their obligations under this Agreement.
Notwithstanding any other provision herein to the contrary, in order to
avoid any conflict between TELUS' obligations under this Agreement and its
obligations under the GTE Agreement, for the period from the Effective Date
until such time that the parties conclude a definitive amendment to this
Agreement as contemplated in this Section 17, Genuity releases TELUS from its
obligations pursuant to Sections 15(a) and 15(b) of this Agreement to use
Genuity as its preferred provider of Telecommunications Services in the United
States.
18. Allocation and Withholding Tax
------------------------------
The parties agree to allocate the purchase price referred to in Section 6
between the properties, services and benefits to be provided to the parties
under this Agreement in a
-26-
reasonable and tax efficient manner, taking into account the fair market value
of each of the properties, services and benefits to be provided under this
Agreement. The parties will use their best efforts to make such allocation as
soon as possible after completing this Agreement and, in any event, prior to the
Effective Date. The Parties agree that the allocation referred to in this
paragraph will be used for all reporting purposes.
All payments to Genuity under this Agreement will be subject to any
applicable Canadian withholding taxes, and any such taxes withheld from a
payment and remitted by TELUS or its Affiliates to the Canadian tax authorities
will be considered to be a payment in that amount to Genuity under this
Agreement. TELUS shall provide Genuity with proof of payment to the Canadian
taxation authorities and shall use its best efforts to satisfy the U.S. Internal
Revenue Service that such payment has been made.
19. Management of Strategic Relationship
------------------------------------
19.1 Executive Council
-----------------
The parties agree to designate senior executives to serve as members of a
committee (the "Executive Council") to take actions necessary to fulfill the
parties' obligations under this Agreement and address requests for waivers and
amendments of the provisions of this Agreement. Either party may change its
representatives on such Executive Council at any time in its sole discretion and
shall make reasonable efforts to inform the other party of such change. The
Executive Council shall be co-chaired by one representative of each party. The
Executive Council shall be authorized to take all actions necessary to further
the principles and to mutually agree on how to implement all matters
contemplated by this Agreement.
The Executive Council shall establish an administrative office (the
"Alliance Management Office") to oversee and coordinate the implementation and
ongoing administration of this Agreement. The parties shall each designate one
representative who shall manage and operate the Alliance Management Office, each
of whom will be a senior representative of his/her respective organization.
Either party may change its representative at any time in its sole discretion
and shall make reasonable efforts to inform the other party of such change. The
mandate of the Alliance Management Office is to oversee and coordinate, subject
to the direction of the Executive Council, the implementation of this Agreement
including, without limitation, coordinating the activities of any working groups
designated by the Executive Council and monitoring and reporting upon the
success of implementation activities. The Executive Council shall also
establish such joint working groups as it deems necessary and desirable to
promote the effective implementation of this Agreement.
19.2 Dispute Resolution
------------------
Either party shall refer any dispute in respect of this Agreement to the
Executive Council for resolution. The Executive Council shall meet as soon as
is reasonably possible after a dispute is referred to it, giving due regard to
the nature and impact of the issue under consideration, to attempt to resolve
such dispute. If a dispute cannot be resolved by the Executive Council by
unanimous action and mutual agreement within 20 days after submission to the
Executive Council, or such other time period that is acceptable to the parties,
either party may refer the
-27-
dispute to arbitration in accordance with Section 19.3. Nothing in this Section
19.2 shall prevent a party from taking any action for injunctive relief
permitted by Section 16.6 which such party concludes, in the exercise of its
sole discretion, is necessary to preserve its rights or benefits, including
preserving the status quo, pending resolution of a dispute.
19.3 Arbitration
-----------
The arbitral proceedings shall be confidential, and any information
disclosed therein shall be treated by the parties as proprietary and
confidential information in accordance with the provisions of Section 14. There
shall be three arbitrators to be selected as follows, one arbitrator shall be
selected by the petitioning party ("Petitioning Party"), one arbitrator shall be
selected by the party defending the arbitration ("Defending Party"), and the
third arbitrator shall be selected by the two arbitrators selected by the
Petitioning Party and the Defending Party, or, if such arbitrators cannot agree
within 30 days on the third arbitrator, such arbitrator will be selected by the
International Chamber of Commerce ("ICC") pursuant to ICC rules. The
arbitration shall take place in Vancouver and shall be administered by the ICC.
