Exhibit 10.19
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT
BECAUSE IT IS BOTH (I) NOT MATERIAL TO THE REGISTRANT AND (II)
WOULD BE COMPETITIVELY HARMFUL TO THE REGISTRANT IF PUBLICLY
DISCLOSED. REDACTED PORTIONS OF THIS EXHIBIT ARE MARKED BY
[***].
LICENSE AGREEMENT
This
License Agreement (together with the Schedules attached hereto, the
“Agreement”) dated as of
March 27, 2020 (the “Effective Date”) is
entered into by and between Zoom Telephonics, Inc.
(“Zoom”), and its wholly
owned subsidiary, MTRLC LLC (“MTRLC”), Delaware
entities
with a place of business at 225 Franklin Street, Boston,
Massachusetts 02110 (collectively “Licensee,” and Zoom and
MTRLC agree to be jointly and severally bound hereunder), on the
one hand, and Motorola Mobility LLC, a Delaware limited liability
company, with a place of business at 222 W. Merchandise Mart Plaza,
Suite 1800, Chicago, Illinois 60654 (“Licensor”), on the
other.
WHEREAS, Licensee
desires to utilize the Licensed Marks for commercial purposes in
accordance with the terms and conditions of this
Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants and conditions
set forth herein, and for other good and valuable consideration
(the receipt and sufficiency of which are hereby acknowledged),
Licensee and Licensor (each, a “Party,” and collectively,
the “Parties”) agree as
follows:
1. DEFINITIONS. For the purposes
of this Agreement, the following terms shall have the meanings
stated:
(a) “Accessory(ies)” shall
mean accessory products that are designed and manufactured to be
compatible with, modify (for enhanced user experience) and/or
otherwise be used in connection with certain Motorola
Devices.
(b) “Affiliate” shall mean any
corporation or other incorporated legal entity, present or future,
which directly or indirectly controls or is controlled by, or is
under common control with, a Party to this Agreement, through
ownership or control of twenty-five percent (25%) or greater of the
voting power of the shares or other means of ownership control, for
as long as such ownership or control continues to
exist.
(c) “Approved Samples” shall
mean Product samples for which Licensor or its designee(s) have
provided all required approvals pursuant to Section 4 and Schedule 7.
(d) “Authorized Channels”
shall mean the channels of trade identified as “Authorized
Channels” on Schedule 1.
(e) “Authorized Service
Provider(s)” shall mean those third-party service
provider(s) for which Licensor provides
its advance written approval (not to be unreasonably withheld) and
that are identified as “Authorized Service Provider(s)”
on Schedule 10, which may be updated from time to time by written
agreement of the Parties.
(f) “Business Day” shall mean
any day on which commercial banks chartered by the United States
Comptroller of the Currency and headquartered in Chicago, Illinois
are required by law to be open to accept deposits.
(g) “Contract Year” shall have
the meaning set forth on Schedule 1.
(h) “Defective Rate” shall
mean the rate(s) corresponding to each Licensed Article identified
as the “Defective Rate(s)” on Schedule 7.
(i) “Distributor(s)” shall
mean the Person(s) whose primary business is buying and/or
representing (as a sales agent) products in volume for sale to
retailers, Internet Service Providers, or other resellers. For the
avoidance of doubt, Distributors include value-added resellers,
system integrators, agents and installers.
(j) “Earned Royalties” shall
mean the royalties earned by Licensor under this Agreement which
shall be calculated by the formula(e) identified as “Earned
Royalty(ies)” on Schedule 4.
(k) “Ethical Standards” shall
mean the standards and policy set forth on Schedule 12.
(l) “Existing Licenses” shall
mean any license agreements that are identified as “Existing
Licenses” on Schedule 1.
(m) “Excluded Channels” shall
mean the channels of trade identified as “Excluded
Channels” on Schedule 1.
(n) “Global Defective Rate”
shall mean the rate(s) corresponding to each Licensed Article
identified as the “Global Defective Rate(s)” on
Schedule
7.
(o) “Guarantor” shall mean any
Licensee Affiliate(s) or other Person(s) identified as
“Guarantor(s”) on Schedule 14.
(p) “Guaranteed Minimum
Royalty(ies)” shall mean those amounts identified as
“Guaranteed Minimum Royalty(ies)” on Schedule 3.
(q) “Intellectual Property
Rights” shall mean any and all patents (and
applications therefor), trademarks (and applications therefor),
trade names, trade dress, logos, slogans, domain names, social
media accounts and handles therefor, service marks (and other
commercial product or service designations), mask works,
copyrights, moral rights, trade secrets and other confidential
business information (including technical information), other
intellectual property rights or proprietary rights, ideas,
concepts, know how, techniques, inventions, discoveries,
improvements, documents, products, systems, practices, procedures,
means, methods, designs, devices, programs, sui generis database rights, software,
databases and data (whether in tangible or intangible form and
whether or not stored, compiled or memorialized physically,
electronically, graphically, photographically or in writing),
together with all ideas, concepts, means, methods, designs,
devices, programs, software, drawings, sketches and any other
intellectual property or proprietary right recognized or
protectable by any jurisdiction in the world, together with all
registrations and applications for any of the foregoing and all
goodwill associated with any of the foregoing. “Intellectual
Property Rights” includes, but is not limited to, subject
matter that falls within the definition of patentable subject
matter under the laws of the U.S. or any other jurisdiction or
within the definition of copyrightable materials under the laws of
the U.S. or any other jurisdiction.
(r) “Internet Service
Provider(s)” shall mean Person(s) that are engaged in
the provision of broadband internet services to residential
consumers (e.g., Comcast, Cox, AT&T, Verizon,
etc.).
(s) “Licensed Article(s)”
shall mean the product(s) or Services identified as “Licensed
Articles” on Schedule 1. The definition of
“Licensed Article(s)” expressly excludes any product or
service whose Primary Purpose is not that of a Licensed Article.
Any functionality not expressly included in the definition of a
Licensed Article shall require the prior written approval of
Licensor.
(t) “Licensed Domain Name(s)”
shall mean the domain names identified as “Licensed Domain
Names” on Schedule
1.
(u) “Licensed Mark(s)” shall
mean the Primary Marks and the Secondary Marks.
(v) “Licensed Social Media
Account(s)” shall mean the social media accounts and
handles therefor identified as “Licensed Social Media
Accounts” on Schedule 1.
(w) “Manufacturer Approval
Agreement” shall mean an agreement following the form
in Schedule 2,
unless otherwise authorized in writing by Licensor.
(x) “Motorola Devices” shall
mean devices designed, developed, manufactured and/or sold by
Licensor.
(y) “Net Sales” for hardware
Products shall mean the aggregate gross receipts (the gross invoice
amount(s) billed by Licensee or its Affiliates to Retailers,
Distributors, Internet Service Providers, consumers, or any other
Person for the sale or provision of the Products (including taxes
and other governmental charges), less [***]. Beginning [***], in
the event that returns and credits exceed [***] of such Net Sales,
after excluding returns for which no problem has been found,
Licensee shall: (i) provide written notice to Licensor that
explains the basis for such [***], and (ii) prepare an action plan
to be approved by Licensor in its reasonable discretion to decrease
such [***]. “Net Sales” for Services shall mean the
aggregate gross receipts realized by Licensee (and any Authorized
Service Providers) in connection with the sale or provision of the
Services (excluding [***]) either directly or indirectly to the end
user, less [***].
(z) “Operations Review(s)”
shall have the meaning set forth on Schedule 9.
(aa) “Payment
Report” shall mean a statement in the form set forth
on Schedule 5,
which is to be provided by Licensee to Licensor as provided in this
Agreement.
(bb) “Payment
Report Certification” shall mean a statement in the
form set forth on Schedule
6, which is to be provided by Licensee to Licensor as
provided in this Agreement.
(cc) “Permitted
Manufacturer(s)” shall mean those third-party
manufacturer(s) that: (i) pass Licensor’s factory
qualification audits and certification procedures and for which
Licensor provides its advance written approval; (ii) have entered
into a binding Manufacturer Approval Agreement with Licensee; and
(iii) are identified as “Permitted Manufacturer(s)” on
Schedule 1, which
may be updated from time to time by written agreement of the
Parties.
(dd) “Person(s)”
shall mean an individual or a limited liability company,
corporation, partnership, trust, unincorporated organization,
association or other entity.
(ee) “Premium”
shall mean any article used for the purpose of publicizing or
increasing the sale or promotion of any product or service,
including without limitation incentives for sales forces and
incentives for the trade.
(ff) “Press
Release(s)” shall mean any press release(s), blog
post(s), statement(s), or other communications distributed via any
medium to members of the public, the press, the relevant trade, or
to Licensor’s competitors.
(gg) “Press
Release Guidelines” shall mean such guidelines
pertaining to the content, substance, and issuance of Press
Releases as Licensor may institute in its sole discretion and
provide to Licensee in writing from time to time.
(hh) “Primary
Marks” shall mean the trademarks identified as
“Primary Marks” on Schedule 1.
(ii) “Primary
Purpose” shall mean the primary intended use of a
product, as determined by Licensor in its reasonable
discretion.
(jj) “Product(s)”
shall mean Licensed Articles bearing, sold or offered under any of
the Licensed Marks and all related packaging and
cartons.
(kk) “Product
Cost” shall mean all of Licensee’s documented
and reasonably substantiated costs relating to the manufacture,
including royalties, shipping, delivery, packaging and provision
for after-sales support and related expenses and provision for
warranty returns.
(ll) “Product
IP” shall mean all Intellectual Property embodied in
or relating to the Products or their manufacture, distribution or
provision, including without limitation the Licensed Marks, the
Licensed Domain Names, the Product Literature, Product Materials,
and the Product Tooling and Design Materials.
(mm) “Product
Literature” shall mean all in-box materials (including
without limitation all Product user guides and Product warranty
statements), terms of use, and any other materials used in
conjunction with the Product packaging, including without
limitation Product packaging overlays.
(nn) ““Product
Material(s)” shall mean all content, advertising and
marketing material, publicity and promotional material, sell
sheets, sales and trade literature, web sites, signs, catalogs,
Press Releases, point of sale materials, Product brochures, and any
other material bearing or making reference to the Licensed Marks
and/or the Products, including without limitation all content
associated with the Licensed Domain Names and Licensed Social Media
Accounts.
(oo) “Product
Tooling and Design Material(s)” shall mean all Product
look and feel, model numbers, designs, schematics, specifications,
software code, drawings, tooling and molds.
(pp) “Program”
shall mean the program pursuant to which Licensor or its Affiliates
use, or grant licenses to licensees to use, the Licensed Marks
(and/or any other trademarks owned by or licensed to Licensor or
its Affiliates) to design, manufacture, promote, market and/or sell
Accessories, including licensor’s “M4DE Motorola and
“Moto Mods” licensing programs, and their
successors.
(qq) “Required
Advertising Expenditures” shall have the meaning set
forth on Schedule
9.
(rr) “Retailer(s)”
shall mean the Person(s) who sell to consumers including brick and
mortar retailers, E-commerce/E-tail retailers, and companies
providing automated retail services via kiosks.
(ss) “Royalty
Rate(s)” shall mean the rates identified as
“Royalty Rate(s)” identified on Schedule 4.
(tt) “Secondary
Marks” shall mean the trademarks identified as
“Secondary Marks” on Schedule 1.
(uu) “Services”
shall mean the service(s) as identified on Schedule 1, which may or may
not be offered or provided under the Licensed Marks, as determined
by Licensor in its reasonable discretion.
(vv) “Setup
Fee” shall mean a one-time, non-refundable license
set-up and administration fee in the amount identified as the
“Setup Fee” on Schedule 4. For the avoidance
of any doubt, the Setup Fee is not a Royalty Payment, and shall not
count against any Minimum Sales or be creditable against any
Guaranteed Minimum Royalties.
(ww) “Style
Guide” shall mean the style guide attached hereto as
Schedule 8, which
may be updated by Licensor from time to time in its reasonable
discretion upon notice to Licensee.
(xx) “Trademark
Attribution Statement” shall mean the trademark
attribution statement specified in the Style Guide to be used on
Product Literature, which may be updated by Licensor from time to
time in its reasonable discretion upon notice to
Licensee.
