AMENDED AND RESTATED
INTELLECTUAL PROPERTY AGREEMENT
This INTELLECTUAL PROPERTY AGREEMENT ("Agreement"), as amended and
restated herein, is entered into this 4th day of August 1999 (the "Effective
Date",) by and between MOTOROLA, INC., a Delaware Corporation (hereinafter
"MOTOROLA"), acting through its Semiconductor Products Sector ("SPS"), and
Semiconductor Components Industries, L.L.C., a Delaware limited liability
company ("SCILLC").
RECITALS
WHEREAS, MOTOROLA, through its Semiconductor Components Group ("SCG"),
develops, manufactures and sells discrete and integrated circuit semiconductor
products and related products.
WHEREAS, SCG presently is a part of SPS.
WHEREAS, SCG has operations in the United States and numerous foreign
countries.
WHEREAS, MOTOROLA desires to reorganize the business, assets, properties
and operations presently constituting SCG to establish SCG as a "stand alone"
business, separate from the remainder of SPS (the "Reorganization").
WHEREAS, SCG Holding Corporation, formerly known as Motorola Energy
Systems, Inc., a Delaware corporation is a wholly owned subsidiary of MOTOROLA
(hereinafter, "SCG Holding"), and SCILLC is a wholly-owned subsidiary of SCG
Holding.
WHEREAS, SCG Holding and SCILLC are to be among the entities into which
MOTOROLA contributes the business, assets and operations of SCG (the "SCG
Business") pursuant to the Reorganization.
WHEREAS, MOTOROLA is the owner or licensee of certain intellectual
property under which MOTOROLA will hereunder assign, license, or sublicense, as
the case may be, to SCILLC certain intellectual property to support and continue
the operation of the SCG Business (such transactions hereunder to be treated as
a contribution by MOTOROLA to the capital of SCG Holding),
WHEREAS, the Parties hereto contemplate entering into a Reorganization
Agreement as soon as practicable following the date hereof under which it is
contemplated that the Reorganization will be effected (the "Reorganization
Agreement").
NOW, THEREFORE, in furtherance of the foregoing premises and in
consideration of the mutual covenants and obligations hereinafter set forth, the
Parties hereto, intending to be legally bound hereby, do agree as follows:
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* Confidential Information in this Exhibit 10.5 has been omitted and
filed separately with the Securities and Exchange Commission.
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SECTION 1
DEFINITION AND TERMS
As used in the agreement, the following terms shall have the meaning set
forth or referenced below:
1.1. ASSIGNED COPYRIGHTABLE MATERIALS means MOTOROLA owned data sheets, data
books, application notes, and other advertising materials used in
connection with the marketing and sale of any SCG PRODUCT and which do not
bear the trademark or tradenames of MOTOROLA other than ASSIGNED
TRADEMARKS. ASSIGNED COPYRIGHTABLE MATERIALS does not include software or
tangible documentation of the process flow sheets used in the manufacture
of any product.
1.2. ASSIGNED KNOW HOW means know-how as set forth in Exhibit 1.2.
1.3. ASSIGNED MASK WORKS means registered masks works as set forth in Exhibit
1.3 and any mask work protection available to MOTOROLA in those mask works
fixed by MOTOROLA which are embodied exclusively in an SCG PRODUCT.
1.4. ASSIGNED PATENTS means the patents and patent applications set forth in
Exhibit 1.4 and any foreign counterparts of the patents and applications
listed on Exhibit 1.4.
1.5. ASSIGNED TRADEMARKS means registered and common law trademarks set forth
in Exhibit 1.5.
1.6. CIRCUIT means a plurality of active and/or passive elements for
generating, receiving, transmitting, storing, transforming or acting in
response to an electrical signal.
1.7. CIRCUIT PATENT means a LICENSED MOTOROLA PATENT which claims a CIRCUIT or
an ELECTRICAL METHOD.
1.8. CLOSING DATE means the date on which the consummation of the transactions
set forth in the Reorganization Agreement occurs.
1.9. CONFIDENTIAL INFORMATION means all proprietary information which is 1) not
publicly known and 2) used to manufacture and sell SCG PRODUCTS or SPS
PRODUCTS or specifically used in the business by the Semiconductor
Components Group of MOTOROLA. CONFIDENTIAL INFORMATION specifically
includes all RESTRICTED PROCESS MODULES.
1.10. ELECTRICAL METHOD means a method or steps for using CIRCUITS or SYSTEMS,
whether or not combined with one or more active and/or passive elements,
for performing electrical or electronic functions.
1.11. INDEMNIFIED PRODUCT means any product:
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1.11.1. which is an SCG PRODUCT; or
1.11.2. which is derived from an SCG PRODUCT and that has substantially
the same form, fit, function, and application as an SCG PRODUCT,
as determined by the data sheet relating to the SCG PRODUCT in
existence prior to the CLOSING DATE.
1.11.3. Notwithstanding the language in this section 1.11, in no event
shall the term INDEMNIFIED PRODUCT include memories,
microprocessors, microcontrollers, digital signal processors,
sensor devices having a mechanical input, RF devices (but not
small signal RF discrete devices such as high frequency small
signal transistors of the type that are SCG PRODUCTS, tuning
diodes, and varactors), Optobus products, power devices integrated
with analog circuitry on the same SEMICONDUCTIVE MATERIAL other
than those specific devices that have product numbers that are SCG
PRODUCTS or within the scope of 1.11.2, hybrid power modules,
compound semiconductor products, Vertical Cavity Surfacing
Emitting Lasers (VCSEL), Field Programmable Gate Arrays (FPGAs),
Field Programmable Analog Arrays (FPAAs), or magnetoresistive
devices or devices that are formed substantially of materials
having a permanent magnetic effect (collectively "EXCLUDED
PRODUCTS"), whether or not any such EXCLUDED PRODUCT includes the
functionality of an SCG PRODUCT.
1.11.4. Notwithstanding the language in this section 1.11, in no event
shall INDEMNIFIED PRODUCT include any product made or sold by
SCILLC if infringement of a third party's patent would have been
avoided but for a change in the manufacturing or design of an SCG
PRODUCT or but for the use of a process or equipment for
manufacture of or the design of an INDEMNIFIED PRODUCT that was
not used in the design or manufacture of an SCG PRODUCT before the
CLOSING DATE.
1.12. INTEGRATED CIRCUIT STRUCTURE means an integral unit consisting primarily
of a plurality of active and/or passive circuit elements associated on, or
in, a unitary body of SEMICONDUCTIVE MATERIAL for performing electrical or
electronic functions and, if provided therewith, such unit includes
housing and/or supporting means therefor.