In the event that the Defending Party within 30 days of any notification made to
the Defending Party of the demand for arbitration by the Petitioning Party
(containing the name, address and profession of the arbitrator selected, the
subject matter of the dispute and the relief sought) does not name its
arbitrator (providing the same information), such arbitrator shall be appointed
by the ICC at the request of the Petitioning Party.
20. Legal and Other Compliance
--------------------------
This Agreement and the relationship of the parties is subject to compliance
with all applicable laws, including export control laws.
TELUS shall obtain all regulatory consents, approvals or licenses necessary
to offer Telecommunications Services in Canada using any of the Marks or
Technology.
21. Obligations of Covenantor
-------------------------
During the term of this Agreement, Covenantor guarantees the obligations of
Genuity hereunder. If, during the term of this Agreement, Genuity Solutions
Inc. ceases to be an Affiliate of the Covenantor, the Covenantor shall thereupon
automatically become the primary contracting party to this Agreement in place of
Genuity Solutions Inc. For the purposes of clarification, any entity that is or
becomes an Affiliate of Genuity at any time during the term of this Agreement
shall be considered to be an Affiliate of Genuity for the purpose and duration
of this Agreement.
22. Binding Agreement
------------------
This Agreement, including Exhibits A, B and C, shall constitute a binding
agreement among the parties and, subject to Sections 13(m) and 17 hereof,
contains the complete and final
-28-
agreement between the parties with respect to the subject matter of this
Agreement and supersedes any prior or contemporaneous negotiations, proposals,
understandings or agreements between the parties with respect to the subject
matter hereof. No modification, amendment or alteration of this Agreement shall
be effective, unless set forth in a writing signed by the duly authorized
representatives of the parties.
Each of the parties shall be responsible for its own fees and other
expenses incurred with respect to the negotiation of this Agreement, the
agreements contemplated hereby and the closing of this transaction.
23. Public Announcements
--------------------
Each of the parties agrees not to make any public announcements concerning
the proposed transaction or the related negotiations without the prior approval
of the other party, except as may be required by law or applicable stock
exchange rules, in which case disclosure may only be made after making all
reasonable efforts to advise the other party of such disclosure and to obtain
their comments prior to making such disclosure.
24. Funds
-----
All dollar amounts referred to herein are expressed in U.S. funds unless
otherwise specifically provided.
25. Law of Contract
---------------
This Agreement shall be governed by the laws of the State of New York.
26. Assignment
----------
Neither TELUS nor Genuity shall assign or transfer directly or indirectly
(including to a Competitor of Genuity by merger or operation of law) any of its
rights and obligations, except with the prior written consent of the other
party; provided that nothing in this section shall prohibit:
(a) either party from assigning or transferring this Agreement to an Affiliate;
or
(b) TELUS from granting a sub-license in accordance with Section 10.
27. No Partnership
--------------
This Agreement is not intended, nor should anything herein be construed, to
create the relationship of partners, principal and agent, or employer and
employee among or between any parties. No party shall have any authority to
represent or to bind any other party in any manner whatsoever, and each party
shall be solely responsible and liable for its own acts.
-29-
28. Severability
------------
If any one or more of the provisions contained in this Agreement shall be
invalid, illegal or unenforceable in any respect under any applicable law, the
validity, legality, and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired.
29. Notices
-------
All notices and other communications to be given under this Agreement shall
be in writing and shall be hand delivered, delivered by courier, delivered by
mail postage prepaid, or sent by facsimile (with another copy being mailed or
delivered in accordance with this Agreement) to the parties at their respective
addresses set forth below or at such other addresses as a party shall notify the
other in accordance with the provisions of this section. Any such notice, (a)
if delivered by hand or by courier in accordance herewith, shall be deemed given
as of the time of such delivery or the date receipt would have been effectuated
if delivery were not refused, (b) if mailed in accordance herewith, shall be
deemed given on the fourth business day following the posting of such mail,
unless there is any postal strike or disruption between the time of posting and
the fourth business day in which case such notice shall not be deemed given
until actually received, and (c) if validly transmitted by fax in accordance
herewith, shall be deemed given on the day of transmission.
If to Genuity: Genuity Solutions Inc.