(yy) “Trademark
Attribution Statement for Collateral” shall mean the
trademark attribution statement specified in the Style Guide to be
used with all Product Materials, which may be updated by Licensor
from time to time in its reasonable discretion upon notice to
Licensee.
(zz) “Term”
shall have the meaning set forth on Schedule 1.
(aa) “Termination”
shall mean the earlier to occur of (i) the last calendar day of the
Term, or (ii) the termination of this Agreement pursuant to
Section
9.
(bb) “Territory”
shall mean the jurisdiction(s) that are set forth on Schedule 1.
2. GRANT OF LICENSE.
(a) Grant. Subject to all of the
terms and conditions set forth in this Agreement, including,
without limitation, Licensor’s timely receipt of all payments
due under this Agreement, as well as Licensee’s strict
compliance with all of this Agreement’s quality control
provisions, and subject to any Existing Licenses, Licensor hereby
grants to Licensee the limited and non-transferable, exclusive (in the manner set forth in
Schedule 1) right
and license to: (i) utilize the Licensed Marks to source,
manufacture, package and provide the Products as specifically
authorized in this Agreement; (ii) utilize the Licensed Marks to
offer, provide and render the Services that have been specifically
authorized by Licensor in writing to be branded under the Licensed
Marks (the “Authorized Services”);
(iii) utilize the Licensed Marks (and the Licensed Domain Names and
Licensed Social Media Accounts, if applicable) to distribute,
promote, advertise, service, offer, provide and sell Products and
Authorized Services to and through Retailers, Distributors,
Internet Service Providers, and consumers in the Territory through
the Authorized Channels; and (iv) grant to Retailers, Distributors,
and Internet Service Providers the right to resell such Products
and Authorized Services in the Territory through the Authorized
Channels. All rights granted herein are exclusive in the manner
specified in Schedule
1.
(b) Sublicenses. Licensee may not
sublicense or subcontract any of the rights granted to it under
this Agreement unless specifically permitted herein or otherwise
permitted in writing by Licensor. Licensee shall be responsible for
taking all necessary actions to remedy any unauthorized actions or
omissions by any of its Retailers, Distributors, Internet Service
Providers, Permitted Manufacturers, Authorized Service Providers or
any unauthorized subcontractors, vendors or
sublicensees.
(c) Rights Reserved by Licensor.
All rights not expressly granted herein are reserved by Licensor.
Except as may be specifically provided to Licensee in Section 2(a) and Schedule 1, Licensor shall be
permitted to use and license the use of any or all of the Licensed
Marks in any manner whatsoever. Notwithstanding any other provision
in this Agreement (including without limitation the Schedules
attached hereto and incorporated by reference herein), nothing in
this Agreement shall limit or prevent Licensor and/or its
Affiliates from using or licensing (or their respective third-party
licensees from using) the Licensed Marks, or any other trademarks
owned by or licensed to Licensor or its Affiliates, in connection
with the Program, regardless of whether any Accessories under the
Program have the same or similar functionality as any of the
Licensed Articles.
(d) Sales Force, E-Commerce, and Active
Licensee. Licensee shall employ, or otherwise engage, a
commercially reasonable number of representatives whose primary
responsibility shall be the development, merchandising and
marketing of the Products and Services. Additionally, Licensee
shall also maintain a commercially reasonable sales force devoted
to the promotion and marketing of the Products to Retailers,
Distributors, and Internet Service Providers, through the
Authorized Channels. As between Licensee and Licensor, Licensee
shall be solely responsible for the payment and provision of any
and all salaries, commissions and any other payments or benefits to
any sales representatives or other Persons engaged by Licensee to
assist in the promotion and sale of the Products and Services.
Licensee shall participate in the e-commerce portion of
Licensor’s web site(s), and Licensee agrees to designate an
employee to oversee, coordinate, and facilitate Licensee’s
participation and to enter into any other agreements reasonably
requested by Licensor related to Licensee’s participation.
Licensee shall use commercially reasonable efforts to actively
exploit the rights granted to it under this Agreement. In the event
that Licensee does not take commercially reasonable steps toward
such exploitation, Licensor may in its reasonable discretion after
consultation with Licensee, remove non-exploited Licensed Articles
from the definition of Licensed Articles and/or remove
non-exploited jurisdiction(s) from the definition of the Territory
for the remainder of the Term upon delivery of written notice to
Licensee. In the case that a jurisdiction and/or products are
removed from the Territory, Licensee shall receive a credit from
Licensor equal to the amount of Guaranteed Minimum Royalties paid
by the replacement licensee (if any) that are associated with that
jurisdiction and/or products for the remainder of the Term of this
License.
(e) Manufacture of the Products.
Except as may otherwise be specifically permitted on Schedule 1, Licensee shall not
engage any subcontractors other than Permitted
Manufacturers and/or
Authorized Service Providers to manufacture or provide the
Products, or to provide any post-sales, return, repair, customer
support, or warranty services relating to the Products. Licensee
agrees that it shall be responsible for the costs of any factory or
service provider qualification audits and agrees to promptly
reimburse Licensor upon receipt of an invoice for Licensor’s
costs in auditing and reviewing any proposed Permitted Manufacturer
and/or Authorized Service Provider. As a precondition to approval,
all proposed Permitted Manufacturers must enter into the
Manufacturer Approval Agreement with Licensee, and Licensee shall
promptly facilitate the full execution of such agreement. After
consultation with Licensee, Licensor may withdraw its approval of
any Permitted Manufacturer or Authorized Service Provider at any
time and in its reasonable discretion upon written notice to
Licensee, which shall specify an effective date of such withdrawal
that is commensurate with the severity of the underlying issue that
caused such withdrawal. Notwithstanding anything herein or in the
Manufacturer Approval Agreement to the contrary, Licensee shall be
responsible to Licensor for any breach of this Agreement or the
Manufacturer Approval Agreement. Licensor may for reasonable cause,
and at Licensee’s sole expense, require Licensee to stop
shipments and provision of the Products if such Products are from
an unauthorized source.
(f) Limitations on License. Unless
otherwise specifically approved in advance in writing by Licensor,
this Agreement does not grant Licensee the right or license (or the
right to confer upon any other Person the right or license) to: (i)
use any of the Licensed Marks as a part of a corporate or trade
name; (ii) grant any security interest in or to the Licensed Marks
or this Agreement; (iii) confer upon or any other Person the right
to distribute, offer, provide or sell the Products outside of the
Territory; (iv) apply to or use, or confer upon any other Person
the right to apply to or use, any of the Licensed Marks in
connection with any goods or services other than the Licensed
Articles, except as specifically authorized in advance in writing
by Licensor; (v) grant any right in or to the Licensed Marks to any
Person other than Licensee, except as may be expressly granted
herein; (vi) register or seek to register any trademark, service
mark, domain name, social media account or handle therefor, logo,
business name, on-line social networking or media user name or
other designation of origin comprised in whole or in part of, or
otherwise confusingly similar to, any of the Licensed Marks; (vii)
co-brand, sub-brand, or otherwise use the Licensed Marks in
connection with any other trademark, trade name, domain name,
social media account or handle therefor, model name, model
designation, alphanumeric model number, lot number, or other
designation of origin. Licensor hereby approves the use of MINIM as
an endorser brand in connection with Licensed Marks, e.g.
“MotoManage by Minim”; (viii) directly or indirectly
source, manufacture, package, distribute, offer, provide or sell
the Products to any Person other than to Retailers, Distributors,
Internet Service Providers, and consumers in the Territory through
the Authorized Channels; (ix) liquidate any Products; (x) directly
or indirectly distribute, offer, provide or sell the Products
through the Excluded Channels; or (xi) distribute any Products to
be used as Premiums, in combination sales, in bundles, as
giveaways, or to be disposed of under similar methods of
merchandising. Licensee acknowledges and agrees that all rights to
license the Licensed Marks, the Product IP and the Products remain,
as between Licensee and Licensor, wholly owned by Licensor.
Licensee shall neither acquire nor confer any right(s), license(s)
or sublicense(s) to the Licensed Marks, the Product IP, or to any
other Intellectual Property owned by or licensed to Licensor or any
of its Affiliates except as may be expressly granted in this
Agreement, and all rights not expressly granted hereunder are
reserved by Licensor, its Affiliates and their respective
licensors.
(g) Non-Circumvention. Licensee
acknowledges that Licensor has granted Licensee a reduced royalty
rate for sales to Internet Service Providers, and for sales in
certain countries within the Territory. In return for such reduced
royalty rate, neither Licensee nor any of its Affiliates
shall:
(i) encourage, promote
or otherwise advocate for the removal of the Licensed Mark from
Products sold to customers;
(ii) remove
the Licensed Mark from Products for purposes of evading or
attempting to avoid the payment of Royalties; and
(iii) manufacture,
import, distribute, offer, sell, advertise, market or otherwise
promote any Licensed Articles bearing, offered, or sold under any
trademarks other than the Licensed Marks, that (a) feature the same
substantially similar overall look and feel as the Products; (b)
have the same substantially similar functionality as the Products;
or (c) are based in whole or part on the Products; unless Licensee
pays a Royalty on the sale of such Products summarized in iii a, b,
and c; provided that the foregoing royalty payment obligation shall
not apply to any product (w) where the hardware is custom-designed
for a company (x) that uses such company’s own brand, (y) a
housing/case design exclusively owned by that company, and (z) such
hardware is not sold or otherwise made available through any
channel other than those owned by the customer.
The
foregoing limitation is in addition to, and does not limit, any
other restriction(s) in this Agreement relating to Licensee’s
use of the Product IP during or after the Term.
(h) Third-Party Licenses, Royalties and
Fees. Without limiting the generality of any provision
herein, Licensee shall have the sole responsibility to obtain and
maintain, at its sole expense, all necessary licenses, third-party
rights and agreements relating directly or indirectly to any trade
secret, patented or patentable method or technology, trademark,
copyrighted work or other Intellectual Property or proprietary
right embodied in the Products, any specifications or tooling
therefor, or any functionalities, models, samples, demos or
prototypes thereof. Licensee shall timely pay all license fees,
royalties, and/or other fees and expenses required to maintain such
licenses, rights and agreements, including without limitation any
payments or fees owed by Licensee to Licensor pursuant to this
Agreement, as well as any third-party royalty payments or fees
agreed to by Licensor as a part of settlements relating to the
Licensed Articles. If Licensee fails to timely pay all such license
fees, royalties, and/or other fees and expenses to any Person,
Licensor shall have the right (but not the obligation) to pay such
past due license fees, royalties, and/or other fees and expenses
(together with any associated late fees or penalties) directly to
the Person to whom such payments are owed, and to directly invoice
Licensee for, and to take any other steps necessary to collect, any
such amounts from Licensee, together with all of Licensor’s
attorneys’ fees and other costs incurred in enforcing this
Section 2(h) and
collecting any amounts due hereunder.
(i) Freight and Duty. As between
Licensee and Licensor, Licensee shall be solely responsible for all
freight costs, taxes, fees charges and expenses associated with
manufacturing, packaging, sourcing, offering, providing, importing
and/or shipping Products, as well as all costs associated with
warehousing the Products, storage and operational costs relating to
warehousing the Products, cross-docking fees and all other such
charges relating to the Products.
(j) Recycling, Waste and Other
Compliance. As further set forth in Section 13(b) of this
Agreement, Licensee shall be responsible for complying with all
applicable federal, state, provincial and local laws, treaties and
regulations, including all waste, recycling, energy and disposal
laws and regulations. Licensee shall be responsible for all
reporting, registration and costs associated with complying with
all applicable waste, recycling, energy and disposal federal,
state, provincial and local laws, treaties and regulations relating
to the Products. Licensee acknowledges that there may be some
instances where Licensor is required to, or it is more cost
efficient for Licensor to, register and report on behalf of its
licensee(s) to comply with any applicable federal, state or other
recycling, waste, energy or disposal program mandated by federal,
state, provincial or local laws, treaties or regulations. In the
event Licensor determines, in its reasonable discretion, to
undertake any such registration or reports, Licensee agrees that it
shall (i) fully cooperate with Licensor and timely provide to
Licensor all necessary information in order to comply with such
laws and regulations, and (ii) upon receipt of any invoices, pay to
Licensor Licensee’s pro
rata share, as determined by Licensor, of all
Licensor’s costs and expenses relating to recycling, waste,
energy and disposal compliance, registration, reporting and other
charges related thereto.