1.13. INTELLECTUAL PROPERTY means the LICENSED MOTOROLA PATENTS, ASSIGNED
PATENTS, LICENSED VISIBLE TRADEMARKS, LICENSED EMBEDDED TRADEMARKS,
ASSIGNED TRADEMARKS, LICENSED KNOW HOW, ASSIGNED KNOW HOW, LICENSED
SOFTWARE, ASSIGNED MASK WORKS, LICENSED MASK WORKS, ASSIGNED COPYRIGHTABLE
MATERIALS, and LICENSED COPYRIGHTABLE MATERIALS.
1.14. LICENSED SCILLC PATENTS means all classes or types of patents, utility
models, design patents, applications, and any counterparts thereof for the
aforementioned or all countries of the world owned by SCILLC which have
claims that read on the manufacture, assembly, test, use, lease, sale,
offer for sale, disposal, importation, or
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design of a LICENSED SPS PRODUCT and which are issued, published or filed
on or before five (5) years after the CLOSING DATE. LICENSED SCILLC
PATENTS also includes patents That are acquired by SCILLC, on or before
five (5) years after the CLOSING DATE, and under which and to the extent
to which and subject to the conditions under which SCILLC may have the
right to grant licenses or rights of the scope granted herein 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 SCILLC, and (b) as consideration for the acquisition of
such patents, utility models, design patents and applications.
1.15. LICENSED COPYRIGHTABLE MATERIALS means MOTOROLA owned data sheets, data
books, application notes, and other advertising materials used in
connection with the marketing and sale of any SCG PRODUCT and which bear
the trademark or tradenames of MOTOROLA other than ASSIGNED TRADEMARKS.
LICENSED COPYRIGHTABLE MATERIALS does not include software or tangible
documentation of the process flow sheets used in the manufacture of any
product.
1.16. LICENSED EMBEDDED TRADEMARKS means any trademark owned by MOTOROLA which
is embedded in or affixed on equipment, software, or materials ("Items")
used in connection with the sale, offering for sale, distribution, or
advertising of an SCG PRODUCT, which Items are not sold or provided to
purchasers of an SCG PRODUCT or trademarks which are not visible to
purchasers of an encapsulated SCG PRODUCT.
1.17. LICENSED KNOW HOW means know how, including business methods, owned
by MOTOROLA as of the CLOSING DATE which is specifically used, as of
the CLOSING DATE, to develop or manufacture an SCG PRODUCT. LICENSED
KNOW HOW includes RESTRICTED PROCESS MODULES. ******************
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In no event shall LICENSED KNOW HOW include any know how developed or
acquired by MOTOROLA after the CLOSING DATE.
1.18. LICENSED MOTOROLA PATENTS means all classes or types of patents, utility
models, design patents, applications, Mid any counterparts thereof for the
aforementioned of all countries of the world which have claims that read
on the manufacture, assembly, test, use lease, sale, offer for sale,
disposal, importation, or design of a LICENSED PRODUCT and are:
(i) Issued, published or filed on or before five (5) years after the
CLOSING DATE, and which arise out of inventions *****************
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* Confidential Information omitted and filed separately with the Securities
and Exchange Commission
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(ii) Are acquired, on or before five (5) years after the CLOSING DATE, by
MOTOROLA SEMICONDUCTOR PRODUCTS SECTOR: and under which and to the
extent to which and subject to the conditions under which the
MOTOROLA SEMICONDUCTOR PRODUCTS SECTOR may have the right to grant
licenses or rights of the scope granted herein 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 MOTOROLA SEMICONDUCTOR PRODUCTS SECTOR, and
(b) as consideration for the acquisition of such patents, utility
models, design patents and applications. In no event shall the term
LICENSED MOTOROLA PATENTS include or encompass patents on inventions
made by employees of MOTOROLA while in the employ of groups or
operations of MOTOROLA other than the MOTOROLA SEMICONDUCTOR
PRODUCTS SECTOR.
1.19. LICENSED PRODUCT means any product:
1.19.1. which is an SCG PRODUCT; or
1.19.2. which is derived from an SCG PRODUCT and that has substantially
the same function as an SCG PRODUCT in existence prior to the
CLOSING DATE; or
1.19.3. an INTEGRATED CIRCUIT STRUCTURE or SEMICONDUCTIVE ELEMENT which is
reasonably anticipated by the Semiconductor Components Group's
1999 Analog Long Range Plan (LRP) dated 18 March 1999, the 1999
Logic LRP dated 19 March 1999, the 1999 Bipolar Discrete LRP dated
16 April 1999, or the 1999 MOS Gated LRP dated 26 February 1999.
1.19.4. Notwithstanding the above language in this section, in no event
shall the term LICENSED PRODUCT include memories, microprocessors,
microcontrollers, digital signal processors, sensor devices having
a mechanical input, RF devices (but not small signal RF discrete
devices such as high frequency small signal transistors of the
type that are SCG PRODUCTS, tuning diodes, and varactors), Optobus
products, power devices integrated with analog circuitry on the
same SEMICONDUCTIVE MATERIAL other than those specific devices
that have product numbers that are SCG PRODUCTS or within the
scope of 1.19.3, hybrid power modules of the type developed by or
made by the former Hybrid Power Modules business unit of MOTOROLA,
compound semiconductor products, Vertical Cavity Surfing Emitting
Lasers (VCSEL), Field Programmable Gate Arrays (FPGAs), Field
Programmable Analog Arrays (FPAAs), or magnetoresistive devices or
devices that are formed substantially of materials having a
permanent magnetic effect (collectively "EXCLUDED PRODUCTS"),
whether or not any such EXCLUDED PRODUCT includes the
functionality of an SCG PRODUCT.
5
1.20. LICENSED SOFTWARE means software owned by MOTOROLA and specifically used
in business applications used by or for the Semiconductor Components Group
of MOTOROLA or in the manufacture, design, operation, or testing of an SCG
PRODUCT.
1.21. LICENSED SPS PRODUCT means any product other than an SCG PRODUCT or a
product which is derived from an SCG PRODUCT and that has substantially
the same function as an SCG PRODUCT, provided, however, that LICENSED SPS
PRODUCT shall include discrete RF devices, discrete sensor devices,
discrete compound semiconductor devices, but shall not include any other
discrete devices, and provided that LICENSED SPS PRODUCT shall include any
product set forth in the PTI code listing for MOTOROLA's MOTOROLA
SEMICONDUCTOR PRODUCTS SECTOR business units other than the Semiconductor
Component Group of MOTOROLA's MOTOROLA SEMICONDUCTOR PRODUCTS SECTOR.
1.22. LICENSED VISIBLE TRADEMARKS means any trademark owned by MOTOROLA which is
affixed on materials (including printed materials, advertising materials,
data sheets, application notes, packing slips, packing materials, or
electronic materials) used in connection with the sale, offering for sale,
distribution, or advertising of an SCG PRODUCT or on an SCG PRODUCT which
is provided to and visible by purchasers of an encapsulated SCG PRODUCT.
1.23. MANUFACTURING APPARATUS means as to each party hereto, any instrumentality
or aggregate of instrumentality primarily designed for use in the
fabrication of that party's LICENSED PRODUCTS (as hereinafter defined).