Attn: General Counsel
0 Xxx xx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
XXX
Fax: x0-000-000-0000
If to the Covenantor: Genuity Inc.
Attn: General Counsel
0 Xxx xx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
XXX
Fax: x0-000-000-0000
If to TELUS: TELUS Corporation
Attn: General Counsel
00 - 0000 Xxxxxxxx
Xxxxxxx, X. X. X0X 0X0
Xxxxxx
Fax: (000) 000-0000
-30-
30. Survival
--------
Notwithstanding the termination or expiry of this Agreement, the provisions
contained in Section 14 shall survive for ten years following the expiry or
earlier termination of the Term and any Extended Term, and the provisions
contained in Sections 6, 11, 12, 13, 17, 18, 19, 20, 21, 25, 28, 29 and 30, and
any other provisions which by their terms are intended to so survive, shall
survive the termination of this Agreement indefinitely or for such shorter
period(s) as stated in such provisions.
Agreed to and accepted as at this 30th day of June, 2000.
----
TELUS CORPORATION
Per: /s/ TELUS Corporation
---------------------
Per:
---------------------
GENUITY SOLUTIONS INC.
Per: /s/ Genuity Solutions Inc.
--------------------------
Per:
---------------------
GENUITY INC.
Per: /s/ Genuity Inc.
----------------
Per:
---------------------
EXHIBIT A
---------
GENUITY PERMITTED ACTIVITIES
1. Sales and services to U.S. government and U.S. governmental agencies,
including U.S. military authorities.
2. Technical, engineering, supply and similar services, including network
monitoring, provided by subsidiaries, divisions and Affiliates of Genuity,
to the extent that they constitute Telecommunications Services, provided
that the provision of any such services shall also be offered outside of
Canada and shall not result in material competition to TELUS in the
provision of Telecommunications Services in Canada.
3. Data processing, system sales, installation, provision of employee services,
disaster recovery services and related services provided by subsidiaries,
divisions and Affiliates of Genuity, excluding data transmission, to the
extent that they constitute Telecommunications Services, provided that the
provision of any such services shall also be offered outside of Canada and
shall not result in material competition to TELUS in the provision of
Telecommunications Services in Canada.
4. The advertisement and promotion of Telecommunications Services offered and
billed outside of Canada directed to non-Canadians temporarily inside of
Canada. Genuity may use the Technology and Marks inside of Canada for the
purpose of carrying on such advertisement and promotion.
5. Provision of services that may be used by Canadian customers or in Canada
that are not directed at or billed to such customers. Examples including
American terminating 1-800 numbers and electronic commerce with a retailer
outside Canada.
6. Sale of Internet Services to America Online in Canada, without any reduction
in obligation to comply with Section 15(b) of the Agreement.
Genuity Existing Contracts (see sections 2.1 and 3.1)
7. Provision of Internet Services to Xxxxxxxx Consulting by Genuity and its
Affiliates pursuant to an agreement (existing as of October 19, 1998) with
Xxxxxxxx Consulting Service Net.
8. Provision of automatic Internet registration services distributed by
personal computer manufacturers, such as Compaq, Acer and Hewlett Packard,
pursuant to contracts with Genuity existing as of October 19, 1998.
EXHIBIT B
---------
TRADEMARK LICENSING AND OTHER PROVISIONS REGARDING SERVICES
1. Genuity has the right to control the quality of any Telecommunications
Services that TELUS advertises and renders in connection with the Marks as
specifically described in this Section 1.
(a) TELUS agrees that it shall maintain standards of quality in the
advertising and rendering of the Telecommunications Services under this
Agreement consistent with those prevalent in the telecommunications
industry in Canada. TELUS agrees that it shall not advertise or render
under the Marks any Telecommunications Services that do not meet such
quality standards.
(b) TELUS agrees that it will not utilize the Marks or any confusingly
similar trademarks, service marks, trade names or domain names, except
in connection with the Telecommunications Services and then only during
the Term and as permitted hereunder.
(c) TELUS agrees to allow Genuity or Genuity's authorized representative at
reasonable times upon reasonable notice to enter the premises of TELUS,
or any premise under the control of TELUS, to inspect the services in
connection with which the Marks are used by TELUS. Such an inspection
shall be at Genuity's expense.
