exv10w3



 





Exhibit 10.3




CONFIDENTIAL




 




PATENT LICENSE AGREEMENT




     This Patent License Agreement (“Agreement”) is entered into on July 19, 2007 (the
“Effective Date”) by and between, on the one hand, Broadcom Corporation, a California
corporation with a principal place of business at 5300 California Avenue, Irvine, CA 92617
(“Broadcom”) and, on the other hand, Cellco Partnership d/b/a Verizon Wireless, a Delaware
partnership, with offices located at One Verizon Way, Basking Ridge, New Jersey 07920
(“Verizon”) together with its parent Verizon Communications Inc., a Delaware corporation
(“Verizon Communications”) (together, the “Verizon Parties”) (Broadcom and the
Verizon Parties, collectively the “Parties” and each individually a “Party”).



     WHEREAS, Broadcom and QUALCOMM Incorporated (“Qualcomm”) are litigating certain
actions regarding infringement of Broadcom patents by Qualcomm (the “Litigation”),
including (i) In the Matter of Certain Baseband Processor Chips and Chipsets, Transmitter and
Receiver (Radio) Chips, Power Control Chips, and Products Containing Same, Including Cellular
Telephone Handsets, United States International Trade Commission (“ITC”), Inv. No.
337-TA-543 (the “ITC Action”); and (ii) Broadcom Corporation v. QUALCOMM
Incorporated, United States District Court for the Central District of California, Case No.
SACV05-467 (JVS) and Broadcom Corporation v. QUALCOMM Incorporated, United States District
Court for the Central District of California, Case No. SACV05-468 (JVS) (the “District Court
Actions”);



     WHEREAS, Qualcomm products, including certain Qualcomm components used in 1xEV-DO cellular
telephone handsets, have been found to infringe certain Broadcom patents; and



     WHEREAS, Verizon imports and sells cellular telephone handsets compliant with the 1xEV-DO
standard for the Verizon Network (as defined below) and desires to obtain a royalty-bearing license
from Broadcom under the Licensed Patents (as defined below) for such handsets, on the terms and
conditions set forth below.



     NOW, THEREFORE, in consideration of the mutual promises, conditions and covenants set forth
below, the Parties hereto agree as follows:


1. Definitions. As used in this Agreement, the following terms shall have the following
meanings:




     1.1 “Affiliate” means, with respect to a given Person (the “Subject Person”),
any other Person who controls, is controlled by or is under common control with the Subject Person.
For purposes of this Section 1.1, control means direct or indirect ownership of more than fifty
percent (50%) of the voting power of a respective Person with respect to the election of directors
or similar managing authority. A Person shall be deemed to be an Affiliate under this Agreement
only so long as such control exists. Notwithstanding the foregoing, in no event shall Qualcomm or
[****] or any of their Affiliates or successors be considered an Affiliate of Verizon under this
Agreement.



     1.2 “Authorized Distributor” means authorized agents, resellers and distributors of
services on the Verizon Network under a written agreement with Verizon (specifically excluding
Qualcomm, [****] and each of their Affiliates and successors).




 



[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




 









 








CONFIDENTIAL




 



     1.3 “EV-DO” means revisions A, B and C of the 1xEV-DO standard (also known as
“cdma2000 High Rate Packet Data Air Interface Specification”), provided that under no circumstances
shall “EV-DO” be
construed as including the standards commonly referred to as “3GPP LTE”, “WiMAX”, “WiFi” or
successors thereto.




     1.4 “Licensed Patents” means only (i) United States Patent Nos. 5,657,317; 6,374,311;
6,389,010; 6,583,675; 6,714,983; and 6,847,686, and (ii) any reissue, reexamination or extension of
an issued patent enumerated in (i) above, and (iii) any claim found in any issued patent that is a
divisional or continuation of an issued patent enumerated in (i) or (ii) above, where such claim is
an obvious variation of any claim found in an issued patent enumerated in (i) or (ii) above; and
(iv) any claim found in any corresponding issued foreign patent claiming priority from an issued
patent enumerated in (i) or (ii) or (iii) above where such claim is substantially the same or an
obvious variation of any claim found in an issued patent enumerated in (i) or (ii) or (iii) above.
The “Licensed Patents” do not include any other patents, patent rights or intellectual property
rights.



     1.5 “Licensed Products” means fully assembled, finished and packaged units of existing
and new cellular telephone handsets, personal digital assistants, data cards for laptop computers
and other finished end user wireless devices that (i) are compliant with at least the EV-DO
standard; and (ii) are used primarily on the Verizon Network under a Service Contract.



     1.6 “Person” shall mean an individual, trust, corporation, partnership, joint venture,
limited liability company, association, unincorporated organization or other legal or governmental
entity.



     1.7 “Service Contract” means service contract for use of a Verizon certified cellular
telephone handset, personal digital assistant, data card or other finished end user wireless device
primarily on the Verizon Network that is entered into by the subscriber with Verizon or its
Affiliate or any of their Authorized Distributors (specifically excluding Qualcomm, [****] and each
of their Affiliates and successors).



