INTELLECTUAL PROPERTY LICENSE AGREEMENT

Exhibit 10.20

 

INTELLECTUAL PROPERTY LICENSE AGREEMENT

 

THIS INTELLECTUAL PROPERTY LICENSE AGREEMENT (this “ Agreement ”) is entered into as of April 4, 2004 (the “ Effective Date ”) between Motorola, Inc., a Delaware corporation (“ Motorola ”), and Freescale Semiconductor, Inc., a Delaware corporation (“ Freescale ”). Capitalized terms used in this Agreement and not otherwise defined will have the meanings ascribed to such terms in Article 1 of this Agreement or in that certain Master Separation and Distribution Agreement between Motorola and Freescale dated as of April 4, 2004 (the “ Master Separation and Distribution Agreement ”).

 

RECITALS

 

WHEREAS, Motorola has determined that it would be appropriate and desirable to separate the SPS Business from Motorola;

 

WHEREAS, in connection with the separation of the SPS Business from Motorola, Motorola desires to contribute or otherwise transfer, and to cause certain of its Subsidiaries to contribute or otherwise transfer, certain Assets and Liabilities associated with the SPS Business, including the stock or other equity interests of certain of Motorola’s Subsidiaries dedicated to the SPS Business, to Freescale and certain of Freescale’s Subsidiaries (the “ Contribution ”);

 

WHEREAS, Freescale and its Subsidiaries desire to receive (and Motorola is willing to grant to Freescale and its Subsidiaries) certain rights under Patents and Non-Patent Intellectual Property retained and owned by Motorola or its Subsidiaries on or after the Effective Date, and Motorola and its Subsidiaries desire to receive (and Freescale is willing to grant to Motorola and its Subsidiaries) certain rights under Patents and Non-Patent Intellectual Property Rights owned by Freescale or its Subsidiaries on or after the Effective Date.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements set forth below, and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereby agree as follows:

 

AGREEMENT

 

1.	DEFINITIONS

 

1.1 “ Affiliate ” of any specified Person means any other Person directly or indirectly “controlling,” “controlled by,” or “under common control with” (within the meaning of the Securities Act), such specified Person; provided , however , that for purposes of this Agreement, unless this Agreement expressly provides otherwise, the determination of whether a Person is an Affiliate of another Person will be made assuming that no member of the Motorola Group is an Affiliate of any member of the Freescale Group.

 

1.2 “ Change of Control ” means the acquisition of at least fifty percent (50%) of the outstanding voting power of a party to this Agreement by another Person by means of any transaction or series of related transactions including, without limitation, any reorganization, merger, consolidation or tender offer, except where such party’s shareholders of record as constituted immediately prior to such transaction will, immediately after such transaction

 

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together hold at least fifty percent (50%) of the outstanding voting power of the surviving or acquiring Person in such transaction. Notwithstanding the foregoing or anything in this Agreement to the contrary, neither the IPO nor Distribution will constitute a Change of Control for purposes of this Agreement.

 

1.3 “ Copyrights ” means: (a) any rights in original works of authorship fixed in any tangible medium of expression as set forth in the United States Copyright Act, 17 U.S.C. § 101 et. seq .; (b) all registrations and applications to register the foregoing anywhere in the world; (c) all foreign counterparts and analogous rights anywhere in the world; and (d) all rights in and to any of the foregoing.

 

1.4 “ Confidential Information ” has the meaning set forth in Section 7.1 (Confidential Information).

 

1.5 “ Corporation Technology ” means any and all Technology that exists as of the Effective Date and that, immediately prior to the Effective Date, was owned by Motorola or any of its Affiliates, including any of its business units and divisions. The term includes any and all Technology owned or controlled by any Motorola Affiliate under which Motorola has the right to grant any of the licenses and rights of the type and on the terms granted in this Agreement.

 

1.6 “ Damages ” means all losses, claims, demands, damages, Liabilities, judgments, dues, penalties, assessments, fines (civil, criminal or administrative), costs, liens, forfeitures, settlements, fees or expenses (including reasonable attorneys’ fees and expenses and any other expenses reasonably incurred in connection with investigating, prosecuting or defending a claim or Action), of any nature or kind, whether or not the same would properly be reflected on a balance sheet.

 

1.7 “ Derivative(s) ” means: (a) for copyrightable or copyrighted material, any translation (including translation into other computer languages), port, modification, correction, addition, extension, upgrade, improvement, compilation, abridgment or other form in which an existing work may be recast, transformed or adapted or which would otherwise constitute a derivative work under the United States Copyright Act; (b) for patentable or patented material, any improvement thereon; and (c) for material which is protected by trade secret law, any new material derived from such existing trade secret material, including new material which may be protected by copyright, patent and/or trade secret law.

 

1.8 “ Development System ” means an assembly of one or more Packaged Devices (as defined in Supplement C (Glossary of Technical Elements)) that is: (a) produced in limited quantities to demonstrate the capabilities of Freescale Semiconductor Products; and (b) not an end user product and is not provided for resale; provided, however, that such an assembly will not be deemed to be provided for resale solely due to Freescale’s distribution of such assembly directly or indirectly through distributors for demonstration purposes only.

 

1.9 “ Distribution ” has the meaning ascribed to such term in the Master Separation and Distribution Agreement.

 

1.10 “ Essential Patent Claims ” means the claims of the Motorola Patents set forth on Exhibit B as well as all other Motorola IC Patent Claims: (a) to the extent that infringement of

 

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such claims cannot be avoided in remaining compliant with the Wireless Standards, including optional implementations thereof provided for in the Wireless Standards, on technical grounds (but not commercial grounds) taking into account normal technical practice and the state of the art generally available at the time of standardization; or (b) that a member of the Motorola Group has certified, declared or otherwise identified to a standards organization or other public subscription system as being claims that cannot be avoided in remaining compliant with Wireless Standards (as further set forth in subsection (a) above) including, for example, Motorola IC Patent Claims of Patents identified on the website of a standard organization as Patents essential to compliance with a Wireless Standard.

 

1.11 “ First Commercially Offered ” means, with respect to a Freescale Wireless Semiconductor Product, the first instance in which a member of the Freescale Group has made available for sampling working Freescale Wireless Semiconductor Products that meet the applicable design specification.

 

1.12 “ Freescale Equipment Patent Claims ” means claims of any Freescale Patent other than a Freescale IC Patent Claim.

 

1.13 “ Freescale Group ” means Freescale, and each Affiliate of Freescale, including each Person that Freescale directly or indirectly controls (within the meaning of the Securities Act) immediately after the Effective Date, and each other Person that becomes an Affiliate of Freescale after the Effective Date.

 

1.14 “ Freescale IC Patent Claims ” means claims of any Freescale Patent to the extent that such claims cover any one or more: (a) Semiconductor Product; (b) method of manufacturing a Semiconductor Product; or (c) Manufacturing Apparatus (as defined in Supplement C (Glossary of Technical Elements)) or method of using or manufacturing a Manufacturing Apparatus.

 

1.15 “ Freescale Indemnified Product ” has the meaning set forth in Section 5.3(a) (Obligation to Defend).

 

1.16 “ Freescale Patent ” means all Patents other than Motorola Patents, filed for or issued anywhere in the world, that are owned or controlled by any member of the Freescale Group and issued on, or claiming priority from, an application filed anywhere in the world prior to the one (1) year anniversary of the Effective Date, including all Patents assigned to Freescale pursuant to that certain Intellectual Property Assignment Agreement between Motorola and Freescale dated on or about the Effective Date; and with respect to which and to the extent that any member of the Freescale Group has a right, as of the Effective Date or thereafter, to grant the licenses and related rights granted in this Agreement without the payment of royalties or other consideration to third Persons, except for payments to third Persons: (a) for inventions made by said third Persons while engaged by any member of the Freescale Group; and (b) as consideration for the acquisition of such Patents.

 

1.17 “ Freescale Process Technology ” means manufacturing process recipes for manufacturing Semiconductor Products and Mask Works developed by or for the Semiconductor Product Sector.

 

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1.18 “ Freescale Technology ” means any and all portions of Corporation Technology that were developed by or for, or otherwise acquired by the SPS Business and that relate to Semiconductor Products and the SPS Business, including all:

 

(a) Technology assigned to Freescale pursuant to that certain Intellectual Property Assignment Agreement between Motorola and Freescale dated on or about the Effective Date; and

 

(b) Technology licensed to or on behalf of the SPS Business that relate to Semiconductor Products and the SPS Business to the extent any member of the Freescale Group has the right to grant the licenses granted in this Agreement without the payment of royalties or other consideration to third Persons, except for payments to third Persons: (i) for Technology made by said third Persons while engaged by any member of the Freescale Group; and (ii) as consideration for the acquisition of intellectual property rights, applications and registrations with respect to such Technology; and

 

(c) Licensed Freescale Technology (but excluding all Motorola Technology as well as Technology that Freescale developed or acquired on behalf of the Motorola Business including, for example, custom Semiconductor Products for a specific Motorola business sector).

 

1.19 “ Freescale Wireless Semiconductor Product ” means a Wireless Semiconductor Product that is sold by Freescale in the merchant market under a Freescale brand as a standard Freescale product.

 

1.20 “ Group ” means either the Motorola Group or the Freescale Group, as the context requires.

 

1.21 “ IPO ” has the meaning ascribed to such term in the Master Separation and Distribution Agreement.

 

1.22 “ IPO Effective Date ” means the date on which the IPO is consummated.

 

1.23 “ Licensed Field ” means the practice of Motorola IC Patent Claims in the: (a) transportation and controller fields – including, for example, telematics applications, navigation systems applications, vehicle assistance applications (for example, aids for power steering and on-board electronics) and industrial and consumer applications; and (b) network and computing fields – including, for example, personal computing applications, computer networking applications, gaming applications and handheld computing applications. The Licensed Field does not include the practice of Motorola IC Patent Claims in Semiconductor Products specifically designed for applications in the Wireless Field.

 

1.24 “ Licensed Freescale Product ” has the meaning set forth in Section 4.3(f) (Combination Claims Excluded – Licensed Freescale Product).

 

1.25 “ Licensed Freescale Technology ” means that Freescale Technology which, at any time prior to the Effective Date, was embodied in or used in connection with the design, development or manufacture of: (a) any product that Motorola offered for sale other than as a reseller or sales agent of the Semiconductor Products Sector (an “ Existing Motorola Product ”) or

 

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was used in connection with the Motorola Business for the design, development or manufacture of such product; provided, however, that Freescale Technology will not be deemed to have been so used or embodied solely as a result of the incorporation of components or other products obtained from Freescale into an Existing Motorola Product; or (b) any Semiconductor Product that was under development by or for Motorola (other than by the Semiconductor Products Sector) as of the Effective Date and offered for sale by Motorola on or before January 1, 2006.