(d) TELUS agrees that the style and manner of use of the Marks in
connection with the advertising and rendering of the Telecommunications
Services shall be in the form, style and manner as may be reasonably
approved by Genuity in writing from time to time.
(e) TELUS agrees to use with the Marks any and all legal notices evidencing
ownership of and/or registration by Genuity of the Marks as may be
reasonably required by Genuity.
(f) Without prejudice to TELUS' right of indemnity pursuant to Section 11,
TELUS agrees that it will not challenge or otherwise contest the right
of Genuity to register the Marks during the Term.
(g) TELUS agrees that nothing herein shall give TELUS any right to or
interest in the Marks, except the right to use the same in accordance
with the terms of this Agreement, and that all and any uses of the
Marks by TELUS shall inure to the benefit of Genuity.
(h) TELUS agrees that it will not hereafter seek registration of the Marks
in its own name or in the name of an Affiliate.
(i) TELUS agrees to cooperate reasonably with Genuity, at Genuity's
expense, in the procurement of any registration of the Marks which
Genuity may choose to undertake at Genuity's sole discretion, including
but not limited to supplying evidence of use of the Marks to Genuity.
(j) TELUS agrees to provide within a reasonable period of time written
notice to Genuity of any conduct on the part of third parties which
TELUS deems to be an infringement of the Marks or Technology in Canada
or a challenge to the validity of any registration of an intellectual
property right in same. Genuity shall have a period of sixty (60) days
from the date of TELUS' notice in which to determine whether or not
Genuity elects to bring an action for infringement of the Marks or
Technology or the defence of any registration of same, and to advise
TELUS in writing of Genuity's decision. In any action brought by
Genuity, the action will be brought in the name of TELUS and Genuity.
The failure of Genuity to advise TELUS of Genuity's decision shall be
treated as a decision by Genuity not to take any action against such
third parties.
If Genuity elects not to take any action against such third parties, TELUS
has the right to bring an action for infringement of the Marks, or to take any
other action related to the Marks, against such third parties. In any action
brought by TELUS, the action will be brought in the name of TELUS and Genuity,
shall be at the sole cost and expense of TELUS, including all out-of-pocket
expenses of Genuity, and Genuity shall co-operate reasonably with TELUS in
respect of such action.
If Genuity decides to take action against such third parties, Genuity will
pay all costs and expenses, including all attorney's fees. If Genuity and TELUS
both decide to take such action, each of Genuity and TELUS will pay all of their
own respective costs and expenses, including attorney's fees. If only TELUS
decides to take such action, TELUS will pay all of its cost and expenses,
including all attorney's fees.
In all such actions: (i) except where Genuity has decided not to take any
action, Genuity shall control the litigation, acting reasonably, in consultation
with TELUS; (ii) if Genuity has decided not to take any action, TELUS shall
control the litigation, acting reasonably in consultation with Genuity; and, in
any event (iii) no settlement shall be made by either party without the consent
of the other party, such consent not to be unreasonably withheld.
2. Nothing contained in this Agreement shall be construed as conferring by
implication, estoppel or otherwise any license or other right under any
trademark except as expressly granted herein.
EXHIBIT C
---------
TELUS PERMITTED ACTIVITIES
1. Sales and services to Canadian government and Canadian governmental
agencies, including Canadian military authorities.
2. Technical, engineering, supply and similar services, including network
monitoring, provided by subsidiaries, divisions and Affiliates of TELUS, to
the extent that they constitute Telecommunications Services, provided that
the provision of any such services shall also be offered in Canada and shall
not result in material competition to Genuity in the provision of
Telecommunications Services in the United States.
3. Data processing, system sales, installation, provision of employee services,
disaster recovery services and related services provided by subsidiaries,
divisions and Affiliates of TELUS, excluding data transmission, to the
extent that they constitute Telecommunications Services, provided that the
provision of any such services shall also be offered in Canada and shall not
result in material competition to Genuity in the provision of
Telecommunications Services in the United States.
4. The advertisement and promotion of Telecommunications Services offered and
billed in Canada directed to Canadians temporarily outside of Canada. TELUS
may use the Technology and Marks outside of Canada for the purpose of
carrying on such advertisement and promotion.
5. Provision of services that may be used by American customers or in the
United States that are not directed at or billed to such customers. Examples
including Canadian terminating 1-800 numbers and electronic commerce with a
retailer in Canada.