1.24. MOTOROLA SEMICONDUCTOR PRODUCTS SECTOR means an existing business unit of
MOTOROLA: (i) now consisting of a Networking & Computing Systems Group, a
Semiconductor Components Group, a Transportation Systems Group, a Wireless
Subscriber Systems Group, and an Imaging and Entertainment Systems
organization, (ii) having major manufacturing facilities located in
Phoenix, Mesa, Chandler and Tempe, Arizona; Austin, Texas; Toulouse,
France; Aizu and Sendai, Japan; Tianjin, China; East Kilbride and South
Queensferry, Scotland, Guadalajara, Mexico, Carmona, Philippines; and
Seremban, Malaysia; and (iii) making and/or developing products falling
within the definition of INTEGRATED CIRCUIT STRUCTURES OR SEMICONDUCTOR
ELEMENTS. This definition of the MOTOROLA SEMICONDUCTOR PRODUCTS SECTOR
also includes the predecessor business unit of MOTOROLA of said groups
taken singularly or in combination and/or said organization and any future
or successor business unit of MOTOROLA acquired or derived from, by
separation, reorganization, or merger, irrespective of appellation, said
groups taken singularly or in combination and/or said organization.
1.25. NON-ASSERTED MOTOROLA PATENTS means all classes or types of patents,
utility models, design patents, applications, and any counterparts thereof
for the aforementioned of all countries of the world which have claims
that read on the manufacture, assembly, test, use lease, sale, offer for
sale, disposal, importation, or design of an SCG PRODUCT and are issued,
published or filed on or before the CLOSING DATE, and which arise out
6
of inventions made solely by one or more employees of MOTOROLA.
NONASSERTED PATENTS shall not include LICENSED MOTOROLA PATENTS.
1.26. PROCESS AND STRUCTURE PATENT means a LICENSED PATENT which claims a
process for manufacturing a SEMICONDUCTOR ELEMENT or INTEGRATED CIRCUIT
STRUCTURE or which claims the arrangement or interrelationship in or on a
semiconductor substrate of regions, layers, electrodes, or contacts
thereof.
1.27. RESTRICTED PROCESS MODULES means that information described in Exhibit
1.27.
1.28. SCG PRODUCT means any product identified as a product, as of the CLOSING
DATE, of the Semiconductor Component Group of MOTOROLA's MOTOROLA
SEMICONDUCTOR PRODUCTS SECTOR as set forth in the pti code listing for the
Semiconductor Components Group, excluding the optoisolator and optocoupler
products, GaAs Schottky products, FPAA, FPGA, and GaAs LEDs.
1.29. SEMICONDUCTIVE MATERIAL means any material whose conductivity is
intermediate to that of metals and insulators at room temperature and
whose conductivity, over some temperature range, increases with increases
in temperature. Such material shall include but not be limited to refined
products, reaction products, reduced products, mixtures and compounds.
1.30. SEMICONDUCTOR ELEMENT means a device other than an INTEGRATED CIRCUIT
STRUCTURE consisting primarily of a body of SEMICONDUCTIVE MATERIAL having
a plurality of electrodes associated therewith, whether or not said body
consists of a single SEMICONDUCTIVE MATERIAL or of a multiplicity of such
materials, and whether or not said body includes one or more layers or
other regions (constituting substantially less than the whole of said
body) of a material or materials which are of a type other than
SEMICONDUCTIVE MATERIAL and, if provided therewith, such device includes
housing and/or supporting means therefor.
1.32. SUBSIDIARY means a corporation, company, or other entity more than or
equal to forty-nine percent (49%) of whose outstanding share or securities
(representing the right to vote for the ejection of directors or other
managing authority) are, now or hereafter, owned or controlled, directly
or indirectly by a party hereto, but such corporation company or other
entity shall be deemed to be a SUBSIDIARY only so long as such ownership
or control exists. SUBSIDIARY shall also mean entities in which SCILLC
holds less than 49% but more than or equal to a thirty-three percent (33%)
interest, provided that the entity's principal business is to manufacture
LICENSED PRODUCTS for SCILLC *******************************************
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* Confidential Information omitted and filed separately with the Securities
and Exchange Commission
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1.33. SYSTEM means one or more CIRCUITS whether or not combined with one or more
active and/or passive elements for performing electrical or electronic
functions, whether or not a housing and/or supporting means for said
circuitry is included.
1.34. THIRD PARTY SCG CONTRIBUTION means any know how, that if existing prior to
the CLOSING DATE, would have been classified as know how under one of the
processes set forth in Exhibit 1.2 (ASSIGNED KNOW HOW) or is solely
related to an SCG PRODUCT and such know how is developed by a third party
that was obligated, under a written agreement with MOTOROLA as of the
CLOSING DATE, to assign to MOTOROLA title or joint ownership in such
development.
SECTION 2
ASSIGNMENT AND LICENSE OF PATENTS
2.1. MOTOROLA hereby assigns all its right, title, and interest, including the
right to sue for infringement before the CLOSING DATE, and subject to any
existing third party licenses before the CLOSING DATE, in ASSIGNED PATENTS
to SCILLC. MOTOROLA shall provide all of its flies of the ASSIGNED PATENTS
to SCILLC no later than ninety (90) days after the CLOSING DATE. Upon
transfer of such files to the SCILLC, SCILLC assumes all responsibility
for the prosecution and payment of fees associated therewith. SCILLC shall
ensure that all documentation necessary to execute and record the transfer
of ASSIGNED PATENTS is prepared by SCILLC and presented to MOTOROLA for
signature. MOTOROLA shall execute and deliver, or cause to be executed and
delivered such documentation to SCILLC, no later than ninety (90) days
after presentation of such documentation to SCILLC.
2.2. MOTOROLA and SCILLC agree that the MOSAIC 5/5e patents and any
counterparts thereof listed in this Section 2.2 will be included as
ASSIGNED PATENTS if and when the MOSAIC 5 and/or MOSAIC 5e process is
transferred to SCILLC as set forth in the SCG Manufacturing Agreement.
SCILLC and MOTOROLA agree that the rights and obligations granted and
accepted hereunder for ASSIGNED PATENTS will apply to the MOSAIC 5/5e
patents and any obligations will be triggered as of the date specified in
this Section 2.2 other than the CLOSING DATE. MOSAIC 5/5e patents are
patents or patent applications with the following Docket Numbers:
SCG64I9P, SC06509P, SC06543P, SC06544P, SC06573P, SCG6645P, 5C07139P,
9C07538P, SC08875P.