     1.8 “Sold,” “Sale,” “Sell” means sold, leased or otherwise transferred
and a sale shall be deemed to have occurred upon first shipment or invoicing, to a third party
whichever shall first occur.



     1.9 [****].



     1.10 “Subsidiary” means, with respect to a given Party, any other Person where such
Party directly or indirectly owns or controls more than fifty percent (50%) of the voting power of
such other Person with respect to the election of directors or similar managing authority. A
Person shall be deemed to be a Subsidiary under this Agreement only so long as such ownership or
control exists. Notwithstanding the foregoing, in no event shall Qualcomm or [****] or any of
their Affiliates or successors be considered a Subsidiary of Verizon under this Agreement.



     1.11 “Verizon Network” means the EV-DO wireless telecommunications network managed or
operated by or for Verizon or its Subsidiaries in the United States and offered under the Verizon
name and which may also be offered by Authorized Distributors under their respective names
(specifically excluding Qualcomm, [****] and each of their Affiliates and successors).


 



[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




2









 








CONFIDENTIAL




 




2. License.




     2.1 Grant.



          (a) Commencing upon the Effective Date, and subject to the per unit royalty payments set forth
in Section 3.1 and other terms and conditions of this Agreement (including the restrictions set
forth in Sections 2.1(b) and (c) below), Broadcom hereby grants to Verizon and its Subsidiaries
(and Verizon Communications and its Subsidiaries to the extent Verizon remains a Subsidiary of
Verizon Communications) a non-exclusive, non-transferable (other than to a successor in interest as
set forth in Section 11.6) license, without the right to sublicense (except solely to Authorized
Distributors in accordance with Section 2.1(d) below), solely under the Licensed Patents, to
import, have imported, make and have made Licensed Products for which per unit royalties are paid
under Section 3.1 and to use, rent, sell and offer to rent or sell such Licensed Products under a
trademark of Verizon or a trademark of Verizon’s Authorized Distributor or other mutually agreed
method of identification to facilitate entry through United States Customs (specifically excluding
Qualcomm, [****] and each of their Affiliates and successors). No rights or licenses are granted
under any patents of Broadcom other than the Licensed Patents.



          (b) Subject to the payment of royalties under Section 3.1, no additional license or royalties
under the Licensed Patents shall be required when such Licensed Products roam on other networks on
a temporary basis while under a Service Contract for the Verizon Network.



          (c) The right to “have made” Licensed Products under the license set forth in Section 2.1(a)
shall apply only when the specifications for such Licensed Products are provided to the
manufacturer by the respective Verizon Party or its Subsidiary and shall be limited to Licensed
Products manufactured on behalf of the respective Verizon Party or its Subsidiary under a written
agreement with the respective Verizon Party or its Subsidiary. The right to “have imported”
Licensed Products under the license set forth in Section 2.1(a) shall be limited to Licensed
Products imported on behalf of the respective Verizon Party or its Subsidiary under a written
agreement with the respective Verizon Party or its Subsidiary and which requires the respective
importer to provide a customs certification to the United States Customs Service that such units of
Licensed Products are imported solely for and on behalf of the respective Verizon Party or its
Subsidiary. Upon written request of Broadcom, Verizon shall, within thirty (30) days of
receiving such request, use all commercially reasonable efforts to inform Broadcom in writing
whether, and if so to what extent, any Person identified by Broadcom is exercising such “have made”
or “have imported” rights on behalf of the Verizon Parties or their Subsidiaries or an Authorized
Distributor under this Agreement.



          (d) The Parties will use all commercially reasonable efforts to agree prior to August 7, 2007
upon a form of sublicense for Authorized Distributors to be granted have made and have imported
Licensed Products that are certified by Verizon for use on the Verizon Network. The right to “have
imported” Licensed Products by Authorized Distributors under the license set forth in Section
2.1(a) shall be limited to Licensed Products imported on behalf of such Authorized Distributors
under a written agreement with Verizon or its Subsidiary which requires the respective importer to
provide a customs certification to the United States Customs Service that such units of Licensed
Products are imported primarily for use on the Verizon Network. Upon written


 



[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




3









 








CONFIDENTIAL




 



request of Broadcom, Verizon shall, within thirty (30) days of receiving such request, use all
commercially reasonable efforts to inform Broadcom in writing of Authorized Distributors who enter
into the mutually agreed form of sublicense. Such Authorized Distributors shall not be required to
pay an additional per unit royalty under the respective sublicense, it being understood that the
royalty under Section 3.1 will be paid by Verizon when service is initiated on the Verizon Network
for Licensed Products of such Authorized Distributors as set forth in Section 3.1.




          (e) The license under the Licensed Patents set forth in Section 2.1(a) will become
royalty-free, fully-paid, and perpetual (subject to Section 9.5) upon the payment of the Aggregate
Amount of royalties set forth in Section 3.1 below.



