1
EXHIBIT 10.6
LICENSE AGREEMENT
APCO PROJECT 25 COMPLIANT PRODUCT
This Agreement is effective as of the 2nd day of August 1994, between Motorola,
Inc., a corporation of the State of Delaware ("Motorola"), by and through its
Land Mobile Products Sector, having a principal place of business at 0000 Xxxx
Xxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000; and Transcrypt International a
corporation having a principal place of business at 0000 Xxxxx 00xx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000 ("Licensee").
Pursuant to the APCO Project 25 IPR MOU, Motorola has agreed to license its
APCO 25 essential patent rights to third parties seeking to manufacture and
sell products that are compliant with the APCO Project 25 Standard and who have
signed the APCO Project 25 MOU. The Licensee wishes to manufacture and/or to
sell products that are compliant with the APCO Project 25 Standard.
Based upon these representations and understandings, the parties agree as
follows:
ARTICLE I - DEFINITIONS
A. "APCO Project 25 Standard" is defined as the system described
in the family of EIA/TIA documents in the 102 series starting with TSB102
Project 25 System & Standard Definition.
B. "Patent Claims" are defined as claims in any United States or
foreign patent that are technically essential to the specific modulation
technology and frame technology specified in the APCO Project 25 Standard.
C. "Licensed Products" are defined as two-way radio
communications products, including both infrastructure components and
subscriber units, that are fully compliant with the APCO Project 25 Standard.
"Licensed Products" include Motorola 12 kB DES-XL, but are limited to
implementation in an APCO 25 compliant digital subscriber radio, and only for
sale to customers who have a Motorola DES-XL system and who have procured, or
are in the process of procuring, APCO 25 compliant digital infrastructure, and
require backward interoperabilty to DES-XL as a condition of the procurement.
2
ARTICLE II - GRANT OF LICENSE
Motorola hereby grants to Licensee a personal, nontransferable,
non-assignable, non-sublicenseable, non-exclusive license under Motorola's
Patent Claims: (1) to manufacture, anywhere in the world, Licensed Products;
and (2) to sell APCO Project 25 Standard compliant systems in any country
provided that this license or exercise of this license in such country is not
contrary to any United States law, regulation, or policy.
The Licensee hereby grants back to Motorola a personal,
nontransferable, non-assignable, non-sublicenseable, non-exclusive license
under Licensee's patents that are technically essential to the APCO Project 25
Standard: (1) to manufacture, anywhere in the world, Licensed Products; and (2)
to sell to users of APCO Project 25 Standard compliant systems in any country
provided that this license or exercise of this license in such country is not
contrary to any United States law, regulation, or policy.
ARTICLE III - ROYALTY
For the license of Motorola's Patent Claims as pertain to technically
essential modulation technology, there is no continuing royalty.
For the license of Motorola's Patent Claims as pertain to technically
essential frame technology, there is no continuing royalty for Licensed Products
that are substantially manufactured in North America. For Licensed Products
that are substantially manufactured outside of North America, there is a
continuing royalty of eight dollars ($8) per Product.
Within thirty (30) days of each January 1, the Licensee shall provide
to Motorola through an independent auditor a written royalty report for the
preceding year, which report shall include a count of all Licensed Products
manufactured by the Licensee during the report period requiring payment of
royalty, and a payment of any continuing royalties that may be due under this
Agreement.
Once each calendar year, Motorola shall have the right to audit the
Licensee's manufacture and sales activities to assure the accuracy of the
Licensee's royalty reports. At the Licensee's request,
3
any such audit may be conducted by an independent third party that is
instructed to maintain the Licensee's information in confidence, and to only
provide such information to Motorola as is necessary to confirm previously
received royalty reports, or to establish the inaccuracy of previously received
royalty reports. Such audits shall be conducted with at least ten (10) days
written notice to the Licensee, and shall be conducted during normal business
hours. Such audits shall be conducted at Motorola's expense, unless the audit
reveals a shortfall in continuing royalty payments in excess of 5% of the
amount previously acknowledged by the Licensee, in which event the cost of the
audit shall be borne by the Licensee.
Each party will use its best endeavors to offer fair and reasonable
licensing terms for future IPR which is mutually deemed essential.
ARTICLE IV - TERM
This Agreement shall terminate with the expiration of the last patent
as licensed pursuant to this Agreement.
ARTICLE V - ENGINEERING CONSULTATION
No engineering consultation is provided by Motorola as part of this
agreement.
ARTICLE VI - ASSIGNMENT
This Agreement and the rights granted hereunder may not be assigned,
sublicensed, or otherwise transferred by either party.
ARTICLE VII- DISCLAIMER OF REPRESENTATION
Motorola makes no express or implied representations or warranties
regarding the modulation technology or the frame technology, their use, or
performance. Motorola disclaims any responsibility for technical accuracy,
improvement of the technology with enhancements, or any other product or
systems responsibility. Motorola further disclaims any representation that
Licensee will be able to use the technology in an effective way such that a
Licensed Product will result from Licensee's efforts in this regard.
4
Nothing in this Agreement shall be construed as:
(a) A warranty or representation that anything made, used, sold,
or otherwise disposed of under any license granted in this agreement is or will
be free from infringement of patents of third persons; or
(b) An obligation to bring or prosecute actions or suits against
third parties for infringement of any patent.
FURTHER, MOTOROLA EXPRESSLY SPECIFICALLY EXCLUDES ALL WARRANTIES, EXPRESSED OR
IMPLIED, AND SPECIFICALLY EXCLUDES, WITHOUT LIMITATION, THE IMPLIED WARRANTIES
OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL
MOTOROLA BE LIABLE FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES TO THE FULL
EXTENT THAT SUCH MAY BE DISCLAIMED BY LAW.
ARTICLE VIII - INSPECTION
In the event that Motorola reasonably deems it necessary for the
purpose of maintaining compliance with this Agreement, to inspect any product
licensed hereunder, Licensee agrees to provide required access to such licensed
product including, but not limited to, hardware, firmware, software, object
code and related information and documentation provided that Motorola executes
a non-disclosure agreement with Licensee.
ARTICLE IX - NOTICES
For the purpose of any and all communications and deliveries between
Motorola and Licensee with reference to this Agreement, the respective
addresses, subject to change upon written notice, shall be:
For Motorola: Motorola, Inc.
0000 X. Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxx
5
For Licensee: Transcrypt International
0000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxx Xxxxxx
ARTICLE X - MARKING
All Licensed Products made pursuant to this Agreement shall be marked:
"This device made under license under one or more of the following
U.S. Patents: 4,636,791; 4,590,473; 5,185,796; 5,148,482."
As additional patents issue, the Licensee agrees to change this notice
when reasonably convenient, provided that Motorola provides to the Licensee
written notice of the then current form of the notice.
ARTICLE XI - CHOICE OF FORUM
Any legal action relating to this agreement shall be commenced in Xxxx
County, State of Illinois.
ARTICLE XII - CHOICE OF LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of Illinois.
ARTICLE XIII - CONFIDENTIALITY
The specific terms, conditions, and details of this agreement are
confidential, and Licensee agrees not to divulge said terms, conditions, and
details to any 3rd party without the written consent of Motorola.
6
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed, by their duly authorized officers.
Each person who signs below personally represents that he or she is
authorized to do so.
MOTOROLA, INC. TRANSCRYPT INTERNATIONAL
By: XXXXX XXXXXX By: [SIG]
--------------------------------- ------------------------------
Title: Vice President Title: President & COO
------------------------------ ---------------------------
Date: 8/4/94 Date: August 2, 1994
------------------------------ ---------------------------