3. PAYMENTS AND
REPORTS.
(a) Setup Fee. Within [***] after
the Effective Date, Licensee shall pay Licensor the Setup Fee by
delivering immediately available funds in accordance with the
electronic payment instructions set forth in Schedule 4.
(b) Guaranteed Minimum Royalties.
During the Term of this Agreement, Licensee shall timely pay
Licensor the Guaranteed Minimum Royalties as provided in
Schedule 3 by
delivering immediately available funds in accordance with the
electronic payment instructions set forth in Schedule 4.
(c) Earned Royalties. Licensee
shall timely pay to Licensor Earned Royalties during the Term of
this Agreement and during any permitted Sell-off Period (as defined
in Section 10(a)
herein). Licensee shall pay the greater of (i) the applicable
Guaranteed Minimum Royalty, or (ii) the actual Earned Royalties
earned in each Contract Year. The Guaranteed Minimum Royalty
payments are to be made retrospectively on a quarterly basis during
each Contract Year, and shall be credited against the Earned
Royalties accrued and paid in arrears in each quarter during such
Contract Year; provided,
however that the Guaranteed Minimum Royalty(ies) may not be
credited against Earned Royalties generated by virtue of Product
sales made during any Sell-Off Period. The Guaranteed Minimum
Royalty(ies) payable during each Contract Year shall be credited
against the accrued Earned Royalties during that Contract Year.
Accordingly, no Earned Royalties shall be payable following the
close of any calendar quarter unless and until the total Guaranteed
Minimum Royalty(ies) for the then-current Contract Year has been
exceeded. If and only if the total accrued Earned Royalties for the
then-current Contract Year exceed the total Guaranteed Minimum
Royalty(ies) for the then-current Contract Year, then Licensee
shall on a quarterly basis pay the amount by which the Earned
Royalties accrued during the then-current Contract Year have
exceeded the total Guaranteed Minimum Royalt(ies) for the
then-current Contract Year. Under no circumstances shall any
portion of the Guaranteed Minimum Royalties be refundable to
Licensee; however, Licensor and Licensee may mutually agree to
apply credits against the Guaranteed Minimum Royalties that will
lower the Guaranteed Minimum Royalties. The obligation to pay
royalties shall accrue upon the sale of the Product, which shall be
deemed to occur when the Product is billed, invoiced, shipped, or
paid, whichever is earlier. The obligation to pay royalties exists
regardless of when Licensee receives payment, and licensee shall
not be permitted to make any deductions for uncollectible accounts.
The obligation of Licensee to pay the Guaranteed Minimum Royalties
in accordance with this Agreement shall survive the Termination of
this Agreement.
(d) Affiliate Sales. If Licensee
distributes, sells or provides any Licensed Articles to any of its
Affiliates, Licensee represents, warrants and covenants that (i)
such sales shall not be made for purposes of reducing the Royalty
payable due hereunder (i.e. “Arm’s Length
Transaction”), and (ii) and the price at which such
Licensed Articles are sold to or by such Affiliates shall be not
less than [***] lower than the average price charged by Licensee to
other non-Affiliate Persons of a similar class of trade. If
Licensed Articles are sold in a non-Arm’s Length Transaction,
or at a price less than the regular price charged to unaffiliated
parties, then the Royalty payable to Licensor will be computed on
the basis of the regular price charged to unaffiliated parties, or
if no non-Affiliate sales exist, the Royalty payable to Licensor
will be computed by Motorola on the basis of the average selling
price to the end user.
(e) [Reserved].
(f) Statements and Payments. On or
before the [***]following the end of each calendar quarter during
the Term and any Sell-Off Period, Licensee shall submit a full,
accurate, and detailed Payment Report including, at a minimum, the
information pertaining to the fields set forth on Schedule 5, which may be
updated from time to time by Licensor in its reasonable discretion.
Simultaneously with the provision of such Payment Report, Licensee
shall remit the Earned Royalty payment then due to Licensor by
delivering immediately available funds in accordance with the
electronic payment instructions set forth in Schedule 4. Licensee shall
obtain all necessary government approvals as may be required to
permit it to remit payments to Licensor.
(g) Quarterly Sales Reports. On or
before the [***]following the end of each quarter during the Term
and any Sell-Off Period, Licensee shall submit, in a format
provided or approved by Licensor, a statement of Net Sales and
number of units of all Products sold in each jurisdiction in the
Territory during the immediately preceding quarter, and any such
other information as may be reasonably required. Such statements
shall be certified as being true and correct by a Person authorized
to bind Licensee.
(h) Retailer Holdback, Chargebacks and
MDF. Licensee shall be solely responsible for all costs and
charges associated with the Products, including without limitation
all Retailer marketing development fund (MDF) programs, holdbacks,
charge backs and other costs associated with MDF programs. Unless
otherwise agreed in advance by Licensor in writing, no payments
hereunder shall be applied against the costs of any
Retailers’ MDF programs, fixtures, or other in-store displays
in connection with the Products, and Licensee shall be solely
responsible for the costs of all such MDF programs, in-store
fixturing and display costs.
(i) Time of Essence; Late Fees.
TIME IS OF THE ESSENCE WITH RESPECT TO ALL OF LICENSEE’S
OBLIGATIONS UNDER THIS AGREEMENT. Acceptance of any partial
payments due to Licensor under this Agreement does not waive
Licensor’s right to collect the full amount owed and other
monies due hereunder or under any other agreement. In addition to
monies due under this Agreement, Licensee shall pay to Licensor a
late payment fee for all past due amounts at a rate per year equal
to [***] above Libor (as hereinafter defined) on the last Business
Day that precedes the first day that such payment is late (or, if
such first day is not a day on which banks in London are open for
business, then on the next preceding Business Day in London) per
annum, compounded monthly until paid, or equal to the highest rate
permitted by applicable law (whichever is less). Interest shall
accrue on each unpaid amount from the first Business Day payment
becomes due through the date of payment. In addition, Licensee
shall pay to Licensor all of Licensor’s costs of collecting
and enforcing the terms and provisions of this Agreement (including
without limitation reasonable attorneys’ fees and costs). For
purposes hereof, “Libor” shall mean the
rate of interest (rounded upwards, if necessary, to the nearest one
sixteenth of one percent (1/16 of 1%) per annum) at which US dollar
deposits in immediately available funds are offered to leading
banks in the London interbank market as listed on the BBA LIBOR
section of the webpage for the British Bankers Association
(http://www.bba.org.UK), for US dollars with a twelve (12) month
maturity.
4. APPROVALS.
(a) Approval of Products. The
Products shall be designed, developed, manufactured and assembled
in strict compliance with any specifications and other instructions
that may be provided by Licensor and its designees and design
consultants. Licensee acknowledges that all Products shall
incorporate state of the art technology and form factors,
consistent with other best-in-class, tier-one manufacturers and
providers of the Licensed Articles. At Licensee’s sole expense,
Licensee must submit one or more samples, as required by Licensor
in its reasonable discretion, of proposed Products to Licensor and
its designee(s) for approval prior to commercial production (and,
for the avoidance of doubt, Licensee shall also be entitled to
develop non-commercial test or sample units during its development
process). When submitting a proposed Product for approval, Licensee
shall follow and comply with all product submission templates,
procedures, and instructions specified by Licensor and/or
identified on Schedule
7, which may be updated by Licensor from time to time in its
reasonable discretion upon written notice to Licensee. Licensor
agrees to promptly review the sample(s) and to notify Licensee of
its decision in writing to designate the sample(s) as approved or
not approved. Any and all approvals of proposed Products shall be
provided by Licensor in its reasonable discretion.
(b) Changes to Products. Licensee
covenants that it shall not, without the prior written approval of
Licensor, make any material changes to the Approved Samples (a
“Material
Departure”). A “Material Departure”
includes without limitation changes that have a material effect on
the form, design, features, fit, function, performance, quality,
reliability, support, warranty or service of the Approved Samples.
During its quality meetings, Licensee also shall provide Licensor
with written notice of any changes to Approved Samples that do not
constitute a Material Departure. If there is an unapproved Material
Departure from Approved Samples made or distributed by Licensee,
Licensor shall have the right to require that Licensee correct such
Material Departure upon a commercially reasonable timeline
specified by Licensor in its reasonable discretion. If Licensee
fails to do so, Licensor may in its reasonable discretion require
Licensee to immediately cease the distribution and sale of the
Products embodying the Material Departure temporarily, until such
Material Departure is corrected.
(c) Quality Assurance. Licensee
shall take all necessary actions to ensure that the Products and
Services comply in all respects with best industry practices and
with the quality approval procedures and performance metrics set
forth in this Agreement, or otherwise communicated in writing by
Licensor from time to time in its reasonable discretion. Without
limiting the generality of the foregoing, Licensee shall (i)
submit, at Licensee’s sole expense, all required samples of
Products to Licensor, or other designated Persons for ongoing
quality control purposes during the Term, and (ii) comply with the
minimum quality assurance procedures specified on Schedule 7. In addition, within
[***]following the end of each calendar month during the Term and
any Sell-Off Period, Licensee shall provide Licensor all quality
assurance reports specified on Schedule 7. Licensee
acknowledges and agrees that Licensor shall have the right to take
all actions, including the invocation of its rights under
Section 9, which it
deems necessary to ensure that Products sourced, manufactured,
offered, provided, serviced, distributed and/or sold and Services
offered, provided or rendered hereunder are consistent with the
reputation and prestige of the Licensed Marks as a designation for
quality products and services, all as determined in
Licensor’s reasonable discretion.
(d) Defective Return
Rate.
(i) Licensee shall
ensure that the actual defective return rate for each model of the
Products in every month
during the Term is maintained at or below the Defective Rate, as
measured and reported by Licensee and subject to Licensor’s
audits thereof. Notwithstanding anything herein to the contrary,
should the actual defective return rate for the total number of any
Product model distributed by Licensee in any
month during the Term exceed the Defective Rate, Licensor may upon
[***]written notice require Licensee to cease sales of the Product
temporarily, until the Product’s Defective Rate is
corrected.
(ii) Licensee
also shall ensure that the aggregate actual defective return rate
for all models of the Products in every month during the Term is
maintained at or below the Global Defective Rate, as measured and
reported by Licensee and subject to Licensor’s audits
thereof.
(iii) Upon
a Termination of this Agreement for Licensee’s breach of this
Section 4(d),
Licensee shall immediately discontinue manufacturing, assembling,
offering, providing, selling, distributing and sourcing the
Licensed Articles, shall immediately discontinue all use of the
Licensed Marks, and shall have no Sell-off Period under
Section
10(a).
(e) Remedial Measures. In the event
that any material quality issue arises with respect to any Product,
including without limitation breaches of this Section 4, Authorized Service
Provider(s), Permitted Manufacturer(s), suppliers, or the
manufacture, distribution, provision, service, return, repair,
customer service, or support of the Products, and/or the Defective
Rate(s) or the Global Defective Rate(s) exceed the standards set
forth in this Agreement (individually and collectively, a
“Material
Issue”), Licensor may in its reasonable discretion
require Licensee to take the remedial measures in this Section 4(e).
(i) Licensee shall
propose and submit to Licensor a written action plan to remediate
the Material Issue within [***]after written notification of the
Material Issue from Licensor. Licensor shall have [***]to approve
or comment upon the proposed remedial action plan. Once approved by
Licensor, Licensee shall promptly enact the remedial action plan
and cure such breach within [***]or such longer period as may be
mutually agreed by the Parties in writing, and Licensee shall bear
all costs associated therewith; and,
(ii) if
a Material Issue is not resolved or cured after implementing the
steps in Section
4(e)(i) above, Licensor may require Licensee to stop
production, provision and shipment of any Products, stop the
resumption of production or provision of Products, and/or direct
Licensee to recall Products affected by the Material Issue. In such
event Licensee shall take all commercially reasonable steps to
ensure that such actions take place with immediate effect, and
shall bear all costs associated with stopping the production,
provision or shipment of such Products, recalling such Products
and/or resuming production or provision of such
Products.
