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Exhibit 10.23
KNOW-HOW LICENSE AGREEMENT
This Agreement is made effective as of February 26, 1998 ("Effective
Date"), between Micron Electronics, Inc. ("MEI"), a corporation having an office
at 900 East Karcher Road, Nampa, Idaho 83687, and MCMS, Inc. (f/k/a Micron
Custom Manufacturing Services, Inc.) ("MCMS"), a corporation having a place of
business at 16399 Franklin Road, Nampa, Idaho 83687.
Whereas, this Agreement is made pursuant to, and is attached as a
Exhibit to, that Recapitalization Agreement dated December 21, 1997 by and among
MCMS, MEI, and Cornerstone Equity Investors, IV, L.P.;
Whereas MEI is the owner of certain Know-How, as defined below; and
Whereas MCMS desires to acquire a license to the Know-How; and
Whereas MEI is willing to grant a non-exclusive license to the Know-How
to MCMS for good and valuable consideration, the adequacy and receipt of which
is hereby acknowledged, and on the terms and conditions set forth in this
Agreement;
Now, therefore, MEI and MCMS hereby agree to the following:
1. Definitions
1.1. "MCMS" means MCMS and its Subsidiaries.
1.2. "Subsidiary" shall mean a corporation, company, or other legal
entity (i) more than fifty percent (50%) of whose outstanding
shares or securities (representing the right to vote for the
election of directors or other managing authority) are, now or
hereafter, owned or controlled, directly or indirectly, by
MCMS; or (ii) which does not have outstanding shares or
securities, but more than fifty percent (50%) of whose
ownership interest representing the right to make the
decisions for such corporation, company, or other entity is,
now or hereafter, owned or controlled, directly or indirectly,
by MCMS.
1.3. "Know-How" shall mean: scientific and engineering information,
trade secrets, specifications, manufacturing and production
processes and techniques, research and development
information, designs, plans, proposals, technical data and
other technical know-how that was conceived by MCMS prior to
the Effective Date or utilized by MCMS as of the Effective
Date and that relates to the Business, provided, however, that
Know-How shall not include any MEI patents, patent
applications, or any invention disclosures (or the inventions
disclosed within the aforementioned patents, patent
applications, or invention disclosures) not
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otherwise assigned to MCMS in the PATENT AND INVENTION
DISCLOSURE ASSIGNMENT AND LICENSE AGREEMENT executed on the
Effective Date.
1.4. "Business" shall mean the design, assembly, or testing of
custom complex printed circuit boards, memory intensive
products and system level assemblies for third party
electronics original equipment manufacturers.
2. Warranties
2.1. MEI warrants that it has not previously granted any assignment
or exclusive license in or to the Know-How to any third party,
and that MEI has the full right and capacity to license the
Know-How to MCMS, and to enter into and carry out its
obligations under this Agreement, without conflicting with any
other obligation of MEI.
3. Know-How License
3.1. MEI hereby grants to MCMS an irrevocable (except as set forth
in Section 3.3), non-transferable, fully paid up, worldwide,
non-exclusive license to utilize the Know-How solely in
connection with the Business. MCMS shall have no right to
sublicense its rights granted hereunder to any third party
without the prior written consent of MEI, which consent shall
not be unreasonably withheld, provided, however, that MEI's
refusal to consent to MCMS' grant of a sublicense to an MEI
competitor shall not be deemed to be unreasonable.
3.2. MCMS shall not assign or transfer any of its rights granted
hereunder without the prior written consent of MEI.
Notwithstanding the foregoing, an assignment or transfer of
the Agreement and the licenses granted therein may be effected
by operation of law, such as for example, by merger,
consolidation, sale of the business or assets,
reincorporation, or nonbankruptcy reorganization.
3.3. This Agreement shall commence on the Effective Date and shall
continue thereafter in perpetuity; provided, however, that
either party may, upon ninety (90) days written notice to the
other party, terminate this Agreement in the event of a
material breach thereof by such party; provided, further, that
if such breach is cured within such ninety (90) day period,
this Agreement shall not be so terminated.
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4. Miscellaneous
4.1. Except as set forth in the Recapitalization Agreement, MEI
neither warrants nor represents that the use of the Know-How
will not result in infringement of any patents of any third
party.