 

1.26 “ Licensed Motorola Technology ” means that Motorola Technology (other than Motorola Restricted Technology) which, at any time prior to the Effective Date: (a) was embodied in or used in connection with the design, development or manufacture of (i) any product that the Semiconductor Products Sector offered for sale other than as a reseller or sales agent of Motorola (an “ Existing Freescale Product ”) or was used in connection with the SPS Business for the design, development or manufacture of such product; provided, however, that Motorola Technology will not be deemed to have been so used or embodied solely as a result of the incorporation of components or other products obtained from Motorola into an Existing Freescale Product, or (ii) any Semiconductor Product that was under development by or for the Semiconductor Products Sector as of the Effective Date and offered for sale by Freescale on or before January 1, 2006; or (b) was used for the internal administration and operation of the SPS Business (e.g., training materials, operational documentation).

 

1.27 “ Licensed Technology ” means Licensed Freescale Technology and/or the Licensed Motorola Technology, as applicable.

 

1.28 “ Mask Work ” means: (a) any mask work, registered or unregistered, as defined in 17 U.S.C. §901; (b) all registrations and applications to register the foregoing anywhere in the world; (c) all foreign counterparts and analogous rights anywhere in the world (including, without limitation, semiconductor topography rights); and (d) all rights in and to any of the foregoing.

 

1.29 “ Motorola Equipment Patent Claims ” means claims of a Motorola Patent other than Motorola IC Patent Claims (including, without limitation, Essential Patent Claims and Non-Essential Patent Claims).

 

1.30 “ Motorola Group ” means Motorola and each Person that is an Affiliate of Motorola (other than any member of the Freescale Group) immediately after the Effective Date, and each other Person that becomes an Affiliate of Motorola after the Effective Date.

 

1.31 “ Motorola IC Patent Claims ” means claims of any Motorola Patent to the extent that such claims cover any one or more of the following (as defined in Supplement C (Glossary of Technical Elements)): (a) Circuit; (b) Integrated Circuit Structure; (c) Packaged Device; (d) Semiconductor Element; (e) Semiconductive Material; (f) System; (g) Circuit and System employing an Electrical Method; (h) method of manufacturing any of (a) through (g); or (i) Manufacturing Apparatus or a method of using or manufacturing a Manufacturing Apparatus.

 

1.32 “ Motorola Patent ” means all Patents (including reissues and reexaminations thereof) other than Freescale Patents, filed for or issued anywhere in the world, that are owned or controlled by any member of the Motorola Group and issued on, or claiming priority from, an

 

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application filed anywhere in the world prior to the one (1) year anniversary of the Effective Date with respect to which and to the extent that any member of the Motorola Group has a right, as of the Effective Date or thereafter, to grant the licenses and related rights granted in this Agreement without the payment of royalties or other consideration to third Persons, except for payments to third Persons: (a) for inventions made by said third Persons while engaged by any member of the Motorola Group or any Affiliate of Motorola; and (b) as consideration for the acquisition of such Patents.

 

1.33 “ Motorola Restricted Technology ” means Celestri Satellite Technology, Iridium Satellite Technology, Teledesic Satellite Technology, iDEN Technology, TETRA Technology, APCO25 Technology, ASTRO Technology and MIRS Technology each as further set forth in the attached Supplement A .

 

1.34 “ Motorola Sector Patents ” means the Motorola Patents, if any, listed on or otherwise licensed under the following Supplements with respect to the applicable Motorola business sector, Motorola Software or Motorola laboratory: (a) Supplement B1 – Broadband Communications Sector; (b) Supplement B2 – Commercial, Government and Industrial Solutions Sector; (c) Supplement B3 – Global Telecom Solutions Sector/iDEN; (d) Supplement B4 – Integrated Electronic Systems Sector; (e) Supplement B5 – Personal Communications Sector; and (f) Supplement B6 – Motorola Laboratories and Software.

 

1.35 “ Motorola Sector Technology ” means the Motorola Technology listed on or otherwise licensed under the following Supplements with respect to the applicable Motorola business sector, Motorola Software or Motorola laboratory: (a) Supplement B1 – Broadband Communications Sector; (b) Supplement B2 – Commercial, Government and Industrial Solutions Sector; (c) Supplement B3 – Global Telecom Solutions Sector/iDEN; (d) Supplement B4 – Integrated Electronic Systems Sector; (e) Supplement B5 – Personal Communications Sector; and (f) Supplement B6 – Motorola Laboratories and Software.

 

1.36 “ Motorola Technology ” means any and all portions of Corporation Technology that were developed by or for, or otherwise acquired by the Motorola Business, including all:

 

(a) Technology licensed to or on behalf of the Motorola Business to the extent any member of the Motorola Group has the right to grant the licenses granted in this Agreement without the payment of royalties or other consideration to third Persons, except for payments to third Persons: (i) for Technology made by said third Persons while engaged by any member of the Motorola Group or any Affiliate of Motorola; and (ii) as consideration for the acquisition of intellectual property rights, applications and registrations with respect to such Technology; and

 

(b) Licensed Motorola Technology and Motorola Restricted Technology (but excluding all Freescale Technology).

 

1.37 “ Motorola Wireless Patent Claims ” means the claims of those Patents set forth on Exhibit A .

 

1.38 “ Non-Essential Patent Claims ” means, with respect to a Wireless Semiconductor Product, Motorola IC Patent Claims (other than Essential Patent Claims) to the extent that such claims would be directly infringed by such Wireless Semiconductor Product.

 

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1.39 “ Non-Patent Intellectual Property Rights ” means all rights in Copyrights, Mask Works, Technology and other intangible property anywhere in the world, and all registrations and applications relating to any of the foregoing and analogous rights thereto anywhere in the world, other than rights in Patents and Trademarks.

 

1.40 “ Patents ” means: (a) patents and patent applications, worldwide, including all divisions, continuations, continuing prosecution applications, continuations in part, reissues, renewals, reexaminations, and extensions thereof and any counterparts worldwide claiming priority therefrom; utility models, design patents, patents of importation/confirmation, and certificates of invention and like statutory rights; and (b) all right in and to any of the foregoing.

 

1.41 “ Person ” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency, or political subdivision thereof. As used in this Agreement, the term “third Person(s)” means a Person that is neither a party to this Agreement nor an Affiliate of a party to this Agreement.

 

1.42 “ Semiconductor Product ” means any one or more of the following items (as defined in Supplement C (Glossary of Technical Elements)), whether or not an item is incorporated in more comprehensive equipment: (a) Circuit; (b) Integrated Circuit Structure; (c) Packaged Device; (d) Semiconductor Element; (e) Semiconductive Material; or (f) Circuits employing an Electrical Method; provided, however, that a “Semiconductor Product” does not include an assembly of more than one Packaged Device.

 

1.43 “ Semiconductor Products Sector ” means the business unit of Motorola known as the Semiconductor Products Sector prior to the Effective Date.

 

1.44 “ Semiconductor Software ” means all Software owned by Freescale and designed solely for use with, or to design, a Semiconductor Product.

 

1.45 “ Software ” means computer programs and systems, whether embodied in software, firmware or otherwise, including, software compilations, software implementations of algorithms, software tool sets, compilers, and software models and methodologies (regardless of the stage of development or completion) including any and all: (a) media on which any of the foregoing is recorded; (b) forms in which any of the foregoing is embodied (whether in source code, object code, executable code or human readable form); and (c) translation, ported versions and modifications of any of the foregoing.

 

1.46 “ SPS Business ” means: (a) the businesses and operations conducted by the Semiconductor Products Sector of Motorola and its Affiliates (including, for purposes of this definition, any member of the Freescale Group) prior to the Effective Date, including as described in the IPO Registration Statement; and (b) except as otherwise expressly provided in this Agreement, any terminated, divested or discontinued businesses or operations that at the time of such termination, divestiture or discontinuation exclusively related to the SPS Business (as described in the foregoing clause (a)) as then conducted.

 

1.47 “ Technology ” means any and all technical information, Software, specifications, drawings, records, documentation, works of authorship or other creative works, ideas,

 

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knowledge, know-how, trade secrets, invention disclosures or other data including works subject to Copyrights and Mask Works (but does not include Trademarks or Patents).

 

1.48 “ Trademarks ” means: (a) trademarks, service marks, logos, trade dress and trade names, and domain names indicating the source of goods or services, and other indicia of commercial source or origin (whether registered, common law, statutory or otherwise); (b) all registrations and applications to register the foregoing anywhere in the world; (c) all goodwill associated therewith; and (d) all rights in and to any of the foregoing.

 

1.49 “ Wireless Equipment ” means, collectively or individually, any of the following the function of which is standardized in any of the Wireless Standards (or between which certain interfaces are substantially standardized in any of the Wireless Standards): (a) subscriber terminals (i.e., equipment such as a mobile, transportable or handheld portable unit containing no less than all of the following components: a display, a battery, plurality of keys or other input device, antenna, RF receiver and controller therefore); (b) subscriber modules (i.e., an assembled unit containing no less than all of the following components: an RF receiver, a controller, and necessary interface connections); and (c) infrastructure equipment (i.e., base transceiver stations, base transcoders, base station controllers, mobile service switching centers, operation and maintenance centers, network management centers, location registers, equipment identity registers, authentication centers, test equipment, and equivalent equipment (e.g. radio access network and Node B)).

 

1.50 “ Wireless Field ” means the practice of the Motorola IC Patent Claims in Semiconductor Products designed for: (a) wireless telecommunications applications that are compliant with or substantially based upon a Wireless Standard; or (b) broadband wireless communications applications. The Wireless Field does not encompass the practice of Motorola IC Patent Claims in products and components (such as certain multipurpose or programmable products and components) that can be used in applications for the Wireless Field but are not specifically designed for such use.

 

1.51 “ Wireless Semiconductor Product ” means a Semiconductor Product specifically designed solely or jointly by or for Freescale for the Wireless Field.