(f) Use of Licensed Marks. All
Products shall prominently feature one or more of the Licensed
Marks as approved by Licensor. Licensee shall use and display the
Licensed Marks only in such form and manner as conforms to the
Style Guide, and Licensee shall use such legends, markings, and
notices as Licensor may reasonably request.
(g) Approval
of Product Material(s) and Product Literature. Licensee shall promptly submit one or more
samples in electronic form, as required by Licensor in its
reasonable discretion, of proposed Product Materials and Product
Literature to Licensor for approval prior to their publication or
distribution. Licensor agrees to review the sample(s) within no
more than t[***], and to notify Licensee of its decision in writing
to designate the sample(s) as approved or not approved. Any and all
approvals of proposed Product Materials and Product Literature
shall be provided by Licensor in its reasonable discretion. All
advertising and promotional materials bearing the Licensed Marks or
otherwise relating to the Products or Services shall include the
Trademark Attribution Statement for Collateral set forth in the
Style Guide, or any other trademark attribution statement approved
by the parties in writing. Licensor may direct Licensee to cease
use of any Product Materials and/or Product Literature upon
[***]written notice to Licensee.
Without limiting the generality of the foregoing, Licensee shall
comply with the procedures for the approval of Product Materials
and Product Literature specified on Schedule
7, which may be updated from
time to time by Licensor in
its reasonable discretion upon written notice to Licensee. Licensor
shall own all right, title and interest in and to all Intellectual
Property Rights in and to the Product Materials and Product
Literature. If for any reason Licensor’s ownership of the
Intellectual Property Rights in and to the Product Materials and
Product Literature does not arise upon their creation, Licensee
hereby irrevocably assigns to Licensor all right, title and
interest in and to the Intellectual Property Rights in the
Product Materials and Product
Literature. Licensee shall execute any further documents as may be
required to affect such assignment(s). Notwithstanding the foregoing, Licensor agrees
that it shall not replicate the Product Materials and Product
Literature exactly as used by Licensee with any subsequent licensee
for the Licensed Articles, provided the Parties acknowledge and
agree that the Product Materials and Product Literature may be
based on Licensor’s style and branding guidelines, and other
guidelines developed by Licensor.
(h) Product Literature.
The Product Literature shall include
the Trademark Attribution Statement set forth in the Style Guide or
a mutually agreed alternative such as: “MOTOROLA and the Stylized M Logo
are trademarks or registered trademarks of Motorola Trademark
Holdings, LLC. and are used under license. All other trademarks are
the property of their respective owners. All rights
reserved.” The Product Literature shall state that: (i) the
Products or Services are offered, provided, and sold under license
from Licensor; (ii) Licensor does not manufacture or provide the
Products or Services; and (iii) Licensor does not provide any
warranty or support for the Products. A statement complying with
the provisions of the previous sentence is provided in the Style
Guide. The Manufacturer’s Warranty statement shall include
the following exclusion of liability statement: IN NO EVENT WILL THE
MANUFACTURER, DISTRIBUTOR, MOTOROLA MOBILITY LLC, MOTOROLA
TRADEMARK HOLDINGS,
LLC, OR THEIR PARENT ENTITIES BE LIABLE FOR ANY INCIDENTAL, DIRECT,
INDIRECT, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES (SUCH AS, BUT
NOT LIMITED TO, DAMAGES FOR LOSS OF PROFITS, BUSINESS, SAVINGS,
DATA OR RECORDS) RELATED TO THIS PRODUCT. EXCEPT AS STATED HEREIN,
NO OTHER WARRANTIES SHALL APPLY. In the event such disclaimer or any part thereof
is not enforceable for any reason in the Territory, then Licensee
shall bear any third-party liability imposed on Licensor in this
respect and will indemnify Licensor as further specified in
Section
15 of this
Agreement.
(i) Licensee Compliance with Applicable
Law. All Products shall be sourced, manufactured imported,
sold, labeled, packaged, distributed, offered, provided, serviced,
promoted and advertised and all Services shall be offered,
provided, promoted, advertised and rendered in accordance with all
applicable laws and regulations of the jurisdictions where Products
are manufactured, sourced, distributed, offered, provided and sold
or any instrumentalities or political subdivisions thereof.
Licensor’s performance under this Agreement, all Permitted
Manufacturers’ performance under the respective Manufacturer
Approval Agreements, and all Products provided to Licensee shall
comply with the Ethical Standards. In addition, Licensee shall be
responsible for obtaining any license or permit necessary for the
performance of this Agreement by Licensee and anyone acting on
Licensee’s behalf hereunder, both within and outside the
Territory.
(j) Serial Numbers. The Products
shall carry a unique identifier (e.g., a unique serial number or
date code) to distinguish them from other products offered,
provided or sold by Licensee, Licensor and/or third-party
licensees. Such unique identifiers shall be sufficient for Licensee
to fully and accurately track each Product through the distribution
chain to the end consumer, as well as in connection with all
post-sales, return, repair, customer support and other services
relating to the Products or the Manufacturer’s Warranty (as
defined herein). Licensee shall at its sole expense ensure that
Licensee as well as all OEM Manufacturers, Permitted Manufacturers
and Authorized Service Providers have implemented systems
sufficient to enable such tracking and to facilitate all reporting
to Licensor regarding the Products required under this Agreement.
Licensee shall promptly comply with the anti-counterfeit label
program relating to the Products as directed by Licensor at this
time. Without limiting the foregoing, Licensee specifically
acknowledges and agrees that it shall comply with all
confidentiality, accounting, and destruction directives and
obligations imposed by Licensor as a part of such
anti-counterfeiting program.
5. MARKETING
PARTICIPATION.
(a) Participation Pledged.
Throughout the Term, Licensee shall actively promote the provision
and sale of the Products to Retailers, Distributors, Internet
Service Providers, and consumers in the Territory through the
Authorized Channels. Licensee hereby acknowledges that the
marketing programs that may be developed by or for Licensor are for
the benefit of all licensees of Licensor and the Licensed Marks,
and that Licensee’s cooperation and support thereof are an
integral part of such program. Licensee therefore pledges its
direct and active support of any marketing program Licensor may
develop, including direct participation in sales and retailer
presentations and shows, (including the attendance of key
executives of Licensee at all presentations and shows). Licensee
agrees to actively participate in any joint sales and marketing
program that is developed by Licensor or its Affiliates for the
benefit of Licensor’s licensees and Affiliates.
(b) Licensee Obligations. In
accordance with Schedule 9, Licensee shall
expend any Required Advertising Expenditures and shall timely remit
to Licensor detailed reports substantiating any such expenditures.
Licensee also shall timely fulfill all other marketing obligations
set forth on Schedule
9, including without limitation participating in the annual
Operations Reviews and any specified trade shows.
(c) Public Announcements. Neither
Licensee, its suppliers, Permitted Manufacturers, OEM
Manufacturers, Authorized Service Providers, Retailers,
Distributors, nor any other Person acting in concert with Licensee
or on its behalf, shall issue, post, or otherwise distribute any
Press Release(s) concerning the business relationship between the
Parties, the license granted in this Agreement, or the
introduction, sales, specifications, or features of any Product or
Service without first obtaining Licensor’s prior written
approval pursuant to Section 4(g) as to the form and
content of such Press Release(s). In no event shall any proposed
Press Release be approved if it does not meet the Press Release
Guidelines. Anything to the contrary withstanding, Licensor will
not restrict Licensee from making statements required by law or by
governmental regulations.
(d) Products for Licensor. Licensor
may at its election purchase up to [***]of each Product directly
from Licensee at a price not to exceed [***]for the applicable
Product plus [***]to be used as Licensor reasonably
determines.
6. PRODUCT TOOLING AND DESIGN
MATERIALS.
(a) Ownership. Licensor shall own
all right, title and interest in and to all Intellectual Property
Rights in and to the Product Tooling and Design Materials, with the
exception of Product Tooling and Design Materials owned by third
party ODM’s. If for any reason Licensor’s ownership of
the Intellectual Property Rights in and to the Product Tooling and
Design Materials does not arise upon their creation, Licensee
hereby irrevocably assigns to Licensor all rights Licensee has in
and to the Intellectual Property Rights in the Product Tooling and
Design Materials. Licensee shall execute any further documents as
may be required to effect such assignment(s).
(b) Physical Tooling. Upon
Termination of this Agreement, howsoever occasioned, Licensor may
elect to purchase any physical tooling for the Products, and
Licensee shall negotiate with Licensor in good faith to facilitate
such purchase. In the event that Licensor elects not to purchase
any physical tooling for the Products following the Termination of this
Agreement, Licensee shall certify the destruction of such tooling
within [***]following the effective date of Termination, unless
otherwise directed in writing by Licensor.
(c) Non-Assert. Licensee
acknowledges and understands that third-party manufacturers and/or
licensees supply to Licensor product(s) that are the same or
substantially similar to the Products covered by this Agreement.
Licensee hereby covenants that neither Licensee nor any of its
Affiliates or Permitted Manufacturers shall: (i) assert, bring,
cause to be brought or threaten to bring against Licensor, its
Affiliates, licensees or customers (collectively, the
“Licensor Parties”) any claim, action or proceeding
alleging that a Licensor Party’s purchase, manufacture, use,
importation, offer to sell, sale, provision, or distribution of the
product(s) of any third-party licensee or manufacturer or any
Licensor product(s) (including without limitation product(s)
designed, assembled, or manufactured for Licensor by third parties
in connection with the Program or otherwise) (collectively, the
“Licensor Products”), infringes or misappropriates any
of Licensee’s Intellectual Property Rights; or (ii) seek to
enjoin or enjoin the supply, importation, sale, distribution, or
manufacture of any Licensor Products or those product(s) of the
Licensor Parties. Licensee’s obligations under this Section 6
shall survive the Termination of this Agreement, howsoever
occasioned, and the obligations of this Section 6 shall be binding
upon Licensee’s successors in interest, all permitted
transferees or assignees, and any exclusive licensee(s) of any of
Licensee’s Intellectual Property Rights.
7. PRODUCT WARRANTY;
SERVICE.
(a) Warranty Obligation. During the
Term of this Agreement and thereafter as set forth below and on
Schedule 10,
Licensee shall be responsible and liable for providing, either
directly or through Authorized Service Providers, all post-sales,
return, repair, customer support and other services relating to the
Products and the Manufacturer’s Warranty for such Products at
Licensee’s sole expense. The Manufacturer’s Warranty
must be approved in advance in writing by Licensor; Licensor shall
provide comments within [***]of submission.
(b) Manufacturer’s Warranty.
Licensee shall provide at its sole expense a limited product
warranty to the original purchaser that the Products are free from defects in materials
and workmanship in accordance with the Magnuson-Moss Warranty Act
(15 U.S.C. Sections 2301 et seq.) and the regulations issued
thereunder, as the same may be amended from time to time, and in
accordance with such other similar regulations as may be applicable
to the Products in the Territory (the “Manufacturer’s
Warranty”). Licensee shall be solely responsible for
providing, either directly or through Authorized Service Providers,
any post-sales, return, repair, customer support and other services
relating to the Products or the Manufacturer’s Warranty at
Licensee’s sole expense, including without limitation any
costs relating to (if applicable) transportation costs, Product
replacement, service labor, field repair, refunds, returns, and
other customer and Retailer concessions to ensure each
customer’s satisfaction for the duration of the applicable
Manufacturer’s Warranty period. In addition, Licensee shall
offer, either directly or through Authorized Service Providers,
repair, replacement, customer support and other services relating
to the Products for a period of not less than [***]after the
duration of the applicable Manufacturer’s Warranty or as
otherwise required by law to help to attempt to ensure each
customer’s continued satisfaction with the Products, and, to
the extent that Licensee offers Product repair service instead of
Product replacement, Licensee shall make commercially reasonable
efforts to ensure (for at least the same time period) that it
maintains sufficient parts to complete all necessary repairs in a
workmanlike manner.
(c) Warranty Services. All
post-sales, return, repair, customer support and other services
relating to the Products or the Manufacturer’s Warranty shall
be provided strictly in accordance with: (i) the service levels set
forth in this Agreement including those set forth on Schedule 10; (ii) all industry
standard service levels for comparable Licensed Articles provided
or sold in the Territory; and (iii) all applicable federal, state,
provincial and local laws, treaties and regulations. Licensee
acknowledges and agrees that it shall require all Authorized
Service Providers to comply with and provide all post-sales,
return, repair, customer support and other services strictly in
accordance with all terms of this Agreement, including without
limitation this Section
7(c).