     2.2 No Implied Rights. The license to Verizon and its Affiliates for the Licensed
Patents is limited to the rights expressly set forth above and no releases or other rights or
licenses are conveyed by implication, estoppel or otherwise, all of which are specifically
disclaimed. Notwithstanding anything to the contrary, no rights, licenses or releases are granted
by Broadcom to any third party, directly or indirectly, whether expressly or by implication,
estoppel, reliance, inducement or otherwise. Without limiting the foregoing, Verizon agrees that
this Agreement does not impair the right of Broadcom to seek or recover damages or any other
remedies available at law or in equity from Qualcomm, including injunctive relief (other than
injunctive relief against Licensed Products), in the Litigation with Qualcomm. Without limiting
the foregoing, each Party agrees that this Agreement does not impair the right of the other Party
to seek or recover damages or any other remedies available at law or in equity from third parties
(other than Broadcom seeking injunctive relief against Licensed Products).



3. Payments by Verizon.




     3.1 Per Unit Royalty Payments. Verizon shall make a non-refundable per unit royalty
payment to Broadcom in the amount of Six U.S. Dollars ($6.00) for each unit of Licensed Product (i)
Sold by or for Verizon, its Affiliates or their authorized agents, resellers or distributors on or
after the Effective Date of this Agreement (net of any returns of such Licensed Products in such
calendar quarter) or (ii) for which service is initiated on the Verizon Network on or after the
Effective Date and prior to the end of the term of this Agreement. Such per unit royalties shall
be due and payable within sixty (60) days after the end of each calendar quarter, commencing with
the calendar quarter ending September 30, 2007. The above per unit royalty payments shall be
non-refundable and shall not be credited or offset against any other payments. The aggregate of
all such royalty payments shall not exceed Two Hundred Million U.S. Dollars ($200,000,000.00) (the
“Aggregate Amount”). The total amount of such royalties to be paid by Verizon to Broadcom
in a respective calendar quarter shall not exceed Forty Million U.S. Dollars ($40,000,000). To the
extent that any royalties accrue for a calendar quarter in excess of such payment of Forty Million
U.S. Dollars ($40,000,000) (“Royalty Accrual”), the Royalty Accrual shall be carried
forward to each subsequent calendar quarter until paid and shall be paid in each such subsequent
calendar quarter to the extent that the royalty payment in such subsequent calendar quarter will
not exceed Forty Million U.S. Dollars ($40,000,000). Verizon shall remain obligated to pay the
amount of the Royalty Accrual in such subsequent calendar quarters unless and until the Aggregate
Amount has been paid by Verizon.


 



[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.





4









 








CONFIDENTIAL




 




3.2 [****]




3.3 [****]




     3.4 Wire Transfer. The payments under Section 3.1 shall be made in US Dollars by wire
transfer in immediately available funds to such bank account as Broadcom may designate in writing.
Unless otherwise notified by Broadcom, such wire transfers shall be made to:



          Bank Name: [****]



          SWIFT code: [****]



          ABA #: [****]



          Account Name: [****]



          Account Number: [****]



     3.5 Taxes. Amounts payable to Broadcom under this Agreement are payable in full to
Broadcom without reduction for taxes (including any withholding tax unless such withholding tax is
due to an assignment by Broadcom) or customs duties. In addition, Verizon shall be responsible for
any and all taxes (including, without limitation, consumption sales, use, value-added and similar
taxes) and customs duties paid or payable on Licensed Products, however designated, levied, or
based on amounts payable to Broadcom hereunder and any associated penalties, fines and attorneys’
fees, but exclusive of United States federal, state and local taxes based solely on Broadcom’s net
income.



     3.6 Convenience of the Parties. The Parties acknowledge and agree that it is mutually
in their best interests, including being most convenient and efficient, for Broadcom to grant
Verizon a license based on the above per unit royalty payments. Both parties acknowledge that the
other has offered to negotiate other methods of calculating compensation for the license granted
herein, and that the above payments are freely chosen and agreed to by the Parties, as a
convenience to the Parties, and each of them, and represent a convenient and fair means of
measuring the value of the license granted to under this Agreement.


4. Reports. During the term of this Agreement and prior to making the Aggregate Payment,
Verizon shall provide Broadcom with a calendar quarterly report (commencing with the calendar
quarter ending September 30, 2007) within thirty (30) days of the end of each calendar quarter
setting forth (i) the number of Licensed Products manufactured by or on behalf of Verizon and its
Affiliates in the respective calendar quarter; (ii) the number of Licensed Products imported into
the United States by or on behalf of Verizon and its Affiliates in the respective calendar quarter;
(iii) the number of Licensed Products Sold by Verizon and its Affiliates in the respective month
net of returns, and (iv) the number of Licensed Products for which service on the Verizon Network
is first initiated during the respective calendar quarter net of returns within ninety (90) days
after service is first initiated.



 



[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.





5









 








CONFIDENTIAL




 




5. Records and Audits.




     5.1 Records. During the term of this Agreement and for all periods prior to payment
of the Aggregate Amount, Verizon and its Affiliates shall keep accurate and complete books and
records concerning all Licensed Products Sold by Verizon and its Affiliates, all Licensed Products
Sold and put into service on the Verizon Network or used by Verizon or its Affiliates and other
information reasonably necessary to confirm the payments and reports under this Agreement. Verizon
and its Affiliates shall preserve and maintain all such books and records for a period of two (2)
years after the calendar quarter for which the books and records apply. Requirements for records
and audits regarding Authorized Distributors will be set forth in the form of sublicense pursuant
to Section 2.1(d).