 

1.52 “ Wireless Standards ” means: (a) all cellular communication technical specifications adopted as a standard by either a standards development organization (SDO) or a major operator of public subscription systems for in-country requirements (e.g., frequency spectrum availability, interconnection with preexisting telephony networks, etc.), as well as various adjunct protocols to the extent incorporated into such standards, including, but are not limited to, those technical specifications for digital radiotelephone service: (i) promulgated by ETSI and known as the GSM, Pan-European Digital Cellular radiotelephone service (including Personal Communications Network services, presently known as DCS1800 and in the United States PCS1900); (ii) promulgated in the United States by the Telecommunications Industry Association/Electronic Industries Associates (TIA/EIA) and presently known as AMPS (Advanced Mobile Phone System), NAMPS (Narrowband AMPS), TDMA Cellular/PCS – Radio Interface Interim Standards IS-136, IS-137 and IS-138 (including IS-54, IS-55 and IS-56 and PCS 1900 standards JSTD-009, JSTD-010 and JSTD-011); (iii) promulgated by ARIB (formerly RCR) and known as PDC (Personal Digital Cellular); (iv) promulgated by the TIA and known as

 

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IS-95 IS-95B, RTT MC 1X and 1X Plus and 1Xtreme Code Division Multiple Access services; (v) third generation (3G) cellular standards currently under development and known by such designations including 3GPP, UMTS, WCDMA and CDMA2000; and (vi) fourth generation (4G) cellular communication standards; and (vii) various derivations thereof that do not fundamentally alter the character thereof (e.g., wireless air-interface, framing structure, control, call set-up and connection management); and (b) all technical specifications promulgated or currently under development and known as IEEE 802 wireless network standards (including any and all international versions thereof).

 

2.	TECHNOLOGY ACCESS AND KNOWLEDGE TRANSFER

 

2.1 Access and Transfer . During the period beginning on the Effective Date and ending on June 1, 2005 (the “ Transfer Period ”), each party has the right to access and to copy any and all portions of the Licensed Technology in the possession of the other party in accordance with a reasonable request and schedule to be mutually agreed upon by the parties. All costs associated with the assembling, copying and delivering of such Licensed Technology will be borne by the requesting party. Notwithstanding the foregoing, the parties acknowledge and agree that except to the extent otherwise expressly stated on any of Supplement B1 through Supplement B6 : (a) Freescale will have no obligation to deliver, provide or make available to Motorola any Freescale Process Technology; and (b) neither party will have any obligation to deliver, provide or make available to the other party any Technology licensed under any of Supplement B1 through Supplement B6 .

 

2.2 Export Control. Each party agrees it and each member of its Group will comply with all applicable import and export laws, rules and regulations with respect to the transfer of any Technology provided to it under this Agreement. Without limiting the generality of the foregoing, each party acknowledges and agrees that such Technology is subject to export controls under the laws and regulations of the United States, including the Export Administration Regulations, 15 C.F.R. Parts 730-774. Each party and the members of its Group will comply strictly with all such United States export controls, and shall not export, re-export, transfer, divert or disclose any Technology provided hereunder, or any direct product thereof, to any destination, end-use or end-user that is prohibited or restricted under such United States export control laws and regulations, except as specifically authorized by the Department of Commerce. If requested by either party, the other party and any other member of such party’s Group agrees to sign written assurances and other export-related documents as may be required for such party or each member of its Group to comply with U.S. export regulations. This Section 2.2 (Export Control) will survive termination of this Agreement for any reason whatsoever.

 

3.	TECHNOLOGY LICENSE TERMS

 

3.1 Licensed Freescale Technology Grant . Subject to the restrictions specified in this Section 3.1 (Licensed Freescale Technology Grant), and any additional restrictions set forth in the Supplements hereto, Freescale hereby grants to each member of the Motorola Group under

 

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the Freescale Non-Patent Intellectual Property Rights in the Licensed Freescale Technology a personal, worldwide, perpetual, irrevocable, non-exclusive, non-transferable, royalty-free, paid-up right and license to continue to use any Licensed Freescale Technology for the businesses in which any member of the Motorola Group are now or hereafter engaged to: (a) create Derivatives of the Licensed Freescale Technology; and (b) use, reproduce, distribute, perform and display the Licensed Freescale Technology and Derivatives (made pursuant to subsection (a) above) of the Licensed Freescale Technology . Except as expressly set forth in Section 3.3 (Procurement Rights), no right is granted hereunder to any member of the Motorola Group to sublicense or disclose any of the Licensed Freescale Technology to any third Person, other than the sublicensing of Software in object code form in connection with the sale of products or services of the Motorola Group.

 

3.2 Licensed Motorola Technology Grant . Subject to the restrictions specified in this Section 3.2 (Licensed Motorola Technology Grant), and any additional restrictions set forth in the Supplements hereto, Motorola hereby grants to each member of the Freescale Group under the Motorola Non-Patent Intellectual Property Rights in the Licensed Motorola Technology a personal, worldwide, perpetual, irrevocable, non-exclusive, non-transferable, royalty-free, paid-up right and license to continue to use any Licensed Motorola Technology for the businesses in which any member of the Freescale Group are now or hereafter engaged to: (a) create Derivatives of the Licensed Motorola Technology; and (b) use, reproduce, distribute, perform and display the Licensed Motorola Technology and Derivatives (made pursuant to subsection (a) above) of the Licensed Motorola Technology . Except as expressly set forth in Section 3.3 (Procurement Rights), no right is granted hereunder to any member of the Freescale Group to sublicense or disclose any of the Licensed Motorola Technology to any third Person, other than the sublicensing of Software in object code form in connection with the sale of products or services of the Freescale Group.

 

3.3 Procurement Rights .

 

(a) Subject to the restrictions in this Article 3 (Technology License Terms), and without limiting its other rights hereunder, each party and each member of its Group may sublicense and disclose to any of its suppliers, prospective suppliers or third Person joint developers (under appropriate joint development agreements) the Licensed Technology of the other party solely to the extent reasonably necessary for the procurement by such party of components, subsystems, subassemblies, products and/or services of the businesses of such party. Such disclosure and/or license may only be made for a bona fide business purpose for the benefit of a party hereto.

 

(b) Each party agrees that it will not make any portion of Licensed Technology of the other party available to any such supplier, prospective supplier, or joint developer except under terms and conditions (including confidentiality, use and disclosure restrictions) normally used by such party to protect its own intellectual property and proprietary information of a similar nature.

 

(c) The rights granted hereunder to each of the parties under this Section 3.3 (Procurement Rights) or otherwise under this Agreement, may not be exercised by either party in a manner such that the exercise of such party’s procurement rights is a sham to effect the

 

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licensing of the Licensed Technology of the other party or any portion thereof, to a third Person and not for bona fide business purposes of such party.

 

(d) Each party agrees that prior to the disclosure of any portion of Licensed Technology of the other party under this Section 3.3 (Procurement Rights), it shall expunge all extraneous proprietary information of the other party.

 

(e) Nothing in this Section 3.3 (Procurement Rights), will be construed to obligate either party to transfer or provide technical assistance to third Persons with respect to the Technology that it has licensed to the other party under this Agreement.

 

3.4 Restricted and Sector Technology . Notwithstanding anything to the contrary in this Article 3 (Technology License Terms): (a) each member of the Freescale Group only has the applicable licenses set forth on Supplement B1 – Supplement B6 , for the applicable Motorola Sector Technology described therein; and (b) no member of the Freescale Group has any right or license under this Agreement with respect to any of the Motorola Restricted Technology except if and to the extent such right or license is expressly set forth in Supplement B1 – Supplement B6 .

 

3.5 Assignment of Technology Licenses . The licenses granted to the members of the Freescale Group under Section 3.2 (Licensed Motorola Technology Grant) and Section 3.4 (Restricted and Sector Technology) are assignable by Freescale only to the acquirer of all or substantially all of the assets of the SPS Business, and provided that: (a) all such licenses are assigned together (i.e., concurrently and to the same assignee); (b) the assignee expressly assumes in writing acceptable to Motorola all obligations and limitations under this Agreement with respect to such licenses; and (c) such assigned licenses may be exercised by the assignee only in connection with (i) the operation of the SPS Business, the Semiconductor Products and assets of Freescale so sold or disposed of, and (ii) with the authorization or approval of any governmental authority as then may be required. Subject to the foregoing, the Technology rights and licenses granted above shall continue in accordance their terms with respect to the assignee as further set forth in Section 9.2(c) . Any assignment or attempted assignment in violation of the foregoing will be null and void.

 

4.	PATENT LICENSE AND NON-ASSERT

 

4.1 Freescale General Patent Terms .

 

(a) License (Equipment Patent Claims) – Freescale hereby grants to each member of the Motorola Group a personal, worldwide, non-exclusive, non-transferable, royalty-free, paid-up right and license under Freescale Equipment Patent Claims to make, have made, use, sell, offer for sale, and import and otherwise dispose of any products designed substantially by or for any member of the Motorola Group, except Semiconductor Products.

 

(b) License (IC Patent Claims) – Freescale hereby grants to each member of the Motorola Group a personal, worldwide, non-exclusive, non-transferable, royalty-free, paid-up right and license under Freescale IC Patent Claims to: (i) use and have made Semiconductor

 

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Products designed substantially by or for any member of the Motorola Group; and (ii) sell, offer for sale, and import and otherwise dispose of equipment offered for sale by a member of the Motorola Group that incorporates Semiconductor Products so made.

 

(c) Covenant Not to Assert – Freescale hereby grants a personal, worldwide, non-exclusive, non-transferable covenant that no member of the Freescale Group will assert any Freescale IC Patent Claims against any member of the Motorola Group or their respective customers or distributors for using, having made, selling, importing or offering for sale any Semiconductor Products embodied in a Motorola product; provided, however, that the aforementioned covenant will not apply to any stand-alone Semiconductor Product component offered for sale or sold as a product except to the extent offered to an equipment manufacturer for use in a Motorola product.

 

(d) Combination Claims Excluded (Licensed Motorola Product) – The licenses granted in this Section 4.1 (Freescale General Patent Terms) include licenses to convey to any customer of any member of the Motorola Group with respect to Motorola products that are sold or leased by any member of the Motorola Group to such customer, rights to use and resell such products as sold or leased by any member of the Motorola Group; provided, however, that no rights may be conveyed to customers with respect to any claim of a Freescale Patent that is: (i) directed to a combination of a Motorola product with any other product (including any other Motorola products); (ii) directed to a method or process other than a method or process the inventive steps of which are implemented primarily by a Motorola product in the operation of such product, and (iii) directed to a method or process involving the use of a Motorola product to manufacture any other product or to test any such manufactured product.

 

4.2 Freescale Supplier Patent Covenants .

 

(a) Covenant Not to Assert (Supplier Incorporated Motorola Technology) – Freescale hereby grants a personal, worldwide, non-exclusive, non-transferable covenant that no member of the Freescale Group will assert any Freescale Patent against any supplier or vendor to any member of the Motorola Group for making, having made, selling, importing or offering for sale any product supplied to any member of the Motorola Group to the extent the alleged infringement relates solely to Motorola Technology incorporated into such product.

