Moto Mods™ Certification Program

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Partner Certification

Upon entering the Moto Mods™ Partner Certification Program, partners will receive information to help them understand how to create safe and inter-operable Moto Mod products. This information includes reference designs for common Moto Mod architectures such as battery charging and digital audio. It also includes product requirements, test procedures, and a checklist to help partner ensure their designs will work correctly across the Moto Z family.

Partners entering the Moto Mods Partner Certification Program will receive the following information:

 

• Reference design packages (schematics, BOM, layouts) for common architectures

• Design guidelines documentation

• Certification Test Requirements documentation

• Self-Certification Test Form checklist

Ready to Partner with Moto? Fill out the form below.

Accelerator Program

To be considered for the Moto Mods Accelerator Program (MAP), all innovators must first complete the MAP application process. 

To successfully pass all stages of the MAP application process, innovators must provide the following documentation (provided as templates to all applicants):

- Marketing Requirements Document

- Product Requirements Document

- Functional Requirements Document

- Business Case

- Sales Deck

Successful applicants will receive critical feedback from industry veterans and will be formally invited to join the Moto Accelerator Program.

The Accelerator Program will provide step-by-step guidance, based on Moto's own best-practices, as well as providing support from industry veterans, to help remove the most common barriers faced by Mods innovators today and increase the potential success of your Mod concept.

Want to apply? Fill out the Developer License Agreement, and we will get in touch. 

CERTIFIED MOD DEVELOPMENT AND LICENSE AGREEMENT

 

 

This Certified Mod Development and License Agreement (together with the Exhibits, Schedules and Launch Addendums hereto, the “Agreement”) is entered into by and between Motorola Mobility LLC, a Delaware limited liability company, with a place of business at 222 Merchandise Mart Plaza, Suite 1800, Chicago, Illinois 60654, (“Licensor”) and you as an individual or the entity on whose behalf you are entering into this Agreement (“Licensee”).

 

WHEREAS, Licensee has obtained and utilized (or intends to obtain and utilize) Licensor’s proprietary MDK (as defined below) to design and develop a prototype of a certain feature-amplifying, modular accessory product (“Proposed Mod(s)”) to be compatible with certain devices developed and sold by Licensor (“Motorola Device(s)”);

 

WHEREAS, Licensee wishes to receive access to certain proprietary Specifications (as defined below) in order to more fully develop the Proposed Mod; and

 

WHEREAS, Licensee desires to certify compliance of the Proposed Mod(s) with Licensor’s Certification Criteria (as defined below), and thereafter market, sell, distribute and otherwise commercially exploit the Certified Mod(s) (as defined below) 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, by clicking “Agreed” below, hereby agrees to be bound by all terms and conditions of this Agreement as follows:

 