     5.2 Audits. No more than once each calendar year, and during the term of this
Agreement but prior to Verizon making the Aggregate Payment, Broadcom may retain a third party,
reasonably acceptable to Verizon, to conduct an audit of Verizon’s applicable books and records to
confirm that Verizon has not underpaid the royalties payable to Broadcom pursuant to Section 3.1
and to confirm the accuracy of the reports provided by Verizon pursuant to Section 4. Such third
party shall enter into a confidentiality agreement with Verizon, on terms reasonably acceptable to
Verizon, which shall permit the third party to disclose only to Broadcom if any underpayment of
royalties or inaccuracy in reporting has occurred and if so, then the amount and basis of such
underpayment or inaccuracy.



6. Additional Covenants.




     6.1 Cessation of Efforts to Overturn. Verizon and its Affiliates shall withdraw its
opposition to Broadcom in the following actions involving Qualcomm by promptly: (i) ceasing and
desisting from further efforts to obtain a Presidential/USTR disapproval of the order issued in the
action styled In the Matter of Certain Baseband Processor Chips and Chipsets, Transmitter and
Receiver (Radio) Chips, Power Control Chips, and Products Containing Same, Including Cellular
Telephone Handsets, United States International Trade Commission (“ITC”), No. 337-TA-543
(such order, the “ITC Order”) or actively assisting any third party to do so; (ii)
withdrawing its Motion for Stay of the ITC Order filed with the United States Court of Appeals for
the Federal Circuit; and (iii) refraining from participation in any opposition to Broadcom in
Broadcom Corp. v. Qualcomm, Inc., Case No. SACV 05-0467-JVS (C.D. Cal.) or Broadcom Corp. v.
Qualcomm, Inc., Case No. SACV 05-0468-JVS (C.D. Cal.) or actively assisting any third party to do
so. In addition, Verizon and its Affiliates shall not initiate any new opposition to Broadcom in
any actions involving the Licensed Patents or reexaminations of the Licensed Patents or actively
assist any third party to do so. Notwithstanding the foregoing, Verizon and its Affiliates may
respond to subpoenas and other lawful process to the extent required by law. In the event Broadcom
asserts a patent(s) against Qualcomm other than the Licensed Patents, Broadcom may (in its sole
discretion) add such patent(s) to the Licensed Patents under this Agreement upon written notice to
Verizon without requiring additional payments for the inclusion of such patent(s), in which case
the obligations of Verizon under this Section 6.1 shall apply to such additional patent(s),
provided that Broadcom shall have no obligation to do so.


 



[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.





6









 








CONFIDENTIAL




 




     6.2 Strategic Alliance Discussions. Verizon Communications, Verizon and Broadcom
shall establish a joint task force [****] to discuss a potential strategic alliance regarding items
of mutual interest relating primarily to: (i) opportunities to enhance the use by Verizon
Communications, Verizon and their Affiliates of Broadcom products in equipment and devices used and
sold by Verizon Communications, Verizon and their Affiliates; (ii) the possibility for Broadcom to
develop products that specifically address the needs of Verizon Communications, Verizon and their
Affiliates, vendors and suppliers, (iii) payments to Verizon as a result of licenses under Verizon
intellectual property, or (iv) incremental (i.e., new) business between Broadcom on the one hand
and Verizon and its suppliers on the other hand . Any such discussions regarding the
matters set forth above shall be non-binding and shall not be construed as modifying or amending
this Agreement in any way. Any modification or amendment to this Agreement may only be made in a
writing signed by authorized representatives of both Parties as set forth in Section 11.11 below.



     6.3 Cooperation with Customs. Broadcom will promptly provide notice to the United
States Customs Service that the Parties have entered into a license agreement relating to the ‘983
patent. Broadcom will use all commercially reasonable efforts to participate in any meetings with
United States Customs and to take all necessary actions to ensure the unimpeded importation of
Licensed Products as permitted under this Agreement, including using all commercially reasonable
efforts to make filings with the ITC or United States Customs so that no bond is required for
Licensed Products as of and after the Effective Date during the term of the license for the
Licensed Patents under this Agreement. The Parties will reasonably cooperate as necessary to
obtain a refund of any bond that is posted as a result of the ITC Order for Licensed Products
imported into the United States on or after the Effective Date under the license set forth in
Section 2.1.