 

(b) Covenant Not to Assert (Motorola Purchased Products) – Freescale hereby grants a personal, worldwide, non-exclusive, non-transferable covenant that no member of the Freescale Group will assert any Freescale IC Patent Claims against third Persons selling Semiconductor Products to any member of the Motorola Group for direct infringement of the Freescale IC Patent Claims by such Semiconductor Products sold for use in Motorola products; provided, however, that the foregoing covenant will not apply if:

 

(i) any member of the Freescale Group is asserting Freescale IC Patent Claims in conjunction with the Freescale Group’s general portfolio of Patents against such third Person;

 

(ii) any member of the Freescale Group is asserting such Freescale IC Patent Claims in a patent cross-licensing negotiation to obtain licenses under the third Person’s

 

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semiconductor patents for Freescale Semiconductor Products in response to such third Person’s claim or demand that such a license is required and, if such third Person declines to take a license to such Freescale IC Patent Claims, also where any member of the Freescale Group subsequently files a lawsuit against such third Person for infringement of such Freescale IC Patent Claims; provided, however, that (A) the applicable member(s) of the Freescale Group agree not to seek an injunction against the continued sale by the third Person of such Semiconductor Products to any member of the Motorola Group; and (B) members of the Freescale Group may seek monetary damages for such infringement; or

 

(iii) Such third Person has a written agreement with any member of the Freescale Group in which such third Person has licensed the Freescale IC Patent Claims or in which such third Person may elect to receive a license to such Freescale IC Patent Claims.

 

(c) License Offer (Resold Custom Products) – Freescale agrees that if a third Person selling Semiconductor Products designed substantially by or for any member of the Motorola Group requests a license from Freescale under the Freescale IC Patent Claims, Freescale will offer to license such claims on fair and reasonable terms and conditions (including payment of royalties or other payments in consideration for such license) to be negotiated between Freescale and such third Person in good faith. For clarity, if such third Person refuses to accept such terms and conditions for a license under the relevant Freescale IC Patent Claims during a commercially reasonable negotiation period, then members of the Freescale Group will be free to exercise legal rights otherwise available to them under the relevant Freescale IC Patent Claims.

 

4.3 Motorola General Patent Terms .

 

(a) License (IC Patent Claims) – Motorola hereby grants to each member of the Freescale Group a personal, worldwide, non-exclusive, non-transferable, royalty-free, paid-up right and license under Motorola IC Patent Claims to make, have made, use, sell, offer for sale, import and otherwise dispose of Semiconductor Products, Semiconductor Software and Manufacturing Apparatus in the Licensed Field.

 

(b) License (Motorola Wireless Patent Claims) – Motorola hereby grants to each member of the Freescale Group a personal, worldwide, non-exclusive, non-transferable, royalty-free, paid-up right and license under Motorola Wireless Patent Claims to make, have made, use, sell, offer for sale, import and otherwise dispose of Freescale Wireless Semiconductor Products and Manufacturing Apparatus.

 

(c) License (Development Systems) – Motorola hereby grants to each member of the Freescale Group a personal, worldwide, non-exclusive, non-transferable, royalty-free, paid-up right and license under Motorola Equipment Patent Claims to make, have made, use, sell, offer for sale, import and otherwise dispose of Development Systems.

 

(d) Covenant Not to Assert (Wireless Semiconductor Product) – Motorola hereby grants a personal, worldwide, non-exclusive, non-transferable covenant that no member of the Motorola Group will assert any Motorola Patents against any member of the Freescale

 

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Group or their respective distributors for making, having made, using, selling, importing or offering for sale Wireless Semiconductor Products.

 

(e) Covenant Not to Assert (Foundry Service Rights) – Motorola hereby grants a personal, worldwide, non-exclusive, non-transferable covenant that no member of the Motorola Group will assert any Motorola IC Patent Claims against any member of the Freescale Group or their respective distributors for: (i) making Semiconductor Products designed solely or jointly by or for a third Person, and (ii) selling, offering to sell, importing or otherwise disposing of such Semiconductor Products solely to such third Person.

 

(f) Combination Claims Excluded (Licensed Freescale Products) – The licenses granted in this Section 4.3 (Motorola General Patent Terms) include licenses to convey to any customer of any member of the Freescale Group, with respect to Manufacturing Apparatus, Development System, Semiconductor Products, Semiconductor Software and Freescale Wireless Semiconductor Products (collectively, the “ Licensed Freescale Products ”) which are sold or leased by any member of the Freescale Group to such customer, rights to use and resell such products as sold or leased by any member of the Freescale Group; provided, however, that no rights may be conveyed to customers with respect to any claim of a Motorola Patent which is: (i) directed to a combination of a Licensed Freescale Product with any other product (including any other Licensed Freescale Products); (ii) directed to a method or process other than a method or process the inventive steps of which are implemented primarily by a Licensed Freescale Product in the operation of such product; or (iii) directed to a method or process involving the use of a Licensed Freescale Product to manufacture any other product and to test any such manufactured product.

 

4.4 Motorola Customer Patent Covenants .

 

(a) Non-Essential Patent Covenants – Motorola hereby grants a personal, worldwide, non-exclusive, non-transferable covenant that:

 

(i) for a period of five (5) years after the Effective Date (the “ Wireless Transition Period ”) no member of the Motorola Group will assert Non-Essential Patent Claims against a third Person purchasing Freescale Wireless Semiconductor Products from any member of the Freescale Group or its distributors for direct infringement of such Non-Essential Patent Claims by Freescale Wireless Semiconductor Products sold by any member of the Freescale Group to such third Person and incorporated by such third Person into Wireless Equipment; and

 

(ii) no member of the Motorola Group will assert Non-Essential Patent Claims against a third Person purchasing Freescale Wireless Semiconductor Products from any member of the Freescale Group or its distributors for direct infringement of such Non-Essential Patent Claims by any Freescale Wireless Semiconductor Product sold after the Wireless Transition Period that was First Commercially Offered by any member of the Freescale Group prior to June 1, 2006 (the “ Wireless Transition Products ”) and incorporated by such third Person into Wireless Equipment;

 

provided , however , that the foregoing covenants shall not apply: (A) where the applicable third Person has a written agreement as of the Effective Date with any member of the Motorola Group

 

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in which such third Person has licensed Non-Essential Patent Claims or in which such third Person may elect to receive a license to such Non-Essential Patent Claims; or (B) to a product design or portion thereof provided by such third Person and embodied in the Freescale Wireless Semiconductor Product (by way of example and not limitation, the manufacturing process employed by Freescale and any ASIC library tool or standard cell of Freescale that is incorporated into a Freescale Wireless Semiconductor Product shall be within the scope of the non-assert, while a circuit or logic design provided by the third Person and embodied in such Freescale Wireless Semiconductor Product shall be outside the scope of the non-assert).

 

(b) Non-Essential Patent Covenant Termination – Without limiting anything in this Article 4 (Patent License and Non-Assert) the covenants set forth in Section 4.4(a) (Non-Essential Patent Covenants) shall automatically terminate with respect to a third Person in response to such third Person’s: (i) claim or demand that a license is required under any of its Patents; or (ii) seeking a declaratory judgment of invalidity or non-infringement with respect to any Patent of any member of the Motorola Group. For clarification, a third Person’s assertion of a claim or demand of a Patent against a member of the Motorola Group in response to a member of the Motorola Group first asserting Essential Patent Claims against such third Person will not cause the covenants in Section 4.4(a) (Non-Essential Patent Covenants) to terminate, unless and until such third Person asserts in litigation a claim of patent infringement against any member of the Motorola Group.

 

(c) Non-Essential Patent Covenant Damages – The parties agree that:

 

(i) upon termination of the covenants set forth in Section 4.4(a) (Non-Essential Patent Covenants) pursuant to Section 4.4(b) (Non-Essential Patent Covenant Termination), members of the Motorola Group may seek damages from the applicable third Person for infringement of Non-Essential Patent Claims; provided , however , that no damages will accrue with respect to accused Wireless Equipment that incorporates a Freescale Wireless Semiconductor Product and that is sold by such third Person prior to the termination of such covenants as set forth in Section 4.4(b) (Non-Essential Patent Covenant Termination); and

 

(ii) except to the extent otherwise limited by the covenant set forth in Section 4.4(a)(ii) , upon expiration of the covenant set forth in Section 4.4(a)(i) , members of the Motorola Group may seek damages from applicable third Persons for infringement of Non-Essential Patent Claims; provided , however that no damages will accrue with respect to any accused Wireless Equipment that is sold by such third Person prior to the expiration of the Wireless Transition Period set forth in Section 4.4(a)(i) .

 

(d) Non-Essential Patent Covenant Assertions – Notwithstanding anything in this Agreement to the contrary, after the expiration of the Wireless Transition Period it shall not constitute a breach of the covenant set forth in Section 4.4(a)(ii) if a member of the Motorola Group asserts a Non-Essential Patent Claims against a third Person purchasing Freescale Wireless Semiconductor Products from any member of the Freescale Group or its distributors for direct infringement of such Non-Essential Patent Claims by any Wireless Transition Products incorporated into Wireless Equipment; provided , however , that such member of the Motorola Group ceases to assert such Non-Essential Patent Claims with respect to Wireless Equipment for

 

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which Freescale provides Motorola sufficient documentation that the Freescale Wireless Semiconductor Product incorporated therein is a Wireless Transition Product.

 

4.5 Assignment of Patent Rights .

 

(a) The licenses granted to the members of the Freescale Group under Section 4.3(a) (License – IC Patent Claims), Section 4.3(b) (License – Motorola Wireless Patent Claims) and Section 4.3(c) (License – Development Systems) are assignable by Freescale only to the acquirer of all or substantially all of the assets of the SPS Business, and provided that: (i) all such licenses are assigned together (i.e., concurrently and to the same assignee); (ii) the assignee expressly assumes in writing acceptable to Motorola all obligations and limitations under this Agreement with respect to such licenses; and (iii) such assigned licenses may be exercised by the assignee only in connection with (A) the operation of the SPS Business, the Semiconductor Products and assets of Freescale so sold or disposed of, and (B) with the authorization or approval of any governmental authority as then may be required. Further, the rights and licenses in favor of the assignee will be the same as those as set forth in Section 9.2(a) as applicable, depending on whether the assignor remains a separately identifiable business.