  1. DEFINITIONS. For the purposes of this Agreement, the following terms shall have the meanings stated:
    1. Access List” shall have the meaning set forth in Section 2(b).
    2. 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.
    3. Approved Samples” shall mean the pre-production samples of each Proposed Mod provided by Licensee in connection with the applicable Self Certification, which have been approved by Licensor in accordance with Section 3(b) and Schedule 2.
    4. 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.
    5. Certification Criteria” shall mean the minimum criteria provided to Licensee by Licensor or its designee related to the design, development, manufacture, implementation, use, maintenance, and/or provision of the Proposed Mod(s) that are required for Licensor’s approval thereof as a “Certified Mod.”
    6. Certified Mod(s)” shall mean those Proposed Mod(s) for which Licensee has submitted a Self-Certification and such Self-Certification has been accepted in writing by Licensor in accordance with Section 3(b), which (i) are enclosed in packaging and/or cartons bearing the Licensed Marks; (ii) are otherwise sold under or offered under any of the Licensed Marks; and/or (iii) are designed or manufactured to be compatible with any Motorola Device(s) (whether or not Licensee is granted a license to use the Licensed Marks in a Launch Addendum). The definition of “Certified Mod(s)” expressly excludes any product (including any previous Certified Mod comprising a Material Departure) for which written acceptance of Licensee’s Self-Certification has not been received from Licensor.
    7. Confidential Information” shall have the meaning set forth in Section 2(a).
    8. Contract Yearshall mean each consecutive twelve (12) month period during the Term commencing on the first (1st) day of January and ending on the thirty-first (31st) day of December, except that the first Contract Year shall commence on the Effective Date and end on the next December 31st, and each subsequent Contract Year shall be each succeeding twelve (12) month period during the Term.
    9. Defective Rate” shall mean the rate of return for defective Certified Mods, which shall not exceed three percent (3%) of such Certified Mods sold.
    10. Derivative Works” shall mean any and all enhancements, adaptions, developments and modifications to any Specifications, which are created or developed under this Agreement.
    11. Earned Royalties” shall mean the royalties earned by Licensor under this Agreement which shall be an amount equal to the Net Sales for the applicable Certified Mod multiplied by the corresponding Royalty Rate (in the event that Earned Royalties are to be calculated based on a percentage of Net Sales).
    12. Ethical Standards” shall mean the standards and policy set forth on Schedule 4.
    13. Excluded Channels” shall mean the channels of trade identified as “Excluded Channels” on Schedule 1 to the Launch Addendum.
    14. Independent Developments” shall have the meaning set forth in Section 8.
    15. Intellectual Property” shall mean, collectively, any and all intellectual property, including but not limited to, (a) patents and patent applications (including all reissuances, continuations, continuations-in-part, revisions, extensions and reexaminations thereof) and patent disclosures and inventions (whether or not patentable and whether or not reduced to practice); (b) trademarks, service marks, trade dress, trade names, Internet domain names, assumed names and corporate names, and any registrations, applications, extensions and renewals therefor; (c) published and unpublished works of authorship, whether copyrightable or not, and any registrations, applications, extensions and renewals therefor; (d) trade secrets; (e) databases; (f) computer programs, including operating systems, applications, routines, interfaces, and algorithms (whether in source code or object code); (g) inventions, discoveries, developments, improvements, concepts, ideas, know-how, designs, analyses, reports, business methods and processes, business models and plans, and documentation; (h) all other intellectual property, Confidential Information and proprietary rights; and (i) all tangible embodiments of the foregoing. For avoidance of doubt, “Intellectual Property” 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.
    16. Interface” shall mean the interface between any Proposed Mod or Certified Mod and a Motorola Device, specifically, (i) the physical alignment and attachment mechanisms, (ii) electrical contacts for use in control, data and power transfer, and other interface and connectivity functionality, and (iii) all other mechanisms for exchanging data between a Motorola Device and a Proposed Mod or Certified Mod.
    17. Launch Addendum” shall have the meaning set forth in Section 3(b).
    18. Licensed Mark(s)” shall mean the trademarks identified as “Licensed Marks” in Schedule 1 to the Launch Addendum.
    19. Licensee IP” shall have the meaning set forth in Section 16(a).
    20. “Licensor IP” shall have the meaning set forth in Section 16(b).
    21. Literature” shall mean all Certified Mod packaging or cartons, in-box materials (including without limitation all Certified Mod user guides and warranty statements), terms of use, and any other materials used in conjunction with the Certified Mod packaging, including without limitation packaging overlays.
    22. Losses” shall have the meaning set forth in Section 17(a).
    23. Manufacturer’s Warranty” shall have the meaning set forth in Section 9(b) below.
    24. Marketing 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, Certified Mod brochures, and any other material bearing or making reference to the Licensed Marks (if applicable under a Launch Addendum) and/or the Certified Mod(s).
    25. Material Departure” shall have the meaning set forth in Section 6(b).
    26. MDK” shall mean Licensor’s proprietary Moto Mods Developer Kit, comprising the software development kit (including the API, developer libraries, sample applications, software (source and object code) and tools), handsets, hardware and other devices, and related documentation.
    27. Modular Product” shall mean any accessory or other product that connects to and exchanges information with a smartphone or other electronic communications device via any interface (other than exclusively through a USB, Wi-Fi, Bluetooth and/or 3.5MM headphone jack connection).
    28. Moto Price” shall mean the price at which Certified Mod(s) will be sold directly to Licensor by Licensee or its Affiliates, as specified on Schedule 2 to the Launch Addendum.
    29. Net Salesshall mean aggregate gross receipts (the gross invoice amount(s) billed by Licensee or its Affiliates to retailers, distributors, consumers, or any other Person for the sale or provision of the Certified Mod(s) (including without limitation all Certified Mod(s) used as premiums, in combination sales, in bundles, as giveaways, or disposed of under similar methods of merchandising), including taxes and other governmental charges). For avoidance of doubt, Net Sales shall include any and all Certified Mods sold to Motorola at the Moto Price.
    30. Open Source Software” shall mean any computer program, including any modification, improvement, derivative work, release or correction, governed by the terms and conditions of a license compliant with the Open Source Initiative (here after OSI) principles defined in the following website: http://www.opensource.org/docs/definition.php.
    31. Payment Report” shall mean a statement in the form set forth on Schedule 3 to the Launch Addendum, which is to be provided by Licensee to Licensor as provided in this Agreement.
    32. Payment Report Certification” shall mean a statement in the form set forth on Schedule 4 to the Launch Addendum, which is to be provided by Licensee to Licensor as provided in this Agreement.
    33. Permitted Recipients” shall have the meaning set forth in Section 2(b).
    34. Person(s)” shall mean an individual or a limited liability company, corporation, partnership, trust, unincorporated organization, association or other entity.
    35. 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.
    36. Press Release Content” shall have the meaning set forth in Section 7(c).
    37. Proposed Mod” shall have the meaning set forth in the Recitals.
    38. Requirements” shall have the meaning set forth in Section 2(a).
    39. Royalty Rate” shall mean the rates identified as “Royalty Rate(s)” on Schedule 2 to the Launch Addendum.
    40. Self Certification” shall have the meaning set forth in Section 3(b).
    41. Sell-off Period” shall have the meaning set forth in Section 12(b).
    42. Shared Component Manufacturers” shall have the meaning set forth in Section 4(f).
    43. Software” shall mean any software, including all proprietary third party software and Open Source Software, whether provided separate from any hardware or embedded in any hardware, and all enhancements, improvements, updates and upgrades to such software, together with all associated documentation and specifications.
    44. Specifications” shall mean all information, data and materials relating to (i) the Interface, (ii) the MDK, (iii) any Motorola Device(s), and/or (iv) the design, development and/or manufacture of the Interface, the MDK and/or any Motorola Device(s), delivered by or on behalf of Licensor, including information supplied by any Licensor customer and/or Licensor Affiliates, directors, officers, employees, advisors, attorneys, advertising agencies, agents, or other Licensor representatives, to Licensee, regardless of the manner in which it is furnished, including, but not limited to, all product specifications, reference designs, schematics, design guidelines, best practices, certification requirements, certification checklists, test procedures, product plans, product images, drawings, computer files, software, product descriptions (product ID, name, functionality, etc.), launch schedules, technical specifications, and any materials which contain, otherwise reflect, or are generated from such information, and all Intellectual Property contained therein.
    45. Style Guide” shall mean the style guide that may be provided by Licensor to Licensee upon execution of a Launch Addendum, including the required trademark attribution statement, which may be updated by Licensor from time to time in its sole discretion upon notice to Licensee.
    46. Term” shall have the meaning set forth in Section 11.
    47. Territory” shall mean the jurisdiction(s) that are set forth in Schedule 1 to the Launch Addendum.
  2. CONFIDENTIALITY.
    1. Definition. All non-public information disclosed by Licensor pursuant to this Agreement, that is (i) in written, graphic, machine recognizable, and/or sample or prototype form, being clearly designated, labeled or marked as “Confidential Restricted”, or its equivalent, (ii) disclosed in oral disclosures indicated at the time of disclosure as “Confidential” or its equivalent, (iii) results obtained by examination, testing or analysis of any hardware, software or any component part thereof provided by Licensor, (iv) any and all software, including but not limited to source code or binary code, and any and all information related thereto, provided however, in the event Recipient wishes to evaluate such software not embedded in a prototype handset, a separate software evaluation will be required, or (v) disclosed by Licensor (orally, in writing or otherwise) and that Recipient should reasonably know, by its nature or the manner of its disclosure, to be confidential, including without limitation, the terms and conditions of this Agreement, the Specifications, and all other confidential information relating to any Motorola Device(s) (collectively, “Confidential Information”) will be kept strictly confidential by the Licensee pursuant to this Section 2, For any information shared by or received from Licensor, Licensee will also follow the instructions and requirements at http://www.motorola.com/MML-information-protection (“Requirements”). “Confidential Information” does not include any information that Licensee can demonstrate by documentation (A) is explicitly approved for release by written authorization of Licensor (including, but not limited to, via email), or (B) is lawfully obtained from a third party or parties without a duty of confidentiality.
    2. The Confidential Information is hereby deemed “Proprietary Information” as defined in the Requirements. Licensee will only grant access to the Confidential Information to: (i) its employees, or (ii) third party suppliers who have entered into a written non-disclosure agreement with Licensee containing terms at least as protective of the Confidential Information as those set forth in this Section 2 (collectively, “Permitted Recipients”). A list of all Permitted Recipients (“Access List”) will be maintained by Licensee and updated as necessary. Licensee shall provide Licensor a copy of the Access List upon request. Licensee shall be liable towards Licensor for acts and omissions of its Permitted Recipient(s) arising from their use of Confidential Information covered by this Agreement. Licensee will promptly inform Licensor of any Permitted Recipients that no longer need access to Confidential Information to perform their work function for Licensee, including but not limited to individuals whose employment with Licensee is being terminated. Confidential Information shall only be transmitted to Permitted Recipients using the encryption methods prescribed by Licensor, including secured/password protected, non-public email networks. Licensee will ensure that the Confidential Information, if transmitted in electronic format, shall only reside on a computer with industry standard hard disk encryption.
    3. Licensee will (i) not disclose Confidential Information to any third party unless so authorized by Licensor; (ii) restrict disclosure of Confidential Information to only those Permitted Recipients; (iii) not reverse engineer, de-compile or disassemble any Confidential Information; (iv) use the same degree of care as for its own information of like importance, but at least use reasonable care, in safeguarding against disclosure of Confidential Information; and (v) promptly notify Licensor upon discovery of any unauthorized use or disclosure of the Confidential Information and take reasonable steps to regain possession of Confidential Information and prevent further unauthorized actions or other breach of these non-disclosure obligations.
    4. In the event that Licensee or any of its representatives receives a demand or request to disclose all or any part of Confidential Information under the terms of a subpoena or order issued by a court of competent jurisdiction or under a civil investigation demand or similar process: (i) Licensee agrees to immediately notify Licensor of the existence, terms and circumstances surrounding such a demand or request such that Licensor has the opportunity to oppose such demand or request or seek a protective order or other similar relief; and (ii) after consultation with Licensor, if Licensee or its applicable representative is, in the reasoned opinion of its counsel, compelled by law or court order to disclose all or a portion of the Confidential Information, Licensee or its applicable representative may disclose only that portion of the Confidential Information that its counsel advises that it is legally compelled to disclose.
    5. All Confidential Information remains the property of Licensor and will not be copied or reproduced without the express written permission of Licensor (including, but not limited to, via email), except for copies that are absolutely necessary in accordance with this Agreement. Within ten (10) days of receipt of Licensor's written request, Licensee will return all Confidential Information to Licensor along with all copies and portions thereof, or certify in writing that all such Confidential Information has been destroyed. No license, express or implied, in the Confidential Information is granted other than to use the Confidential Information in the manner and to the extent authorized by this Agreement. Licensor makes no representation or warranty of any kind with respect to the Confidential Information.
    6. Licensee acknowledges and agrees that Confidential Information contains valuable Licensor trade secrets, and any breach or threatened breach of this Section 2 would cause Licensor and its Affiliates irreparable harm for which money damages alone will not be an appropriate or sufficient remedy. Licensee therefore agrees that Licensor or its affiliates are entitled to seek injunctive or other equitable relief to remedy or prevent any breach or threatened breach, without the necessity of posting bond. Such remedy is not the exclusive remedy for any breach or threatened breach, but is in addition to all other rights and remedies available at law or in equity. All losses liabilities, costs, charges, fees, fines, penalties, damages, duties and taxes and expenses (including reasonable court costs and attorneys’ fees) arising from a violation of this Section 2 are direct damages and are not, and will not be, limited by any other provision hereof.
    7. In the event Licensee requests and receives Prototypes from Licensor (defined in Schedule 1), the terms and conditions set forth in Schedule 1 shall also apply, in addition to the terms set forth herein.
  3. ACCESSORY DEVELOPMENT PROCESS.
    1. Release of Specifications. Upon execution of this Agreement by Licensee, Licensor will provide the Specifications to Licensee to be used for the sole purpose of developing and manufacturing the Proposed Mod(s) (and Certified Mods upon execution of an applicable Launch Addendum) in compliance with the Certification Criteria. Licensee shall be solely responsible for any and all testing, reporting or other procedures necessary to comply and/or certify compliance with the Certification Criteria (including all costs and fees associated therewith). Licensee may share the Specifications with only those of its employees, service providers, manufacturers, and Shared Component Manufacturers that require access to such Specifications in order to carry out the manufacture of such Proposed Mod(s) (and Certified Mods upon execution of an applicable Launch Addendum), who agree, prior to receipt of the Specifications, to treat such Specifications in accordance with the terms of this Agreement. Without limiting the generality of the foregoing, Licensee shall remain responsible for any breach of Section 2 by such employees, service providers, manufacturers, and Shared Component Manufacturers.
    2. Certification. Licensee shall evidence Licensee’s compliance with the Certification Criteria by electronically signing the digital self-certification checklist provided by Licensor, and shall provide requisite samples of the Proposed Mod to Licensor in accordance with Schedule 2 (“Self Certification”). At Licensee’s sole expense, Licensee must submit all required samples of final Proposed Mod(s) to Licensor and/or its designee(s) for approval in connection with Licensee’s Self Certification prior to production. When submitting a proposed Certified Mod for approval, Licensee shall follow and comply with all product submission templates, procedures, and instructions specified by Licensor and/or identified on Schedule 2, which may be updated by Licensor from time to time in its sole discretion upon written notice to Licensee. Once such Self Certification and requisite samples have been submitted by Licensee, Licensor will either (i) accept such Self Certification in writing, or (ii) specify any deficiencies identified in Licensee’s Self Certification for correction and/or additional submissions by Licensee. A separate Self Certification must be submitted for each Proposed Mod. Acceptance by Licensor of any Self Certification shall be granted by Licensor in its sole discretion in each instance. Upon receipt of Licensor’s written acceptance of a Self Certification, and prior to mass producing, selling, distributing or otherwise commercially exploiting any Certified Mod, Licensee shall enter into a separate written addendum setting forth any and all additional licenses, obligations, restrictions and/or other business terms relating to the Certified Mod (a “Launch Addendum”). A separate Launch Addendum must be entered into for each Certified Mod. For avoidance of doubt, no Certified Mod may be manufactured, sold, distributed or otherwise commercially exploited by Licensee prior to (A) Licensee’s receipt of Licensor’s written acceptance of a Self Certification, and (B) execution by Licensee and Licensor of a Launch Addendum in connection with the applicable Certified Mod. Further, any use of the Specifications for the manufacture, sale, distribution and/or other commercial exploitation of (1) any Proposed Mod(s) for which a Self Certification has not been accepted by Licensor or for which a Launch Addendum has not been entered, or (2) any products to be compatible with any device that is not a Motorola Device, constitutes a material breach of this Agreement by Licensee.
    3. Coordination. In Licensor’s discretion, Licensor may provide Licensee early access to Specifications relating to unreleased Motorola Device(s) for purposes of launching a Certified Mod contemporaneously with or immediately subsequent to such Motorola Device(s). In the event Licensee receives early access to such Specifications, Licensee acknowledges and agrees that it will not announce and/or launch any Certified Mod(s) hereunder in advance of the applicable official public announcement and launch of the applicable Motorola Device(s). Additionally, in such event, the Parties agree to work together in good faith to ensure their respective product launches are appropriately timed.
    4. Return of Specifications. Within ten (10) days of receiving a written request by Licensor for the return and/or destruction of Specifications for any reason (including without limitation any failure to comply with the Certification Criteria or other deficiencies in a Self Certification), Licensee shall, at Licensor’s option, return or destroy all Specifications furnished to the Licensee and/or any of its representatives by or on behalf of Licensor. Licensee and its representatives will also destroy all written material, memoranda, notes, copies, excerpts and other writings or recordings whatsoever prepared by Licensee and/or its representatives based upon, containing or otherwise reflecting any Specifications. The return and/or destruction of materials in accordance with the foregoing shall be certified to Licensor in writing by an authorized officer of the Licensee. The failure of Licensee to meet the Certification Criteria shall not relieve Licensee from any obligation to keep the Specifications confidential under this Agreement.
  4. GRANT OF LICENSE; OBLIGATIONS.
    1. Licensor Grant. Subject to all of the terms and conditions set forth in this Agreement, including, without limitation, written acceptance by Licensor of the applicable Self-Certification, Licensee’s execution of the applicable Launch Addendum, 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, during the Term and within the Territory, a limited, non-exclusive, non-sublicenseable and non-transferable right and license under the Licensor IP (excluding the Licensed Marks unless specifically authorized in a Launch Addendum) to: (i) develop, make, have made and manufacture the Proposed Mod(s), and (ii) upon execution of an applicable Launch Addendum, (A) make, have made, use, offer to sell, sell and import the Certified Mod(s) as specifically authorized in this Agreement, and (B) grant to retailers and distributors the right to resell such Certified Mod(s) in the Territory. Licensee may not sublicense or subcontract any of the rights granted to it under this Agreement unless specifically permitted herein. Licensee shall be liable to Licensor for any and all damages or losses that are caused by any action or omission by any Licensee manufacturers or service providers, as well as any unauthorized subcontractors, vendors or sublicensees. In addition, Licensor shall enforce all of the terms, conditions and standards set forth in this Agreement against all retailers, distributors, and any subcontractors, vendors and/or sublicensees.