(d) Records. Licensee shall keep
and maintain a detailed record and database of all customer service
calls, inquiries, consumer or Retailer complaints, repair and
warranty claims relating to the Products. Without limiting the
foregoing, during the Term and thereafter so long as Licensee is
obligated to service the Products pursuant to this Section 7, Licensee shall, in
conjunction with any Authorized Service Providers, prepare and send
to Licensor (i) within [***]after the end of each month, a report
tallying all Product returns, consumer, Distributor and Retailer
complaints, and post-sales, return, repair, replacement, customer
support, Manufacturer’s Warranty, and other services relating
to the Products, known to Licensee, during the preceding month, and
(ii) within [***]following the end of each calendar quarter a
statement summarizing all problems and quality issues reported to
Licensee or any Authorized Service Providers for each Product
during the preceding calendar quarter.
(e) Licensor’s Satisfaction.
Licensor has the right to take all reasonable actions, including
the invocation of its rights under Section 9, which it deems
necessary to ensure that all post-sales, return, repair, customer
support and other services relating to the Products are handled to
Licensor’s satisfaction. In the event that Licensee or its
Authorized Service Providers do not handle all post-sales, return,
repair, customer support and other services relating to the
Products to Licensor’s satisfaction, Licensor may in its
reasonable discretion: (i) mandate that Licensee change service
providers; (ii) mandate that Licensee change the applicable service
level relating to the affected Product (e.g., replacement in lieu
of repair); (iii) elect to provide the required post-sales, return,
repair, customer support or other services directly or indirectly
through Licensor’s appointee(s), in which case Licensee shall
reimburse Licensor within [***]for [***] of all costs incurred by
or on behalf of Licensor in connection with such services; and/or
(iv) require Licensee to halt the distribution and sale of Products
in whole or in part, to recall Products in whole or in part, or to
take other remedial actions, where Licensor validly determines that
serious customer satisfaction, quality, safety, returns, or
compliance problem(s) exist.
8. RECORDS;
DISCREPANCIES.
(a) Records. Licensee, all
Permitted Manufacturers and all Authorized Service Providers shall
keep accurate books of account, records and databases covering all
transactions relating to this Agreement. Within [***]after each
Contract Year, Licensee shall provide Licensor with (i) a copy of
Licensee’s annual audited financial statements, and (ii) the
Payment Report Certification certifying that each of the Payment
Reports from the previous Contract Year is true and correct in all
respects.
(b) Audit. Licensor, its
representatives and designees, upon [***]prior written notice,
shall have the right at all reasonable business hours of the day to
freely and fully examine such books of account, records and
databases in the possession or control of Licensee and/or any of
the Permitted Manufacturers and/or any of the Authorized Service
Providers with respect to the subject matter and terms of this
Agreement, including the right to make extracts and copies
therefrom. All such books of account, records, and databases shall
be kept available during the Term and for at least [***] after
Termination of this Agreement, howsoever occasioned. Licensee
further agrees that, in order to facilitate inspection of its books
and records with respect to amounts due, it shall designate a
symbol or number which shall be used exclusively in connection with
Products and with no other articles or services which Licensee may
source, manufacture, offer, provide, sell, or distribute, and such
records shall be kept in reference to the unique Product
identifiers required pursuant to Section 4(j).
(c) Discrepancies. In the event
that Licensor reasonably determines, in the course of any
examination under Section
7(a) herein or otherwise, that payments, fees or other
monies owed to Licensor have been underpaid, Licensee shall remit
the amount of the underpayment to Licensor within [***] after
delivery of written notice of the error in accordance with the
payment instructions set forth in Schedule 4 (as may be updated
by Licensor from time to time), together with any late fees owed to
Licensor pursuant to Section 3(i) above. If the
amount of any underpayment equals [***]or more of any payments,
fees or other monies owed by Licensee to Licensor in any payment
period, Licensee shall be responsible to Licensor for the total
reasonable out-of-pocket cost of the examination/audit which
revealed the underpayment within [***]after receipt of an invoice
therefor.
9. TERMINATION. Notwithstanding
anything to the contrary in this Agreement, this Agreement may be
earlier terminated in any manner provided below:
(a) For Breach. Unless the
breaching Party’s default is one that cannot be cured, the
breaching Party shall have (i) in the case of breach by Licensee of
any obligation to pay any monies due under this Agreement, [***]to
remedy its breach; (ii) in the case of breach by Licensee of its
obligation to cooperate pursuant to Section 15(c), [***]to remedy
its breach; or (iii) in all other cases, [***]after the breaching
Party receives written notice of its breach. If the breaching Party
should fail to remedy a curable breach within the applicable cure
period, this Agreement may be terminated in the reasonable
discretion of the non-breaching Party upon delivery of written
notice to the breaching Party. If the breaching Party’s
default is one that cannot be cured, this Agreement may be
terminated by the non-breaching Party upon delivery of written
notice to the breaching Party. Notwithstanding the foregoing, in
the event that a Party breaches the same or related provision of
this Agreement [***]or more times in an [***]period, this Agreement
may be immediately terminated (without opportunity to cure) in the
reasonable discretion of the non-breaching Party upon delivery of
written notice to the breaching Party.
(b) Insolvency. Licensor may
terminate this Agreement effective immediately upon delivery of
written notice to Licensee if the Licensee: (i) for [***]or more is
unable to pay its debts as they mature or admits in writing its
inability to pay its debts as they mature; (ii) makes a general
assignment for the benefit of creditors; (iii) files a voluntary
petition for bankruptcy or has filed against it an involuntary
petition for bankruptcy which is not discharged within a period of
[***]after such filing; or (iv) applies for the appointment of a
receiver or trustee for substantially all of its assets or permits
the assignment of any such receiver or trustee who is not
discharged within a period of [***]after such
appointment.
(c) Immediate Termination.
Notwithstanding anything herein to the contrary, Licensor may
terminate this Agreement effective immediately upon delivery of
written notice to Licensee upon Licensee’s breach of
Sections 2(b) (no
sublicensing) 2(f)(i)-(vi) (no misuse of License rights), 2(g)
(non-circumvention)), 4(e) (failure to undertake remedial
measures), 6(c) (non-assert), and 14(a),(b),(d),(e) (no threats to
Motorola’s ownership or goodwill associated with the Licensed
Marks).
10. EFFECT OF
TERMINATION.
(a) Cessation of Use. If this
Agreement terminates pursuant to Section 9, Licensee shall
immediately (i) discontinue sourcing, manufacturing, packaging,
assembling, providing, selling and distributing the Products and
Services and shall immediately discontinue any and all other use of
the Licensed Marks, and (ii) cease accepting and fulfilling
purchase orders for the Products and Services. If this Agreement is
terminated for any other reason, Licensee shall have [***], and
shall be permitted to allow any Retailers, Distributors, and
Internet Service Providers an additional period of [***] (the
“Sell-off
Period”) to dispose of then-existing Products and
cease providing the Services; provided, however, that Licensee may
not stockpile Products in anticipation of the Termination of this
Agreement and, at the option of Licensor, Licensor may purchase all
unsold Products then in Licensee’s possession, custody or
control at Licensee’s actual and reasonably substantiated
cost plus reasonable shipping charges. Notwithstanding anything to
the contrary in this Agreement, any such Sell-off Period shall be
non-exclusive.
(b) Accounts Receivable. Upon the
Termination of this Agreement, notwithstanding anything to the
contrary herein and subject to Section 10(c): (i) any unpaid
balance of the Guaranteed Minimum Royalty that would be due for the
balance of the Term, as liquidated damages and not as a penalty,
shall accelerate and become immediately due and payable to
Licensor; and (ii) all Earned Royalties due and owing by virtue of
Product sales theretofore shall become due and payable within
[***]of such Termination. All Earned Royalties generated by virtue
of Products sold or provided to Retailers, Distributors, Internet
Service Providers, and consumers through the Authorized Channels
during any applicable Sell-off Period shall be due within ten (10)
Business Days after the conclusion of the Sell-off
Period.
(c) Reservation of Rights and
Remedies. Any Party who terminates this Agreement in
accordance with the terms of this Agreement shall also have all
other rights and remedies available under applicable law or equity
for any claim it may have against the other Party, whether for
breach of contract or otherwise. Without limiting the foregoing,
Licensor shall have and hereby reserves all rights and remedies
which it has or which are granted to it by operation of law or
equity to enjoin the unlawful or unauthorized use of the Licensed
Marks.
(d) Continued
Support. Notwithstanding
the termination of expiration of this Agreement, Licensee
acknowledges that is shall remain responsible for providing, at its
cost, all warranty and repair services required by this Agreement
or the federal, state, provincial and local laws, treaties and
regulations of the country in which the Products were sold, and in
the event Licensee offers Services in connection with such
Products, Licensee shall remain responsible for providing and
maintaining, at its cost, such Services for the entire expected
life of the Product, provided that such Services shall not be
permitted to use the Licensed Marks after the expiration or
termination of the Agreement, including the Sell-off Period (if
any).
11. INSURANCE.
(a) Throughout the Term
of this Agreement, and for the period of time specified in
Schedule 11
following the date of Termination, Licensee shall at its sole cost
and expense obtain and maintain, and shall use commercially
reasonable efforts to require its Permitted Manufacturers and
Authorized Service Providers to obtain and maintain,
industry-standard insurance policies from a recognized insurance
company qualified to do business in the United States of America or
such other jurisdictions as Licensor may from time to time request
on terms and with limits of at least those standards set forth on
Schedule
11.
(b) As of the Effective
Date and annually upon renewal of each insurance policy, Licensee
shall supply Licensor with a Certificate of Insurance with respect
to each of the foregoing policies that names Licensor and any other
Persons identified on Schedule 11 as additional
insureds, and which also provides that such insurance shall not be
canceled or changed unless at least [***]prior written notice has
been given to Licensor. Licensee’s insurance shall be primary
and required to respond to and pay claims prior to other coverage.
Coverage and limits referred to above and in Schedule 11 shall not in any
way limit the liability of Licensee and may be required to be
increased as requested by Licensor in its reasonable discretion to
stay current with industry standards or cost of living. Licensee
hereby waives any rights of subrogation against Licensor and any
other additional insureds identified in Schedule 11. Licensee shall
also ensure that its insurers waive their rights of subrogation
against Licensor and any other additional insureds identified in
Schedule
11.
(c) Licensee shall
promptly pay all premiums required to be paid under each insurance
policy and shall immediately furnish proof of such payment to
Licensor upon Licensor’s request. In no event shall Licensee
utilize the Licensed Marks for commercial purposes in accordance
with the terms and conditions of this Agreement prior to
Licensee’s provision to Licensor of evidence of the insurance
policies required under this Section 11.
12. EXPORT;
TRANSSHIPPING
(a) Export. Licensee represents and
covenants that it makes commercially reasonable efforts to be aware
of the pertinent export laws and regulations relating to the
Licensed Articles, Licensed Marks and Product IP and to not violate
them. To the extent that Licensee or its Affiliates exports,
transports, sources, distributes, manufactures or has manufactured
any products or technologies in any way connected to the Licensed
Marks, Licensee hereby represents and covenants to Licensor that
neither Licensee nor its Affiliates shall (without the prior
written consent of both Licensor and the Office of Export Licensing
of the U.S. Department of Commerce, P.O. Box 273, Washington, D.C.
20230), directly or indirectly export, transport, source, offer,
provide, distribute, manufacture or have manufactured any Licensed
Articles or any technical information provided hereunder in, to or
by: (i) any Person(s) listed in the Table of Denial Orders as
published from time to time in Supplement No. 2 to Part 764 of the
above referenced regulations; (b) embargoed countries or foreign
nationals of such countries, as may be changed from time to time,
under U.S. export laws and regulations; or (c) controlled countries
and foreign nationals of such countries to the extent such products
and technologies are defined as controlled technologies in the U.S.
Export Administration Regulations Part 774.