 

(b) Freescale may not assign any of its rights or privileges under Section 4.4 (Motorola Customer Patent Covenants) or Section 4.3(d) (Covenant Not to Assert – Wireless Semiconductor Product) without the prior written consent of Motorola which consent may be withheld in its sole and absolute discretion. The covenants not to sue as well as the rights and obligations of Section 4.4 (Motorola Customer Patent Covenants) and Section 4.3(d) (Covenant Not to Assert – Wireless Semiconductor Product) are personal and will not be assignable or transferable in the event of a Change of Control of Freescale (whether by operation of law or otherwise), without Motorola’s prior written consent, which consent may be withheld in its sole and absolute discretion.

 

(c) Any assignment or attempted assignment in violation of the foregoing will be null and void.

 

(d) If any member of the Motorola Group or Freescale Group, respectively, assigns to a third Person any Motorola Patent or Freescale Patent that is otherwise subject to any of the licenses or covenants set forth in Article 4 (Patent License and Non-Assert) then: (i) notwithstanding such assignment, such assigned Motorola Patent or Freescale Patent, as applicable, shall remain subject to the applicable licenses and covenants set forth in Article 4 (Patent License and Non-Assert); and (ii) the assigning party shall notify the third Person assignee that the assigned Motorola Patent or Freescale Patent, as applicable, shall remain subject to the applicable licenses and covenants set forth in Article 4 (Patent License and Non-Assert).

 

4.6 Sector Patent License . Notwithstanding anything to the contrary in this Article 4 (Patent License and Non-Assert), each member of the Freescale Group only has the applicable licenses set forth on Supplement B1 – Supplement B6 , for the applicable Motorola Sector Patents, if any.

 

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4.7 Term of Patent Licenses and Covenants . Except as expressly set forth above, the term of the licenses and covenants granted under this Article 4 (Patent License and Non-Assert), are for the lives of the applicable Patents unless earlier terminated in accordance with this Agreement.

 

4.8 Motorola Restricted Technology . Notwithstanding anything to the contrary in this Article 4 (Patent License and Non-Assert), no member of the Freescale Group has any right or license under this Agreement with respect to any Patents related to the Motorola Restricted Technology except if and to the extent such right or license is expressly set forth in Supplement B1 – Supplement B6 .

 

4.9 Non-Exhaustion of Patents .

 

(a) For the avoidance of doubt, Freescale agrees that the covenants not to sue of Section 4.3(d) (Covenant Not to Assert – Wireless Semiconductor Product) and Section 4.4 (Motorola Customer Patent Covenants): (i) extend only to the members of the Freescale Group and their respective distributors; (ii) do not constitute a license; and (iii) do not constitute an unconditional sale or a consent to an unconditional sale by Freescale that would exhaust Motorola’s patent rights as to third parties with respect to any Motorola Patent that is incorporated into, or would otherwise be infringed by the use of Wireless Semiconductor Products. In the event that, despite the parties’ intent, under the laws of any jurisdiction covenants not to sue of the nature provided in Section 4.3(d) (Covenant Not to Assert – Wireless Semiconductor Product) or Section 4.4 (Motorola Customer Patent Covenants) would exhaust Motorola’s patent rights in any country, then Motorola and Freescale agree to meet promptly to negotiate in good faith a mutually acceptable substitute provision for such jurisdictions.

 

(b) For the avoidance of doubt, Motorola agrees that the covenants not to sue of Section 4.1(c) (Covenant Not to Assert) and Section 4.2 (Freescale Supplier Patent Covenants): (ii) extend only to the members of the Motorola Group and their respective customers or distributors; (ii) do not constitute a license; and (iii) do not constitute an unconditional sale or a consent to an unconditional sale by Motorola that would exhaust Freescale’s patent rights as to third parties with respect to any Freescale Patent that is incorporated into, or would otherwise be infringed by the manufacture or sale of Semiconductor Products or any other product. In the event that, despite the parties’ intent, under the laws of any jurisdiction covenants not to sue of the nature provided in Section 4.1(c) (Covenant Not to Assert) or Section 4.2 (Freescale Supplier Patent Covenants) would exhaust Freescale’s patent rights in any country, then Freescale and Motorola agree to meet promptly to negotiate in good faith a mutually acceptable substitute provision for such jurisdictions.

 

5.	RETENTION, MAINTENANCE AND DEFENSE OF RIGHTS

 

5.1 Retained Rights . Neither party grants any license (or makes any covenant not to assert) other than as expressly set forth in Article 3 (Technology License Terms), Article 4 (Patent License and Non-Assert) and Supplements B1 thought Supplement B6 . Subject only to such licenses and covenants, each party retains all right, title and interest (including all Patents

 

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and Non-Patent Intellectual Property Rights), in and to its respective Technology, Patents and Non-Patent Intellectual Property Rights. Without limiting the foregoing, the party granting the license or non-assert with respect to certain Technology or Patents will have the sole right (but not the obligation) to file for, prosecute and maintain any applications, registrations or recordation thereof and to bring any action to enforce or otherwise seek to abate any infringement thereof.

 

5.2 No Representations or Warranties .

 

(a) FREESCALE (ON BEHALF OF ITSELF AND EACH MEMBER OF THE FREESCALE GROUP) ACKNOWLEDGES AND AGREES THAT: (i) NO MEMBER OF THE MOTOROLA GROUP IS MAKING IN THIS AGREEMENT (OR ANY OTHER AGREEMENT CONTEMPLATED BY THIS AGREEMENT OR OTHERWISE) ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, AS TO THE CONDITION, QUALITY, MERCHANTABILITY OR FITNESS OF ANY LICENSED INTELLECTUAL PROPERTY OR LICENSED MOTOROLA TECHNOLOGY; (ii) ALL SUCH LICENSED INTELLECTUAL PROPERTY OR LICENSED MOTOROLA TECHNOLOGY SHALL BE LICENSED ON AN “AS IS,” “WHERE IS” BASIS; AND (iii) FREESCALE AND ITS AFFILIATES SHALL BEAR THE ECONOMIC AND LEGAL RISKS THAT ANY LICENSE OR NON-ASSERT SHALL PROVE TO BE INSUFFICIENT TO VEST IN IT THE RIGHTS AND LICENSES PURPORTED TO BE GRANTED HEREUNDER.

 

(b) MOTOROLA (ON BEHALF OF ITSELF AND EACH MEMBER OF THE MOTOROLA GROUP) ACKNOWLEDGES AND AGREES THAT: (i) NO MEMBER OF THE FREESCALE GROUP IS MAKING IN THIS AGREEMENT (OR ANY OTHER AGREEMENT CONTEMPLATED BY THIS AGREEMENT OR OTHERWISE) ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, AS TO THE CONDITION, QUALITY, MERCHANTABILITY OR FITNESS OF ANY LICENSED INTELLECTUAL PROPERTY OR LICENSED FREESCALE TECHNOLOGY; (ii) ALL SUCH LICENSED INTELLECTUAL PROPERTY OR LICENSED FREESCALE TECHNOLOGY SHALL BE LICENSED ON AN “AS IS,” “WHERE IS” BASIS; AND (iii) MOTOROLA AND ITS AFFILIATES SHALL BEAR THE ECONOMIC AND LEGAL RISKS THAT ANY LICENSE OR NON-ASSERT SHALL PROVE TO BE INSUFFICIENT TO VEST IN IT THE RIGHTS AND LICENSES PURPORTED TO BE GRANTED HEREUNDER.

 

5.3 Freescale Indemnified Products .

 

(a) Obligation to Defend – Subject to the limitations and exclusions stated below, Freescale and each member of the Freescale Group will defend, at Freescale’s expense, any Claim against Motorola (which, for purposes of this Section 5.3 (Freescale Indemnified Products) also includes “Motorola Indemnified Parties” as defined in the Master Separation and Distribution Agreement), and will indemnify and hold Motorola harmless from all Damages awarded in the Suit or resulting from settlement of the Suit or any Claim. “ Suit ” means a lawsuit based on a Claim. For purposes of this Section, “ Claim ” means a claim that a product:

 

(i) furnished by the Semiconductor Products Sector to Motorola prior to the Effective Date (“ Intra-Company Product ”); or

 

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(ii) furnished by the Semiconductor Products Sector to a third Person prior to the Effective Date or by Freescale to a third Person (including, without limitation, pursuant to Article 6 (Trademark Transition) on or after the Effective Date ((i) and (ii), collectively, “ Freescale Indemnified Products ”);

 

infringes a Patent or Non-Patent Intellectual Property Right anywhere in the world.

 

(b) Indemnification Procedure – In connection with any Claim or Suit, Motorola shall:

 

(i) promptly notify Freescale in writing as soon as reasonably practicable after Motorola first becomes aware of the Claim, and

 

(ii) gives Freescale sole control of the Claim and all requested assistance for resolving the Claim or defending the Suit.

 

Freescale will not be liable for the settlement of a Claim made without Freescale’s prior written consent unless Freescale breaches its duty to defend hereunder. If any suit against Motorola involves a Claim as well as other claims against Motorola, Freescale shall nonetheless be fully responsible for defending, indemnifying and holding Motorola harmless from the Claim(s), and shall provide reasonable cooperation to Motorola’s counsel with respect to the other claims asserted in such suit.

 

(c) Exclusions – Freescale will have no obligation to defend, indemnify or hold Motorola harmless to the extent:

 

(i) Motorola or any third Person has altered the Intra-Company Product, and the alleged infringement would not have occurred but for this alteration;

 

(ii) Motorola or any third Person has combined the Intra-Company Product with any other products or elements not furnished by Freescale, and the alleged infringement would not have occurred but for this combination;

 

(iii) the Intra-Company Products were designed or manufactured in accordance with Motorola’s designs, specifications, or instructions (other than those of the Semiconductor Products Sector), and the alleged infringement would not have occurred but for these designs, specifications or instructions; or

 

(iv) the Intra-Company Product infringes Essential Patent Claims for which Freescale does not have pass-through license rights that if extended to Motorola would avoid such infringement.

 

(d) Remedies – If the use or permitted resale of any Freescale Indemnified Product is enjoined as a result of a Suit or in Freescale’s reasonable belief is likely to be enjoined, Freescale, at Freescale’s option, and at no expense to Motorola, will: (i) obtain for Motorola the right to use or sell the Freescale Indemnified Product; (ii) modify the Freescale Indemnified Product to make it non-infringing without degrading it, (iii) substitute an equivalent non-infringing product(s) reasonably acceptable to Motorola and extend this indemnity to that

 

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product(s); or (iv) accept the return of the Freescale Indemnified Product and refund Motorola the purchase price paid for the Intra-Company Product, less a reasonable charge for prior use, if any.