7. [****]



8. Press Release; Confidentiality of Terms. Upon the Effective Date, the Parties shall
issue a press release in the form set forth in Exhibit A announcing the fact that Verizon has taken
a license from Broadcom and that it is withdrawing its opposition to the ITC Order. Except as set
forth in such press release or as publicly disclosed as permitted below, neither Party shall
disclose the terms of this Agreement without the prior written consent of the other Party, except:
(a) to any governmental body having jurisdiction and specifically requiring such disclosure; (b) in
response to a valid subpoena or as otherwise may be required by any law or regulation; (c) for the
purposes of disclosure in connection with the Securities and Exchange Act of 1934, as amended, the
Securities Act of 1933, as amended, and any other reports filed with the Securities and Exchange
Commission or Stock Exchange Rules; (d) to a Party’s accountants, legal counsel and other financial
and legal advisors, subject to obligations of confidentiality; (e) as required during the course of
litigation, subject to protective order or other similar protections as applicable; (f) as required
for enforcement of this Agreement; and/or (g) with respect to the material financial terms, as
necessary to obtain indemnification or insurance coverage with respect to the payments made by
Verizon under this Agreement; provided, however, that prior to any such disclosure pursuant to
paragraphs (a), (b), (c) and/or (e) hereof, the Party seeking disclosure shall notify the other
Party and take reasonable actions in an effort to minimize the nature and extent of such
disclosure. Notwithstanding the foregoing, Broadcom shall have the right to disclose this
Agreement in the Litigation subject to a protective order.



 



[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.





7









 








CONFIDENTIAL




 




9. Term and Termination.




     9.1 Term. The term of this Agreement shall commence upon the Effective Date and
continue for a period of five (5) years from the Effective Date, unless earlier terminated as set
forth below; provided, however, that, except as otherwise specified under Section 9.5 below, the
license granted under the Licensed Patents herein shall continue until the expiration of the last
to expire of the Licensed Patents.



     9.2 Termination for Settlement with Qualcomm. This Agreement may be terminated by
Verizon upon written notice from Verizon (in its sole discretion) if Broadcom and Qualcomm enter
into a definitive written agreement providing a final settlement of all Litigation with respect to
all of the Licensed Patents.



     9.3 Termination by Verizon. [****] In addition, Verizon may terminate the Agreement
(in its sole discretion) on: (1) the date (if any) on which all of the claims of the Licensed
Patents are found invalid by a final, nonappealable judgment, or (2) Broadcom breaching any
material provision of this Agreement, provided that Broadcom shall have a cure period of [****]
after receipt of written notice of any such material breach.



     9.4 Termination by Broadcom. Broadcom shall have the right to terminate this
Agreement (in its sole discretion) at any time if:



          (a) a Verizon Party breaches any material provision of this Agreement, provided that such
Verizon Party shall have a cure period of thirty (30) days after receipt of written notice of any
such material breach, provided that Broadcom may terminate immediately without providing a cure
period in the event of a material breach by a Verizon Party of Section 6.1 (i), (ii) or (iii); or



          (b) Verizon or any of its Affiliates challenges or attempts to challenge the validity or
enforceability of the Licensed Patents, including through any declaratory judgment action or
re-examination (each, a “Patent Challenge”) or, except as required by law, participates in
or actively assists (“Support”) any Patent Challenge by a third party, provided that this
termination right will not apply with respect to Verizon or any of its Affiliates asserting a
defense of invalidity or unenforceability if Broadcom asserts the Licensed Patents against Verizon
or its Affiliates for products other than Licensed Products.



     9.5 Effect of Termination and Expiration. Upon any termination or expiration of the
Agreement, those units of Licensed Products sold prior to such termination or expiration for which
per unit royalty payments have been made pursuant to Section 3.1 of this Agreement through the date
of termination/expiration shall be deemed fully licensed under Section 2.1, and fully paid and
royalty-free pursuant to such license, with respect to those units of Licensed Products for which
such royalties have been paid prior to termination. Except in the event of termination under
Section 9.2 or 9.4 or the first sentence of Section 9.3, and subject to Verizon’s continued
compliance with the surviving terms and conditions of this Agreement, upon payment of the Aggregate
Amount, the license under Section 2.1 to the Licensed Patents shall be deemed non-exclusive,
royalty-free, fully-paid, perpetual, and non-transferable (other than to a successor in interest as
set forth in Section 11.6) and shall survive any termination or expiration of the Agreement (unless
an event that would have given rise to termination under Section 9.4 occurs after such termination
or expiration, in which event


 



[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.





8









 








CONFIDENTIAL




 



the right and licenses granted to Verizon shall terminate). Upon termination of this
Agreement prior to the payment of the Aggregate Amount or in the event of termination under Section
9.2 or 9.4 or the first sentence of Section 9.3, all rights and licenses granted to Verizon shall
immediately terminate. Notwithstanding expiration or termination of this Agreement for any reason,
Broadcom shall have the right to retain the full amount of all payments that have been made prior
to termination and to receive payment for all unpaid amounts that have accrued prior to
termination. In addition, Verizon’s obligation to pay per unit royalties under Section 3.1 shall
survive with respect to all Licensed Products imported into the United States prior to the
effective date of termination or expiration and with respect to all Royalty Accruals under Section
3.1 (unless and until the Aggregate Amount has been paid by Verizon to Broadcom). Sections 2.2;
Sections 3, 4, 5 (for payments accruing prior to or surviving termination as set forth above),
Section 6.1 (with respect to the ITC Order and pending Litigation as of the Effective Date), 7 (if
all of the payments pursuant to Section 3.1 payable through the date of termination have been or
are made in accordance with the terms hereof and the Verizon Parties have not breached Section
6.1), 8, 9.5 and 11 shall survive the termination of this Agreement for any reason. Sections 2.2;
Sections 3, 4, 5 (for payments accruing prior to or surviving expiration as set forth above),
Section 6.1 (with respect to the ITC Order and pending Litigation as of the Effective Date), 7, 8,
9.5 and 11 shall survive the expiration of this Agreement.