(b) No Transshipping. Licensee and
its Affiliates shall limit their distribution and provision of the
Products to direct sales to Retailers, Distributors, Internet
Service Providers, and consumers through Approved Channels in the
Territory. All Retailers, Distributors, and Internet Service
Providers correspondingly shall only distribute and sell Products
through the Approved Channels in the Territory, and Licensee shall
be responsible for taking all necessary actions to aggressively
pursue and where possible remedy any breach of that obligation by
its Affiliates, Retailers, Distributors, or Internet Service
Providers. Neither Licensee, its Affiliates, Retailers, Internet
Service Providers, nor Distributors shall directly or indirectly
transship, distribute or otherwise transfer Products outside the
Approved Channels in the Territory. Licensee and its Affiliates
shall over time incorporate this limitation into all agreements for
the resale of the Products and obtain Retailers’, Internet
Service Providers’, and Distributors’ acknowledgement
and agreement to the limitation. Licensee shall strictly enforce
this limitation with its Affiliates, Retailers, Internet Service
Providers, Distributors, agents, and any other permitted Person(s)
including immediate termination of agency and distribution
agreements and termination of further sales to Persons violating
the terms of this limitation. Any intentional violation of this
Section 12(b),
whether by Licensee, its Affiliates, Retailers, Internet Service
Providers, Distributors, or any other Person under Licensee’s
agency or control, shall be a material breach of this Agreement
resulting in irreparable harm to Licensor for which money damages
will not be adequate. In addition to any other remedies Licensor
may have at law or in equity, Licensor may within its reasonable
discretion: (i) terminate this Agreement pursuant to Section 9(a);
(ii) require Licensee to recall the affected Product(s); and/or
(iii) require Licensee to immediately remit to Licensor an amount
equal to twice the Net Sales of the Product(s) made outside the
Approved Channels in the Territory as liquidated damages. Licensee
further acknowledges and agrees that Licensor shall be entitled to
injunctive relief to prevent a threatened or continued material
breach and to specifically enforce this Section 12(b). If Licensee, its
Affiliates, Retailers, Distributors, or their respective agents
directly or indirectly distributed or sold Products outside the
Approved Channels in the Territory, Licensee shall be responsible
for taking all necessary actions to remedy such situation,
including reimbursing Licensor for any losses or expenses
incurred.
13. REPRESENTATIONS, WARRANTIES AND
COVENANTS.
(a) By Licensee. Licensee
represents, warrants and covenants to Licensor that: (i) it has the
authority to enter into this Agreement and to provide and sell the
Products, free and clear of all liens, charges, encumbrances, or
other restrictions; (ii) at all times during the Term of this
Agreement, and thereafter as required hereunder, Licensee shall
maintain the necessary working capital and manufacturing facilities
or relationships to perform all obligations of Licensee under this
Agreement; (iii) the Products shall be free from defects in design,
manufacture, material and workmanship, and shall be fit and safe
for the use(s) normally and reasonably intended; (iv) the Products
shall be of merchantable quality and shall be manufactured and
shall perform in conformance with approved samples; (v) the
Products shall be new and shall not contain anything used,
refurbished or reconditioned; (vi) Licensee shall not distribute or
sell any used, refurbished or reconditioned Products without
Licensor’s prior written authorization; (vii) Licensee shall
not directly or indirectly offer, distribute, provide or sell
Products or Services outside the Approved Channels in the Territory
(or otherwise in violation of this Agreement); (viii) the Products
(including their labeling and packaging) and Services shall not
violate or infringe any Intellectual Property right of any third
party or any other right of any third party, nor shall their offer,
provision, resale or distribution by Retailers, Distributors, any
customers of Retailers or Distributors, or any other Person; (ix)
Licensee has timely paid, and shall continue to timely pay, all
license fees, royalties and/or other fees and expenses to third
parties that are necessary to facilitate sourcing, manufacturing,
packaging, distributing, providing, selling, repairing and
servicing the Products; (x) Licensee shall provide a
Manufacturer’s Warranty to end users of the
Products in accordance
with the terms of this Agreement and in compliance with all
applicable laws and regulations; (xi) neither Licensee, Permitted
Manufacturer(s) nor any Authorized Service Provider(s) will violate
any of the terms or conditions of the Ethical Standards in
Schedule 12,
including without limitation by producing, manufacturing,
assembling, packaging, servicing or distributing any Products or
providing any Services by or in connection with the use of forced
labor, prison labor, forced or illegal child labor or Conflict
Minerals (as defined in Schedule 12); (xii) the
Products shall not be trans-shipped for the purpose of mislabeling,
evading quota or country of origin restrictions or for the purpose
of avoiding compliance with forced labor, prison labor or child
labor laws; (xiii) Licensee has full power and authority to enter
into and deliver this Agreement and to lawfully perform all of its
obligations hereunder; (xiv) Licensee shall actively exploit all of
the rights granted to it under this Agreement; (xv) it is duly
organized, validly existing and in good standing under the laws of
its jurisdiction of organization and is duly authorized to do
business under the laws of such jurisdiction and each other
jurisdiction in which such qualification is required; (xvi) this
Agreement has been duly executed and delivered by it and
constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms; and (xvii) notwithstanding any other
provisions in this Agreement, Licensee shall not make any use of
the Licensed Marks or the Licensed Domain Names or Licensed Social
Media Accounts in the Excluded Channels, including without
limitation marketing, promoting, distributing or selling any
Products through the Excluded Channels.
(b) Compliance with Laws. Licensee
represents, warrants and covenants that all Products shall be
sourced, imported manufactured, processed, packaged, labeled,
tagged, tested, certified, accurately marked, weighed, inspected,
distributed, shipped, offered, provided, sold, repaired and
serviced and all Services rendered and provided in compliance with
all applicable industry standards and all applicable federal,
state, provincial and local laws, treaties and regulations,
including, without limitation, all laws and regulations relating to
health, safety, environment, serial and identification numbers,
manufacturing, packaging, labeling and country of origin
designation, all toxic substances, OSHA, RoHS and EPA regulations
(or other similar applicable regulations), all waste, recycling and
disposal laws and regulations, customs and importation
requirements, and voluntary or mandatory compliance certifications
(e.g., Underwriter’s Laboratories, Inc., CE, CSE, etc.).
Licensee shall provide Licensor with evidence of all such
certifications prior to delivering any Products to Retailers,
Distributors or consumers.
(c) By Licensor. Licensor
represents and warrants that it has (i) the right to grant to
Licensee the license to the Primary Marks granted hereunder which,
notwithstanding any other provisions in this Agreement, do not
include uses of the Licensed Marks, the Licensed Domain Names and
the Licensed Social Media Accounts in or through the Excluded
Channels, and (ii) full power and authority to enter into and
deliver this Agreement and to perform all of its obligations
hereunder. THE LICENSE GRANTED IN
SECTION 2 ABOVE AS TO THE SECONDARY MARKS IS GRANTED TO LICENSEE ON
AN "AS IS", “WHERE IS” AND "AS AVAILABLE" BASIS.
LICENSOR MAKES NO REPRESENTATION OR WARRANTIES OF ANY KIND, EXPRESS
OR IMPLIED, AS TO THE OWNERSHIP OF THE SECONDARY MARKS, AND NEITHER
LICENSOR, ITS AFFILIATES, NOR THEIR RESPECTIVE LICENSORS SHALL BE
OBLIGATED TO INDEMNIFY LICENSEE FOR ANY CLAIMS, DEMANDS, CAUSES OF
ACTION, LOSSES, EXPENSES OR DAMAGES RELATED TO LICENSEE’S USE
OF THE SECONDARY MARKS.
(d) Privacy and Information
Security.
(i) Licensee
and its Affiliates have established and are in compliance with a
written information security program that: (1) includes
administrative, technical and physical safeguards designed to
safeguard the security, confidentiality, and integrity of user
data, personal data, and other data and information collected,
stored or processed by Licensee, its Affiliates, or the Licensed
Articles, including any services used in connection therewith
(collectively, “User
Data”); and (2) is designed to protect against
unauthorized access to the computer systems and networks owned,
controlled or utilized by Licensee and its Affiliates (each, a
“Licensee
System”) and User Data. Licensee is neither aware of
nor has any reason to believe that either Licensee or any of its
Affiliates have suffered or incurred any material security breach
or incident with respect to any such Licensee System or User Data.
No breach or violation of any security program described above has
occurred or, to the knowledge of Licensee or its Affiliates, is
threatened, and there has been no unauthorized or illegal use of or
access to any Licensee System or User Data. Licensee is neither
aware of nor has any reason to believe that either Licensee or any
of its Affiliates has notified, or been required to notify, any
Person of any information security breach or incident involving any
personal data. Each database of User Data that is required to be
registered or maintained under any applicable law has been duly
registered and maintained.
(ii) Licensee
and its Affiliates have published and maintained in effect privacy
policies as required by applicable laws. Licensee and its
Affiliates each maintain a comprehensive privacy compliance program
designed to ensure compliance with all of their respective privacy
policies and with all applicable laws pertaining to privacy,
personal data or user data. The execution, delivery or performance
of this Agreement will not result in any material violation of any
of Licensee’s or its Affiliates’ privacy policies or
any law pertaining to privacy, user data, or personal data.
Licensee and its Affiliates have all rights necessary to collect,
use, possess, and exploit the User Data in connection with the
operation of their respective business.
(iii) Licensee
and its Affiliates each maintain a product security compliance
program designed to ensure compliance with all of their respective
product security policies and with all applicable laws pertaining
to product security. The execution, delivery or performance of this
Agreement will not result in any material violation of any of
Licensee’s or its Affiliates’ product security policies
or any law pertaining to product security. Licensee and its
Affiliates possess the necessary expertise, or will employ or
acquire such expertise, in order to ensure the secure operation of
the Licensed Articles, and any services used in connection
therewith.
(iv) Licensee
will make reasonable efforts to comply with all applicable
security, privacy and data protection laws and regulations; will
implement processes to assess the Licensed Article for privacy and
security compliance prior to public launch or release; will
implement and maintain appropriate technical and other protections
for the User Data and Licensee System; will immediately report to
Licensor any breaches (or similar incidents) of protection of User
Data or Licensee System; and will cooperate fully with
Licensor’s requests for access to, correction of, and
destruction of User Data in any Licensee System.
(v) Licensee
will protect the privacy and legal rights of any users of the
Licensed Articles (“End Users”). If End Users
provide Licensee with, or if the Licensed Articles access or use,
user names, passwords, or other login information or personal
information, Licensee must make the End Users aware that the
information will be available to the Licensed Articles, and shared
with Licensor, and Licensee will provide legally adequate privacy
notice and protection for those End Users. Further, Licensee may
only use that information for the limited purposes for which the
End User has given Licensee permission. Licensee will not use,
disclose, or transfer across borders User Data except as necessary
to perform under this Agreement and pursuant to the terms of a
separate confidentiality agreement signed by the
Parties.
(vi) All
User Data collected by Licensee, its Affiliates, or the Licensed
Articles is and shall remain the exclusive property of Licensor.
Licensee may not otherwise use or modify the User Data, merge it
with other data, commercially exploit it, use it for unauthorized
marketing or advertising purposes, disclose it, transfer it across
international borders or do any other thing that may in any manner
adversely affect the integrity, security or confidentiality of such
User Data, other than as expressly specified herein, as authorized
by user, or as directed by Licensor in writing.
(vii) Licensee,
and its Affiliates warrant that Licensee will make reasonable
efforts to ensure that the Licensed Articles (a) will not contain
any viruses, worms, Trojans, error files, password cracking
programs, malware or any program that might compromise security or
privacy for the end users, or open source software; (b) will not
cause any privacy or security concerns; and (c) will not or cause
any other errors or issues which could impact the security of the
Licensed Articles or the privacy of its users (collectively
“Issue(s)”). In the event of an Issue, Licensee shall
attempt to resolve such Issue in a timely manner.
14. OWNERSHIP OF LICENSED
MARKS.
(a) Ownership and Goodwill.