 

(e) Limitations on Payable Damages –

 

(i) Except as expressly set forth in (ii) below, Freescale’s total liability for damages under this Section 5.3 (Freescale Indemnified Products), with respect to any Suit or Claim with respect to an Intra-Company Product will not exceed fifty percent (50%) of the net sales to Motorola of the applicable Intra-Company Product (as recorded in Motorola’s audited financial statements), plus attorneys’ fees and costs related to such Claim.

 

(ii) Freescale’s total liability under this Section 5.3 (Freescale Indemnified Products) will be unlimited with respect to: (A) all products other than Intra-Company Products, and (B) any Suit or Claim with respect to Intra-Company Products where such Suit or Claim is brought as part of a retaliatory action.

 

(iii) For purposes of the foregoing, a “retaliatory action” means a third Person claim against any member of the Motorola Group: (A) alleging that a Freescale Intra-Company Product infringes such third Person’s Patent or Non-Patent Intellectual Property Rights anywhere in the world; and (B) that is asserted against Motorola within six (6) months after any member of the Freescale Group has first asserted a claim or action against such third Person.

 

(f) ENTIRE LIABILITY – THIS SECTION CONTAINS (I) FREESCALE’S ENTIRE LIABILITY AND ALL OBLIGATIONS RELATED TO INTELLECTUAL PROPERTY INFRINGEMENT OR MISAPPROPRIATION FOR FREESCALE INDEMNIFIED PRODUCTS, AND (II) MOTOROLA’S EXCLUSIVE REMEDIES AGAINST FREESCALE FOR INTELLECTUAL PROPERTY INFRINGEMENT OR MISAPPROPRIATION OF FREESCALE INDEMNIFIED PRODUCTS. THESE REMEDIES ARE PROVIDED IN LIEU OF ALL WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, THE WARRANTY AGAINST INFRINGEMENT SPECIFIED IN THE UNIFORM COMMERCIAL CODE.

 

(g) WITHOUT LIMITATION OF FREESCALE’S OBLIGATIONS UNDER THIS SECTION 5.3 (FREESCALE INDEMNIFIED PRODUCTS) WITH REGARD TO THIRD PARTY CLAIMS AGAINST MOTOROLA INDEMNIFIED PARTIES, IN NO EVENT WILL FREESCALE OR ANY OF ITS AFFILIATES BE LIABLE FOR ANY OTHER SPECIAL, INCIDENTAL, INDIRECT, COLLATERAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OR LOST PROFITS OF MOTOROLA OR ITS AFFILIATES, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, IN CONNECTION WITH ANY CLAIMS, LOSSES, DAMAGES OR INJURIES UNDER THIS SECTION 5.3 (FREESCALE INDEMNIFIED PRODUCTS).

 

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6.	TRADEMARK TRANSITION

 

6.1 Transitional Trademark License.

 

(a) Trademark License Grant – Motorola grants Freescale a worldwide royalty-free, personal, non-transferable, non-exclusive license to continue to use the Motorola Trademarks in connection with the manufacture, repair, maintenance, support, marketing, promotion, distribution and sale of Semiconductor Products that have been manufactured or masked out prior to or are being manufactured or masked out as of the IPO Effective Date (a “ Trademark Transition Product ”) for a period of eighteen (18) months after the IPO Effective Date, except as otherwise specified below (the “ Trademark License Period ”). For purposes of this Article 6 (Trademark Transition), a “Motorola Trademark” means a Trademark of Motorola that, as of the Effective Date, is used on or connection with a Trademark Transition Product.

 

(b) Quality Standards – Without limiting anything set forth in this Article 6 (Trademark Transition), Freescale may only: (i) use the Motorola Trademarks on or in connection with Transition Trademark Products that meet the same product specifications and the general standards of quality (including performance parameters) applicable to the fabrication, performance, design, use, provision, and support of such products (or products substantially similar thereto) by Motorola prior to the IPO Effective Date; and (ii) use the Trademark Transition Products in compliance with the Motorola’s general trademark usage guidelines and standards applicable to the manner in which Motorola Trademarks may be used on marketing, advertising, and promotion materials.

 

(c) Quality Control – As necessary to enable Motorola to maintain its rights in and to the Motorola Trademarks and the goodwill represented thereby, Freescale shall at regular periodic intervals and as otherwise reasonably requested by Motorola, submit to Motorola samples of its Transition Trademark Products and usage of the Motorola Trademarks to enable Motorola to verify compliance with the foregoing. All new usage of the Motorola Trademarks (e.g., on new packaging, advertisements and other material) is subject to Motorola’s prior written consent.

 

6.2 Trademark Transition Efforts . As soon as practicable following the Effective Date, Freescale shall cease use of all Motorola Trademarks by: (a) removing, changing or covering external signage, building flags and vehicle markings bearing or incorporating Motorola Trademarks not later than six (6) months after the IPO Effective Date, except that Freescale shall remove and make no further use of the sixty (60) foot neon cube bearing the ‘M’ logo on its building in Kuala Lumpur, Malaysia no later than eighteen (18) months after the IPO Effective Date; (b) removing, changing or covering internal signage incorporating Motorola Trademarks not later than eighteen (18) months after the IPO Effective Date; (c) ceasing production of promotional or advertising material bearing or incorporating Motorola Trademarks in whatever medium not later than eighteen (18) months after the IPO Effective Date; (d) changing stationery and business cards bearing or incorporating Motorola Trademarks not later than six (6) months after the IPO Effective Date; and (e) ceasing use of Motorola Trademarks in Freescale’s corporate, partnership, doing business as, and fictitious name no later than the Distribution Date, except that Freescale may continue to use the Motorola name, or similar reference approved by Motorola in writing, in connection with a statement indicating that

 

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Freescale is a former Motorola company for up to three (3) years after the IPO Effective Date. The parties acknowledge that the laws of certain foreign jurisdictions may be such that Freescale may not be able to meet its obligations under this Section 6.2 (Trademark Transition Efforts) as of the dates specified therein. In these circumstances, such dates will be adjusted accordingly so that Freescale ceases its use as soon as commercially possible in accordance with the relevant laws.

 

6.3 Inventory and Stock Exhaustion . Subject to Freescale’s compliance with the foregoing, Freescale may use its inventory, stock or supply (“ Freescale Inventory ”) of:

 

(a) Finished Goods – goods fully assembled, manufactured, marked and bearing Motorola Trademarks (the “ Finished Goods ”) until the earlier of: (i) sixty (60) months after the IPO Effective Date; or (ii) the date on which Freescale’s supply of such Finished Goods in inventory as of the IPO Effective Date is depleted; unless required otherwise by applicable State or Federal laws or the laws of the relevant foreign jurisdiction.

 

(b) Reticles and Internal Material – masks and reticles, tools, dies, equipment, engineering/manufacturing drawings, archived collateral and literature, manuals, work sheets, operating procedures, other written materials which include or contain any Motorola Trademarks for the life of such materials; provided, however, that: (i) such matter may only be used for Freescale’s internal purposes (except that with respect to archived collateral and literature, Freescale may provide access to and grant the right to Freescale customers to copy in electronic or other form); and (ii) all stock of the foregoing is replaced in the ordinary course and such replacements do not include or contain any Motorola Trademarks.

 

For purposes of this Section 6.3 (Inventory and Stock Exhaustion), “Freescale Inventory” includes inventory owned by Freescale but maintained at its customer facilities. Notwithstanding anything in this Article 6 (Trademark Transition), Freescale will not be obligated to retract or remark any packaging or inserts bearing Motorola Trademarks that are otherwise already included in inventories of Freescale or Freescale’s customers upon the expiration of the Trademark License Period.

 

6.4 Restrictions and Limitations.

 

(a) Retained Ownership – Motorola will retain all right, title and interest in and to Motorola Trademarks including, without limitation, the right to use and license others to use such Motorola Trademarks in connection with the marketing, offer or provision of any product or service, including any product or service which competes with Freescale products and services. All use of Motorola Trademarks, including all goodwill accrued thereby, will inure to the benefit of Motorola.

 

(b) Rights Not Granted – Freescale may not use Motorola Trademarks in connection with any product or service except as expressly set forth in this Article 6 (Trademark Transition). Without limiting the generality of the foregoing, Freescale may not use the Motorola Trademarks on any new stationery, new business cards, new building signage, new building flags, new employee badges or new vehicle markings after the Effective Date or to affix

 

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or use Motorola Trademarks on or in connection with products other than Trademark Transition Products.

 

(c) Change to Motorola Trademarks – Freescale may not alter the placement or appearance of the Motorola Trademarks on the Freescale Inventory, except to obliterate or to cover the mark with a Freescale label. Notwithstanding the foregoing, if as a result of governmental regulation or court order Motorola must modify or discontinue the use of any of the Motorola Trademarks, Freescale shall, within sixty (60) days of notice: (i) modify the Motorola Trademarks on the Freescale Inventory as necessary to comply with such regulation or order; or (ii) cease all use of the applicable Freescale Inventory.

 

(d) Third Party Trademarks – Without limiting the foregoing, Freescale is solely responsible for obtaining any required consent from third Persons to use any third Person Trademarks that may appear on the Freescale Inventory. In addition, Freescale may not add any third Person Trademarks to the Freescale Inventory without Motorola’s prior written consent.

 

7.	CONFIDENTIALITY

 

7.1 Confidential Information . Each party and the members of such party’s Group (collectively, the “ Receiving Party ”) expressly acknowledges that in connection with this Agreement (including, without limitation, the sector license terms set forth in Supplement B1 through Supplement B6 ) members of the party’s Group (collectively, the “ Disclosing Party ”) has disclosed or may disclose or make available information and material relating to the Disclosing Party’s business or Technology which is confidential or proprietary in nature (including, without limitation, information that embodies or relates to Technology, any other technical, business, financial, customer information, product development plans, supplier information, forecasts, strategies and other confidential information) which to the extent disclosed to the Receiving Party is hereinafter referred to as “ Confidential Information ” of the Disclosing Party provided such information: (a) is disclosed in writing and conspicuously marked “CONFIDENTIAL” or with words of similar effect; (b) is disclosed orally after the Effective Date and is identified as confidential information at the time of disclosure and, within thirty (30) days of such disclosure, is summarized in a writing by the Disclosing Party that is submitted to the Receiving Party and that confirms the confidential nature of such information; or (c) was disclosed orally prior to the Effective Date and specifically identified in any of Supplement B1 through Supplement B6 as confidential information.

