Telus 2006 Annual Report Download - page 17

Verizon software and related technology and services
Concurrently with the 2004 sale by Verizon of its equity interest in TELUS, Verizon and TELUS
adjusted their business relationships to reflect changes in their business requirements since the
alliance was first established. A number of business agreements (including the agreements
described in this section) between Verizon and TELUS or their subsidiaries were amended or
terminated.
The alliance agreement between TELUS and Verizon (the “Verizon Agreement”), which came
into effect on January 1, 2001, 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 licenced 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 licences in Canada to specified Verizon trademarks, and software
and technology where such licences 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 licenced 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.
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