2.3. MOTOROLA and SCILLC agree that U.S. Patent Number 5,418,410, and any
counterparts thereof (Tisinger patents) will be included as ASSIGNED
PATENTS upon the naming of SCILLC as a party to the litigation Power
Integrations v. Motorola, Inc. or if SCILLC is not named as a party to
such litigation, then upon the settlement of the litigation. SCILLC and
MOTOROLA agree that the rights and obligations granted and
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* Confidential Information omitted and filed separately with the Securities
and Exchange Commission
8
accepted hereunder for ASSIGNED PATENTS will apply to the Tisinger patents
and any obligations will be triggered as of the date specified in this
Section 2.3 rather than the CLOSING DATE.
2.4. MOTOROLA and SCILLC agree that U.S. Patent Number 4,450,367 will be
included as ASSIGNED PATENTS upon the settlement of the Power Integrations
v. Motorola, Inc. litigation. SCILLC and MOTOROLA agree that the rights
and obligations granted and accepted hereunder for ASSIGNED PATENTS will
apply to U.S. Patent Number 4,450,367 and any obligations will be
triggered as of the date specified in this Section 2.4 rather than the
CLOSING DATE.
2.5. MOTOROLA hereby grants SCILLC, for the life of the last to expire LICENSED
MOTOROLA PATENTS, a world wide, non-exclusive, nontransferable license
under LICENSED MOTOROLA PATENTS without the right to sub-license (except
and only to the extent necessary for SCILLC to fulfill its obligations
assumed under the Technology License Contract originally between Motorola,
Inc. and Leshan-Phoenix Semiconductor Company, Ltd):
2.5.1. ****************************************************************
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(i) that are designed solely or jointly by or for SCILLC, or
(ii) that are designed by third parties*****************************
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and to practice any process or method involved in the manufacture
or use thereof, and
2.5.2. to make, use and have made MANUFACTURING APPARATUS and to practice
any process or method involved in the use thereof.
2.6. MOTOROLA hereby grants to SCILLC, for the life of the last to expire
LICENSED MOTOROLA PATENT, a world wide, non-exclusive, non-transferable
covenant not to assert LICENSED MOTOROLA PATENTS against SCILLC as a
result of the purchase, importation, use, lease, resale, offer for sale,
or other disposal of LICENSED PRODUCTS designed solely or jointly by or
for a third party and manufactured by a third party. MOTOROLA hereby
agrees to extend such covenant not to assert to Customers, distributors,
and users of SCILLC that purchase, lease, or otherwise acquire such
LICENSED PRODUCTS from SCILLC.
2.7. ***********************************************************************
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and Exchange Commission
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2.8. MOTOROLA hereby grants to SCILLC, for the life of the last to expire
CIRCUIT PATENTS, a non-exclusive, world wide, non-transferable license
under CIRCUIT PATENTS, without the right to sub-license, to have made
LICENSED PRODUCTS designed solely or jointly by or for SCILLC and to
import, use, lease, sell, offer for sale, or otherwise dispose of such
LICENSED PRODUCTS. MOTOROLA hereby further grants to SCILLC, for the term
of this license, a world wide, non-exclusive, nontransferable covenant not
to assert LICENSED MOTOROLA PATENTS against SCILLC for having such
LICENSED PRODUCTS made. MOTOROLA hereby agrees to extend such covenant not
to assert to customers, distributors, and users that purchase or otherwise
acquire such LICENSED PRODUCTS from SCILLC.
2.9. MOTOROLA agrees not to make any claim of infringement against the
customers, distributors and users of LICENSED PRODUCTS, based upon any
claim of any LICENSED MOTOROLA PATENT under which such LICENSED PRODUCTS
are licensed hereunder, for the use of any LICENSED PRODUCTS which are
made imported, sold, leased or otherwise disposed of by SCILLC or its
SUBSIDIARIES.
2.10. MOTOROLA hereby grants to SCILLC, for the life of the last to expire
NONASSERTED MOTOROLA PATENT, a world wide, non-exclusive, non-transferable
covenant not to assert NON-ASSERTED MOTOROLA PATENTS against SCILLC to
make, have made, use, lease, sell, offer for sale, import, design,
assemble, have assembled, test, or otherwise dispose of SCG PRODUCTS.
MOTOROLA agrees to extend such covenant not to assert to customers,
distributors, and users that purchase any such SCG PRODUCT from SCILLC.
This covenant not to assert does not extend to products other than SCG
PRODUCTS.
2.11. SCILLC hereby grants to MOTOROLA a worldwide, paid-up, royalty free,
non-exclusive license, without the right to sublicense after the CLOSING
DATE, under ASSIGNED PATENTS AND LICENSED SCILLC PATENTS, for the life of
the last to expire ASSIGNED PATENT or LICENSED SCILLC PATENT, to make,
have made, use, lease, sell, offer for sale, import, design, assemble,
have assembled, test, or otherwise dispose of LICENSED SPS PRODUCTS and to
practice any process or method involved in the manufacture or use thereof,
and to make, use and have made MANUFACTURING APPARATUS and to practice any
process or method involved in the use thereof. SCILLC hereby further
warrants to MOTOROLA, for the life of the last to expire ASSIGNED PATENT,
a world wide, non-exclusive, non-transferable covenant not to
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* Confidential Information omitted and filed separately with the Securities
and Exchange Commission
10
assert ASSIGNED PATENTS against MOTOROLA to make, have made, use, lease,
sell, offer for sale, import, design, assemble, have assembled, test, or
otherwise dispose of any comprehensive product or assembly which
incorporates a product made on a SEMICONDUCTIVE MATERIAL and purchased
from or made by a third party. This covenant not to assert does not extend
to products made on a SEMICONDUCTIVE MATERIAL which are commercially sold
to a third party by MOTOROLA that are not incorporated into a more
comprehensive product or assembly. SCILLC agrees to extend such Covenant
not to assert to Customers, distributors, and users that purchase or
otherwise acquire such comprehensive product or assembly from MOTOROLA.
2.12. SCILLC agrees not to make any claim of infringement against the customers,
distributors, and users of any LICENSED SPS PRODUCTS, based upon any claim
of any ASSIGNED PATENT or LICENSED SCILLC PATENTS under which such
products are licensed hereunder, for the use of any LICENSED SPS PRODUCTS
which are made, imported, sold, leased or otherwise disposed of by
MOTOROLA or its SUBSIDIARIES.
2.13. The licenses and covenants granted herein extend to each party's
respective SUBSIDIARIES, so long as such party's SUBSIDIARIES agree to
grant the same licenses and covenants granted in this Section 2 that
SCILLC and MOTOROLA granted herein, respectively.
2.14. A covenant not to assert is not considered a license for the purposes of
this Agreement.
2.15. The license and rights granted to SCILLC from MOTOROLA herein do not
extend to Zilog or any other third party owned or controlled by the Texas
Pacific Group.