Licensee acknowledges and agrees that: (i) the Licensed Marks are
famous and there is substantial goodwill associated with the
Licensed Marks; (ii) Licensor and/or its Affiliates owns all right,
title, interest and goodwill in and to the Licensed Marks,
including without limitation in connection with the Licensed
Articles; and (iii) all use of the Licensed Marks pursuant to this
Agreement shall inure exclusively to the benefit of Licensor, its
Affiliates and their respective licensors. Licensee covenants that it shall
not at any time: (1) challenge the right, title or interest of
Licensor, its Affiliates and their respective licensors in the
Licensed Marks or any trademarks, trade names, domain names or
social media accounts owned by or licensed to Licensor or its
Affiliates; (2) do or cause to be done or omit to do anything, the
doing, causing or omitting of which would contest or in any way
impair or tend to impair Licensor’s and its Affiliates’
rights in the Licensed Marks or any trademarks, trade names, domain
names or social media accounts associated therewith; (3) represent
to any third party that Licensee has any ownership or rights with
respect to the Licensed Marks, or any trademarks, trade names,
domain names or social media accounts associated therewith, other
than any specific rights granted to Licensee herein; or (4)
duplicate, adopt, use or register any words, phrases, symbols,
designs, technology or anything else that is identical to or
confusingly similar to any of the Licensed Marks or any trademarks,
trade names, domain names or social media accounts associated
therewith. In the event that any Licensed Marks are co-branded,
sub-branded, or otherwise combined with any other trademark, trade
name, domain name, social media account name or handle therefor,
model name, model designation, alphanumeric model number, lot
number, or other designation of origin (“Co-Branded Mark”),
Licensee hereby assigns and Licensor shall own, all right, title
and interest in and to all Intellectual Property Rights in and to
any and all Co-Branded Marks. Licensee shall execute any further
documents as may be required to effect or otherwise confirm such
assignment(s). Notwithstanding any other provision in this
Agreement, Licensee acknowledges and agrees that it shall not
assert any trademark, trade dress, or other Intellectual Property
right in any Product model number or serial number, and that
Licensor shall own all such rights in and to all Product model
numbers and serial numbers. For the avoidance of doubt, this
provision shall survive Termination of this agreement.
(b) Trademark Registrations.
Licensor, its Affiliates and their respective licensors shall have
the right, in their sole discretion, to apply to register the
Licensed Marks, or any trademarks, trade names, domain names or
social media accounts (or handles therefor) associated therewith,
in their name in any and all jurisdictions including the Territory.
Licensee shall cooperate with Licensor, its Affiliates and their
respective licensors in obtaining such registrations, including by
promptly executing all requested documents. In addition, if
Licensor, its Affiliates, or their respective licensors agree to
make filings for the Licensed Marks in the Territory in connection
with the Licensed Articles at the request of Licensee, Licensee
shall promptly remit to Licensor all costs and fees associated with
such filings, as well as the maintenance of any resulting
registrations. Notwithstanding anything in this Agreement to the
contrary, Licensee covenants that it shall not under any
circumstance seek to register any of the Licensed Marks, or any
other trademarks, trade names, domain names or social media
accounts associated therewith, comprised thereof or confusingly
similar thereto, during the Term of this Agreement or at any point
thereafter. Licensee acknowledges and agrees that any violation of
this provision shall result in automatic assignment of any such
applications, registrations or other rights to Licensor, its
Affiliates and their respective licensors, at Licensee’s sole
expense, and Licensee agrees to sign any documents requested by
Licensor for such purpose. Licensee hereby irrevocably provides its
power of attorney to Licensor for the purposes of effectuating the
assignments and transfer(s) contemplated in this Section 14(b).
(c) Notice of Infringement.
Licensee shall notify Licensor promptly in writing of any actual or
potential infringements or imitations by others of the Licensed
Marks that come to Licensee’s attention during the Term of
the Agreement.
(d) Enforcement. During the Term of
this Agreement and at all times thereafter, Licensor, its
Affiliates and their designee(s) shall have the exclusive right,
exercisable in their reasonable discretion, to pursue infringers of
the Licensed Mark and any trademarks, trade names, domain names or
social media accounts associated therewith. Licensee agrees to
assist Licensor, its Affiliates and their representatives and
designee(s) to the extent necessary to protect any of
Licensor’s and its Affiliates’ rights in the Licensed
Marks and any trademarks, trade names, domain names or social media
accounts associated therewith. Licensee acknowledges and agrees
that such assistance may include, without limitation: (i)
assistance in the filing and prosecution of trademark, copyright or
domain name registration applications or transfers; (ii) the
publication of notices; and (iii) the doing of any other act or
acts with respect to the Licensed Marks and any trademarks, trade
names, domain names or social media accounts associated therewith,
including the prevention of the use thereof by an unauthorized
person, firm or corporation, which in the reasonable discretion of
Licensor may be necessary or desirable under any law, regulation or
decree of any jurisdiction(s).
(e) Reservation of Rights. Licensee
acknowledges and agrees that all Intellectual Property owned by or
licensed to Licensor or its Affiliates, including without
limitation the Licensed Marks and any trademarks, trade names,
domain names or social media accounts (and handles therefor)
associated therewith, shall continue to be owned by or licensed to
Licensor or its Affiliates.
(f) Termination of Rights. Upon
Termination of this Agreement, howsoever occasioned, all rights and
license in and to the Licensed Marks granted by Licensor to
Licensee under this Agreement shall immediately terminate, subject
only to any applicable Sell-off Period as well as to any ongoing
obligation of Licensee to provide post-sales customer support,
return, repair, and other services relating to the
Manufacturer’s Warranty or the Products pursuant to the terms
of this Agreement.
(g) Violations. Licensee
acknowledges and agrees that any violation of Section 14(a), (b), (d) or (e)
shall be deemed a material breach of this Agreement that shall
cause Licensor irreparable harm, and upon which Licensor shall have
the right to immediately terminate this Agreement without limiting
any other additional remedies to which Licensor may be
entitled.
15. INDEMNIFICATION.
(a) By Licensee. Licensee hereby
agrees to assume complete and immediate responsibility for, and to
immediately defend, indemnify and hold harmless Licensor, its
Affiliates, and their respective directors, officers, employees,
shareholders, members, agents, parents, subsidiaries, licensors,
successors and assigns, from any and all liabilities, claims,
demands, causes of action, losses, expenses and damages (including,
without limitation, reasonable attorneys’ fees and settlement
amounts) relating to or arising out of: (i) any death or injury to
any person or any property damage resulting or arising from, or
alleged to have resulted or arisen from, any Products; (ii)
Licensee’s negligence, misconduct or breach in providing any
post-sales, customer support, return, repair, or other services
relating to the Products; (iii) any actual or threatened breach of
this Agreement (including without limitation Licensee’s
representations in Sections 13(a) and 13(b)) or the
Manufacturer’s Warranty by Licensee, Permitted Manufacturers,
Authorized Service Providers, OEM Manufacturers, or any
unauthorized third-party subcontractors or vendors; (iv)
Licensee’s actual or alleged violation of any of the laws of
any governmental entity with respect to the Products; (v)
Licensee’s failure to obtain, secure or maintain any
Intellectual Property license, agreement or third-party right
necessary to manufacture, promote, distribute, service or sell any
of the Products, even if the third-party claim involves in any
fashion Intellectual Property owned by or licensed to Licensor or
its Affiliates; (vi) Licensee’s failure to provide Products
that comply with all laws and regulations; (vii) any imposition of
waste and/or recycling charges pertaining to the Products; or
(viii) anything else directly or indirectly relating to sourcing,
manufacturing, packaging, distributing, providing, selling,
re-selling, servicing and/or using the Products or the actual or
alleged failure of the Products, including, without limitation,
claims, demands, causes of action, losses and damages based upon
Intellectual Property Rights or other proprietary rights of any
third party, alleged and claimed defects in the Products, Product
recalls and returns, and the actions, alleged actions and omissions
of, and materials provided by, OEM Manufacturers and any
unauthorized subcontractors or vendors. Notwithstanding anything to
the contrary in this Agreement, failure of Licensee to perform any
of its obligations under this Section 15 shall give Licensor
the right to terminate this Agreement, effective upon immediately
upon delivery of written notice to Licensee.
(b) By Licensor. Provided that
Licensee is in compliance with all of the terms, conditions and
obligations imposed upon them under this Agreement, Licensor hereby
agrees to be responsible for, to defend, indemnify and hold
harmless Licensee, its Affiliates and their respective directors,
officers, employees, shareholders, agents, successors and permitted
assigns, from any and all liabilities, claims, demands, causes of
action, losses, expenses and damages (including, without
limitation, reasonable attorneys’ fees and settlement
amounts) relating to or arising out of (i) claims that the Primary
Marks used in connection with the Licensed Articles pursuant to
this Agreement infringe any valid trademark rights of any third
party, or (ii) any breach of Licensor’s representations in
Section 13(c)
herein. Notwithstanding anything to the contrary in this Agreement,
failure of Licensor to perform any of its obligations under this
Section 15 shall
give Licensee the right to immediately terminate this Agreement,
effective upon delivery of written notice to Licensor.
Notwithstanding any provision in this Agreement, neither Licensor,
its Affiliates, nor their respective licensors shall be liable for
any use by Licensee of any Secondary Mark which is asserted by a
third party to be an infringement of its intellectual property or
other proprietary rights and/or an act of unfair
competition.
(c) Cooperation. A Party seeking
indemnification under this Agreement (“Indemnitee”) shall
promptly notify the indemnifying Party (“Indemnitor”) in writing
of the claim, suit or proceeding for which indemnification is
sought. The Indemnitee shall have the right to participate in such
defense at its own expense, shall reasonably cooperate with the
Indemnitor, and shall not be obligated, against its consent, to
participate in any settlement which it reasonably believes would
have an adverse effect on its business. In the event that any third
party alleges that any of the Licensed Marks infringe such
Person’s Intellectual Property or other proprietary rights,
or any of the Licensed Marks are determined by a court of competent
jurisdiction to infringe a third party’s Intellectual
Property or other proprietary rights, Licensor reserves the right
to substitute a reasonably equivalent mark (as determined and
exercised in Licensor’s reasonable discretion) as a
substitute for use in connection with the applicable Licensed
Articles, and such substitute mark shall be thereafter deemed to be
among the Licensed Marks for the purposes of this
Agreement.
16. CONFIDENTIALITY. Unless agreed
to in advance by the other Party, or otherwise required by law,
court order or other legal process, neither Party hereunder shall
disclose any of the terms and conditions of this Agreement, or any
confidential information received from the other Party in
connection with the performance of this Agreement, to any other
Person, except to such Party’s officers, directors,
employees, counsel, consultants and auditors and then only to the
extent necessary in the ordinary course of its business. In
addition to and without limiting the foregoing, Licensee shall
fully cooperate with Licensor in advance of the disclosure of any
Product prototype or related filings to any Person (including
without limitation any governmental or regulatory authority) and
shall coordinate with Licensor regarding the disclosure of all
prototypes and all related filings to ensure that confidentiality
concerning such Products is maintained. If either Party receives
any subpoena, court order or other legal process requiring the
disclosure of any of the terms and conditions of this Agreement,
such Party shall promptly notify the other Party hereto in writing,
and shall cooperate with the other Party in obtaining protective
orders or other appropriate forms of relief, limiting the extent
and scope of such legally required disclosures. In addition to the
foregoing, Licensor shall, and shall cause its Affiliates to, keep
in confidence and not share or use, except to perform its
obligations or exercise its rights under this Agreement, all
confidential information of Licensee, until such time as Licensor
can demonstrate that such information (i) is explicitly approved
for release by written authorization of Licensee, or (ii) is
lawfully obtained by a third party or parties without a duty of
confidentiality.
17. AFFILIATES. Licensee represents
and warrants that a current and comprehensive list of all of
Licensee’s Affiliates is identified in Schedule 14, which shall be
updated by Licensee from time to time at Licensee’s sole
expense.
18. TAXES. Licensee shall pay all
taxes and charges imposed by any government or taxing authority
(other than the United States or a subdivision thereof) with
respect to payments by Licensee to Licensor or transfer of rights
hereunder. Notwithstanding the foregoing, to the extent Licensee is
required by any applicable income tax law to withhold a portion of
the payment owing to Licensor hereunder, Licensor shall accept the
resulting net payment as due performance under this agreement.