    2. Licensee Grant. Subject to all of the terms and conditions set forth in the Agreement, and subject to any existing Licenses, Licensee hereby grants to Licensor and its Affiliates a worldwide, royalty-free, non-exclusive, non-transferable right and license under the Licensee IP to use, offer to sell, sell, import, distribute, market, promote, and service Certified Mod(s) to retailers, distributors and consumers (including, without limitation, the right to use Licensee’s name, logo and other Licensee trademarks for the purpose of advertising, marketing and promoting the Certified Mod(s), including in advertising content, marketing materials, social media and on Licensor’s websites). Further, with respect to Licensee Software, Licensee grants Licensor a non-exclusive, royalty-free, worldwide, perpetual, irrevocable, and sublicensable license, under Licensee IP, to do any of the following in connection with Motorola Devices: (i) reproduce, prepare derivative works of, display, perform and distribute Software provided in object code format; (ii) use, make, have made, import, export, offer to sell and sell Software provided in object code format; (iii) reproduce, distribute and prepare derivative works of Software provided in source code format, including modifying and compiling the Software, including any modified Software, into object code, and exercise the rights granted in subsections (i) and (ii) above for such Software and modified Software in object code format; (iv) use, make, have made, import and export the Software, including any modified Software, in source code format; and (v) grant Licensor’s distributors, customers and end users a non-exclusive, royalty-free, worldwide, perpetual and irrevocable right to use and distribute Software in object code format.
    3. Moto Purchases. At Licensor’s discretion, Licensor (or third party entities on Licensor’s behalf) may purchase Certified Mods directly from Licensee for sale and distribution, including without limitation, (i) to carriers, retailers and/or other distributors for re-sale, (ii) for sale as a bundle (whether packaged and sold as a bundle, or unpackaged and sold inbox, with the applicable Motorola Device), and/or (iii) for sale directly to end customers via Motorola’s website or any other Motorola channel. Licensee acknowledges and agrees that, in the event Licensor opts to purchase Certified Mods from Licensee for such purposes, any and all such purchases shall be subject to the specific terms and conditions set forth in the Purchase Terms and Conditions attached hereto as Exhibit A. Additionally, Licensee agrees that any and all Certified Mod(s) sold to Licensor (or to third party entities purchasing Certified Mods on Licensor’s behalf) by Licensee, or by any entity controlling, controlled by or under common control with Licensee, shall be in accordance with the Moto Price specified on Schedule 2 to the Launch Addendum.
    4. Rights Reserved by Licensor. All rights not expressly granted herein are reserved by Licensor. Licensor shall be permitted to use and license the use of any or all of the Licensor IP in any manner whatsoever, and nothing in this Agreement shall prevent or limit Licensor, its Affiliates, licensees or any other Person in privity with Licensor or its Affiliates from engaging in any activity relating to the Licensor IP, in any jurisdiction or in any channels of trade, including without limitation in the Territory.
    5. Sales Force and E-Commerce. Licensee shall employ, or otherwise engage, a reasonable number of representatives to support Licensee’s obligations under this Agreement whose responsibility (in whole or in part) shall be the development, merchandising, promotion, marketing and sales of the Certified Mod(s). 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 to assist in the promotion and sale of the Certified Mod(s). To the extent that Licensee participates in or is requested by Licensor to participate in the e-commerce portion of Licensor’s web site(s), 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.
    6. Manufacture of the Certified Mod(s). Licensee may request from Licensor a list of certain components necessary for production of the Certified Mod(s), to allow Licensee to source such components from original equipment manufacturers as specified by Licensor (“Shared Component Manufacturers”). Licensee agrees that it shall be responsible for the costs of verifying the compliance of each of Licensee’s service providers, manufacturers, Shared Component Manufacturers or other component suppliers with the Certification Criteria and Licensor’s other service provider/factory qualification audits and certification procedures, and agrees to promptly provide to Licensor or its designee such documentation as is requested by Licensor, or are otherwise reasonably necessary, to verify such compliance. Notwithstanding anything herein to the contrary, Licensee shall be liable to Licensor for any breach of this Agreement, including for any damages or losses relating to the Certified Mod(s) or Licensed Marks that are caused by any action or omission by any of its services providers, manufacturers, Shared Component Manufacturers or other component suppliers, as well as any subcontractors, vendors or sublicensees. Licensor may in its sole discretion, and at Licensee’s sole expense, require Licensee to stop shipments and provision of the Certified Mod(s) if such Certified Mod(s) are, in whole or in part, from an unauthorized source. Licensee shall ensure that each of Licensee’s manufacturers shall: (i) permit Licensor and its designee(s) to inspect and review such manufacturer’s facilities, quality control procedures and related records upon two (2) Business Days’ prior written notice; (ii) promptly stop production, provision and/or shipment of Certified Mod(s) if mandated by Licensor in its reasonable discretion; and (iii) permit Licensor and its designee(s) to inspect and review such manufacturer’s books of accounts, records and/or databases relating to the Certified Mod(s) upon two (2) Business Days’ prior written notice.
    7. Approval of Marketing Material(s) and Literature. Licensee shall promptly submit all required samples of proposed Marketing Materials and Literature (as specified on Schedule 2) to Licensor for approval prior to their publication or distribution. All approvals of Marketing Materials and Literature shall be provided in Licensor’s sole discretion, and Licensor may in its reasonable discretion direct Licensee to cease use of any Marketing Materials and/or Literature at any time upon written notice to Licensee. Without limiting the generality of the foregoing, Licensee shall comply with the procedures for the approval of Marketing Materials and Literature specified on Schedule 2, which may be updated from time to time by Licensor in its sole discretion upon written notice to Licensee.
    8. Limitations on License. Unless otherwise specifically approved in advance in writing by Licensor, neither this Agreement nor any Launch Addendum grants Licensee the right or license (or the right to confer upon any other Person the right or license) to (i) use the Specifications to develop, manufacture or otherwise produce any accessory or device other than a Certified Mod; (ii) grant any security interest in or to the Licensor IP or this Agreement; (iii) directly or indirectly source, manufacture, package, distribute, offer, provide or sell the Certified Mod(s) to any Person other than to retailers, distributors, consumers and other Persons in the Territory; (iv) liquidate any Certified Mod(s); (v) directly or indirectly distribute, offer, provide or sell the Certified Mod(s) through the Excluded Channels; (vi) confer upon retailers, distributors, suppliers, Shared Component Manufacturers, or any other Person the right to distribute, offer, provide or sell the Certified Mod(s) outside of the Territory; or (vii) grant any right in or to the Licensor IP to any Person, except as may be expressly granted herein. Licensee acknowledges and agrees that all rights to license the Licensor IP remain wholly owned by Licensor. Licensee shall neither acquire nor confer any right(s), license(s) or sublicense(s) to the Specifications 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/or in any Launch Addendum, and all rights not expressly granted are reserved by Licensor, its Affiliates and their respective licensors.
    9. 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 or used in the Certified Mod(s), 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 Certified Mod(s).
    10. Compliance. Licensee agrees to provide in Schedule 6 of the Launch Addendum a list of all Software that is included in, integrated with or necessary for the use of the Certified Mod. Licensee represents and warrants that the applicable Certified Mod does not include any Software not identified on Schedule 6 of the Launch Addendum. Licensee represents and warrants that it has all necessary rights to incorporate the Software in or to use the Software with the Certified Mod and has the rights to grant any required license, sublicense or other permission to end users of the Certified Mod in order for such end users to use the Certified Mod. Licensee represents and warrants that it is and shall during the Term of this Agreement remain in full compliance with any and all obligations imposed by the respective licenses, including any and all proprietary licenses and Open Source Software licenses, under which Licensee has obtained its rights to use and permit others to use the Software. Licensee represents and warrants that no Software is subject to or will subject any of Licensor’s software or products to any “copyleft” or other similar obligation or condition (including any such obligation or condition under any “open source software,” “free software” or other similar license or agreement, including without limitation the GNU General Public License, the GNU Lesser General Public License, and the Lesser/Library GPL, that requires the Software or any of Licensor’s proprietary software to (a) be disclosed or distributed in source code form, (b) be licensed for the purpose of making derivative works, (c) be redistributable at no or minimal charge; or (d) otherwise imposes any limitation, restriction, or condition on the right or ability of Licensor to sell, offer for sale, license or distribute any of Licensor’s products or software on terms of its choosing.
    11. Software Updates. Licensee shall notify and make available to Licensor at no additional cost Licensee Software updates, new versions patches, bug fixes or other modifications of Licensee Software (including any source code therefor) for the current version of the Certified Mod. Licensor may, in Licensor’s sole discretion and on such terms as the parties may hereafter agree on in writing, push any such Software updates or new versions to existing Motorola Devices. Further, Licensee shall use reasonable efforts to promptly incorporate in the production of Certified Mods all Software updates, new versions, patches, bug fixes or other modifications to the Certified Mods and cease incorporation of any earlier release of Licensee Software in the production of Certified Mods. Any such Licensee Software update or new version is subject to all terms and conditions of this Agreement, including all representations and warranties. Before any Software update or new version is first provided to Licensor, Licensee will perform a Software audit and deliver the findings to Licensor. The Software audit is an automated scan of the source code to identify: (a) the origin and licenses of all software included in the Software; and (b) the license obligations associated with any open source or third party software in the Software.
    12. 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 Certified Mod(s), as well as all costs associated with warehousing the Certified Mod(s), storage and operational costs relating to warehousing the Certified Mod(s), cross-docking fees and all other such charges relating to the Certified Mod(s).
    13. Recycling, Waste and Other Compliance. As further set forth in Section 15(b) of this Agreement, Licensee shall be responsible for complying with all applicable federal, state, provincial and local laws, treaties and regulations applicable to the Certified Mod(s), 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 Certified Mod(s). 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 reasonably 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.
    14. Exclusivity. Unless Licensor has consented beforehand in writing, during the Term and for a period of six (6) months immediately following the expiration or termination of this Agreement, Licensee agrees that it will not develop any Modular Products similar to the Certified Mod(s) for or on behalf of any third party engaged in the mobile device or mobile technology industry, including, but not limited to, competitors of Licensor.
  5. PAYMENTS AND REPORTS.
    1. 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 12(b) herein) pursuant to the terms of this Section 5.
    2. Statements and Payments. On or before the fifteenth (15th) day of each calendar quarter during the Term and any Sell-off Period, Licensee shall submit a full, accurate, and detailed Payment Report for the immediately preceding calendar month, including, at a minimum, the information pertaining to the fields set forth on Schedule 3 of the Launch Addendum (including, without limitation, license title/description (e.g., “Moto Mods Licensing Program”), as well as the identity of the retailers, distributors and consumers to which the Certified Mod(s) have been sold, a statement of Net Sales and number of units of all Certified Mods sold in each jurisdiction in the Territory, and any such other information as reasonably requested by Licensor), which may be updated from time to time by Licensor in its reasonable discretion. On or before the fifteenth (15th) day following the end of each calendar quarter, 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 2 of the Launch Addendum. Such Earned Royalty payments shall (i) match the amounts set forth in applicable Payment Report, (ii) be separate and apart from any and all other licensing program payments which may be owed to Licensor by Licensee, and (iii) include a title/description (e.g., “Moto Mods”) with such payment/wire transfer to allow Licensor to identify such payment. Licensee shall obtain all necessary government approvals as may be required to permit it to remit payments to Licensor. Failure to comply with the requirements of this Section 5(b) shall constitute an event of default permitting Licensor to terminate this Agreement pursuant to the terms of Section 11(a) of this Agreement, without limiting any other remedies at law or equity to which Licensor may be entitled.
    3. Retailer Holdback, Chargebacks and MDF. Licensee shall be solely responsible for all costs and charges associated with the Certified Mod(s), 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 Certified Mod(s), and Licensee shall be solely responsible for the costs of all such MDF programs, in-store fixturing and display costs.
    4. Late Fees. 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. Any payment not received from Licensee by the due date shall accrue late charges at the rate of twelve percent (12%) per annum (one percent (1%) per month), or the maximum rate permitted by applicable law, whichever is lower, from the date such payment was due until the date paid.
  6. QUALITY.
    1. Certification Criteria. The Certified Mod(s) shall be designed, developed, manufactured and assembled by Licensee. Licensee acknowledges that all Certified Mod(s) shall incorporate state of the art technology and form factors, consistent with similar manufacturers and providers of comparable products. Further, the Certified Mod(s) shall at all times be in compliance with the Certification Criteria. In the event Licensor at any time believes in its reasonable discretion that such Certified Mod(s) do not materially conform to any Certification Criteria and/or other reasonable requirements of Licensor, the Parties shall work together to correct any such deficiencies in the Certified Mod(s) prior to production and development.
    2. Changes. Licensee covenants that it shall not, without the prior written approval of Licensor, make any material changes to any Certified Mod as compared to the Approved Samples thereof, (a “Material Departure”). A “Material Departure” includes without limitation material changes to the form, design, features, fit, function, performance, quality, reliability, support, warranty or service of the Approved Samples. Licensee also shall provide Licensor prompt written notice of any other changes to a Certified Mod as compared to the Approved Samples thereof that do not constitute a Material Departure. In the event of any Material Departure in a Certified Mod, Licensee shall submit a new Self-Certification for such Certified Mod. For avoidance of doubt, Licensee shall not manufacture, sell, distribute or otherwise commercially exploit any Certified Mod containing a Material Departure prior to receiving Licensor’s written acceptance of the Self-Certification for such modified Certified Mod. If there is an unauthorized Material Departure made or distributed by Licensee, Licensor shall have the right to require that Licensee correct such Material Departure upon a 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 Certified Mod(s) embodying the Material Departure and/or terminate this Agreement and/or any Launch Addendum pursuant to Section 11(c).
    3. Quality Assurance. Licensee shall take all commercially reasonable actions to ensure that the Certified Mod(s) 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 discretion. Without limiting the generality of the foregoing, Licensee shall (i) submit, at Licensee’s sole expense, all required samples of Certified Mod(s) to Licensor or its designee(s) for ongoing quality control purposes during the Term, and (ii) comply with the minimum quality assurance procedures specified on Schedule 2. In addition, every sixty (60) days during the Term and any Sell-off Period, Licensee shall provide Licensor all quality assurance reports specified on Schedule 2. Licensee acknowledges and agrees that Licensor shall have the right to take all actions, including the invocation of its rights under Section 11, which it deems necessary to ensure that Certified Mod(s) sourced, manufactured, offered, provided, serviced, distributed and/or sold hereunder are consistent with the reputation and prestige of Licensor or the Licensed Marks (if applicable under a Launch Addendum) as a designation for quality products and services, all as determined in Licensor’s sole discretion.
    4. Defective Return Rate. Licensee shall ensure that the actual defective return rate for each model of the Certified Mod(s) 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 Certified Mod model distributed by Licensee in any month during the Term exceed the Defective Rate, in addition to the remedies set forth in Section 6(e) below, Licensor may in its sole discretion immediately terminate this Agreement and/or any Launch Addendum. Upon a termination of this Agreement for Licensee’s breach of this Section 6(d), Licensee shall immediately discontinue manufacturing, assembling, offering, providing, selling, distributing and sourcing the Certified Mod(s), shall immediately discontinue all use of the Licensed Marks (if applicable under a Launch Addendum), and shall have no Sell-off Period under Section 12(b).
    5. Remedial Measures. In the event that any material quality issue arises with respect to any Certified Mod, or any Licensee service provider(s), manufacturer(s), suppliers, or the manufacture, distribution, provision, service, return, repair, customer service, or support of the Certified Mod(s) and/or the Defective Rate(s) exceed the standards set forth in this Agreement (individually and collectively, a “Material Issue”), Licensor may in its sole discretion require Licensee to take remedial measures to remediate the Material issue, including, but not limited to, (i) developing and following a written remedial action plan, (ii) requiring Licensee to stop production, provision and shipment of the affected Certified Mod(s), and/or (iii) recall such affected Certified Mod(s). Licensee’s failure to timely comply with its obligations shall constitute cause for immediate termination of this Agreement with no Sell-off Period under Section 12(b).
    6. Serial Numbers. Unless otherwise agreed by Licensor, the Certified Mod(s) shall carry a unique identifier (e.g., a tool id and manufactured date) 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 Certified Mod. Additionally, Licensee acknowledges and agrees that required third party components necessary for the manufacture of the Certified Mod(s) contain pre-programmed unique identifiers, and such pre-programmed unique identifiers will be read out at build time and tracked through to shipment by Licensee. Licensee shall ensure that Licensee as well as all of Licensee’s manufacturers and service providers have implemented systems sufficient to enable such tracking and to facilitate all reporting to Licensor regarding the Certified Mod(s) required under this Agreement. Licensee shall at its sole expense promptly and fully comply with all anti-counterfeiting programs and initiatives relating to the Certified Mod(s) as directed by Licensor in its sole discretion. 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 programs and initiatives.
  7. MARKETING PARTICIPATION.
    1. Participation Pledged. Throughout the Term, Licensee shall use commercially reasonable efforts to promote the provision and sale of the Certified Mod(s) to retailers, distributors and consumers in the Territory. Further, Licensee shall use commercially reasonable efforts to cooperate with Licensor to support any marketing programs that may be developed by or for Licensor for the benefit of all licensees, which may include direct participation in sales and retailer presentations and shows, as well as joint sales and marketing programs developed by Licensor.
    2. Public Announcements. Licensor shall provide Licensee with pre-approved content that may be incorporated by Licensee in any Press Releases issued by Licensee in connection with the Certified Mod (“Press Release Content”). Neither Licensee, its suppliers, manufacturers, Shared Component Manufacturers, 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 Motorola Device that is not in material compliance with the Press Release Content.
    3. Certified Mod(s) for Licensor. Licensee shall provide up to ten (10) samples of each Certified Mod annually to Licensor, upon Licensor’s request, at no charge. Licensor may at its election purchase additional Certified Mod(s) directly from Licensee at Licensee’s actual and reasonably-substantiated cost for the applicable Certified Mod plus ten percent (10%). Such Certified Mod(s) may be used by Licensor only for internal purposes in Licensor’s sole discretion, provided, further, that Licensor shall not resell such Certified Mod(s). The parties acknowledge and agree that no Royalties shall be due for Certified Mod(s) provided to Licensor by Licensee pursuant to this Section 7(d).
  8. NON-ASSERTION. Licensee acknowledges and understands that Licensor may be working independently or with third parties to develop its certain modular technology or other products which may be similar to the Proposed Mod(s) and/or Certified Mod(s) (“Independent Developments”). In addition, Licensee acknowledges and understands that third party licensees are licensed by Licensor to supply under the Licensed Marks third party product(s) that are similar to the Proposed Mod(s) and/or Certified Mod(s). As between Licensor and Licensee, (a) Licensor shall own and retain ownership of all rights, title and interest in and to all Intellectual Property arising from such Independent Developments; and (b) nothing in this Agreement shall be construed to prevent Licensor from doing anything that is not precluded by applicable law nor in themselves render the Independent Development to be deemed a “modification, improvement, enhancement or derivative work” of the applicable Proposed Mod and/or Certified Mod. Licensee hereby covenants and agrees that neither Licensee nor any of its Affiliates will, directly or indirectly, alone or through others, assert, bring, cause to be brought, threaten to bring, cooperate or participate in the commencement of any claim, action or proceeding in any tribunal or government agency against Licensor, its Affiliates or any other third party licensee or manufacturer in connection with such Independent Developments, including Intellectual Property related thereto and/or use of any of the Licensee IP, and hereby waives and releases Licensor, its Affiliates and its third party licensee and manufacturers from any and all such claims.
  9. PRODUCT WARRANTY; SERVICE.
    1. Warranty Obligation. During the Term of this Agreement and thereafter as set forth below and on Schedule 8 to the Launch Addendum, Licensee shall be responsible and liable for providing, either directly or through its designated service providers, all post-sales, return, repair, customer support and other services relating to the Certified Mod(s) and the Manufacturer’s Warranty for such Certified Mod(s) at Licensee’s sole expense.