SECTION 3
ASSIGNMENT AND LICENSE OF TRADEMARKS
3.1. MOTOROLA hereby assigns all its right, title, and interest, including the
goodwill of the business associated with the ASSIGNED TRADEMARKS, in
ASSIGNED TRADEMARKS to SCILLC. MOTOROLA shall provide all of its files for
each trademark registration or registration application of those ASSIGNED
TRADEMARKS designated as being registered or pending registration no later
than ninety (90) days after the CLOSING DATE. Upon transfer of such files
to the SCILLC, SCILLC assumes all responsibility for the prosecution and
payment of fees associated therewith. SCILLC shall ensure that all
documentation necessary to execute and record the transfer of ASSIGNED
TRADEMARKS is prepared by SCILLC and presented to MOTOROLA for signature.
MOTOROLA shall execute and deliver, or cause to be executed and delivered
such documentation to SCILLC no later than ninety (90) days after
presentation of such documentation to SCILLC.
3.2. MOTOROLA hereby grants to SCILLC a limited, worldwide, paid-up, royalty
free, nontransferable, nonexclusive license, without the right to grant
sublicenses, to
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reproduce, copy, or use, for a period of one year after the CLOSING DATE,
or to use up any inventory existing as of the CLOSING DATE, any LICENSED
VISIBLE TRADEMARK on or in connection with the sale, offering for sale,
distribution, or advertising of any LICENSED PRODUCT. This license is
granted solely for a transition period to allow SCILLC to use up any
inventory that bears any LICENSED VISIBLE TRADEMARK and to change tooling
that places any LICENSED VISIBLE TRADEMARK on LICENSED PRODUCTS. SCILLC
agrees to use its best efforts to cease such reproduction, copying, or use
of LICENSED VISIBLE TRADEMARKS as soon as commercially reasonable; in any
event, except as provided in Section 3.3, the license granted under this
Section 3.2 shall extend no longer than one (1) year after the CLOSING
DATE.
3.3. Notwithstanding Section 3.2, for any LICENSED PRODUCT that must be
re-qualified when a LICENSED VISIBLE TRADEMARK on the LICENSED PRODUCT or
its packaging is removed, SCILLC shall be permitted, for up to two (2)
years after the CLOSING DATE, to reproduce, copy, or use LICENSED VISIBLE
TRADEMARKS in a manner necessary for the continued sale and distribution
of the LICENSED PRODUCT during such re-qualification.
3.4. After SCILLC ceases reproducing, copying, or using LICENSED VISIBLE
TRADEMARKS pursuant to Sections 3.2 and 3.3, SCILLC may use up any
inventory bearing such LICENSED VISIBLE TRADEMARKS, so long as the amount
of such inventory is manufactured consistent with reasonable commercial
practices.
3.5. MOTOROLA hereby grants to SCILLC a limited, worldwide, nonexclusive right,
without the right to grant rights to third parties, to use the term
"formerly a division of Motorola" (hereinafter "Transition Statement"),
for a period of one (1) year after the CLOSING DATE with the stylized
version of "Motorola" used by MOTOROLA and for a period of two (2) years
after the CLOSING DATE without the stylized version of "Motorola", on or
in connection with the sale, offering for sate, distribution, or
advertising of any LICENSED PRODUCT. SCILLC shall submit to MOTOROLA the
first use of each version of material containing the Transition Statement
for approval by MOTOROLA. The use shall be deemed approved if MOTOROLA
does not reject the submission within thirty (30) days of the date of the
receipt of the submission by MOTOROLA. Except to the extent permitted in
this Section 3.5, in no event will SCILLC have the right to use the
Motorola logo, any stylized versions of the mark "Motorola" used by
MOTOROLA, or other trademarks or tradenames owned by MOTOROLA with the
Transition Statement. In no event shall SCILLC have the right to prepare
and use new advertising, distribution materials, or business forms, in
connection with the sale, offering for sale, distribution, or advertising
of any product, which use the Motorola logo, a stylized version of the
mark "Motorola" used by MOTOROLA (except as permitted above with the
Transition Statement), or other trademarks or tradenames of Motorola. The
preceding sentence does not modify the licenses granted in sections 3.3,
3.6, 3.13, and the right to mark products provided in section 3.2.
12
3.6. MOTOROLA hereby grants to SCILLC a limited, worldwide, paid-up, royalty
free, nontransferable, nonexclusive license, without the right to grant
sublicenses, to reproduce, copy, or use any LICENSED EMBEDDED TRADEMARK on
or in connection with the sale, offering for sale, distribution, or
advertising of any LICENSED PRODUCT. SCILLC agrees to use its best efforts
to discontinue the use of any LICENSED EMBEDDED TRADEMARKS as soon as
commercially reasonable. Notwithstanding the above, SCILLC agrees to
remove the LICENSED EMBEDDED TRADEMARK upon the redesign of any LICENSED
PRODUCT. This limited license shall terminate with the discontinuance or
replacement of the items bearing such LICENSED EMBEDDED TRADEMARKS.
3.7. During the period of time that any LICENSED VISIBLE TRADEMARK or LICENSED
EMBEDDED TRADEMARK is used by SCILLC, SCILLC shall manufacture LICENSED
PRODUCT using standards of quality which are not changed in a substantial
way from those used by Semiconductor Components Group prior to the CLOSING
DATE.
3.8. So long as any LICENSED VISIBLE TRADEMARK or any LICENSE, EMBEDDED
TRADEMARK is used by SCILLC, MOTOROLA shall have the right at reasonable
times and on reasonable notice to conduct, during regular business hours,
an examination of LICENSED PRODUCTS bearing the LICENSED VISIBLE TRADEMARK
or LICENSED EMBEDDED TRADEMARK manufactured by SCILLC (including those in
process, assembled or tested) at SCILLC or its SUBSIDIARIES' facilities to
determine compliance of such LICENSED PRODUCTS with the applicable quality
standards referred to in Section 3.7. If at any time such LICENSED
PRODUCTS in the sole, reasonable opinion of MOTOROLA, fail to conform to
the standards of quality in materials, design, workmanship, use,
advertising, and promotion, MOTOROLA or its authorized representative
shall so notify SCILLC. Upon such notification, SCILLC shall cease to use
the LICENSED VISIBLE TRADEMARKS or the LICENSED EMBEDDED TRADEMARKS on
such LICENSED PRODUCTS or else take such steps as are necessary promptly
to restore the LICENSED PRODUCT to the required standard.
3.9. SCILLC shall not make any use of the LICENSED VISIBLE TRADEMARKS or
LICENSED EMBEDDED TRADEMARKS in such a manner that would represent to the
public that SCILLC, rather than MOTOROLA, is the owner of the such
LICENSED VISIBLE TRADEMARKS or LICENSED EMBEDDED TRADEMARKS. SCILLC agrees
that it shall not at any time adopt, use or apply for any registration of
any trademark, service mark, copyright or other designation which is
identical to or confusingly similar to LICENSED VISIBLE TRADEMARKS or
LICENSED EMBEDDED TRADEMARKS or which could affect Motorola's ownership of
such LICENSED VISIBLE TRADEMARKS or LICENSED EMBEDDED TRADEMARKS.