10. [****]




11. General Provisions.




     11.1 Authority. Each Party represents it has the power and authority to enter into
this Agreement and to perform all of its duties and obligations set forth herein. Additionally,
Broadcom warrants and represents that it owns the Licensed Patents and that it has the right to
grant the rights and licenses to Verizon pursuant to this Agreement.



     11.2 Representation. Each Party declares and represents it is executing this Agreement
after consultation with its own legal counsel.



     11.3 Disclaimers. This Agreement and the license granted herein do not and shall not
be interpreted or construed to include: (1) any representation, warranty or admission as to the
validity, enforceability or scope of any Licensed Patent or any other patent or patent application,
(2) any requirement or obligation to file, maintain or enforce any Licensed Patent or any other
patent or patent application, (3) any obligation to furnish any technical or support information,
(4) any release or waiver of any claims, counterclaims or liabilities of any Party or any third
party, or (5) any license or rights by implication or estoppel. Except for the express
representations set forth in Sections 11.1 and 11.2, THE LICENSED PATENTS ARE LICENSED “AS IS, WITH
ALL FAULTS,” AND WITHOUT ANY REPRESENTATIONS OR WARRANTIES WHATSOEVER, AND BROADCOM DISCLAIMS ALL
WARRANTIES, EXPRESS, IMPLIED OR STATUTORY AS TO ANY MATTER WHATSOEVER, INCLUDING ALL IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT.


 



[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




9









 








CONFIDENTIAL




 




     11.4 Notices. All notices required or permitted to be given hereunder shall be in
writing and shall be delivered by hand, or if dispatched by prepaid air courier or by registered or
certified airmail, postage prepaid, addressed as follows:



	 	 	 
	If to Verizon:

	 	Vice President — Legal and External Affairs and General Counsel
	 

	 	Verizon Wireless
	 

	 	1 Verizon Way, VC43E024
	 

	 	Basking Ridge, New Jersey 07920-1097
	 

	 	Fax: [****]
	 
	 	 
	If to Verizon
	 	 
	Communications:

	 	Senior Vice President and Deputy General Counsel (Intellectual Property)
	 

	 	Verizon Communications Inc.
	 

	 	1 Verizon Way
	 

	 	Basking Ridge, New Jersey 07920-1097
	 

	 	Fax: [****]
	 
	 	 
	If to Broadcom:

	 	Senior Vice President, Business Affairs & General Counsel
	 

	 	Broadcom Corporation
	 

	 	5300 California Avenue
	 

	 	Irvine, California 92617
	 

	 	Fax: [****]





Such notices shall be deemed to have been served when received by addressee or, if delivery is not
accomplished by reason of some fault of the addressee, when tendered for delivery. Either Party
may give written notice of a change of address and, after notice of such change has been received,
any notice or request shall thereafter be given to such Party as above provided at such changed
address.




     11.5 Attorneys’ Fees. Each Party shall be responsible for and shall pay its own
attorneys’ fees and costs incurred in connection with this Agreement.



     11.6 Assignment, Acquisition and Change of Control. 



     (a) Neither Party shall assign or otherwise transfer this Agreement or any rights
under this Agreement to any third party, whether by assignment, operation of law or otherwise,
except that each of Verizon Communications, Verizon and Broadcom shall have the right to assign
this Agreement and its rights under this Agreement in their entirety to a successor in interest in
connection with a sale or transfer of all or substantially all of the business or assets of Verizon
Communications, Verizon or Broadcom, as the case may be, whether by assignment, operation of law or
otherwise, provided that the assignee agrees in writing to comply with all of the terms and
condition of this Agreement; and provided however, that if Verizon or Verizon Communications shall
engage in a sale or transfer of all or substantially all of its business or assets to


 



[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.





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Qualcomm or any of its Affiliates or undergoes a Change of Control involving Qualcomm or any
of its Affiliates, then the licenses granted to Verizon and its Affiliates under Section 2.1 of
this Agreement shall terminate. Upon any assignment by Verizon to a third party or Change of
Control of Verizon, the licenses granted to Verizon Communications and its Subsidiaries (other than
Verizon and its Subsidiaries) shall terminate. Broadcom may also assign its right to receive
payments under this Agreement.




