Telus 2007 Annual Report Download - page 19

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ALLIANCES
Verizon software and related technology and services
Concurrently with the 2004 sale by Verizon of its equity interest in TELUS (the “Verizon
Sale”), Verizon and TELUS adjusted their business relationships to reflect changes in
their business requirements since their business alliance was first established.
In particular, there were significant amendments to the January 1, 2001 alliance
agreement between TELUS and Verizon (the “Verizon Agreement”). Subject to existing
third party rights and certain other exceptions and conditions, TELUS and its affiliates
had obtained under the Verizon Agreement 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. 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 required 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 the software and technology and their upgrades that are licenced to
TELUS, and the two companies will use each other’s cross-border services where
capabilities and customer requirements permit. The Verizon Agreement also contained
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
Mobility and Verizon Wireless negotiated and implemented mutually beneficial changes
to their reciprocal roaming arrangements.
The Verizon Agreement, as amended on December 14, 2004, will expire on
December 31, 2008. In most instances, TELUS will have a right to use the licenced
software and technology on a non-exclusive basis following the expiry or other
termination of the agreement. As amended on December 14, 2004, annual payments in