3.10. MOTOROLA hereby grants to SCILLC the right to use all part numbers, model
numbers and the like in use by MOTOROLA to identify SCG PRODUCTS to
customers as of the CLOSING DATE. SCILLC shall further have the right to
additional part or model numbers to any series or numbering scheme in use
as of the CLOSING DATE. Other
13
than as permitted in the other Sections of this Section 3, SCILLC will not
use a part number, model number and the like that is a MOTOROLA owned
trademark.
3.11. At the CLOSING DATE, and for a period of two (2) years thereafter,
MOTOROLA shall display, on the home page of its MOTOROLA SEMICONDUCTOR
PRODUCTS SECTOR web site, a hypertext link to SCILLC's uniform resource
locator (URL). The initial wording of such hypertext link shall be agreed
upon between SCILLC end MOTOROLA prior to the CLOSING DATE. Thereafter,
upon the approval of MOTOROLA, MOTOROLA shall reword the hypertext link as
reasonably requested by SCILLC.
3.12. SCILLC hereby grants to MOTOROLA a limited, worldwide, paid-up royalty
free, nontransferable, nonexclusive license, without the right to grant
sublicenses, under any ASSIGNED TRADEMARKS, to use up any inventory of
printed materials, including any data books, or to display and distribute
electronic materials which contain information about MOTOROLA's products
other than SCG PRODUCTS. MOTOROLA agrees to use its best efforts to
discontinue the use of any ASSIGNED TRADEMARKS as soon as commercially
reasonable. During the period of time that any ASSIGNED TRADEMARK is used
by MOTOROLA, MOTOROLA shall maintain standards of quality as to goods
and/or materials that bear the ASSIGNED TRADEMARKS that are not changed in
substantial way from those used prior to the CLOSING DATE. SCILLC shall
have the right, at reasonable times and on reasonable notice, to examine
and insure the quality of goods and/or materials used or distributed by
MOTOROLA that bear the ASSIGNED TRADEMARKS
3.13. At the CLOSING DATE and for a period of two (2) years thereafter, SCILLC,
at the request of MOTOROLA, shall display, on the home page of its web
site, a hypertext link to the URL of MOTOROLA's MOTOROLA SEMICONDUCTOR
PRODUCTS SECTOR. The initial wording of such hypertext link shall be
agreed upon between SCILLC and MOTOROLA prior to the CLOSING DATE.
Thereafter, upon the approval of SCILLC, SCILLC shall reword the hypertext
link as reasonably requested by MOTOROLA.
3.14. MOTOROLA and SCILLC agree to negotiate, in good faith, the extension of
the obligations set forth in Section 3.11 and 3.13 for another two (2)
year period. The parties agree that the negotiations shall take into
account the respective value of the link to each party.
3.15. The licenses and covenants granted herein extend to each party's
respective SUBSIDIARIES, so long as such party's SUBSIDIARIES agree to
grant the same licenses and covenants granted in this Section 3 that
SCILLC and MOTOROLA granted herein, respectively.
14
SECTION 4
ASSIGNMENT OF MASK WORKS
4.1. MOTOROLA hereby assigns all its right, title, and interest, subject to any
existing third party licenses before the CLOSING DATE, in ASSIGNED MASK
WORKS to SCILLC. MOTOROLA shall provide all of its files of the registered
ASSIGNED MASK WORKS to SCILLC no later than ninety (90) days after the
CLOSING DATE. SCILLC shall ensure that all necessary documentation
necessary to execute and record the transfer of ASSIGNED MASK WORKS is
prepared by SCILLC and presented to MOTOROLA for signature. MOTOROLA shall
execute and deliver, or cause to be executed and delivered such
documentation to SCILLC, no later than ninety (90) days after presentation
of such documentation to SCILLC.
4.2. This Agreement imposes no obligation on MOTOROLA to file any mask work
registrations on any ASSIGNED MASK WORK which has been fixed by MOTOROLA
and which statutory protection is still available.
SECTION 5
ASSIGNMENT AND LICENSE OF KNOW HOW
5.1. MOTOROLA hereby assigns all its right, title, and interest, subject to any
existing third party licenses before the CLOSING DATE, in ASSIGNED KNOW
HOW to SCILLC.
5.2. MOTOROLA hereby grants to SCILLC a perpetual, world wide, non-exclusive,
license, without the right to sublicense (except and only to the extent
necessary for SCILLC to fulfill its obligations assumed under the
Technology License Contract originally between Motorola, Inc. and
Leshan-Phoenix Semiconductor Company, Ltd), to LICENSED KNOW HOW to
manufacture, have manufactured, use, lease, sell, offer for sale, import,
design, assemble, have assembled, test, or otherwise dispose of LICENSED
PRODUCTS.
5.3. MOTOROLA shall make available to SCILLC all ASSIGNED KNOW HOW and LICENSED
KNOW HOW existing in tangible form no later than ninety (90) days after
the CLOSING DATE. For that ASSIGNED KNOW HOW or LICENSED KNOW HOW which is
not being utilized in Motorola Energy Systems, Inc. before the CLOSING
DATE, any transition services and transfer thereof to SCILLC's facilities
will be addressed in Collateral Agreements to be agreed upon between
SCILLC and MOTOROLA.
5.4. MOTOROLA agrees to grant joint ownership rights, subject to any existing
third party, licenses before such grant, in the MOSAIC 5 and MOSAIC 5e
know how if and when the MOSAIC 5 and/or MOSAIC 5e process is transferred
to SCILLC as set forth in the SCG Manufacturing Agreement. Upon such
grant, SCILLC and MOTOROLA will retain an
15
undivided one-half interest in such MOSAIC 5 and MOSAIC Se know how,
without accounting to the other. The parties agree that prior to the
granting of the rights herein, it likely will be necessary to provide
certain know how to SCILLC for SCILLC to install the MOSAIC 5 and/or
MOSAIC 5e process in its own facilities. SCILLC and MOTOROLA will agree on
a transfer schedule of the MOSAIC 5 and/or MOSAIC 5e know how to SClLLC in
advance of the transfer of such know how in a manner that facilitates the
orderly transfer of such know how to SCILLC's facilities.
5.5. MOTOROLA hereby assigns to SCILLC all its right, title, and interest,
subject to any existing third party licenses before the CLOSING DATE, in
Standard Linear know how used solely by the Semiconductor Components Group
before the CLOSING DATE and such Standard Linear know how shall be
considered as ASSIGNED KNOW HOW. MOTOROLA hereby grants to SCILLC joint
ownership rights, subject to any existing third party licenses before such
grant, in the Standard Linear know how used by both the Semiconductor
Components Group and other business units of MOTOROLA's SEMICONDUCTOR
PRODUCTS SECTOR and SCILLC and MOTOROLA will retain an undivided one-half
interest in such Standard Linear know how, without accounting to the
other.