4.2. No modification of or amendment to this Agreement shall be
valid unless in a writing signed by the parties hereto
referring specifically to this Agreement and stating the
parties' intention to modify or amend the same. Any waiver of
any term or condition of this Agreement must be in a writing
signed by the party hereto sought to be charged with such
waiver referring specifically to the term or condition to be
waived, and no such waiver shall be deemed to constitute the
waiver of any other breach of the same or of any other term or
condition of this Agreement.
4.3. For a period of ten (10) years from the Effective Date, MCMS
and its sublicensees shall hold and keep as confidential and
secret all Know-How. During such ten (10) year period, MCMS
and its sublicensees shall take reasonable precautions to
prevent unauthorized disclosure and to safeguard the
confidentiality and secrecy of the Know-How, provided,
however, that MCMS and its sublicensees shall have the right
to disclose such Know-How to third parties to whom disclosure
is made in the ordinary course of the Business under
reasonable obligations of confidentiality.
MCMS and its sublicensees shall not be required to keep secret
and confidential any Know-How which they can demonstrate:
(i) has become generally available to the public through
no fault, negligence, unauthorized act or omission of
MCMS or its sublicensees and not as a result of a
breach of this Agreement; or
(ii) is lawfully disclosed to MCMS or its sublicensees by
an independent third party not previously employed by
MCMS or its sublicensees and that lawfully acquired
such information through no breach of any direct or
indirect obligation to MEI.
4.4 All notices and other communications hereunder shall be
sufficiently given for all purposes hereunder if in writing
and delivered personally, sent by documented overnight
delivery service or, to the extent receipt is confirmed,
telecopy, telefax or other electronic transmission service to
the appropriate address or number as set forth below or to
such other address or to the attention of such other person as
one party may designate by written notice to the other party
hereto.
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NOTICES TO MEI SHALL BE ADDRESSED TO:
Micron Electronics, Inc.
900 East Karcher Road
Nampa, Idaho 83687
Attention: General Counsel
Telecopy No: (208) 893-8711
WITH A COPY TO:
(which shall not constitute notice to MEI)
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Barry A. Bryer
Telecopy No: (212) 403-2000
NOTICES TO MCMS SHALL BE ADDRESSED TO:
MCMS, Inc.
16399 Franklin Road
Nampa, Idaho 83687
Attention: President
Telecopy No: (208) 898-2789
WITH A COPY TO:
(which shall not constitute notice to MCMS)
Cornerstone Equity Investors, L.L.C.
717 Fifth Avenue
Suite 1100
New York, New York 10022
Attention: Tony Downer
Michael E. Najjar
Telecopy No: (212) 826-6798
and
Kirkland & Ellis
153 East 53rd Street
New York, New York 10022
Attention: Frederick Tanne
Telecopy No: (212) 446-4900
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4.5 The headings and captions contained in this Agreement are for
reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. The use of the
word "including" herein shall mean "including without
limitation."
4.6 The language used in this Agreement shall be deemed to be the
language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied
against any person.
4.7 This Agreement and the Recapitalization Agreement contain the
entire agreement and understanding between the parties hereto
with respect to the subject matter hereof and supersede all
prior agreements and understandings, whether written or oral,
relating to such subject matter.
4.8 Any provision of this Agreement which is invalid or
unenforceable shall be ineffective to the extent of such
invalidity or unenforceability, without affecting in any way
the remaining provisions hereof.
4.9 Except as specifically provided herein, neither MEI nor MCMS
shall act or represent or hold itself out as having authority
to act as an agent or partner of the other party, or in any
way bind or commit the other party to any obligations. The
rights, duties, obligations and liabilities of the parties
shall be several and not joint or collective, and nothing
contained in this Agreement shall be construed as creating a
partnership, joint venture, agency, trust or other association
of any kind, each party being individually responsible only
for its obligations as set forth in this Agreement.
4.10 The terms and conditions of this Agreement shall be governed
by and interpreted under the laws of the State of Idaho, and
may not be superseded, amended or modified except by written
agreement between the parties. Any litigation brought by a
party to this agreement shall be brought exclusively in the
state or federal courts located in Idaho.
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In witness whereof, this Agreement has been executed by duly
authorized representatives of the parties on the date below.
Micron Electronics, Inc. MCMS, Inc.
By: /s/ T. Erik Oaas By: /s/ Robert F. Subia
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T. Erik Oaas Robert F. Subia
Executive Vice President, President and Chief Executive
Finance and Chief Financial Officer Officer
Date: February 26, 1998 Date: February 26, 1998
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