    2. Manufacturer’s Warranty. Licensee shall provide at its sole expense a limited product warranty to the original purchaser, for a duration of no less than twelve (12) months from the purchase date of such Certified Mod, which shall warrant that the Certified Mod is 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 Certified Mods in the Territory (the “Manufacturer’s Warranty”). In addition, Licensee shall be solely responsible for providing, either directly or through its designated service providers, all post-sales, return, repair, replacement, customer support and other services relating to the Certified Mod(s) or the Manufacturer’s Warranty at Licensee’s sole expense, including without limitation all 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.
    3. Warranty Services. All post-sales, return, repair, customer support and other services relating to the Certified Mod(s) 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 8 to the Launch Addendum; (ii) all industry-standard service levels for comparable products provided or sold in the Territory; and (iii) all applicable federal, state, provincial and local laws, treaties and regulations.
    4. 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 Certified Mod(s). Licensee shall promptly provide Licensor and its designee(s) full access to such records and database(s) upon Licensor’s request.
  10. RECORDS; DISCREPANCIES.
    1. Records. Licensee shall, and shall cause all of its manufacturers, suppliers, service providers, and all Shared Component Manufacturers to, keep accurate books of account, records and databases covering all transactions relating to this Agreement. Within ninety (90) days after each Contract Year, Licensee shall provide Licensor with the Payment Report Certification certifying that each of the Payment Reports from the previous Contract Year is true and correct in all respects.
    2. Audit. Licensor, its representatives and designees, upon three (3) Business Days’ prior written notice, shall have the right, during reasonable business hours, to freely and fully examine such books of account, records and databases in the possession or control of Licensee and/or any of its manufacturers, suppliers, service providers and/or all Shared Component Manufacturers 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 for at least two (2) years after the effective date of expiration or termination of this Agreement, howsoever occasioned.
    3. Discrepancies. In the event that Licensor or its representatives or designees determine, in the course of any examination under Section 10(b) 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 ten (10) Business Days after delivery of written notice of the error in accordance with the payment instructions set forth in Schedule 2 of the Launch Addendum (as may be updated by Licensor from time to time), together with any late fees owed to Licensor pursuant to Section 5(f) above. If the amount of any underpayment equals three percent (3%) 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 ten (10) Business Days after receipt of an invoice therefor.
  11. TERM AND TERMINATION. Unless earlier terminated in accordance with this Section 11, this Agreement shall commence as of the Effective Date, and shall continue in full force and effect for a period of one (1) year following such Effective Date (“Initial Term”). Thereafter, this Agreement shall automatically renew for successive one (1) year periods (each, a “Renewal Term,” and together with the Initial Term, the “Term”) unless either Party provides the other Party written notice of its intent not to renew at least sixty (60) days prior to the expiration of the then current Term. Notwithstanding anything to the contrary in this Agreement, this Agreement and/or any Launch Addendum may be earlier terminated in any manner provided below:
    1. 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, ten (10) days to remedy its breach, or (ii) in all other cases, thirty (30) days 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 and/or any Launch Addendum may be terminated in the sole 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 and/or any Launch Addendum may be terminated in the sole discretion of the non-breaching Party upon delivery of written notice to the breaching Party.
    2. Insolvency. Licensor may terminate this Agreement effective immediately upon delivery of written notice to Licensee if the Licensee: (i) 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 thirty (30) days 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 thirty (30) days after such appointment.
    3. Immediate Termination. Notwithstanding anything herein to the contrary, Licensor may terminate this Agreement effective immediately upon written notice to Licensee upon Licensee’s breach of Sections 2, 3(b), 3(c), 4(g), 6(b), 6(c), 6(e) and/or 14 (or any Schedules referenced therein), as well as according to the terms of Sections 11(a) and/or 11(b).
    4. By Licensor. Licensor shall have the right to terminate this Agreement and/or any Launch Addendum for any or no reason upon sixty (60) days prior written notice to Licensee.
  12. EFFECT OF TERMINATION.
    1. For any Reason. Subject to Section 12(b), upon the effective date of expiration or termination of this Agreement for any reason, all Launch Addendums shall automatically terminate and all rights and licenses granted by Licensor to Licensee hereunder shall immediately cease, 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 Certified Mod(s) pursuant to the terms of this Agreement. In addition, Licensee shall be obligated to fulfill any and all Orders submitted by Licensor prior to the effective date of expiration or termination of this Agreement in accordance with Exhibit A. The expiration or termination of this Agreement for any reason 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 the effective date of expiration or termination of this Agreement: Sections 1, 2, 3(d), 4(d), 4(m), 5(a), 5(d), 6(c), 6(e), 8-10 and 12-19.
    2. Cessation of Use. If this Agreement terminates as a result of a breach of any of Licensee’s payment obligations hereunder, or as a result of any quality or safety issue relating to any Certified Mod(s) as determined in Licensor’s sole discretion, Licensee shall immediately (i) discontinue sourcing, manufacturing, packaging, assembling, providing, selling and distributing the Certified Mod(s) and shall immediately discontinue any and all other use of the Licensed Marks (if applicable under a Launch Addendum), and (ii) cease accepting and fulfilling purchase orders for the Certified Mod(s). If this Agreement is terminated for any other reason, Licensee shall have, and shall allow any retailers and distributors, a period of six (6) months (the “Sell-off Period”) to (1) finish manufacturing Certified Mod(s) either in process or committed pursuant to orders that may not be canceled by Licensee without cost or penalty, and (2) promote, advertise, distribute and sell the Certified Mod(s); provided, however, that Licensee may not stockpile Certified Mod(s) in anticipation of the expiration or termination of this Agreement and, at the option of Licensor, Licensor may purchase all unsold Certified Mod(s) 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.
    3. Accounts Receivable. Upon the termination of this Agreement, notwithstanding anything to the contrary herein and subject to Section 12(d), all Earned Royalties due and owing by virtue of Certified Mod sales theretofore shall become due and payable within thirty (30) days of the effective date of such termination. All Earned Royalties generated by virtue of Certified Mod(s) sold or provided to retailers, distributors and consumers during any applicable Sell-off Period shall be due within thirty (30) days after the conclusion of the Sell-off Period.
    4. 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.
  13. INSURANCE.
    1. Throughout the Term of this Agreement, and for the period of time specified in Schedule 3, Licensee shall at its sole cost and expense obtain and maintain, and shall ensure that its manufacturers and service providers 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 3.
    2. 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 3 as additional insureds, and which also provides that such insurance shall not be canceled or changed unless at least thirty (30) days’ 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 3 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 3. Licensee shall also ensure that its insurers waive their rights of subrogation against Licensor and any other additional insureds identified in Schedule 3.
    3. 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 a Launch Addendum prior to Licensee’s provision to Licensor of evidence of the insurance policies required under this Section 13.
  14. EXPORT. Licensee represents and covenants that it is aware of all pertinent export laws and regulations relating to the Certified Mod(s), Specifications and Licensed Marks and will 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 Specifications or 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 Certified Mod 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.
  15. REPRESENTATIONS, WARRANTIES AND COVENANTS.
    1. By Licensee. Licensee represents, warrants and covenants to Licensor that: (i) it has the full power and authority to enter into this Agreement and to perform its obligations hereunder; (ii) the Certified Mod(s) (excluding the Specifications) will be Licensee’s original creation, and will not incorporate, disclose or otherwise use any trade secrets, works of authorship or other property of any third party; (iii) the Certified Mod(s) 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 Certified Mod(s) shall be of merchantable quality, and the Certified Mod(s) shall be manufactured and shall perform in conformance with Approved Samples and the Certification Criteria; (v) Licensee shall not distribute or sell any used, refurbished or reconditioned Certified Mod(s) without Licensor’s prior written authorization; (vi) Licensee shall not directly or indirectly offer, distribute, provide or sell Certified Mod(s) outside the Territory (or otherwise in violation of this Agreement); (vii) the Certified Mod(s) (including their labeling and packaging) shall not violate or infringe any third-party Intellectual Property right 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; (viii) 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 Certified Mod(s); (ix) Licensee shall provide a Manufacturer’s Warranty to end-users of the Certified Mod(s) in accordance with the terms of this Agreement and in compliance with all applicable laws and regulations; (x) neither Licensee, its manufacturer(s), suppliers, service providers, nor any Shared Component Manufacturer(s) will violate any of the terms or conditions of the Ethical Standards in Schedule 4, including without limitation by producing, manufacturing, assembling, packaging, servicing or distributing any Certified Mod(s) by or in connection with the use of forced labor, prison labor, forced or illegal child labor or Conflict Minerals (as defined in Schedule 4); (xi) the Certified Mod(s) 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; (xii) Licensee shall use commercially reasonable efforts to exploit all of the rights granted to it under this Agreement; (xiii) 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; and (xiv) notwithstanding any other provisions in this Agreement, in the event Licensee is granted a license to use the Licensed Marks under the Launch Addendum, Licensee shall not make any use of the Licensed Marks in the Excluded Channels, including without limitation marketing, promoting, distributing or selling any Certified Mod(s) through the Excluded Channels.
    2. Compliance with Laws. Licensee represents, warrants and covenants that all Certified Mod(s) shall be sourced, imported, manufactured, processed, packaged, labeled, tagged, tested, certified, accurately marked, weighed, inspected, distributed, shipped, offered, provided, sold, repaired and serviced in compliance with all applicable industry standards and all applicable federal, state, provincial and local laws, treaties and regulations, including, without limitation, FCC and FDA regulations and requirements and/or other similar applicable regulations (including in connection with any re-certifications, change notifications and/or other filings necessary as a result of any changes in the underlying Motorola Device), 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, energy, 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 promptly upon Licensor’s request. Without limiting the foregoing, Licensee also 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 Certified Mod(s).
    3. By Licensor. Licensor represents and warrants that it has (i) the right to grant to Licensee the licenses granted hereunder and in the Launch Addendum which, notwithstanding any other provisions in this Agreement, do not include use of the Licensed Marks 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.
  16. INTELLECTUAL PROPERTY.
    1. Licensee IP. As between Licensor and Licensee, Licensee shall own and retain ownership of all rights, title and interest in and to the Certified Mod(s), together with all Intellectual Property embodied therein and all derivative works thereof (excluding, for avoidance of doubt, any and all Licensor IP), which may be incorporated into the Certified Mod(s) by Licensee (collectively, “Licensee IP”).
    2. Licensor IP. As between Licensor and Licensee, Licensor shall own and retain ownership of all rights, title and interest in and to (i) the Licensed Marks (and all goodwill associated therewith), (ii) the Specifications (including the MDK and the Interface), (iii) all Derivative Works, and (iv) the Confidential Information, together with all Intellectual Property embodied therein (collectively, “Licensor IP”). Further, Licensee acknowledges and agrees that: (A) the Licensed Marks are famous and there is substantial goodwill associated with the Licensed Marks; and (B) all use of the Licensed Marks pursuant to any license granted in the Launch Addendum shall inure exclusively to the benefit of Licensor, its Affiliates and their respective licensors.
    3. Licensee covenants that it shall not at any time: (i) challenge the right, title or interest of Licensor, its Affiliates and their respective licensors in the Specifications, the Licensed Marks or any patents, trademarks, trade names, copyrights or domain names owned by or licensed to Licensor or its Affiliates; (ii) 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 Specifications or any Intellectual Property associated therewith; (iii) represent to any third party that Licensee has any ownership or rights with respect to the Specifications or Licensed Marks or any Intellectual Property associated therewith, other than any specific rights granted to Licensee herein; or (iv) 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 or domain names associated therewith. 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 Certified Mod model number or serial number.
    4. Trademark 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 or domain names 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 promptly sign any documents requested by Licensor for such purpose.
    5. Notice of Infringement. Licensee shall notify Licensor promptly in writing of any actual or potential infringements or imitations by others of the Specifications and/or Licensed Marks that come to Licensee’s attention during the Term of the Agreement.
    6. 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 sole discretion, to pursue infringers of the Specifications and Licensed Marks and any Intellectual Property associated therewith. Licensee agrees to assist Licensor, its Affiliates and their representatives and designee(s) (at Licensor’s expense) to the extent necessary to protect any of Licensor’s and its Affiliates’ rights in the Specifications and/or Licensed Marks and any Intellectual Property associated therewith. Licensee acknowledges and agrees that such assistance may include, without limitation: (i) assistance in the filing and prosecution of patent, trademark, trade dress, copyright or domain name registration applications or transfers; (ii) the publication of notices; and (iii) the doing of any other reasonable act or acts with respect to the Specifications and/or Licensed Marks and any Intellectual Property associated therewith, including the prevention of the use thereof by an unauthorized person, firm or corporation, which in the sole discretion of Licensor may be necessary or desirable under any law, regulation or decree of any jurisdiction(s).
    7. Violations. Licensee acknowledges and agrees that any violation of Sections 16(a)-(f) 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.
  17. INDEMNIFICATION.
    1. By Licensee. Licensee hereby agrees to be immediately responsible for, to immediately defend, and to immediately indemnify and hold harmless Licensor, its Affiliates, and their respective officers, directors, employees, shareholders, members, agents, representatives, 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) (collectively, “Losses”) resulting from any third party claim, demand or cause of action 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 Certified Mod(s); (ii) Licensee’s negligence, misconduct or breach in providing any post-sales, customer support, return, repair, or other services relating to the Certified Mod(s); (iii) any actual or threatened breach of this Agreement; (iv) Licensee’s actual or alleged violation of any of the laws of any governmental entity with respect to any of the Certified Mod(s); (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 Certified Mod(s), 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 Certified Mod(s) that comply with all laws and regulations; (vii) any imposition of waste and/or recycling charges pertaining to the Certified Mod(s); (viii) Licensee’s unauthorized use of the Licensed Marks or other Licensor IP; and/or (ix) any allegation that the Licensee IP, any Certified Mod or any portion thereof (other than the Licensed Marks and the Specifications provided by Licensor), infringe or otherwise violate any intellectual property or other proprietary rights of any individual or entity. Notwithstanding anything to the contrary in this Agreement, failure of Licensee to perform any of its obligations under this Section 17 shall give Licensor the right to terminate this Agreement, effective immediately upon delivery of written notice to Licensee.
    2. By Licensor. Provided that Licensee is in compliance with all of the terms, conditions and obligations imposed 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, representatives, parents, subsidiaries, successors and permitted assigns, from any and all Losses resulting from any third party claim, demand or cause of action relating to or arising out of (i) claims that the authorized use of the Licensed Marks in connection with the Certified Mod(s) pursuant to a Launch Addendum (if applicable) infringe any valid trademark rights of any third party, (ii) claims that any Motorola Device, not in combination with anything, infringes or otherwise violates any intellectual property or other proprietary rights of any third party, or (iii) any breach of Licensor’s representations and warranties in Section 15(c) herein. For the avoidance of doubt, Licensor has no obligation to indemnify or defend against any claim asserted against the combination of a Motorola Device and the Certified Mod(s), unless such claim is or could survive as a claim of indirect infringement against the Motorola Device alone. Notwithstanding anything to the contrary in this Agreement, failure of Licensor to perform any of its obligations under this Section 17 shall give Licensee the right to immediately terminate this Agreement, effective upon delivery of written notice to Licensor.
    3. 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 Indemnitor’s products, services, actions or marks are alleged or found by a court of competent jurisdiction to infringe a third party’s Intellectual Property or other proprietary rights, Indemnitor may: (i) procure for Indemnitee the right to continue the alleged or court-determined infringement, (ii) substitute a non-infringing alternative, (iii) modify the product, service, activity or mark to be non-infringing, or (iv) otherwise take remedial actions, as reasonably directed by Licensor, that are necessary to mitigate any damages resulting from such alleged or court-determined infringement, including halting the distribution and sale of Certified Mod(s) in whole or in part, or recalling Certified Mod(s) in whole or in part.
  18. TAXES; MDF. 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 reasonable 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 7 of the Launch Addendum, which may be updated from time to time by Licensor in writing. Licensee also shall be solely responsible for all costs and charges associated with the Certified Mod(s), including without limitation all retailer marketing development fund (MDF) programs, holdbacks, charge backs and other costs associated with MDF programs.
  19. GENERAL PROVISIONS.
    1. Notices. All notices and other communications given hereunder shall be deemed given to a Party if sent to the addresses identified in Schedule 7 of the Launch Addendum (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 below 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 7 of the Launch Addendum 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 7 of the Launch Addendum, provided that confirmation of receipt has been personally acknowledged by recipient.
    2. Limitation of Liability. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL LICENSOR OR ITS AFFILIATES, OR THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, SHAREHOLDERS, MEMBERS, AGENTS, REPRESENTATIVES, PARENTS, SUBSIDIARIES, LICENSORS, SUCCESSORS OR ASSIGNS BE LIABLE TO LICENSEE OR ANY OTHER INDIVIDUAL OR ENTITY FOR ANY INDIRECT, SPECIAL, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES UNDER THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, DAMAGES FOR LOSS OF PROFITS, LOSS OF REVENUE, LOSS OR CORRUPTION OF DATA, OR BUSINESS INTERRUPTION AND THE LIKE, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, OR OTHERWISE IN CONNECTION WITH LICENSEE’S USE (WHETHER OR NOT AUTHORIZED) OR INABILITY TO USE THE SPECIFICATIONS, REGARDLESS OF WHETHER SUCH DAMAGES ARISE IN TORT, CONTRACT, OR OTHERWISE, AND EVEN IF LICENSOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
    3. 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. For avoidance of doubt, the words “including” and “includes”, when following any general provision, sentence, clause, statement, term or matter, shall be deemed to be followed by, “but not limited to,” and but is not limited to,” respectively.
    4. 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.
    5. Assignment. This Agreement shall not be assigned or otherwise transferred by the Licensee without the prior written consent of the Licensor, provided in its sole discretion. Any attempted assignment or transfer by Licensee in violation of this provision shall be null and void. Licensor may freely assign this Agreement and any of its rights hereunder.
    6. 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.
    7. 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.
    8. Waiver. The failure of either Party to exercise or enforce any right conferred upon it by this Agreement shall not be deemed to be a waiver of any such right or operate so as to bar the exercise or enforcement thereof at any time or times thereafter. All waivers must be in writing signed by the Party waiving its rights.
    9. 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.
    10. Relationship of Parties. The Parties hereto are independent contractors and shall not be deemed to be partners, joint venturers or agents of the other.
    11. 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.
    12. Third-Party Beneficiaries. The Parties acknowledge and agree that the indemnified parties contemplated by Section 17 above are intended third-party beneficiaries of this Agreement, and may enforce the terms relating to the indemnification rights set forth in Section 17 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.
    13. 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(m) and (n), 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.
    14. 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.
    15. 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.
    16. 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 non-performance and any damages caused by any force majeure event under this Section 19(q), and (ii) Licensor shall have the right to terminate this Agreement following an extended period of Licensee’s non-performance 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.
    17. 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.
    18. 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.