5.6. SCILLC hereby grants to MOTOROLA a perpetual, world wide, non-exclusive,
paid-up license, without the right to sublicense, to use ASSIGNED KNOW HOW
to make. have made, use, lease, sell, offer for sale, import, design,
assemble, have assembled, test, or otherwise dispose of any LICENSED SPS
PRODUCT.
5.7. The licenses and covenants granted herein extend to each party's
respective SUBSIDIARIES, so long as such party's SUBSIDIARIES agree to
grant the same licenses and covenants granted in this Section 5 that
SCILLC and MOTOROLA granted herein, respectively.
SECTION 6
ASSIGNMENT AND LICENSE IN COPYRIGHTABLE MATERIALS
6.1. MOTOROLA hereby assigns all copyrights, right, title, and interest in
ASSIGNED COPYRIGHTABLE MATERIALS to SCILLC.
6.2. MOTOROLA hereby grants to SCILLC a perpetual, worldwide, nonexclusive,
license to use, reproduce, prepare derivative works of, or distribute
LICENSED COPYRIGHTABLE MATERIALS in conjunction with the marketing or sale
of LICENSED PRODUCTS, provided all trademarks and tradenames of MOTOROLA
shall be removed from any LICENSED COPYRIGHTABLE MATERIALS before any
distribution thereof. Notwithstanding the above language of this Section
6. 2, the use of LICENSED VISIBLE TRADEMARKS and LICENSED EMBEDDED
TRADEMARKS shall be governed by Section 3 of the Agreement.
16
6.2.1. In the event that SCILLC requires additional rights in order to
institute a lawsuit for copyright infringement against a third
party relating to the infringement of LICENSED COPYRIGHTABLE
MATERIALS, MOTOROLA agrees to cooperate with SCILLC to provide
SCILLC with additional rights sufficient to permit SCILLC to
Institute an action for infringement. Such additional rights shall
be provided without additional charge to SCILLC and SCILLC will
reimburse MOTOROLA for any reasonable expenses incurred to provide
to such additional rights.
6.3. SCILLC hereby grants to MOTOROLA a worldwide, paid-up, royalty free,
non-exclusive license under ASSIGNED COPYRIGHTABLE MATERIALS to use,
reproduce, prepare derivative works of; or distribute ASSIGNED
COPYRIGHTABLE MATERIALS in conjunction with the marketing or sale of
LICENSED SPS PRODUCTS, provided all ASSIGNED TRADEMARKS shall be removed
from any ASSIGNED COPYRIGHTABLE MATERIALS used by MOTOROLA before the
distribution thereof. Notwithstanding the above language of this Section
6.3, the use of ASSIGNED TRADEMARKS by MOTOROLA shall be governed by
Section 3 of the Agreement.
6.4. The licenses and covenants granted herein extend to each party's
respective SUBSIDIARIES. so long as such party's SUBSIDIARIES agree to
grant the same licenses and covenants granted in this Section 6 that
SCILLC and MOTOROLA granted herein, respectively.
SECTION 7
LICENSE OF SOFTWARE
7.1. MOTOROLA hereby grants to SCILLC a perpetual, worldwide, nonexclusive
license in LICENSED SOFTWARE to use, reproduce. or prepare derivative
works of LICENSED SOFTWARE and to otherwise utilize LICENSED SOFTWARE in
the manufacture, sale, or design of semiconductor products. MOTOROLA
hereby grants to SCILLC a perpetual, worldwide, nonexclusive license in
LICENSED SOFTWARE to distribute or sublicense LICENSED SOFTWARE that was
historically distributed, embedded, or sublicensed to customers or
suppliers in conjunction with the manufacture, sale, or design of any SCG
PRODUCT by MOTOROLA
7.2. LICENSED SOFTWARE is provided "AS IS." The licenses granted in this
Section 7 impose no obligation on MOTOROLA to maintain LICENSED SOFTWARE
for SCILLC. However, for a period of two (2) years, to the extent any
updates are made to LICENSED SOFTWARE to fix errors in LICENSED SOFTWARE,
MOTOROLA will license and provide copies of such updates to SCILLC upon
SCILLC's written request and at SCILLC's expense.
7.3. The licenses granted herein extend to SCILLC's SUBSIDIARIES.
17
SECTION 8
INDEMNIFICATION, LITIGATION, AND ASSISTANCE
8.1. MOTOROLA shall have all control over and obligations and liability, to the
extent limited herein. for the litigation styled POWER INTEGRATIONS, INC.
V. MOTOROLA, INC., No. CA 98-490, presently pending in the United States
District Court for the District of Delaware, and will indemnify SCILLC as
set forth herein as to such litigation and any subsequent litigation led
against SCILLC by Power Integrations to the extent that such subsequent
litigation claims infringement of the same patents and the same products
(but not any products redesigned after the CLOSING DATE) as the Power
Integrations, Inc. Motorola, Inc. litigation (hereinafter "PI
Litigation"). SCILLC will provide such reasonable assistance as may be
requested by MOTOROLA during the further conduct of the PI Litigation, at
MOTOROLA's expense. SCILLC shall have the right to participate in the
litigation, with its own counsel, at its own expense. Notwithstanding the
above language, MOTOROLA shall retain all control over and ability to
settle such PI Litigation at any time during such PI Litigation, even if
SCILLC is subsequently named as a party to such PI Litigation. MOTOROLA
will communicate any settlement offer to SCILLC prior to presenting to
Power Integrations and will promptly communicate to SCILLC any settlement
offers presented to MOTOROLA by Power Integrations. With respect to any
product(s) enjoined by such PI Litigation, MOTOROLA will pay for lost
profits, reasonably shown and extrapolated by orders placed and accepted
by SCILLC, up to five years after such injunction and for the direct costs
of redesigning the product(s) enjoined to be non-infringing. MOTOROLA
shall not be further liable for any liability arising after such redesign.
MOTOROLA's total, cumulative obligation to indemnify, as set forth in this
Section 8.1, shall not exceed the amount of five (5) million dollars $US,
such amount to include any and all costs and fees, including attorneys
fees and costs incurred or paid by or for MOTOROLA after the CLOSING DATE,
lost profits of SCILLC as set forth above (and only for this Section 8.1),
and damages, settlement amounts, and royalties paid by or for MOTOROLA.
The indemnification provided under this Section 8.1 shall not apply to the
Indemnity Cap set forth in Section 8.4.
8.2. As of the CLOSING DATE, the licenses and other items listed in Exhibit 8.2
shall be assigned to SCILLC. SCILLC shall assist MOTOROLA in obtaining any
third-party consents necessary to effectuate the transfer of the licenses
in Exhibit 8.2 to SCILLC. If any such license is not assigned to SCILLC,
MOTOROLA's total liability shall be covered under Section 8.3 and its
subsections. With respect to the pending agreements, MOTOROLA makes no
representation that the agreements will be executed as of the CLOSING
DATE. In the event that MOTOROLA's legal department is informed of,
subsequent to the CLOSING DATE, a THIRD PARTY SCG CONTRIBUTION, MOTOROLA
assigns and agrees to assign such THIRD PARTY SCG CONTRIBUTION to SCILLC.