 

7.2 Treatment of Confidential Information . The Receiving Party will: (a) take commercially reasonable precautions to protect such Confidential Information consistent with all precautions the Receiving Party usually employs with respect to its own comparable confidential materials; (b) except as expressly provided in this Agreement, not disclose any such Confidential Information to any third Person, except under terms and conditions (including confidentiality, use, and disclosure restrictions) normally used by the Receiving Party to protect its own confidential or proprietary information of a similar nature; and (c) not use or disclose such Confidential Information except as necessary to exercise its rights and perform its obligations under this Agreement (including, without limitation, the sector license terms set forth in

 

23

Supplement B1 through Supplement B6 ) in accordance with any applicable restrictions or obligations with respect thereto. Subject to the limitations and requirements set forth in this Article 7 (Confidentiality) and elsewhere in this Agreement (including, without limitation Section 3.3 (Procurement Rights)) the Receiving Party may disclose Technology of the Disclosing Party to a customer, supplier, prospective supplier or third Person joint developer of the Receiving Party except as set forth in any of Supplement B1 through Supplement B6 .

 

7.3 Exclusions . Without granting any right or license, the Disclosing Party agrees that Section 7.2 (Treatment of Confidential Information) will not apply with respect to any information that the Receiving Party can document: (a) is or becomes generally available to the public through no improper action or inaction by the Receiving Party or any of its Affiliates, agents, consultants or employees; or (b) was properly in the Receiving Party’s possession or known by it prior to receipt from the Disclosing Party; or (c) was rightfully disclosed to the Receiving Party by a third Person provided the Receiving Party complies with restrictions imposed by the third Person. The Receiving Party, with prior written notice to the Disclosing Party, may disclose such Confidential Information to the minimum extent possible that is required to be disclosed to a governmental entity or agency, or pursuant to the lawful requirement or request of a governmental entity or agency, provided that reasonable measures are taken to guard against further disclosure (including without limitation, seeking appropriate confidential treatment or a protective order, or assisting the Disclosing Party to do so) and has allowed the Disclosing Party to participate in any proceeding that requires the disclosure.

 

8.	CONSIDERATION

 

Except as expressly set forth in any of Supplement B1 through Supplement B6 , the parties to this Agreement acknowledge and agree that the licenses, rights and obligations exchanged hereunder by the parties are of substantially equal value, and accordingly, unless otherwise expressly set forth in this Agreement (including any Supplements to this Agreement), no payments or royalties will be due from or to any party under this Agreement.

 

9.	TERMINATION

 

9.1 Group Member Termination . If a Person ceases to be an Affiliate of a party (i.e., ceases to be a member of such party’s Group), then notwithstanding anything in this Agreement to the contrary (including the Supplements hereto): (a) all rights and license granted with respect to such Person under this Agreement will automatically terminate on the date such Person ceases to be an Affiliate (except, however, as to product units already sold by such Person as of such date); (b) all of the licenses and rights granted by such Person with respect to the other parties hereunder with respect to Patents of such Person for which applications were filed prior to the date such Person ceases to be an Affiliate will not be affected by such cessation; and (c) such Person’s obligations under Section 2.2 (Export Control) and Article 7 (Confidentiality) will survive, together with all other obligations under this Agreement that arose prior to the date such Person ceases to be an Affiliate.

 

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9.2 Corporate Change .

 

(a) If a party remains a separate identifiable business after a Change of Control, the Patent licenses and Patent-related rights granted to that party or the members of its Group hereunder will continue in accordance with the terms thereof with respect to such party. If a party does not remain as a separate identifiable business after a Change of Control, the Patent licenses and Patent-related rights granted to that party hereunder will extend only to those products that such party has offered for sale prior to such Change of Control and, except as otherwise set forth in this Agreement, all other rights and licenses will automatically terminate. Except as expressly set forth above, in no event will the Patent licenses and Patent-related rights granted to a party hereunder be extended to any other Person involved in such Change of Control, without the prior written consent of the party whose Patents are being licensed, which consent may be withheld in its sole and absolute discretion.

 

(b) In the event that either party (the “ Acquiring Party ”) hereto acquires any Person, then all Patent licenses and Patent-related rights granted to the Acquiring Party hereunder: (i) may be sublicensed to the acquired Person subject to the terms of this Agreement, if such Person is not merged into the Acquiring Party; or (ii) may be extended to all products and services manufactured by the portion of the business previously operated by the acquired Person, if such Person is merged into the Acquiring Party, provided that:

 

(i) if the non-Acquiring Party is Motorola, that Motorola is licensed under all Patents owned or controlled by the acquired Person at the time of the acquisition for which applications were filed prior to the one (1) year anniversary of the Effective Date under the same terms and conditions as apply to Freescale Patents, and

 

(ii) if the non-Acquiring Party is Freescale, that Freescale is licensed under all Patents owned or controlled by the acquired Person at the time of the acquisition for which applications were filed prior to the one (1) year anniversary of the Effective Date under the same terms and conditions as apply to Motorola Patents .

 

(c) Notwithstanding the foregoing, in the event of a Change of Control of a party, the Technology licenses granted hereunder will continue in accordance with the terms thereof whether or not such party remains a separate identifiable business after a Change of Control.

 

9.3 Material Breach . No party may unilaterally terminate this Agreement, or any licenses granted hereunder, for a material breach of this Agreement by another party, provided, however, that each party will retain any remedies for such breach that it may be entitled to in a court of law or equity.

 

10.	MISCELLANEOUS

 

10.1 Governing Law . The internal laws of the State of Delaware (without reference to its principles of conflicts of law) govern the construction, interpretation and other matters arising

 

25

out of or in connection with this Agreement and its exhibits and schedules (whether arising in contract, tort, equity or otherwise).

 

10.2 Jurisdiction . If any Dispute arises out of or in connection with this Agreement, except as expressly contemplated by another provision of this Agreement, the parties irrevocably (and the parties will cause each other member of their respective Group to irrevocably): (a) consent and submit to the exclusive jurisdiction of federal and state courts located in Delaware; (b) waive any objection to that choice of forum based on venue or to the effect that the forum is not convenient; and (c) WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO TRIAL OR ADJUDICATION BY JURY.

 

10.3 Dispute Resolution .

 

(a) Amicable Resolution –

 

(i) Motorola and Freescale mutually desire that friendly collaboration will continue between them. Accordingly, they will try, and they will cause their respective Group members to try, to resolve in an amicable manner all disagreements and misunderstandings connected with their respective rights and obligations under this Agreement, including any amendments hereto or thereto. In furtherance thereof, in the event of any dispute or disagreement (a “ Dispute ”) between any Motorola Group member and any Freescale Group member as to the interpretation of any provision of this Agreement (or the performance of obligations hereunder), the matter, upon written request of either party, will be referred for resolution to a steering committee established pursuant to this Section 10.3(a) (Amicable Resolution) (the “ Steering Committee ”). The Steering Committee will have eight (8) members, four (4) of whom will be appointed by Motorola and four (4) of whom will be appointed by Freescale. Each of Motorola and Freescale will use its good faith efforts to avoid replacing the initial members of the Steering Committee for the first year after the Effective Date. Thereafter, Motorola and Freescale will, to the extent practicable, honor the other party’s reasonable objections to any replacements of Steering Committee members. While any person is serving as a member of the Steering Committee, such person may not designate any substitute or proxy for purposes of attending or voting at a Steering Committee meeting. Notwithstanding the foregoing, unless otherwise specifically agreed upon by the parties, the members comprising the steering committee established for purposes of resolving Disputes under the Master Separation and Distribution Agreement will constitute the Steering Committee for purposes of resolving Disputes under this Agreement. The Steering Committee will make a good faith effort to promptly resolve all Disputes referred to it. Steering Committee decisions made with the consent of at least three (3) Freescale members and at least three (3) Motorola members will be binding on Motorola and Freescale. If the Steering Committee does not agree to a resolution of a Dispute within thirty (30) days after the reference of the matter to it, each of Motorola and Freescale will be free to exercise the remedies available to it under applicable law, subject to Section 10.3(b) (Mediation and Alternate Dispute Resolution). Notwithstanding anything to the contrary in this Section 10 (Miscellaneous), any amendment to the terms of this Agreement may only be effected in accordance with Section 10.10 (Amendment).

 

(ii) Between the Effective Date and the first anniversary of the Effective Date, the Steering Committee will hold meetings every six (6) weeks on dates

 

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established at the organizational meeting of the Steering Committee, which will be held as promptly as practicable after the Effective Date. Such meeting dates may be rescheduled by the Steering Committee if it becomes reasonably impracticable to hold such a meeting. After the first anniversary of the Effective Date, the Steering Committee will hold regularly scheduled meetings as determined by the Steering Committee.

 

(b) Mediation and Alternate Dispute Resolution – In the event any Dispute cannot be resolved in a friendly manner as set forth in Section 10.3(a) (Amicable Resolution), the parties intend that such Dispute be resolved by an alternative dispute resolution process (“ ADR ”). If the Steering Committee is unable to resolve the Dispute as contemplated by Section 10.3(a) (Amicable Resolution), either Motorola or Freescale may demand mediation of the Dispute by written notice to the other in which case the two parties will select a mediator within ten (10) days after the demand. Neither party may unreasonably withhold consent to the selection of the mediator. The parties may agree to replace mediation with some other form of non-binding ADR such as neutral fact finding or mini-trial. The use of any ADR procedures will not be construed under the doctrines of laches, waiver or estoppel to affect adversely the rights of either party. Each of Motorola and Freescale will bear its own costs of mediation or other form of ADR, but both parties will share the costs of the mediator or other arbiter equally.

 

(c) Non-Exclusive Remedy – Nothing in this Section 10.3 (Dispute Resolution) will prevent either Motorola or Freescale from commencing formal litigation proceedings or seeking injunctive or similar relief if: (i) the Dispute has not been resolved within forty-five (45) days after commencement of the applicable ADR process; or (ii) any delay resulting from efforts to mediate such Dispute could result in serious and irreparable injury to either Motorola, Freescale, or any member of either party’s Group.

 

(d) Commencement of Dispute Resolution Procedure – Notwithstanding anything to the contrary in this Agreement, Motorola and Freescale are the only members of their respective Group entitled to commence a dispute resolution procedure under this Agreement, whether pursuant to this Section 10.3 (Dispute Resolution) or otherwise, and each party will cause its respective Group members not to commence any dispute resolution procedure other than through such party as provided in this Section 10.3(d) .