 

EXHIBIT A

Purchase Terms and Conditions

 

1. ACCEPTANCE AND AGREEMENT. This Exhibit A is intended to supplement, and not replace, the main body of the Agreement, and such terms are hereby referenced and incorporated herein. Without limiting the foregoing, this Exhibit A contains the entire understanding between Motorola, on behalf of itself and its Affiliates, and Supplier, on behalf of itself and its Affiliates, concerning the subject matter hereof and supersedes all prior discussions, agreements and representations, and any terms and conditions in any quotation, proposal, bid, invoice or acknowledgment, or any other supplemental agreement between the Parties regarding such subject matter. Motorola’s payment of an invoice will be made only in accordance with the terms of this Exhibit A and will not be considered an acceptance of any terms and conditions proposed by Supplier’s documents. This Exhibit A applies solely to purchases by Motorola of Certified Mods from Supplier hereunder.

 

Motorola objects to any terms proposed by Supplier in any documents that add to, vary from, or conflict with the terms of this Exhibit A. This Exhibit A may only be amended by a document in writing signed by an authorized officer of each Party. Capitalized terms set forth herein not otherwise defined shall have the meanings ascribed in the main body of the Agreement. For purposes of this Exhibit A, the term (i) “Motorola” shall include Licensor and any third party entities placing an Order (as defined below) for Certified Mods on Licensor’s behalf or otherwise for the benefit of Licensor, and (ii) “Supplier” shall include Licensee and any Licensee-designated third party supplier fulfilling an Order on Licensee’s behalf. In the event of any inconsistencies between (a) the terms of this Exhibit A and the terms of the main body of the Agreement, or (b) the terms of this Exhibit A and the terms of any Order, in each case, the terms of this Exhibit A shall control to the extent of such inconsistency solely as such terms relate to the purchase by Motorola of Certified Mods from Supplier.

 

2. FORECASTING AND ORDERING.

 

    1. Unless directed by Motorola to use an alternate process or system, Supplier will use Motorola’s forecasting and ordering system at https://supplychain.motorola.com or another link as designated by Motorola. Alternatively, Motorola may issue purchase order forms for the purchase of Certified Mods. Supplier will accept and fill any and all such orders for Certified Mods made by Motorola, whether such order is placed using a written purchase order or through Motorola’s ordering and forecasting system (each, an “Order”). Supplier will manufacture and have available for direct ship the quantity of Certified Mods specified in the Order by the date specified in the Order.

 

    1. Under the applicable ordering and forecasting system:

 

      1. Motorola may issue a non-binding forecast providing up to a 12-month estimate of its anticipated requirements and will communicate its delivery requirements on a weekly basis through the ordering and forecasting system(s). Within 2 business days of the system reflecting the delivery requirements, Supplier will make delivery commitment(s) (“Delivery Commitments”) as set out below. Supplier will deliver Certified Mods in accordance with the Delivery Commitments. Delivery Commitments will include any Certified Mods in transit. If Supplier fails to make Delivery Commitments within the 2 business day period, the Delivery Commitments for that week will be deemed to be equal to the communicated delivery requirements.

 

        1. If the delivery requirements do not exceed 130% of the most recent Delivery Commitment, Supplier will make Delivery Commitments equal to the delivery requirements;

 

        1. If the delivery requirements exceed 130% of the most recent Delivery Commitment, Supplier will make Delivery Commitments equal to at least 130% of the previous week’s Delivery Commitments and will use best efforts to make Delivery Commitments equal to the delivery requirements; and

 

        1. If there is no prior Delivery Commitment or if the most recent Delivery Commitment is zero, Supplier will make Delivery Commitments equal to the delivery requirements.

 

      1. Motorola has the right to return, at Supplier’s expense, all Certified Mods that exceed the delivery requirements.

 

      1. Supplier will use best efforts to fill Orders (or portions of Orders) that request quantities that exceed prior forecasts.

 

      1. Supplier will use best efforts to reduce its inventory exposure whenever forecasts issued by Motorola change the demand for a Certified Mod, including but not limited to, attempting to return unused components and/or other materials without re-stocking charges, canceling pending purchase orders for components and/or other materials without cancellation charges, and/or using such components and/or materials for other customers to manage its inventory whenever Motorola’s forecast changes. All of these efforts will be at no charge to Motorola, and Supplier will maintain written records detailing its efforts.

 

      1. All raw material, work-in-progress, and finished goods will be consumed on a first-in, first-out basis. Upward Certified Mod demand fluctuations will offset downward Certified Mod demand fluctuations.

 

    1. If Supplier’s ability to supply any Certified Mods in accordance with the then current forecast is constrained for any reason, Supplier will (i) fill Motorola’s Orders prior to fulfilling orders for other customers, (ii) immediately notify Motorola’s management of the issue for the purpose of resolving the supply constraint; and (iii) promptly provide a written report to Motorola specifying the number of Certified Mods available during the constrained period.

 

    1. Supplier will not require any Orders to be on “non-cancellable” or “non-returnable” terms or to have any minimum order quantity requirements, unless otherwise agreed in writing by Motorola.

 

    1. Supplier will issue invoices for Orders through http://www.ob10.com or other system designated by Motorola. All invoices will be paid net 90 days after receipt of both a correct invoice and the Certified Mods invoiced. Invoices will be sent directly to Motorola, and Motorola will be solely responsible for the payment of such invoices.

 

    1. Each invoice will separately state any duties or taxes for which Motorola is responsible. No tax will be charged if Motorola has an applicable certificate or other verification of exemption. Motorola will withhold and pay any required withholding tax and furnish Supplier with evidence of payments made by Motorola on Supplier’s behalf. Supplier's invoice will be paid net of any tax withheld.

 

    1. Motorola shall have the same rights and remedies under this Exhibit with respect to any Certified Mod ordered by third party entities on Motorola’s behalf as if Motorola purchased the Certified Mod directly from Supplier, and Motorola’s rights and remedies are not affected by any separate terms that may exist between Supplier and such third party entity. Any products purchased on behalf of Motorola by any third party entities shall count toward any volume or revenue-based thresholds. Motorola will not be responsible for, or incur or assume liability in connection with, any such third party entity.

 

3. SUPPLIER-OWNED INVENTORY.

 

    1. Upon Motorola’s request, certain Certified Mods will be covered by Motorola’s Supplier-owned inventory program and shipped to a warehouse designated by Motorola (“Hub”). Supplier will be responsible for entering into a separate warehousing agreement with the applicable third party in charge of each Hub that governs the care and custody of Certified Mods shipped to that Hub.

 

    1. Supplier may send Motorola a reasonable request in writing to review the status of Certified Mods Warehoused in a Hub for more than sixty (60) days. Within five (5) business days of completing the review, Motorola will notify Supplier of its proposed schedule to withdraw any such Certified Mods. Motorola will only be required to withdraw that number of Certified Mods consistent with Motorola’s forecast at the time of shipment to the Hub.

 

    1. For Certified Mods that are held in a Hub, such Certified Mods will not be deemed to have been delivered, and title to and/or risk of loss of such Certified Mods will not transfer from Supplier to Motorola, until such Certified Mods are withdrawn from the Hub. Supplier cannot withdraw Certified Mods from a Hub without Motorola’s prior written approval.

 

4. ORDER CANCELLATION, REDUCTION OR RESCHEDULING.

 

    1. Motorola may, without liability, cancel or reschedule delivery of any Order (in whole or in part).

 

    1. If Motorola cancels, reduces or reschedules any Order (in whole or in part) under this Agreement, the delivery requirements will automatically reduce accordingly.

 

5. INVOICING AND PAYMENT. If Supplier is participating in Motorola’s “Pay from Receipt” program, Motorola will pay Supplier in accordance with that program. Otherwise, Supplier will issue invoices through http://www.ob10.com or other Motorola designated system. Supplier will separately state on each invoice any import duties or sales, use, value added, excise or similar tax that Motorola is responsible for under this Exhibit A (and will not include such fees in the purchase price).

 

No tax will be charged if Motorola has an applicable certificate or other verification of exemption. To the extent that Motorola is required by law to withhold income-based taxes based upon Supplier’s income, Motorola will deduct such tax from the fees payable to Supplier and remit them to the appropriate government authorities. Motorola will deliver to Supplier an official receipt for any taxes withheld, and any other documents necessary to enable Supplier to claim a foreign tax credit. In advance of any amounts payable by Motorola under this Exhibit A, for a withholding tax rate, other than the standard U.S. 30% rate, to apply, Supplier will provide to Motorola, a completed U.S. Form W-8BEN (or completed Form W-8ECI) to support a reduced rate of U.S. tax withholding as a resident of a foreign country with which the United States has an income tax treaty. Upon the expiration of the Form W-8BEN (or Form W-8ECI), Supplier will provide a new Form W-8BEN (or Form W-8ECI) to Motorola. A Form W-8BEN (or Form W-8ECI) furnished with a U.S. taxpayer identification number will remain in effect for a minimum of 3 years or until a change in circumstances makes any information on the form incorrect. Supplier's invoice will be paid net of any tax withheld.

 

At Motorola’s request, Supplier will invoice and accept payment in other currencies at prevailing currency exchange rates. Unless a different period is indicated in writing by Motorola, all invoices will be paid net 90 days after receipt of a correct invoice and Motorola’s receipt of Certified Mods or, if Supplier is participating in Motorola’s supplier owned inventory program, Motorola’s withdrawal of Certified Mods from the Hub, or as applicable, Supplier’s completion of performance.

 

If local law requires a shorter payment term, then the longest payment term permitted applies. Supplier may not assign, pledge, discount or otherwise encumber Motorola receivables without Motorola’s prior written consent. Supplier will work cooperatively with Motorola to ensure timely payment of any amounts payable to Motorola, not to exceed 90 days from receipt of Motorola’s invoice. Motorola has the right to set off any amounts owed to Supplier under this Exhibit A against amounts owed to Motorola by Supplier under this Exhibit A, any other order, agreement, or related to any other claim or circumstance.

 

6. PRICE. The Moto Price for the Certified Mod is set forth in the main body of the Agreement, in US dollars unless Motorola designates other currency. The Moto Price is inclusive of all costs and expenses incurred to the delivery point. Supplier agrees to use reasonable efforts to bring the Moto Price down quarter-on-quarter and to cooperate with Motorola to continuously implement cost reduction opportunities. Additionally, Supplier will not increase the Moto Price without Motorola’s prior written approval. Any lower prices will apply to Certified Mods received after the price change.

 

Further, Supplier guarantees that the Moto Price for Certified Mods will be no higher than the price offered to Supplier’s other customers purchasing the same or similar products, and is competitive with any other seller’s price for similar products (“Price Guarantee”). If Supplier offers a lower price to another customer, at any time, the Moto Price will be automatically reduced to such lower price. The reduced price will apply to Certified Mods received after Supplier first offers the lower price to the other customer. Supplier will, at Motorola’s option, promptly provide Motorola a refund or issue a credit memo to Motorola for any overpayments made by Motorola. Motorola may terminate this Exhibit A and/or any Order in whole or in part without liability if Supplier breaches its Price Guarantee. Supplier will keep appropriate records to demonstrate to Motorola, compliance with this Section.

 

7. DELIVERY TERMS. Supplier will deliver Certified Mods to Motorola: (i) on time (time is of the essence for all deliveries); (ii) undamaged; (iii) in accordance with this Exhibit A and the applicable Order; (iv) packed and shipped according to Motorola’s instructions; (v) at the lowest total cost; and (vi) unless otherwise stated in this Exhibit A or in the applicable Order, FCA (Incoterms 2010) to, at Motorola’s’ option: (a) the delivery point set forth in the applicable Order; (b) a Motorola designated Hub (if Supplier is participating in Motorola’s supplier owned inventory program); or (c) if no delivery point is stated in the Order, the closest major international airport, port or depot to Supplier’s factory, depending on the mode of transportation. Supplier will have title to and risk of loss of a Certified Mod until it is received and accepted by Motorola, except for Certified Mods held in a Hub, such Certified Mods will not be deemed to have been delivered, and title to or risk of loss of such Certified Mods will not transfer from Supplier to Motorola, until they are withdrawn from the Hub. Supplier cannot withdraw Certified Mods from a Hub without Motorola’s prior written approval.

 

Supplier will not charge Motorola for packing, labeling, commissions, customs, duties, storage, crating, express handling or travel, unless specifically indicated in the applicable Order or under a mutually agreed separate logistics support program.

 

8. QUALITY. In addition to the Quality Assurance and Approvals requirements set forth in Schedule 2 of the main body of the Agreement, Supplier will maintain the highest level of quality standards, which shall include registration and compliance with ISO-9001 and other certifications required by Motorola. Supplier will also continuously improve its quality performance (aiming for zero defects), improve its corrective action response time, implement industry appropriate statistical process control and statistical control methods, and introduce plans for safely launching new products and services.

 

Supplier will regularly monitor its processes and Certified Mods to ensure they meet and satisfy all applicable industry performance and quality standards and other Motorola-designated test and quality standards. As requested by Motorola, Supplier will provide quality reports and data containing the following minimum indices: (i) Defects Per Unit (“DPU”) and Pareto of top DPU contributors and corrective actions; (ii) rolled yield and Pareto of top yield contributors and corrective actions; (iii) process control Cpk’s and Pareto of top process contributors and corrective actions; (iv) FQA Kppm and Pareto of top FQA contributors and corrective actions; (v) distribution FQA Kppm and Pareto of the top contributors and corrective actions; and (vi) distribution FQA stop shipments and Pareto of the top contributors and corrective actions.

 

Motorola may, without liability, reject or return shipments or partial shipments of, or cancel, reduce or reschedule any Order (in whole or in part) for, Certified Mods that do not meet these quality standards.

 

If any indices or data indicates that there is or could be a quality issue with a Certified Mod, Supplier will promptly notify Motorola’s Supplier Quality department of any such quality issue. Within 5 business days of Supplier’s notification, Motorola and Supplier will agree on a containment and corrective action plan. If the Parties do not agree upon a containment and corrective action plan within such 5-business day period, Supplier will follow Motorola’s designated containment and corrective action plan. If the quality issue is not corrected within 15 days of implementing the containment and corrective action plan, Motorola may, without liability, reject or return any shipment or any partial shipment of, or cancel or reschedule this Order (in whole or in part) for, Certified Mods affected by the quality issue.

 

9. SOFTWARE. Supplier grants Motorola a non-exclusive, royalty-free, worldwide, perpetual, irrevocable, and sublicenseable license, under Supplier’s and its licensors’ Intellectual Property, to do any of the following in connection with Motorola products and services: (i) reproduce, prepare derivative works of, display, perform and distribute Software provided in object code format; (ii) use, make, have made, import, export, offer to sell and sell Software provided in object code format; (iii) reproduce, distribute and prepare derivative works of Software provided in source code format, including modifying and compiling the Software, including any modified Software, into object code, and exercise the rights granted in 7(i) and 7(ii) above for such Software and modified Software in object code format; (iv) use, make, have made, import and export the Software, including any modified Software, in source code format; and (v) grant Motorola’s distributors, customers and end users a non-exclusive, royalty-free, worldwide, perpetual and irrevocable right to use and distribute Software in object code format. “Software” is any software, whether provided separate from any hardware or embedded in any hardware, and all enhancements, improvements, updates and upgrades to such software, together with all associated documentation and specifications.

