Telus 2005 Annual Report Download - page 19

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Verizon adopted, with certain changes, the February 1, 1999 agreement (the “GTE Agreement”)
made between TELUS and a predecessor to Verizon, GTE Corporation, with respect to certain
GTE intellectual property rights and services. The agreement between TELUS and Verizon (the
“Verizon Agreement”) was made effective January 1, 2001 and contains provisions which,
subject to existing third party rights and certain other exceptions and conditions, give TELUS
and its affiliates certain rights to purchase exclusive licences of Verizon software and other
technology, trademarks and service marks as specified by TELUS, and to use exclusively the
remaining Verizon software and other technology, trademarks and service marks, in each
instance in connection with the provision of Telecommunications Services (as defined in the
Verizon Agreement) in Canada. Telecommunications Services do not include the provision of
content for broadcasting, video, cable or Internet services, or the sale, publication or provision of
directories. If Verizon proposes to transfer all or a substantial portion of the software and other
technology underlying the intellectual property rights sold or licensed to TELUS to a third party
unrelated to Verizon, and the transferred software and other technology were in fact used in the
U.S. (excluding Puerto Rico) or Canada by Verizon at the time of transfer, Verizon must use
commercially reasonable efforts to obtain for TELUS substantially the same rights obtained by
Verizon to use all upgrades, enhancements, additions and modifications to the transferred
software and other technology developed by the third party transferee. As amended on
December 14, 2004, TELUS retains the exclusive licenses in Canada to specified Verizon
trademarks, and software and technology where such licenses were purchased or such
trademarks, software and technology were used by TELUS prior to the closing of the Verizon
Sale, together with certain collateral rights associated therewith granted under the Verizon
Agreement, but not to any other Verizon trademarks or software and technology. TELUS also
has relinquished certain purchasing rights. Verizon is required to continue to provide upgrade
and support on the retained software and technology.
Verizon’s obligation to provide intellectual property rights, or any other right, service or product
called for in the Verizon Agreement is subject to compliance with U.S. regulatory requirements
by Verizon and its affiliates.
The Verizon Agreement requires Verizon to provide certain functional and consulting services to
TELUS as requested by TELUS. As amended on December 14, 2004, TELUS has the right to
require Verizon to provide such services under commercial terms with respect to those software
and technology and their upgrades that are licensed to TELUS. The parties have also agreed,
subject to existing obligations, to use reasonable efforts to provide services and products that are
seamless with each other and each has agreed to use reasonable efforts to purchase for itself and
its customers the Telecommunications Services of the other party in that party’s territory. As
amended on December 14, 2004, the two companies will use each other’s cross-border services
where capabilities and customer requirements permit. The Verizon Agreement also contains
certain joint marketing and non-competition provisions, which do not apply to Verizon Wireless
or TELUS Mobility. As at December 14, 2004, TELUS was released from its obligation not to
compete against Verizon in the U.S., and the exceptions to the remaining non-competition
obligations were in some cases clarified or modified.
The Verizon Agreement applies to Verizon and its American and Canadian affiliates, but
specifically excludes Verizon Wireless. Independent of the Verizon Agreement, TELUS