     (b) Notwithstanding anything to the contrary, in the event of any Business Combination which
results in Additional Subscribers, then, (x) the license set forth in Section 2.1 and royalties
under Section 3.1 will apply to Licensed Products for Additional Subscribers added to the Verizon
Network where the number of Additional Subscribers resulting from such Business Combination is
[****] or fewer subscribers in the aggregate without the payment of any additional royalty beyond
the Aggregate Amount as set forth in Section 3.1, and (y) in the event the aggregate number of
Additional Subscribers on the Verizon Network resulting from the Business Combination exceeds
[****] and is less than [****], unless Verizon provides written notice within thirty (30) days
after the closing of such Business Combination electing not to obtain a license under this
Agreement with respect to such Additional Subscribers, then the license set forth in Section 2.1
and royalties under Section 3.1 will apply to Licensed Products for such Additional Subscribers and
the Aggregate Amount under Section 3.1 shall be increased by an additional amount equal to the
product of [****] times the fraction determined by dividing (i) the number of Additional
Subscribers by (ii) the number of subscribers on the Verizon Network immediately prior to the
Business Combination (“Existing Subscribers”), which amount shall be due and payable within
sixty (60) days after the end of the quarter in which the Business Combination closes. If the
aggregate number of Additional Subscribers would be more than [****] subscribers, then the license
granted to Verizon under Section 2.1 of this Agreement shall be limited to Licensed Products for
Existing Subscribers and the Licensed Products for Additional Subscribers will not be licensed or
subject to the other rights or benefits granted under this Agreement (including Sections 7 and 10).
In such event, on a going forward basis after the closing of such Business Combination, the
license set forth in Section 2.1 will apply only to a pro rata portion of Licensed Products for new
subscribers on the Verizon Network (beyond the Existing Subscribers and Additional Subscribers)
based on the ratio of the number of Existing Subscribers to the number of Additional Subscribers.
The number of Additional Subscribers and Existing Subscribers, respectively, shall be determined by
reference to the net number of subscribers assuming the completion of any divestures required as a
condition to any such Business Combination or pursuant to any consent decree or to be transferred
pursuant to any agreement signed upon or prior to the effective time of the Business Combination.
As used above, “Additional Subscribers” means additional subscribers added to the Verizon
Network as a result of a Business Combination where the wireless devices used by such subscribers
are not already covered by a license under the Licensed Patents.



     (c) If a Business Combination results in Additional Subscribers being added to the Verizon
Network that are not licensed pursuant to 11.6(b), Verizon and Broadcom shall discuss in good faith
terms under which licenses may be granted for such Additional Subscribers.



     (d) If Verizon assigns this Agreement to a Carrier or undergoes a Change of Control with a
Carrier, then Section 10 shall terminate.


 



[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.





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     (e) If a Subsidiary of the Verizon Parties (other than Verizon) ceases to be a Subsidiary of
the Verizon Parties (“Former Subsidiary”), the licenses and rights set forth in this
Agreement (including under Sections 2, 7 and 10) shall cease to apply to such Former Subsidiary as
of the date the Former Subsidiary ceases to be a Subsidiary under this Agreement. If a Person
becomes a Subsidiary of the Verizon Parties after the Effective Date (“New Subsidiary”), such New
Subsidiary shall only be entitled to the licenses and benefits granted under this Agreement
(including under Sections 2, 7 and 10) with respect to Licensed Products that become licensed under
this Agreement pursuant to Section 11.6(b).



     (f) As used above, a “Business Combination” means a transaction or series of related
transactions in which either (i) all or substantially all of the business or assets of Verizon are
sold or otherwise transferred to a third party, whether by assignment, operation of law or
otherwise; or (ii) Verizon undergoes a Change of Control; or (iii) Verizon or its Affiliate
acquires any business or assets from a Carrier, whether by assignment, operation of law or
otherwise; or (iv) Verizon or its Affiliates acquires directly or indirectly, more than fifty (50%)
of the of voting power with respect to the election of directors or similar managing authority of
any Carrier.



     (g) As used above, “Carrier” means Sprint, T-Mobile, AT&T or any other U.S. carrier or
operator, manager or reseller of a wireless services or any Affiliates of any of the foregoing
(other than Affiliates or Authorized Distributors of Verizon immediately prior to a respective
Business Combination).



     (h) As used above, a “Change of Control” means a transaction or series of related
transactions in which either (i) Verizon consolidates or merges with or into another Person, or any
Person consolidates with, or merges with or into, Verizon, in each case unless the direct holders
of voting power with respect to the election of directors or similar managing authority of the
Party immediately prior to the transaction or series of related transactions will hold, directly or
indirectly, more than fifty (50%) of the of voting power with respect to the election of directors
or similar managing authority of the surviving entity immediately after the transaction or series
of related transactions; or (ii) any Person (other than Verizon Communications) or “group” (as such
term is used in Rule 13d-5 under the United States Securities Exchange Act of 1934) becomes, or has
the right to become, the beneficial owner, directly or indirectly, of more than fifty (50%) of the
of the voting power with respect to the election of directors or similar managing authority of
Verizon.



     (i) Subject to the foregoing, this Agreement shall be binding upon and inure to the
benefit of the Parties and their permitted successors and assigns.



     11.7 Governing Law. This Agreement and matters connected with the performance, breach
or termination thereof shall be construed, interpreted, applied and governed in all respects in
accordance with the laws of the State of New York, without reference to conflict of laws
principles. In the event of a dispute between the Verizon Parties and Broadcom regarding the
interpretation, breach or termination of this Agreement (“Dispute”), prior to either Party
commencing litigation with respect to such Dispute, each Party shall make available its senior
management to meet to attempt to resolve such Dispute within thirty (30) days after notice of such
Dispute has been provided by either Party to the other Party. If such Dispute is not resolved
during such thirty (30) day period, then either Party may litigate such Dispute. Notwithstanding


 



[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.