8.3. MOTOROLA shall indemnify and hold SCILLC harmless from any and all of
SCILLC's damages arising out of any and all third party claims or suits
asserting that an act
18
committed by MOTOROLA prior to the CLOSING DATE infringes any patent,
copyright, trademark, or trade secret rights of a third party.
8.4. MOTOROLA agrees to indemnify and hold SCILLC, its SUBSIDIARIES and its and
their respective officers, directors, employees, and agents harmless, to
the extent limited in this Section 8.4 and its subsections 8.4.1, 8.4.2,
and 8.4.3, from damages arising out of all claims or suits by a third
party patent licensor of MOTOROLA**************************************
************************************** that the INDEMNIFIED PRODUCT, to
the extent so made infringes any patent that would have been covered by
any such third party patent license in existence as of the CLOSING DATE
between MOTOROLA and such third party if said patent license had been
extended or assigned to SCILLC or its SUBSIDIARIES. This indemnity shall
not apply to any products sold by SCILLC or its SUBSIDIARIES that are not
INDEMNIFIED PRODUCTS.
8.4.1. MOTOROLA's total, cumulative obligation to indemnify as set forth
above, shall not exceed the amount seventy-five (75) million
dollars $US (hereinafter, the "Indemnity Cap"), such amount to
include any and all costs and fees, including attorneys fees and
costs incurred or paid by or for MOTOROLA, lost profits of SCILLC
and its SUBSIDIARIES (and only for this Section 8.4), and damage
or royalties paid by or for MOTOROLA. The indemnification
obligation for claims made by a third party patent licensor of
MOTOROLA hereunder shall extend for the term of each patent
license which MOTOROLA was a party to with such licensor as that
term existed as of the CLOSING DATE or for three (3) years,
whichever is shorter (hereinafter the "Indemnification Period").
MOTOROLA's indemnification obligation will terminate after the
Indemnification Period even if a claim arises during or before the
Indemnification Period, where no notice is provided to MOTOROLA of
such claim within five (5) years after the CLOSING DATE. If
MOTOROLA is provided with notice of a claim covered hereunder,
which arose during the applicable Indemnification Period, within
five (5) years after the CLOSING DATE, MOTOROLA shall retain the
obligations to indemnify as set forth herein for such claim
subject to the Indemnity Cap and only for the Indemnification
Period. In the event that a claim covered hereunder results in the
filing of a lawsuit by a third party patent licensor asserting
patent infringement against SCILLC within the Indemnification
Period and outside the Indemnification Period, SCILLC and MOTOROLA
agree that the costs arising out of such lawsuit will be
apportioned accordingly. In no event will the preceding sentence
be interpreted to expand MOTOROLA's indemnification obligation set
forth in this entire Section 8.4.
8.4.2. MOTOROLA shall not be obligated to provide any indemnification
under Section 8.4 and its subsections for claims arising from a
third party if SCILLC or its SUBSIDIARIES initiates, solicits, or
asserts a claim or offer for license, directly or indirectly,
under any intellectual property against such third party and such
third party asserts a claim of infringement against SCILLC or its
SUBSIDIARIES after receiving such claim from SCILLC or its
SUBSIDIARIES. In any event, MOTOROLA shall have no obligation
whatsoever for any claims brought by any
- ---------------------
* Confidential Information omitted and filed separately with the Securities
and Exchange Commission
19
party which was not a third party licensor to MOTOROLA under a
valid licensing agreement at the time as of the CLOSING DATE.
8.4.3. As a precondition to any such obligation to indemnify, SCILLC or
its SUBSIDIARIES shall provide MOTOROLA prompt written notice of a
claim giving rise to an indemnity obligation under these Sections
8.3 and 8.4 upon receipt or notification by SCILLC of any such
claim, and at MOTOROLA's request, MOTOROLA shall be given control
of said claim. MOTOROLA shall have the right, but not the
obligation, to defend against any such claim of infringement.
SCILLC and its SUBSIDIARIES shall provide all reasonable
information and assistance to settle such claims. MOTOROLA shall
communicate any settlement proposals to SCILLC prior to
communicating them to a claimant. If commercially reasonable,
SCILLC and its SUBSIDIARIES will redesign any infringing products
in order to settle a claim. In order to settle a claim, SCILLC and
its SUBSIDIARIES hereby agree to grant patent licenses under
patents owned or controlled by SCILLC and its SUBSIDIARIES, so
long as SCILLC and its SUBSIDIARIES receive a reciprocal license
under the third party's patents.
8.5. Notwithstanding any other provision of this Section 8, SCILLC may, in its
sole discretion, elect to defend any claim of infringement itself and not
seek indemnification from MOTOROLA under this Section 8. If SCILLC makes
such an election, it shall have no obligation to disclose the existence of
any such claim to MOTOROLA, and MOTOROLA shall have no obligation to
defend or to indemnify SCILLC or its SUBSIDIARIES as to such claim.
8.6. MOTOROLA shall have all control over and obligations and liability for the
litigation Kermit Aguago and Khanh N. Tran V. Motorola, Inc., No. A
99CA097JN, presently pending in the United States District Court for
the Western District of Texas, Austin Division will indemnify SCILLC as
to such litigation for a claim related to any equipment owned by MOTOROLA
as of the CLOSING DATE if SCILLC is named as a party to such litigation.
SCILLC will provide such reasonable assistance as may be requested by
MOTOROLA during the further conduct of such litigation, at MOTOROLA's
expense.
8.7. THIS SECTION 8 STATES THE ENTIRE LIABILITY OR INDEMNITY OBLIGATION OF
MOTOROLA WITH RESPECT TO CLAIMS BY A THIRD PARTY REGARDING INFRINGEMENT OF
ANY INTELLECTUAL PROPERTY RIGHT.
SECTION 9
CONFIDENTIALITY
9.1. For a period of five (5) years from the date of receipt of the
CONFIDENTIAL INFORMATION and ten (10) years from the CLOSING DATE for the
RESTRICTED
- ---------------------
* Confidential Information omitted and filed separately with the Securities
and Exchange Commission
20
PROCESS MODULES, each party agrees to use the same care and discretion,
but at least reasonable care and discretion, to avoid disclosure,
publication, or dissemination of CONFIDENTIAL INFORMATION of the other
party as that party employs with similar information of its own which it
does not desire to publish, disclose, or disseminate, unless it is in
connection with its business and provided that the third party executes a
confidentiality agreement having substantially the same obligations as
these confidentiality provisions.
9.2. Disclosure of CONFIDENTIAL INFORMATION shall not be precluded if such
disclosure is