 

10.4 Notices . Each party giving any notice required or permitted under this Agreement will give the notice in writing and use one of the following methods of delivery to the party to be notified, at the address set forth below or another address of which the sending party has been notified in accordance with this Section 10.4 (Notices): (a) personal delivery; (b) facsimile or telecopy transmission with a reasonable method of confirming transmission; (c) commercial overnight courier with a reasonable method of confirming delivery; or (d) pre-paid, United States of America certified or registered mail, return receipt requested. Notice to a party is effective for purposes of this Agreement only if given as provided in this Section 10.4 (Notices) and will be deemed given on the date that the intended addressee actually receives the notice.

 

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10.5 Binding Effect and Assignment . This Agreement binds and benefits the parties and their respective successors and assigns, except that (other than as expressly provided in this Agreement, including Section 3.5 (Assignment of Technology Licenses) and Section 4.5 (Assignment of Patent Rights), or otherwise in connection with a Change of Control of a party, subject to Section 9.2 (Change of Control)), neither party may assign any of its rights or delegate any of its obligations under this Agreement without the written consent of the other party which consent may be withheld in its sole and absolute discretion and any assignment or attempted assignment in violation of the foregoing will be null and void. Notwithstanding the preceding sentence, Motorola may assign this Agreement in connection with a merger transaction in which Motorola is not the surviving entity or the sale of all or substantially all of its assets.

 

10.6 Severability . If any provision of this Agreement is determined to be invalid, illegal or unenforceable, the remaining provisions of this Agreement will remain in full force, if the essential terms and conditions of this Agreement for each party remain valid, binding and enforceable.

 

10.7 Entire Agreement . This Agreement, together with the Ancillary Agreements and each of the exhibits and schedules appended hereto and thereto, constitutes the final agreement between the parties, and is the complete and exclusive statement of the parties’ agreement on the matters contained herein and therein. All prior and contemporaneous negotiations and agreements between the parties with respect to the matters contained in this Agreement are superseded by this Agreement. In event of any conflict between (a) any provision in the Master Separation and Distribution Agreement or any Contribution Agreement (as defined in the Separation and Distribution Agreement) on the one hand, and (b) any specific provision of this Agreement, on the other hand, pertaining to the subject matter of this Agreement, the specific provisions of this Agreement will control over the provisions in the Master Separation and Distribution Agreement or such Contribution Agreement, as applicable.

 

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10.8 Counterparts . The parties may execute this Agreement in multiple counterparts, each of which constitutes an original as against the party that signed it, and all of which together constitute one agreement. The signatures of both parties need not appear on the same counterpart. The delivery of signed counterparts by facsimile or email transmission that includes a copy of the sending party’s signature is as effective as signing and delivering the counterpart in person.

 

10.9 Expenses . Except as otherwise provided in this Agreement, any of the other Ancillary Agreements or any other agreement between the parties contemplated hereby, all costs, fees and expenses of either party in connection with the transactions contemplated by this Agreement will be paid by the party that incurs such costs and expenses.

 

10.10 Amendment . The parties may amend this Agreement only by a written agreement signed by each party to be bound by the amendment and that identifies itself as an amendment to this Agreement.

 

10.11 Waiver . The parties may waive a provision of this Agreement only by a writing signed by the party intended to be bound by the waiver. A party is not prevented from enforcing any right, remedy or condition in the party’s favor because of any failure or delay in exercising any right or remedy or in requiring satisfaction of any condition, except to the extent that the party specifically waives the same in writing. A written waiver given for one matter or occasion is effective only in that instance and only for the purpose stated. A waiver once given is not to be construed as a waiver for any other matter or occasion. Any enumeration of a party’s rights and remedies in this Agreement is not intended to be exclusive, and a party’s rights and remedies are intended to be cumulative to the extent permitted by law and include any rights and remedies authorized in law or in equity.

 

10.12 Authority . Each of the parties hereto represents to the other that: (a) it has the corporate or other requisite power and authority to execute, deliver and perform this Agreement, (b) the execution, delivery and performance of this Agreement has been duly authorized by all necessary corporate or other action, (c) it has duly and validly executed and delivered this Agreement, and (d) this Agreement is a legal, valid and binding obligation, enforceable against it and its Affiliates in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and general equity principles.

 

10.13 Construction of Agreement .

 

(a) Where this Agreement states that a party “ will ” or “ shall ” perform in some manner or otherwise act or omit to act, it means that the party is legally obligated to do so in accordance with this Agreement.

 

(b) The captions, titles and headings, and table of contents, included in this Agreement are for convenience only, and do not affect this Agreement’s construction or interpretation. When a reference is made in this Agreement to an Article or a Section, exhibit or schedule, such reference will be to an Article or Section of, or an exhibit or schedule to, this Agreement unless otherwise indicated.

 

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(c) This Agreement is for the sole benefit of the parties and the respective Group members of the parties hereto (and their respective customers as specifically provided in this Agreement) and, except for the indemnification rights of the Motorola Indemnified Parties under Section 5.3 (Freescale Indemnified Products) of this Agreement, does not, and is not intended to, confer any rights or remedies in favor of any Person (including any employee or stockholder of Motorola or Freescale) other than the parties signing this Agreement and their respective Group members.

 

(d) The words “ including ,” “ includes ,” or “ include ” are to be read as listing non-exclusive examples of the matters referred to, whether or not words such as “ without limitation ” or “ but not limited to ” are used in each instance.

 

(e) Any reference in this Agreement to the singular includes the plural where appropriate. Any reference in this Agreement to the masculine, feminine or neuter gender includes the other genders where appropriate. For purposes of this Agreement, after the Effective Date, the SPS Business will be deemed to be the business of Freescale and the Freescale Group, and all references made in this Agreement to Freescale as a party which operates as of a time following the Effective Date, will be deemed to refer to all members of the Freescale Group as a single party, where appropriate.

 

(f) Unless otherwise expressly specified, all references in this Agreement or any Ancillary Agreement to “ dollars ” or “ $ ” means United States Dollars. If any payment required to be made hereunder is denominated in a currency other than United States Dollars, such payment will be made in United States Dollars and the amount thereof will be computed using Motorola’s P&L rate for the current month.

 

(g) Any reference in this Agreement to a “ member ” of a Group means a party to this Agreement or another Person referred to in the definition of Freescale Group or Motorola Group, as applicable.

 

(h) Any reference in this Agreement to the products of a party (e.g., a “Motorola product” or “Freescale Wireless Semiconductor Product”) includes products of any member of such party’s Group and any reference in this Agreement to the Patent or Non-Patent Intellectual Property Rights of a party means the Patent or Non-Patent Intellectual Property Rights of any member of such party’s Group.

 

10.14 Performance . Motorola shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement to be performed by any member of the Motorola Group. Freescale shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement to be performed by any member of the Freescale Group. Each party further agrees that it will cause its other Group members not to take any action or fail to take any action inconsistent with such party’s obligations under this Agreement or the transactions contemplated hereby. Without limiting the foregoing or anything else in this Agreement, the parties shall cause each member of their respective Group to: (a) comply with all applicable limitations and restrictions with respect to the licenses, rights and covenants granted by, to or on behalf of such member under this Agreement; and (b) make such license grants or covenants (or take such other

 

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action) as may be necessary to make effective the licenses, covenants and other rights granted by the parties under this Agreement.

 

[S IGNATURE P AGE F OLLOWS ]

 

 

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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed on its behalf by a duly authorized officer on the day and year first above written.

 

 

 

INTELLECTUAL PROPERTY LICENSE AGREEMENT

 

TABLE OF SUPPLEMENTS

 

 

 

INTELLECTUAL PROPERTY LICENSE AGREEMENT

 

SUPPLEMENT A MOTOROLA RESTRICTED TECHNOLOGY

 

“ Celestri Satellite Technology ” means all confidential and proprietary Technology owned or licensable by any member of the Motorola Group that relates to: (a) system concepts or designs developed by Motorola for any combined GEO/LEO satellite broadband data transmission system, concepts, together with any systems, concepts, studies, or research from any predecessor programs to such combined GEO/LEO satellite broadband data transmission system; and (b) the number and arrangement of satellites, capacity enhancement strategies, network transport protocols, network topologies, network routing and operation concepts, network control, system control, and methods of hand-off.

 

“ Iridium Satellite Technology ” means all confidential and proprietary Technology owned or licensable by any member of the Motorola Group that relates to: (a) system concepts or designs developed by Motorola for any primarily voice, narrowband satellite-based telecommunications system, concepts, or studies; and (b) the number and arrangement of satellites, capacity enhancement strategies, network transport protocols, network topologies, network routing and operation concepts, network control, system control and methods of hand-off.

 

“ Teledesic Satellite Technology ” means all confidential and proprietary Technology owned or licensable by any member of the Motorola Group that relates to: (a) system concepts or designs developed by Motorola for a satellite-based broadband system for the transmission of communications and data, such system including satellites; ground-based sites, equipment, and facilities to operate and manage the satellites and the communications links of the system; one or more network control systems; and ground-based equipment and Software which is used by subscribers for sending and receiving communications through the system; and (b) the number and arrangement of satellites, capacity enhancement strategies, network transport protocols, network topologies, network routing and operation concepts, network control, system control, and methods of hand-off.

 

“ iDEN Technology ” means all confidential and proprietary Technology (other than Freescale Technology embedded in or used for the design of Semiconductor Products), patented or otherwise, owned or licensable by any member of the Motorola Group that relates to products, systems, concepts or designs developed by/for Motorola with respect to a wireless communications technology commonly referred to as Integrated Digital Enhanced Network (iDEN) Technology that: (a) supports voice, circuit data, packet date, short messaging and dispatch radio (two way radio) functionality in a single mobile phone device; (b) is based on digital TDMA (Time Division Multiple Access); and (c) uses QAM (Quadrature Amplitude Modulation) techniques. iDEN Technology includes all enhancements and improvements to such Technology including, but not limited to, WiDEN.

 

A-1

“ CGISS Communication Technology ” means all confidential and proprietary Technology (other than Freescale Technology embedded in or used for the design of Semiconductor Products), patented or otherwise, owned or licensable by any member of the Motorola Group that relates to products, systems, concepts or designs developed by/for Motorola with respect to:

 

(a)

the following standards formulated by the European Telecommunications Standard Institute (ETSI): (i) Terrestrial Trunked Radio (TETRA) Standard for mobile radio devices with two-way radio, cellular, paging and data functionality; (ii) Low Tier Digital (LTD) Standard; and (iii) Digital Mobile Radio (DMR) Standard; and

 

(b)	the standards formulated in connection with following projects of the Telecommunications Industry Association (TIA) in the TR-8 Committee: (i) Project 25; (ii) Project 34; (iii) the Scalable Adaptive Modulation (SAM) Pro