 

Before any Software is first delivered, Supplier will perform a Software audit and deliver the findings to Motorola. The Software audit is an automated scan of the source code to identify: (a) the origin and licenses of all software included in the Software; and (b) the license obligations associated with any open source or third party software in the Software. Supplier will notify Motorola no later than 5 business days before initial delivery of a Certified Mod if Supplier has not yet performed a Software audit, in which case Supplier will deliver the full source code along with such notice in order to allow Motorola or a Motorola designated audit specialist to perform the Software audit. All Software audits will be at Supplier’s expense, and all findings will be maintained as Supplier’s confidential information, except that Motorola may disclose findings in response to a legal demand or claim or in order to refute public inquiries regarding Motorola’s software license compliance. Motorola and Supplier will prepare a plan of action based on the Software audit findings to ensure full license compliance with any open source or third party software, and Supplier will, at no charge to Motorola, take all actions specified in the plan of action. Motorola may, but is not obligated to, use any open source or third party software in the Software according to the license applicable to such open source or third party software, even if such use conflicts with this Exhibit A. Motorola may suspend payments related to Certified Mods containing Software that is not fully compliant with associated third party licenses, and such payments will not be due until both Parties agree that critical issues in the plan of action have been resolved.

 

10. REPRESENTATIONS AND WARRANTIES.

  1. represents and warrants that: (i) when delivered, each Certified Mod and all components, materials and parts therein are new; (ii) it owns good title to the Certified Mods and there are no restrictions or liens on, or rights of possession held by third parties to, the Certified Mods; (iii) it has obtained all necessary rights to comply with its obligations under this Exhibit A and to allow Motorola to exercise their rights under this Exhibit A; (iv) has no knowledge that the Certified Mods infringe, misappropriate, or otherwise make unauthorized use of any Intellectual Property of any third party; (v) there are no pending, or to its knowledge, threatened claims, demands or litigation on the Certified Mods; (vi) the Certified Mods do not contain any Illicit Code, and Supplier will follow industry practices for detecting and correcting Illicit Code and promptly notify Motorola of any vulnerability of which it becomes aware (such notice will include a description of the nature of the vulnerability, an analysis of the threats created by the vulnerability and Supplier's proposed mitigation plan); (vii) all services will be performed in a good and workmanlike manner, in accordance with applicable industry standards and mutually agreed specifications and requirements, by qualified and properly trained personnel utilizing, if applicable, Motorola parts or parts of equal quality; (viii) it has obtained and will obtain all governmental licenses, certifications, qualifications or approvals needed to sell, import, export or deliver the Certified Mods and will provide Motorola all documentation with all required information to receive the Certified Mods; (ix) all invoices, country of origin certificates and other required documents will be complete and accurate; (x) if applicable, a free trade agreement (FTA) qualification was performed and all documents meet the requirements of the FTA, and Supplier will reimburse Motorola for any Losses (as defined below) arising from or related to any errors in such documents; (xi) each Certified Mod complies and will comply with all applicable laws; (xii) each Certified Mod conforms and will conform to the quality requirements in this Exhibit A and in the main body of the Agreement and will not pose a potential environmental, safety or regulatory issue; (xiii) upon delivery and for 30 months after delivery (or if a Certified Mod is repaired by or for , for the longer of 15 months from the repair date or the balance of the original 30-month period), each Certified Mod: (a) will conform to its specifications; and (b) will be free from defects in design, material and workmanship; (xiv) all Certified Mods provided under this Exhibit A and/or any Order are merchantable and fit and safe for the purpose intended by Motorola; (xv) has obtained all necessary approvals, consents and authorizations to enter into this Exhibit A and to perform and carry out its obligations under this Exhibit A; (xvi) the performance of under this Exhibit A does not violate any provision of any bylaw, charter, regulation, or any other governing authority of and has been duly authorized by all necessary partnership or corporate action.

 

Additionally, Supplier will extend to Motorola all warranties Supplier receives from its suppliers, service providers and subcontractors (collectively, its “Supply Chain”). All warranties run to Motorola and through Motorola to its customers. All representations and warranties in this Exhibit A are reaffirmed with each shipment or delivery of Certified Mods under any Order and survive any inspection of, acceptance of, payment for or resale by Motorola.

 

11. REMEDIES. If Supplier defaults on or breaches any of its obligations under any provision of this Exhibit A, delivers Certified Mods late, or delivers Certified Mods that are defective, non-conforming, or otherwise fail to comply with the warranties in this Exhibit A or which experience an Excessive Failure (as defined below) (“Affected Products”), whether or not returned to Motorola by a customer or apparent upon inspection by Motorola, (i) Motorola shall notify Supplier in writing of the Affected Products, (ii) Motorola may destroy such Affected Products, (iii) Supplier will promptly and at its sole expense: (a) replace or provide a refund for the Affected Products; (b) expedite late deliveries of the delayed Certified Mods, if any, required as a result of such non-conformance; and (c) pay all losses, costs and damages incurred by Motorola or its customers related to the Affected Products, and (iv) at Motorola’s option, cancel, reduce or reschedule a delayed Order (in whole or in part) without liability; provided, however, if any Order (in whole or in part) is delayed for 20 days or more, Motorola may cancel, reduce or reschedule the delayed Order as well as any other Orders (in whole or in part) without liability. In addition, at Motorola’s option, Supplier shall reimburse Motorola for any and all losses directly and indirectly incurred, including all liabilities, costs, charges, fees, fines, penalties, damages and expenses (including reasonable court costs and attorneys’ fees) (collectively “Losses”) arising from or related to the Affected Products and/or the delayed delivery thereof, or pay Motorola liquidated damages of 1% of the purchase price of the delayed Certified Mods on a daily basis, up to 20% of the purchase price of the delayed Certified Mods.

 

In the event of an Excessive Failure (as defined below), Supplier will, in addition to the foregoing remedies: (a) perform a root cause analysis to identify the source of the problem at Supplier’s expense: (b) implement an agreed containment and corrective action plan within 5 business days, or, if a plan is not agreed within such time, Motorola’s designated plan, at Supplier’s expense; and (c) reimburse Motorola for any Losses arising from or related to the corrective action plan and any product recall, proactive repair program or field action arising from or related to the Excessive Failure. “Excessive Failure” means (1) a repetitive failure of a Certified Mod to meet and/or operate in accordance with the Specifications and/or Motorola’s reasonable expectations; (2) a failure rate of more than 100 Parts Per Million of any distinguishable group of Certified Mod(s); or (3) a condition which, in Motorola’s reasonable opinion, presents a potential environmental, safety or regulatory issue.

 

Unless specifically prohibited by this Exhibit A, all rights and remedies under this Exhibit A are cumulative and in addition to all other rights and remedies available under this Exhibit A or at law or equity. None of Motorola’s rights and remedies under this Exhibit A or arising at law or equity, including, without limitation, the total amount and type of damages Motorola may recover, or the time in which Motorola must assert a claim or file a lawsuit, are or may be limited, restricted, or reduced in any way. Motorola also has the right to seek and Supplier agrees that Motorola is entitled to receive specific performance by Supplier of its obligations under this Exhibit A and/or any Order.

 

12. SUPPORT OBLIGATIONS. Supplier acknowledges its post-sales Certified Mod warranty and support services obligations under Section 9 of the main body of the Agreement and Schedule 8 of the Launch Addendum. Accordingly, in the event Motorola provides any customers with post-sales return, replacement, customer support and/or other services relating to the Certified Mods in response to any customer call, complaint or other request of any nature whatsoever, Supplier agrees to indemnify and make Motorola whole with regard to any such post-sales support, including by refunding Motorola the Moto Price of any such Certified Mod return or replacement, and other otherwise reimbursing Motorola for any out-of-pocket costs incurred in connection with such post-sales Certified Mod support services.

 

13. INDEMNITY. Supplier will defend (or settle) and hold harmless, at Supplier’s expense, Motorola, Motorola’s third parties, Motorola’s customers, and their respective past, present and future employees, directors, officers, assigns and successors, and each person or entity acting for or on behalf of Motorola (the “Motorola Indemnitees“) against any third party claims, actions, demands, lawsuits and liabilities (“Claims”) brought against a Motorola Indemnitee, and fully indemnify the Motorola Indemnitees for any Losses, arising from or related to any of the following: (i) any death, injury, or property damage caused by or arising from a Certified Mod; (ii) any acts or omissions of Supplier under this Exhibit A or any Order; or (iii) any Claim of infringement or misappropriation of any Intellectual Property (“IP Claim”), with respect to the design, manufacture, having made, use, license, distribution, importation, exportation, offer for sale, or sale of a Certified Mod, or a Motorola product by virtue of incorporation of a Certified Mod, either alone or in combination with other products, unless the IP Claim would survive without such combination.

 

Supplier will: (a) take all appropriate actions to handle the Claim responsibly (e.g., perform a substantive non-infringement inquiry, cooperate with Motorola to provide Motorola with relevant Supplier information); (b) keep Motorola advised of the defense or negotiation efforts; (c) execute all papers requested by Motorola in order for a Motorola Indemnitee to provide Supplier with confidential information related to a Claim; and (d) not enter into a settlement agreement that affects any Motorola Indemnitee unless agreed in writing by Motorola and signed by an authorized officer of Motorola.

 

Motorola may participate in a case at its own expense. Motorola may undertake the defense or settlement of a Claim, at Supplier’s expense, if Supplier does not do so within 30 days of receipt of notice from Motorola of the Claim.

 

If an IP Claim is likely, in Motorola’s reasonable opinion, to result in an injunction or an exclusion order, then: (1) Supplier will promptly, at Supplier’s expense and at Motorola’s request, obtain the right for the Motorola Indemnitees to use, make, have made, import, export, distribute, sell, and offer to sell the Certified Mod and Motorola products and services incorporating the Certified Mods; or substitute a non-infringing and functionally equivalent product or service acceptable to Motorola and extend this indemnity to that product and service, and reimburse Motorola for any Losses arising from or related to the use of such substitute product or service; and (2) Motorola may, without liability: (A) cancel, reduce or reschedule the applicable Order (in whole or in part); (B) reject shipments or delivery of such Certified Mod(s); and (C) return such Certified Mod(s) for a full refund of the purchase price.

 

Supplier will cooperate with Motorola and other Motorola suppliers in good faith to resolve and defend an IP Claim against products or services similar to Certified Mods (including entering into joint defense arrangements).

 

14. OFFSET CREDITS. Any Order may be placed in support of applicable Motorola offset obligations in countries that Motorola is subject to ‘offset obligations’ that require Motorola to create economic benefits in those countries in order to be eligible to continue to sell products or services or otherwise conduct business in those countries. All offset credits generated as a result of its fulfillment of any Order: (i) belong solely to Motorola; and (ii) will be timely transferred by Supplier to Motorola. Supplier will provide at its cost all documentation and other assistance as may be reasonably necessary for Motorola to claim and validate offset credits with relevant government authorities.

 

15. MOTOROLA TRADEMARKS. Other than as expressly set forth in the main body of the Agreement, neither Party has any right under this Exhibit A to use the name, trademarks or trade names of the other, unless prior written approval has been obtained for each specific use, except that Motorola may use any Supplier name, trademarks or trade names provided as part of the Certified Mods.

 

16. TERMINATION AND SURVIVING PROVISIONS. Motorola, at its option, may terminate this Exhibit A and/or any Order (in whole or in part) immediately upon written notice, without liability to Supplier: (i) if Supplier has not remedied a breach of any of its material obligations under this Order within 30 days of receipt of Motorola’s written notice of such breach; (ii) if Supplier is included on a denied persons or sanctions entity list of any country; (iii) if it believes in good faith that Supplier has violated Section 17 or that such a violation is likely to occur, or if Supplier has threatened to violate Section 17; (iv) it does not believe that Supplier is financially or operationally sound and Supplier fails to promptly provide adequate assurances that it is not experiencing such problems or of its ability to perform under this Exhibit A despite such problem; or (v) for its convenience by giving Supplier 30 days notice. Supplier may not revoke its acceptance or otherwise refuse to fully perform its obligations under this Exhibit A or any Order. Supplier may terminate this Exhibit A if Motorola has not remedied a breach of any of its material obligations under this Exhibit A within 30 days of receipt of Supplier’s written notice of such breach; or Motorola is included on a denied persons or sanctions entity list of any country.

 

Upon expiration or termination of this Exhibit A and/or fulfillment of all Orders: (a) each Party will return or destroy the other Party’s confidential information, except for one copy which may be kept for archival purposes; (b) Motorola may continue to sell the Certified Mods they have in inventory or in transit; (c) Motorola may keep any documentation needed to support the Certified Mods; and (d) the Parties must continue to comply with the obligations in Sections 10, 11, 12, 13, 16, 17, 18 and 20, and any other provision(s) whose context indicates that it is intended to survive. At Motorola’s request, Supplier will transfer all records that pertain to this Exhibit A to Motorola, but retain a copy of any records required to be kept by law, rule, regulation, or in connection with any legal process or proceeding, subject at all times to applicable confidentiality obligations.

 

17. COMPLIANCE WITH LAWS. Supplier will: (i) comply with the latest version of Motorola’s Supplier Code of Conduct (at http://www.motorola.com/suppliers/code) and take any necessary actions to comply with any changes made to the Supplier Code of Conduct within a reasonable amount of time; and (ii) comply with all applicable anti-bribery laws, including the U.S. Foreign Corrupt Practices Act (FCPA), and Motorola’s Business Partner Due Diligence Process and will not offer anything of value, directly or indirectly, to anyone to secure any improper advantage or make any facilitation payments to induce officials to perform routine functions they are otherwise obligated to perform.

 

Supplier will electronically provide material and chemical safety data sheets or equivalent documentation for all chemicals incorporated in a Certified Mod or otherwise supplied to Motorola. For all chemicals supplied or imported into the U.S., Supplier will certify that the chemicals are listed on the Toxic Substances Control Act, 15 USCS §2601, et. seq., chemical inventory, or are exempt from that requirement.

 

Supplier will comply with applicable laws, regulations, directives and requirements, including, if applicable, U.S. Federal Acquisition Regulations (FAR) 52.219-8 and 52.222-21, -26, -35, -36, -40 and -50 pertaining to Utilization of Small Business Concerns, Segregated Facilities, Equal Opportunity, Equal Opportunity for Veterans, Affirmative Action for Workers with Disabilities, Employee Rights Under the National Labor Relations Act and Human Trafficking, respectively, and will maintain affirmative action programs under 41 CFR 60-1 and 60-2. If Supplier is located in the U.S. or is supplying Certified Mods to Motorola locations based in the U.S., Supplier and Motorola will agree on a goal for, and Supplier will track and report on, Supplier’s and its suppliers’ and subcontractors’ spend with minority-owned, women-owned and disabled veteran-owned businesses located in the U.S., based upon a percentage of Supplier’s total gross revenues under this Exhibit A. Supplier will submit quarterly progress reports, in a format designated by Motorola, by the 25th day of the month following the end of each calendar quarter to supplierdiversity@motorola.com.

 

Supplier will comply with applicable import and export laws, regulations, administrative determinations and security programs, and, when the exporter of record, will obtain all U.S. and other necessary authorizations, to lawfully make or receive shipments. Supplier will provide all documentation, including part number and description, cost and country of origin, needed to import a Certified Mod. If Supplier is providing Certified Mods to be delivered to, or services to support delivery to, the U.S., Supplier will comply with the security criteria of the U.S. Customs and Border Protection’s Customs Trade Partnership against Terrorism Program (http://www.cbp.gov). Upon Motorola’s request, Supplier will certify that it complies with the above mentioned security criteria. Supplier agrees that it will not resell or re-export any products, source code or technical data in any form without obtaining appropriate export or re-export licenses from the respective governmental authority of the U.S., or other country of origin.