Licensee shall, however, take all necessary steps to secure the
benefit of any reduction of withholding tax rate available under
treaty (provided that, as applicable, Licensor shall promptly
provide to Licensee any forms required to support a reduced rate of
withholding), and Licensee shall promptly provide Licensor with a
receipt for any tax withheld. Receipts should be sent to the
address specified on Schedule 13, which may be
updated from time to time by Licensor in writing.
19. GENERAL
PROVISIONS.
(a) Notices. All notices and other
communications given hereunder shall be deemed given to a Party if
sent to the addresses identified in Schedule 13 (or such new
address as shall be provided by proper notice under this provision
by the relevant Party): (i) the next Business Day after sending to
the address specified in Schedule 13 via express
overnight courier (e.g., Federal Express); (ii) the next Business
Day if delivered personally (including delivery by messenger);
(iii) the fifth Business Day after sending to the address specified
in Schedule 13 via
certified First Class U.S. Mail, return receipt requested; or (iv)
the next Business Day after sending to the email address specified
in Schedule 13,
provided that confirmation of receipt has been personally
acknowledged by recipient.
(b) Limitation of Liability.
LICENSOR SHALL NOT BE LIABLE IN ANY EVENT FOR LOSS OF PROFITS OR
GOODWILL, OR OTHER FINANCIAL LOSS OR SPECIAL, INDIRECT, INCIDENTAL,
COVER, PUNITIVE OR CONSEQUENTIAL DAMAGES, WHETHER OR NOT
FORESEEABLE AND EVEN IF LICENSOR HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
(c) Construction. EACH PARTY
ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED BY COUNSEL OF ITS OWN
CHOOSING IN THE NEGOTIATIONS, PREPARATION AND REVIEW OF THIS
AGREEMENT AND EACH PARTY FURTHER ACKNOWLEDGES THAT IT HAS READ THIS
AGREEMENT WITH ITS COUNSEL AND IS FULLY AWARE OF AND UNDERSTANDS
ALL OF ITS TERMS AND THE CONSEQUENCES THEREOF. IT IS AGREED BY THE
PARTIES THAT IN THE EVENT THAT AN AMBIGUITY OR QUESTION OF INTENT
OR INTERPRETATION ARISES, THIS AGREEMENT, INCLUDING ANY AND ALL
SCHEDULES ATTACHED HERETO, WILL BE CONSTRUED AS IF DRAFTED JOINTLY
BY THE PARTIES AND NO PRESUMPTION OR BURDEN OF PROOF WILL ARISE
FAVORING OR DISFAVORING ANY PARTY BECAUSE OF THE AUTHORSHIP OF ANY
PROVISION OF THIS AGREEMENT.
(d) Dispute Resolution. The Parties
will attempt to settle any claim or controversy relating to this
Agreement through negotiation in good faith and a spirit of mutual
cooperation. If those attempts fail to achieve a settlement, then
the dispute will be mediated by a mutually acceptable mediator to
be chosen by the Parties within [***]after written notice by either
Party demanding mediation. Neither Party may unreasonably withhold
consent to the selection of a mediator, and the Parties will share
the costs of mediation equally. The non-binding mediation hearing
shall be conducted within forty-five (45) calendar days after the
selection of the mediator. Each Party shall bear its own
attorney’s fees and other costs. Any mediation shall be
conducted in the English language. Any dispute that cannot be
resolved between the Parties through negotiation or mediation
within [***]of the date of the initial demand for mediation by one
of the Parties may then be submitted to the courts for resolution.
The use of any mediation procedures will not be construed under the
doctrines of laches, waiver or estoppel to affect adversely the
rights of either Party. Nothing in this Section will prevent either
Party from resorting to judicial proceedings if interim relief from
a court is necessary to prevent serious and irreparable injury to
that Party or to others. In addition, nothing in this Section shall
be construed as applying to disputes regarding (i) the Intellectual
Property Rights (including Confidential Information) of either
Party, (ii) payments due under this Agreement, or (iii) any claim
arising from or relating to Section 15 of this
Agreement.
(e) Governing
Law. This Agreement
shall be interpreted and construed in accordance with the laws of
the State of Illinois, without regard to its conflict of laws
principles, and venue for any dispute under this Agreement shall
lie in state or federal courts located in Cook County, Illinois.
The Parties hereby consent to the jurisdiction and venue of such
courts.
(f) Survival. Termination shall not
relieve either Party of the obligation to pay any sums due
hereunder. The following provisions and any Schedules referenced
therein shall survive according to their terms after Termination of
this Agreement: Sections
1, 2(c), 2(e), 2(f), 2(g), 2(h), 2(j), 3(b), 3(c), 3(e)-(h),
4(b)-(e), 4(g), 4(i), 5(c), 6-8, and 10-19.
(g) Assignment. This Agreement shall not be
assigned or otherwise transferred by the Licensee without the prior
written consent of the Licensor. Notwithstanding the above,
Licensee shall have the right to assign its rights and to delegate
its duties under this Agreement, with Licensor’s prior
written consent, which shall not be unreasonably withheld, to
wholly-owned subsidiaries of Licensee. In the event that Licensee
undergoes a substantial change of ownership, whether or not such a
change results from a merger, acquisition, consolidation or
otherwise, Licensee shall have the right to assign its rights and
to delegate its duties to such new owner under this Agreement,
provided that the substantial change of ownership does not result
in a substantial degradation in the nature of the Licensee’s
Motorola brand product mix, pricing structure, financial condition
or method of doing business. However, in any instance, Licensee and
its assignee shall remain joint and severally liable to Licensor
for all of the obligations assumed by it under the terms of this
Agreement.
(h) Entire Agreement;
Amendment. This
Agreement constitutes the entire understanding of the Parties with
respect to the subject matter hereof, and shall supersede any and
all prior communications, negotiations, correspondence, course of
dealings and other agreements between the Parties regarding such
subject matter. This Agreement may only be amended or modified in a
writing signed by both Parties. The terms and conditions of this
Agreement shall prevail notwithstanding any conflict with the terms
and conditions of any purchase order, acknowledgment or other
instrument submitted by Licensee.
(i) Currency. All sums set forth in
this Agreement and any schedules hereto are, and are intended to
be, expressed in United States dollars. All payments and
remittances due under this Agreement shall be paid in United States
Dollars at the “Foreign Exchange Rate.” For the
purposes hereof, the term “Foreign Exchange Rate”
means, for any particular currency, the spot rate for such currency
as quoted in the Wall Street Journal (to the extent that the Wall
Street Journal provides quotations therefore, or such other
resource that is mutually satisfactory to the Licensor and
Licensee) on the second Business Day prior to the date on which any
relevant payment hereunder is due.
(j) Waiver. No failure or delay by
any Party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. No terms or
provisions hereof shall be deemed waived and no breach consented to
or excused, unless such waiver, excuse or consent shall be in
writing and signed by the Party claimed to have waived or
consented. Any consent, waiver or excuse by any Party of a breach
of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach.
(k) Severability. If any provision of this Agreement is
found to be invalid, illegal or unenforceable, a modified provision
shall be substituted which carries out as nearly as possible the
original intent of the parties and the remaining provisions shall
in no way be affected thereby.
(l) Relationship of Parties.
The Parties hereto
are independent contractors and shall not be deemed to be partners,
joint venturers or agents of the other.
(m) Section Headings. This
Agreement contains paragraph headings solely for the convenience of
the reader, and such headings shall not affect or provide any
interpretation as to the meaning of this Agreement or the
Parties’ intentions.
(n) Third-Party Beneficiaries. The
Parties acknowledge and agree that the indemnified parties
contemplated by Section
15 above are intended third-party beneficiaries of this
Agreement, and may enforce the terms relating to the
indemnification rights set forth in Section 15 directly against the
Parties. The Parties further acknowledge and agree that no other
Person is an intended third-party beneficiary under this Agreement,
including without limitation Retailers and
Distributors.
(o) Parties in Interest. This
Agreement shall inure to the benefit of and be binding upon the
Parties and their respective successors and permitted assigns.
Except as provided in Sections 19(n) and (o), nothing
in this Agreement, express or implied, is intended to confer upon
any Person other than Licensor, Licensee or their respective
successors or permitted assigns any rights or remedies under or by
reason of this Agreement.
(p) Further Assurances. From time
to time, at the request of any Party hereto, and at the expense of
the Party so requesting, the other Party shall execute and deliver
to the requesting Party such documents and take such other action
as such requesting Party may reasonably request in order to
consummate more effectively the transactions contemplated
hereby.
(q) No Implied Assignments or
Licenses. Except as expressly set forth herein, nothing in
this Agreement is to be construed as an assignment or grant of any
right, title, interest, license or sublicense in or to any
Intellectual Property owned by or licensed to Licensor or any of
its Affiliates, including, without limitation, the Licensed Marks.
All rights with respect to the Product IP and Licensor’s
other Intellectual Property, other than those expressly granted
herein, are reserved.
(r) Force Majeure. No Party hereto
shall be in default by reason of any failure in performance of this
Agreement if such failure arises directly out of causes reasonably
beyond the direct control of such Party, including, but not limited
to, acts of God or of the public enemy, acts of terrorism, U.S. or
foreign governmental acts in either a sovereign or contractual
capacity, fire, wind, flood, accident, epidemic, restrictions,
strikes or freight embargoes or because of any law, order,
proclamation, regulation or ordinance of any governmental authority
or any other unforeseeable act or action of like character.
Notwithstanding any other provision of this Agreement (i) Licensee
has a duty to mitigate its nonperformance and any damages caused by
any force majeure event under this Section 19(r), and (ii)
Licensor shall have the right to Terminate this Agreement following
an extended period of Licensee’s nonperformance caused by a
force majeure event under this Section 19(q), with the
duration of such period of time to be determined by Licensor in its
reasonable discretion.
(s) Remedies Not Exclusive. Neither
Party shall be relieved of its liability for any breach of this
Agreement or its obligations accruing or occurring prior to or
resulting from any Termination of this Agreement, howsoever
occasioned. Any specific remedies provided to Licensor under this
Agreement are not exclusive, and do not in any way limit or
restrict Licensor’s right or ability to pursue any and all
other remedies available to Licensor at law or equity.
(t) Counterparts; Facsimile. This
Agreement may be executed in counterparts, each of which shall be
deemed to be an original, and each of which alone and all of which
together, shall constitute one and the same instrument, but in
making proof of this Agreement it shall not be necessary to produce
or account for each copy of any counterpart other than the
counterpart signed by the Party against whom this Agreement is to
be enforced. This Agreement may be transmitted by facsimile or via
portable document format (.pdf), and it is the intent of the
Parties for the facsimile or .pdf image (or a photocopy thereof) of
any autograph printed by a receiving facsimile machine or
transmitted via .pdf to be an original signature and for the
facsimile (or a photocopy thereof) and any complete photocopy or
.pdf image of the Agreement to be deemed an original
counterpart.
(u) No Litigation. It is agreed by
the Parties that Licensor’s and its Affiliates’
exclusive right to the ownership of the Licensed Marks and any
trademarks, trade names, domain names or social media accounts (and
handles therefor) associated therewith and their right to control
the design, nature, and quality of any products sold under any of
their trademarks, shall not be the subject of litigation unless
Licensor, its Affiliates and their respective licensors
specifically consent thereto in writing, it being conceded by
Licensee that Licensor’s, its Affiliates’ and their
respective licensors’ right to ownership of any of their
trademarks (whether registered or not) is absolute, and if
resisted, may be enforced by Licensor, its Affiliates and their
respective licensors through any and all acts and proceedings
available to it under the law.
[Signatures
on Next Page]
IN
WITNESS WHEREOF the Parties hereto have duly executed and delivered
this License Agreement as follows:
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LICENSOR:
MOTOROLA MOBILITY LLC
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LICENSEE:
ZOOM TELEPHONICS, INC.
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By:
/s/ David
Carroll
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By:
/s/ Joseph
Wytanis
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Name:
David Carroll
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Name:
Joseph Wytanis
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Title:
Executive Director, Brand Licensing
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Title:
President & CEO
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Date:
3/26/2020
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Date:
3/26/2020
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LICENSEE:
MTRLC, LLC.
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By:
/s/ Joseph
Wytanis
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Name:
Joseph Wytanis
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Title:
President & CEO
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Date:
3/26/2020
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