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anything to the contrary, and consistent with the terms of Section 2.2, nothing in this
Agreement shall be construed as restricting or limiting the jurisdiction or venue in which Broadcom
may assert or otherwise enforce the Licensed Patents or any other patents or intellectual property
rights against Qualcomm or any of its Affiliates or any other third party in any jurisdiction or
venue, including in any court or the ITC.




     11.8 Severability. If any provision of this Agreement is held to be illegal or
unenforceable, such provision shall be limited or eliminated to the minimum extent necessary so
that the remainder of this Agreement will continue in full force and effect and be enforceable. The
Parties agree to negotiate in good faith an enforceable substitute provision for any invalid or
unenforceable provision that most nearly achieves the intent of such provision.



     11.9 No Third Party Beneficiaries. This Agreement is solely for the benefit of
Broadcom and Verizon. No other person or entity shall be entitled to rely on this Agreement or to
anticipate the benefits of this Agreement or otherwise assert or be entitled to any rights or
licenses as a third party beneficiary hereof. Notwithstanding anything to the contrary, nothing in
this Agreement shall be construed as a release of or license or grant of other rights to or for the
benefit of Qualcomm or any of its Affiliates or any other third party, whether directly or
indirectly.



     11.10 Entire Agreement. This Agreement embodies the entire understanding of the
Parties with respect to the subject matter hereof, and merges all prior discussions between them,
and neither of the Parties shall be bound by any conditions, definitions, warranties,
understandings, or representations with respect to the subject matter hereof other than as
expressly provided herein; except for the Mutual Non-Disclosure and FRE 408 Agreement between
Broadcom and Verizon dated July 10, 2007 which remains in full force and effect in accordance with
its own terms with respect to information disclosed under the Mutual Non-Disclosure and FRE 408
Agreement that is not disclosed in this Agreement. In the event of a conflict between such Mutual
Non-Disclosure and FRE 408 Agreement and this Agreement with respect to the subject matter of this
Agreement, then the terms of this Agreement shall prevail. No oral explanation or oral information
by either Party hereto shall alter the meaning or interpretation of this Agreement.



     11.11 Modification; Waiver. No modification or amendment to this Agreement may be
made except in a writing signed by authorized representatives of both Parties. No waiver of any
rights will be effective unless assented to in writing by the Party to be charged, and the waiver
of any breach or default will not constitute a waiver of any other right hereunder or any
subsequent breach or default.



     11.12 Counterparts. This Agreement may be executed in any number of original, fax or
copied counterparts, each of which shall be deemed to be an original and all of which together
shall be deemed to be one and the same instrument.



     11.13 Bankruptcy. Each Party acknowledges that all rights and licenses granted by it
under or pursuant to this Agreement are, and shall otherwise be deemed to be, for purposes of
Section 365(n) of the United States Bankruptcy Code (the “Bankruptcy Code”), licenses of
rights to “intellectual property” as defined under Section 101(35A) of the Bankruptcy Code. Each
Party acknowledges that if such Party, as a debtor in


 



[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.





13









 








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possession or a trustee-in-bankruptcy in a case under the Bankruptcy Code, rejects this
Agreement, the other party may elect to retain its rights under this Agreement as provided in
Section 365(n) of the Bankruptcy Code. Each Party irrevocably waives all arguments and defenses
arising under 11 U.S.C. 365(c)(1) or successor provisions to the effect that applicable law excuses
the party, other than the debtor, from accepting performance from or rendering performance to an
entity other than the debtor or debtor in possession as a basis for opposing assumption of the
Agreements by the other party in a case under Chapter 11 of the Bankruptcy Code to the extent that
such consent is required under 11 U.S.C. § 365(c)(1) or any successor statute; provided that such
Party, as a debtor in possession or a trustee-in-bankruptcy, agrees in writing (with approval of
the court) that any assumption, assignment or Change of Control of Verizon resulting from or
subsequent to any such bankruptcy proceeding shall be subject to Section 11.6.




[Remainder of Page Intentionally Blank]



 



[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.





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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be signed below by their
respective duly authorized officers.




	 	 	 	 	 	 	 	 	 
	BROADCOM CORPORATION	 	 	 	CELLCO PARTNERSHIP
	 	 	 	 	 	 	d/b/a VERIZON WIRELESS
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ David Dull
	 	 	 	By:
	 	/s/ Steven E. Zipperstein
	 

	 	 
	 	 	 	 	 	 
	Print:

	 	David Dull
	 	 	 	Print:
	 	Steven E. Zipperstein
	Title:

	 	Senior Vice President & General Counsel
	 	 	 	Title:
	 	Vice President & General Counsel
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	VERIZON COMMUNICATIONS INC.
	 

	 	 	 	 	 	By:
	 	/s/ John Thorne
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Print:
	 	John Thorne
	 

	 	 	 	 	 	Title:
	 	Senior Vice President and Deputy
	 

	 	 	 	 	 	 	 	General Counsel





 



[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.





15