 

Prior to assigning any individual to perform Services Supplier will at its own expense comply with the latest version of Motorola’s Background Check Requirements (at http://www.motorola.com/us/background-check-requirements.html). Motorola may, in its sole discretion, reject the assignment of any individual from performing Services.

 

18. DISPUTE RESOLUTION. The UN Convention on Contracts for the International Sale of Goods is explicitly disclaimed. Motorola and Supplier will first try to resolve any dispute in connection with this Exhibit A or any Order through discussions. If the dispute is not resolved through discussions, then either Party will refer the dispute to mediation in Illinois, USA, and the Parties will share the costs of the mediation equally, except that each Party will pay its own attorneys’ fees. The mediation will occur no more than 45 days after the referral. If the dispute is not resolved through mediation, either Party can bring the dispute to court, but only to the courts that are within the Northern District of Illinois, USA, Eastern Division. Motorola will have the right to recover all costs associated with enforcing its rights under the preceding sentence. Supplier will not stop performing under this Exhibit A or any Order during a dispute.

 

19. INSURANCE. In addition to Supplier’s Insurance requirements under the main body of the Agreement, Supplier shall also maintain the following insurance policies and minimum limits, or such insurance policies which are equivalent to the extent available to Supplier in the country in which the Order is placed (i) Errors & Omissions/Professional Liability (E&O), covering all acts, errors, omissions, and negligence in the provision of professional services, infringement of Intellectual Property (except patent and trade secret), and network security and privacy risks, of a minimum of US$5,000,000 per claim/annual aggregate; and (ii) All-risk property insurance (with business interruption/continuity coverage) covering Supplier’s assets and operations and Motorola property while in Supplier’s care, custody, or control, in an amount sufficient to fund the costs of compliance with this Exhibit A.

 

These policies will: (a) be issued by reputable insurance carriers (Best rating A or better or equal standard); (b) be designated primary and non-contributory; (c) provide coverage worldwide; and (d) where available, provide a waiver of subrogation in favor of Motorola (except for E&O). The CGL and Umbrella policies will: (1) be on an occurrence basis; (2) together with the E&O policy, be maintained for 5 years after the later of: fulfillment, expiration or termination of this Exhibit A or all Orders; (3) include Motorola and its directors, officers, employees and contractors as additional insureds; and (4) include cross liability coverage. The E&O policy will be maintained for 5 years after the later of: fulfillment, expiration or termination of this Exhibit A or all Orders. Upon Motorola’s request, Supplier will provide Motorola certificates of insurance and copies of endorsements evidencing the above requirements. The failure of Motorola to request such certificate or endorsements will not be construed as a waiver of any requirement to maintain insurance. Supplier will, or will cause its insurance carrier to, provide Motorola with at least 30 days prior written notice of any cancellation or changes to any policy in accordance with the policy terms. These requirements will not limit the scope or limits of coverage, which will apply to the full extent provided by the policies, or limit Supplier’s liability under this Exhibit A or otherwise. Supplier is responsible for ensuring that its subcontractors maintain insurance coverage at customary industry levels. Supplier is solely responsible for any deductibles or retentions, which must not exceed $50,000 unless first approved in writing by Motorola. Supplier releases any rights of recovery against Motorola, its employees, contractors, successors and assigns. Supplier, its directors, officers, employees and agents will not be entitled to any benefits under Motorola’s insurance policies.

 

20. MISCELLANEOUS. Notices and other required communications will be sent in a manner that confirms delivery, to the respective addresses of the Parties set forth in the main body of the Agreement (or such other addresses a Party may designate in writing). Upon Motorola’s request, Supplier will participate in the Ariba Supplier Network, more fully described at http://www.ariba.com/supplier/suppliernetwork. At Motorola’s request, Supplier will provide Motorola information about, and participate in regular meetings with Motorola to discuss, the status of outstanding deliverables, at no charge to Motorola, Supplier will not sell, recycle, or otherwise dispose of excess, obsolete, scrap, work in progress, raw materials, or Certified Mods associated with this Exhibit A (“Scrap”) without Motorola’s prior written approval. Supplier will manage such Scrap pursuant to a Motorola-approved plan and in an environmentally responsible manner, protective of the Motorola brand, and will only use a Motorola-designated third party to destroy such Scrap. Motorola, or a Motorola designated external auditor, may inspect Supplier’s and Supplier’s Supply Chain facilities, equipment, materials, books, and records that pertain to this Exhibit A and/or any Order and the Certified Mods, and may audit for compliance with this Exhibit A. Supplier will not make any disclosure, including any press releases or on Supplier’s website, regarding this Exhibit A, the Parties’ business relationship, Motorola or any non-public aspect of Motorola’s business.

 

Supplier may not assign or transfer any part of this Exhibit A or any Order by operation of law or otherwise, including by consenting to a change in the direct or indirect ownership of Supplier, unless agreed in writing by Motorola and signed by an authorized officer of Motorola. Any attempt to assign or transfer in violation of the prior sentence is void. Supplier will notify Motorola of any proposed assignment or transfer of all or part of this Exhibit A or any Order, as well as the general business and, if legally permissible, the name of the proposed assignee or transferee, at least 30 days before the execution of any substantive documents in connection with such proposed assignment or transfer. Following Motorola’s receipt of such notice, Motorola may, by written notice to Supplier, do any or all of: (i) request that Supplier immediately return all confidential information of Motorola; (ii) make assumption of this Exhibit A and/or any Order (upon the same terms and conditions) a condition of such assignment or transfer; (iii) terminate this Exhibit A and/or any Order immediately without liability; or (iv) request Supplier to take commercially reasonable actions that Motorola deems necessary in order to ensure Certified Mod supply continuity. Motorola may freely assign this Exhibit A and/or any Order in whole or in part, or split or replicate its rights and obligations under this Exhibit A and/or any Order in connection with a divestiture, sale or reorganization of any of its business(es).

 

Supplier will not subcontract any of its obligations under this Exhibit A or any Order without Motorola's prior written approval (which may be revoked at any time). Supplier retains responsibility for all obligations subcontracted hereunder and will indemnify, defend and hold harmless the Motorola Indemnities against any Claim arising from or related to the acts or omissions of Supplier’s subcontractors.

 

UNDER NO CIRCUMSTANCES WILL MOTOROLA BE LIABLE FOR INDIRECT OR CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT LIMITATION, LOST PROFITS. MOTOROLA'S TOTAL LIABILITY FOR DAMAGES UNDER THIS EXHIBIT A WILL NOT EXCEED THE PRICE PAID BY MOTOROLA FOR THE SPECIFIC CERTIFIED MODS GIVING RISE TO THE CLAIM.

 

The Parties will perform under this Exhibit A as independent contractors. This Exhibit A does not create a joint venture, partnership, or formal business organization of any kind. This Exhibit A is binding upon, inures to the benefit of, and is enforceable by the Parties and their respective successors and assigns. The unenforceability of any provision will not affect any other provision in this Exhibit A, and the Parties will negotiate in good faith a substitute, enforceable provision. Failure to insist upon the performance of, or to exercise any rights under, this Exhibit A will not be construed as a waiver of any future performance or the future exercise of any such right.

 

Supplier must formally initiate any legal action or claim against Motorola for non-payment within 6 months of the date on which the payment was due. Failure to do so will constitute a knowing and intentional waiver of all claims for non-payment, and Supplier will be estopped from pursuing any claim for non-payment more than 6 months after the date on which the alleged payment was due. In addition, Supplier must formally initiate any legal action or claim against Motorola for an alleged breach of any obligation related to or arising out of this Exhibit A within 1 year of the date of the alleged breach or be forever barred from pursuing such action or claim.

 

Any electronic communications made by Motorola and Supplier will be considered to be “in writing” and admissible as business records in documentary form. Any Order acknowledgements must be sent by email to POacknowledgments@motorola.com or by expedited delivery service or registered or certified mail, postage pre-paid and return-receipt requested, to Motorola Mobility LLC, 222 W. Merchandise Mart Plaza, Suite 1800, Attn: PO Acknowledgements, Chicago, IL 60654.

 

 

SCHEDULE 1

Additional Terms and Conditions for Prototypes

 

 

  1. Prototype Terminal Delivery and Return. Pursuant to the terms of this Agreement, Licensor agrees to deliver to Licensee certain devices, developer boards and/or prototypes of its products (“Prototypes”) for the Purpose. Licensee will track and return each of the Prototypes within five (5) days following completion of testing, or, immediately upon Licensor’s request.

 

  1. Post Delivery Support. Licensee and Licensor agree that no post delivery support by Licensor is required by this Agreement. Licensor will handle any request for post delivery support from Licensee on a case-by-case basis.

 

  1. Software Upgrades for Prototype. Licensor will upgrade the Prototypes with the latest software if requested by Licensee, but does not guarantee that the Prototypes will have the capability to be upgraded. Any software upgrades will be provided within a jointly agreed period of time.

 

  1. Type Approvals. Licensee further understands that the Prototypes have been designed and manufactured to comply with all applicable laws and regulations, that Licensor is in the process of obtaining type approval from the appropriate regulatory bodies, and that Licensor is testing the Prototypes to ensure compliance with all applicable product safety requirements; however, Licensor has not yet obtained the necessary approvals and has not placed the Prototypes on the market.

 

  1. Labeling. Depending on where the Prototypes will be shipped, Licensor shall label the Prototypes with the following notice language:

 

If shipped to North America or Latin America:

“This device has not been authorized as required by the rules of the FCC. This device is not and may not be, offered for sale or lease, or sold or leased, until authorization is obtained” and “CONFIDENTIAL MOTOROLA RESTRICTED PROPERTY: NOT FOR SALE”

 

If shipped to Europe:

“This device does not currently comply with the RTTE directive and is intended for demonstrative purposes only. This apparatus may not be marketed or put into service until it has been made to comply with the RTTE directive” and “CONFIDENTIAL MOTOROLA RESTRICTED PROPERTY: NOT FOR SALE”

 

If shipped to Asia:

“CONFIDENTIAL MOTOROLA RESTRICTED PROPERTY: NOT FOR SALE”

 

The label shall be placed in a conspicuous location on the Prototypes. The Prototypes must not be labeled with the CE mark. Licensee shall not remove, cover or otherwise tamper with any labels or markings on the Prototypes. Licensee shall not photograph the Prototypes.

  1. No Transfer of Prototypes. Licensee represents and warrants that it will not transfer (sell, lease, or otherwise receive compensation from any third party for the right to use, possess, or operate) the Prototypes to any third party who is not on the Access List.

 

  1. Licensee agrees: i) it will not reverse engineer, de-compile, or disassemble the Prototypes including but not limited to any security related software (“Security Software”) embedded on such Prototypes; ii) it will place the Prototypes in a secure environment within Licensee’s facility and will not remove the Prototypes from such facility unless so authorized by Licensor; iii) it will place the Prototypes in a secure and locked location when not in use by Licensee; and iv) to restrict access to the Prototypes to the Permitted Recipient(s), as defined in this Agreement.

 

  1. Licensee acknowledges, agrees, and consents to Security Software sending location information of such Prototype to Licensor (USA), which may reveal the location of Licensee or Licensee’s employees evaluating such Prototype(s). Such location information shall be used by Licensor solely to track the location of the Prototypes.

 

  1. Indemnification. Licensee agrees to defend, indemnify, and hold Licensor harmless against any claims brought by third parties alleging injuries, damages, liabilities, and expenses (including attorney’s fees) caused by any unauthorized use of the Prototypes on any telecommunications systems.

 

  1. No Warranty. NO WARRANTY OR INDEMNITY OF ANY KIND, EXPRESS, IMPLIED, OR STATUTORY, INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, IS GIVEN BY LICENSOR IN CONNECTION WITH LICENSEE’S USE OF THE PROTOTYPES. LICENSOR AND LICENSEE AGREE AND ACKNOWLEDGE THAT ALL SUCH WARRANTIES ARE HEREBY EXCLUDED AND THE PROTOTYPES ARE PROVIDED "AS IS."

 

  1. No Liability. IN NO EVENT WILL LICENSOR BE LIABLE FOR ANY DAMAGES, INCLUDING, WITHOUT LIMITATION, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES, OR EXPENSES ARISING UNDER THIS AGREEMENT, ARISING OUT OF LICENSEE’S USE, POSSESSION, OR OPERATION OF THE PROTOTYPES OR OTHERWISE. LICENSEE HEREBY WAIVES SUCH DAMAGES, LOSSES, AND EXPENSES.

 

  1. Title of Prototypes. Title to the Prototypes will at all times remain with Licensor. Licensee will not acquire any property rights, including, but not limited to intellectual property rights, in the Prototypes by reason of this Agreement and will not allow any mortgage, lien, or other encumbrance to be placed thereon.

 

SCHEDULE 2

 

Quality Assurance and Approvals

  1. Approval of Certified Mod(s).
    1. Proposed Products. Without limiting Licensee’s other obligations under the Agreement, Licensee shall submit to Licensor the Self Certification for the Proposed Mod certifying that the Proposed Mod complies with the Certification Criteria in accordance with the Agreement. Additionally, Licensee shall submit at least two (2) pre-production samples of each of Proposed Mod embodying the approved Certification Criteria, together with two (2) samples of such items’ packaging, cartons, and containers (including packing and wrapping material), along with any additional samples as may be reasonably required by Licensor or its designee for quality control purposes. For avoidance of doubt, such samples will not count toward the samples that Licensee is required to provide annually to Licensor under Section 7(d) of the Agreement. Licensee may not proceed with mass production of a Proposed Mod unless and until (i) the Proposed Mod complies with the Certification Criteria, (ii) Licensor and/or the Third-Party Designee (as defined below) have approved in writing the pre-production samples of the Proposed Mod, and (iii) the applicable Self-Certification has been accepted in writing by Licensor.
    2. Acceptance. If Licensor does not provide written acceptance of the Self Certification or any of the foregoing submitted items or Proposed Mod(s) in writing within fifteen (15) Business Days after receipt of the same by Licensor, such materials or Proposed Mod(s) shall be deemed not approved. All approvals and disapprovals are to be provided in Licensor’s sole discretion. Licensee shall ensure compliance with any and all labeling and packaging laws applicable to the Proposed Mod(s). Any approvals by Licensor do not in any way modify or limit Licensee’s representations, warranties, or obligations under the Agreement, including without limitation Licensee’s indemnification obligations under Section 17(a).
    3. Samples. All sketches, drawings, specifications, and samples relating to Proposed Mod(s) shall be provided by Licensee at its sole cost and expense. All samples shall be submitted to Licensor or its designee(s), as directed by Licensor.
  2. Quality Assurance.
    1. Quality Control Procedures. Without limiting Section 6 of the Agreement, Licensee shall comply with the following minimum quality assurance procedures:
      1. Licensee shall maintain industry-leading quality assurance systems for the control of material quality, processing, assembly, testing, packaging and shipping in accordance with the Approved Samples, the performance metrics set forth in the Agreement and the Certification Criteria, and Licensor’s instructions as reasonably provided by Licensor from time to time.
      2. Licensee shall maintain industry-leading quality assurance systems for the control of the quality of any post-sales, return, repair and customer support services relating to the Certified Mod(s) performed by Licensee or any of its designated service providers in connection with the Certified Mod(s) or the Manufacturer’s Warranty (as defined herein) to ensure that such services are provided in accordance with this Agreement.
      3. Licensee shall perform industry-leading test procedures relating to the Certified Mod(s) and any post-sales, return, repair and customer support services relating to the Certified Mod(s) and the Manufacturer’s Warranty (as defined herein) performed by Licensee or its designated service providers. Licensee shall also perform such Certified Mod(s) and post-sales, return, repair and customer support services test procedures as may be requested by Licensor from time to time, at the sole cost of Licensee. Licensee shall perform all such tests using the test equipment, procedures and software as approved by Licensor in its sole discretion, and shall provide such test results to Licensor and its designee(s).
      4. Prior to beginning mass production of a Certified Mod, Licensee shall supply to a mutually agreed upon third-party test house (the “Third Party Designee”), a reasonable number of samples of each Certified Mod version (where applicable), as may be requested by the Third Party Designee, agreed by Licensee (such agreement not to be unreasonably withheld), and approved by Licensor in its sole discretion, to test for reliability, usability, functionality and/or any other industry standard performance metrics, including compliance with the Certification Criteria. Licensee shall be solely responsible for all costs and expenses associated with such Third Party Designee usability and functionality tests. Licensee shall make such test results available to Licensor and its designee(s) and shall comply with Licensor’s reasonable requests for changes to the Certified Mod(s) based on the results of such testing.
      5. Licensee shall track and disclose to Licensor (upon its request) targeted quality metrics appropriate to the Certified Mod(s) as a conformance standard, such as statistical product control (“SPC”) limit defects per hundred unity (“DPHU”) < (less than) 0.X% (with “X” to be established by Licensee and published to Licensor upon request).
      6. Licensee shall disclose to Licensor (upon its request) out-of-box (“OOB”) defect rate data. Licensor shall the right to require a reasonable OOB defect rate equal to or less than 0.XX% (with “XX” to be determined by mutual agreement of the Parties) for major defects and less than 0.YY% (with “YY” to be determined by mutual agreement of the Parties) for minor defects. Licensor shall have the right to direct Licensee to reject lots that test above the acceptable minimum OOB defect rate.
      7. Upon two (2) Business Days’ prior written notice, Licensor and/or its designee(s) may inspect and review Licensee’s, its manufacturers’, and its service providers’ facilities, quality control procedures and related records as reasonably necessary for Licensor to ensure Licensee’s and any of its manufacturers’ and service providers’ strict compliance with the terms of the Agreement. Such inspection shall be performed during normal business hours.
    2. Quality Assurance Reports.
      1. Licensor shall have the right to request on-going lot acceptance histogram data for quality assurance review. If such a report is requested, Licensee shall respond within fifteen (15) days.
      2. Licensor shall have the right to review Licensee’s quality reporting program and to request covering items such as total DPHU, yields, sigma for each process, Pareto, corrective actions, and other items deemed reasonably necessary by Licensor to maintain and track Certified Mod quality. Each such report shall be due within fifteen (15) days after receiving the request from Licensor.
  3. Approval of Marketing Material(s). Unless otherwise requested by Licensor, within thirty (30) days before the launch of any new marketing campaign in the Territory, Licensee must submit to Licensor a representative sampling of the Marketing Materials for each new marketing campaign that is contemplated for use for Licensor’s approval. These representative materials must sufficiently represent the tone and message(s) conveyed by each such marketing campaign. After Licensor has initially approved Marketing Materials used in connection with a new marketing campaign, Licensee shall provide Licensor a representative sampling of any Marketing Materials used with existing marketing campaigns that convey a tone or message that differs from the previously-approved Marketing Materials used in connection with the campaign. Licensee further agrees to provide Licensor such other samples of Marketing Materials as Licensor deems reasonably necessary to ensure that such materials are consistent with the reputation and prestige of Licensor and/or the Licensed Marks (if applicable under a Launch Addendum) as a designation for quality products and otherwise complies with Licensee’s obligations under this Agreement. If Licensee plans to make any advertising claims in the Marketing Materials it shall submit substantiation of such claims with the corresponding Marketing Material samples. In addition, any Marketing Materials that are not produced in English shall be accompanied by an accurate English translation. If Licensor does not approve or comment upon submitted Marketing Material samples within fifteen (15) Business Days after receipt of the same by Licensor, such materials shall be deemed not approved. All approvals and disapprovals are to be provided in Licensor’s reasonable discretion. Licensee shall ensure compliance with any and all labeling and packaging laws applicable to the Marketing Materials. Any approvals by Licensor do not in any way modify or limit Licensee’s representations, warranties, or obligations under the Agreement, including without limitation Licensee’s indemnification obligations under Section 17.
  4. Approval of Literature. Unless otherwise requested by Licensor, Licensee shall submit two (2) samples of all Literature to Licensor prior to publication or distribution. Licensee further agrees to provide Licensor such other samples of Literature as Licensor deems reasonably necessary to ensure that such materials are consistent with the reputation and prestige of Licensor and/or the Licensed Marks (if applicable under a Launch Addendum) as a designation for quality products and otherwise complies with Licensee’s obligations under this Agreement. In addition, any Literature that is not produced in English shall be accompanied by an accurate English translation. If Licensor does not approve or comment upon submitted Literature samples within fifteen (15) Business Days after receipt of the same by Licensor, such materials shall be deemed not approved. All approvals and disapprovals are to be provided in Licensor’s reasonable discretion. Licensee shall ensure compliance with any and all labeling and packaging laws applicable to the Literature. Any approvals by Licensor do not in any way modify or limit Licensee’s representations, warranties, or obligations under the Agreement, including without limitation Licensee’s indemnification obligations under Section 17.

 

 

 

 

SCHEDULE 3

 

Policy Term, Requirements and Limits

Throughout the Term of the Agreement and for six (6) years following the date of effective date of expiration or termination of the Agreement, Licensee shall maintain the following insurance coverage: (1) statutory Workers' Compensation in all jurisdictions where services are performed in connection with this Agreement; (2) Employer's Liability with minimum limits of US $1,000,000 per occurrence; (3) Broad Form Commercial General Liability, including Contractual Liability with minimum limits of US $1,000,000 per occurrence; (4) Business Automobile Liability including coverage for owned, hired and non-owned automobiles with minimum limits of US $1,000,000 per occurrence; (5) Umbrella/Excess Liability with minimum limits of US $5,000,000 per occurrence; (6) Professional Liability/Cyber Liability with minimum limits of $3,000,000. All policies must be issued on an occurrence basis with the exception of the Professional Liability policy. The Commercial General Liability policy must name Motorola Mobility LLC and Motorola Trademark Holdings, LLC, their respective Affiliates, directors, officers and employees as additional insureds. The Workers' Compensation and Employer's Liability policies must provide a waiver of subrogation in favor of Licensor. Licensee further releases, assigns and waives any and all rights of recovery against Licensor, employees, successors, and permitted assigns which Licensor may otherwise have, acquire in or from, or are in any way connected with any loss covered by policies of insurance maintained or required to be maintained by Licensee pursuant to this Agreement or because of deductible clauses in or inadequacy of limits of any such policies of insurance.

 

 

SCHEDULE 4

 

Ethics and Compliance

 

Licensor’s requirements for Licensee’s business conduct are set forth below and Licensee hereby represents and warrants that will comply with all these requirements. If Licensee or any Person in its Supply Chain (as defined below) fails to comply in any respect with all of these requirements, Licensor may immediately and without liability terminate this Agreement pursuant to Section 9(c).

  1. Licensee at all times shall conduct itself, directly through its employees and officers, and indirectly through third parties, in the performance of this Agreement honestly and fairly, using the highest ethical standards, and treat its employees, agents, contractors and customers with dignity.
  2. Licensee agrees to comply with Licensor’s Licensee Code of Conduct, as it may be modified from time to time (a current version of which may be found at: http://responsibility.motorola.com/index.php/suppliers/scoc/) (“Licensee Code of Conduct”), and to communicate and flow down these requirements in its agreements with its permitted sublicensees, service providers and subcontractors (collectively, its “Supply Chain”). By executing the Agreement, Licensee consents to the latest version of the Licensee Code of Conduct.
  3. Licensee and its Supply Chain shall comply with all laws, rules, regulations, statutes, codes, licenses, standards, governmental or quasi-governmental restrictions or prohibitions, decrees, directives, orders, and all other legal requirements of any type that apply to any aspect of Licensee’s or its Supply Chain related to this Agreement, including, without limitation, those set forth in the Licensee Code of Conduct.
  4. Licensee, on behalf of itself and its Supply Chain, represents and warrants that: (a) all Certified Mod(s) produced, manufactured, assembled, packaged, labeled and supplied, (b) all manufacturing services rendered in connection with the Certified Mod(s), and (c) the actual Certified Mod(s) provided to Licensor or on its behalf, are in compliance with all applicable laws, rules, regulations and standards including compliance the Licensee Code of Conduct. Licensee agrees to immediately correct any non-compliance with the foregoing requirements. Licensee shall indemnify, defend 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 actions, losses, expenses and damages (including, without limitation, reasonable attorneys’ fees and settlement amounts) arising from or caused by an act or omission of Licensee’s Supply Chain with respect to this Schedule 4.
  5. All costs, expenses, damages, harm and other losses of any type incurred by Licensor arising from a breach of this Schedule 4, including, without limitation, damage to Licensor’s reputation or goodwill, are deemed direct damages and are not subject to any limitations on damages or recovery set forth in this Agreement.
  6. Environmental sustainability
    1. Environmental Management System: Licensee will have an Environmental Management System (EMS) in accordance with ISO 14001 or equivalent. The EMS must be implemented and functioning. Third-party registration is strongly recommended but not required.
    2. Environmentally Preferred Products: Licensor values environmentally preferred products. Licensor works with and encourages its licensees to create products that are energy efficient, highly recyclable and contain significant amounts of recycled materials and low amounts of hazardous materials. To enable Licensor to evaluate Licensee’s components and products for environmental performance, Licensee will provide material disclosures as outlined in Licensor’s controlled and reportable materials disclosure process, available at the following URL: http://responsibility.motorola.com/index.php/Licensees/materialdisclose/.
    3. Ozone-Depleting Substances: It is Licensor’s policy to eliminate from Licensor products any components — including components provided by its licensees — that contain or that are manufactured with a process that uses any Class I ozone-depleting substance. As outlined in the Internal Revenue Service's Publication 510, the U.S. government imposes an environmental tax on the sale or use of ozone-depleting chemicals and imported products containing or manufactured with these chemicals. Licensee will promptly provide certification, (accessible at the following URL: http://responsibility.motorola.com/index.php/Licensees/materialdisclose/ozonedepleting/) that products and materials imported into the U.S. pursuant to this Agreement do not contain or are not manufactured with a process that uses any Class I ozone-depleting chemicals.
  7. Conflict Minerals

The mining and processing of raw materials is an integral stage in Licensor’s global licensees, service providers and subcontractors supply chain. Licensor and its customers strongly discourage and seek to avoid the sourcing of raw materials from areas where proceeds from the sale of raw materials fund social unrest and political repression, violence, or conflict (“Conflict Minerals”). Upon request, Licensee will certify that the products and materials provided to Licensor do not contain Conflict Minerals.

 

  1. Materials Safety Data Sheets

Licensee will electronically provide material safety data sheets, chemical safety data sheets, or equivalent documentation for all chemicals sold to Licensor. For all chemicals supplied or imported into the United States, Licensee will certify that the chemicals are listed on the Toxic Substances Control Act, 15 USCS §2601, et. seq., chemical inventory, or are subject to an exemption specified in the material safety data sheets.

 

  1. Utilization of Small Business Concerns

If applicable, Licensee will comply with the provisions of U.S. Federal Acquisition Regulation (FAR) 52.219-8 pertaining to Utilization of Small Business Concerns, as well as any other state and local, small and other business utilization laws.

 

  1. Equal Opportunity

If applicable, Licensee will comply with the provisions of FAR 52.222-21, 52.222-26, 52.222-35, 52.222-36 and 52.222-50 pertaining to Segregated Facilities, Equal Opportunity, Equal Opportunity for Veterans, and Affirmative Action for Workers with Disabilities and Human Trafficking. If applicable, Licensee will maintain, at each establishment, affirmative action programs required by the rules of the U.S. Secretary of Labor (41 CFR 60-1 and 60-2).

  1. Licensee Diversity

If Licensee is located in the United States or is supplying Certified Mod(s) to Licensor locations based in the United States, Licensee will track and report its Supply Chain’s spend with minority-owned, women-owned and disabled veteran-owned business enterprises located in the United States. Licensee and Licensor will agree on a goal for Licensee’s Supply Chain spend, based upon a percentage of Licensee’s total gross revenues under this Agreement and all DSAs. Licensee will submit quarterly progress reports, in a format designated by Licensor, by the twenty-fifth day of the month following the end of each calendar quarter. All reports will be forwarded to the Motorola Supplier Diversity Group via email to Licenseediversity@motorola.com.

 

  1. Export Restriction

If Licensee is the exporter of record for any shipments, Licensee will obtain all export authorizations from the U.S. government or other governments that may be required to lawfully make such shipments.

 

  1. Imports and Customs

Licensee will comply with all import and customs laws, regulations and administrative determinations of the importing country. Licensee will provide all documentation needed to import including a commercial invoice with all required information including part number, part description, cost of each part, and country of origin of each part.

 

If Licensee is providing documentation for product to comply with a particular free trade agreement (FTA), Licensee warrants that an FTA qualification was performed and document are in full compliance with the requirements of the agreement.

 

Licensee represents and warrants that all provided invoices, country of origin certificates and other documents are accurate. If any documentation is found to contain errors, Licensee will be liable for all duties, interest, fines or penalties Licensor incurs in connection with the error.

 

Licensee will comply with the security criteria of the importing or exporting country’s government security program. If Licensee is providing Certified Mod(s) to be delivered to, or services to support delivery to, the U.S., Licensee will comply with the security criteria of the U.S. Customs and Border Protection’s Customs-Trade Partnership against Terrorism (C-TPAT) Program (available on http://www.cbp.gov) and will certify compliance with the program regularly upon written request from Licensor.

 

  1. Product Safety and Compliance

Licensee shall ensure that all Certified Mod(s) and services provided under this Agreement comply with all applicable laws and regulations, as well as any Licensor specifications or general standards as set forth in any documentation or specifications for all jurisdictions where the Certified Mod(s) are shipped and/or marketed. Such laws and regulations include without limitation and by way of example only, the following (collectively and individually referred to herein as “Laws”):

 

    1. Regional, national and local laws as well as local rules, statutes, ordinances, regulations and codes;
    2. All applicable product safety, electromagnetic energy, accessibility, environmental, and recycling regulations; and
    3. All updates to required product certification or other government required documentation arising out of product changes made during the product lifecycle.

Licensee’s obligation to comply with all Laws includes the procurement of permits, certificates, approvals, inspections, and licenses, wherever appropriate or needed for shipping and/or marketing of Certified Mod(s) supplied hereunder.

 

 

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