Sample Business Contracts

Component Recovery Revenue Sharing Agreement - Micron Semiconductor Inc. and Micron Custom Manufacturing Services Inc.

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                      COMPONENT RECOVERY
      This  Component Recovery Revenue Sharing Agreement  is
entered  into effective as of July 14, 1994 (the  "Effective
Date"), by and between Micron Semiconductor, Inc., and Idaho
corporation  located at 2805 E. Columbia Road, Boise,  Idaho
83706  ("MSI"),  and  Micron Custom Manufacturing  Services,
Inc., and Idaho corporation located at 8445 Westpark Street,
Boise,  Idaho 83704 ("MCMS").

WHEREAS,   MSI is engaged in the business of developing  and
manufacturing  semiconductor  memory  devices  and  MCMS  in
engaged  in the business of recovering semiconductor  memory
devices for sale to third parties; and

WHEREAS,   MSI  wishes to sell and MCMS wishes  to  purchase
semiconductor memory devices manufactured by  MSI  which  do
not  meet MSI's full specifications and utilize them in less
critical applications;

NOW,  THEREFORE,  for good and valuable  consideration,  the
receipt of which is hereby acknowledged, the parities hereto
agree as follows:

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

     (a)   "Affiliated company" means any entity  which  is
fifty percent (50%) owned or controlled by MCMS or by Micron
Technology, Inc. and any entity which is fifty percent (50%)
owned or controlled by any such entity.

     (b)   "Components"  means  MSI  semiconductor  memory
devices, in die or packaged form, including but not  limited
to   DRAMs,  SRAMs,  and  VRAMs,  which  have  failed  MSI's
electrical  or burn-in tests or otherwise do not meet  MSI's
databook specifications for such devices.

     (c)   "MSI's Average Sales Price" means:

           (i)  with respect to a non-DRAM component,  MSI's
gross  revenues  from  direct sales in the  previous  fiscal
month   of   any  such  component  meeting  MSI's   databook
specifications, divided by the total number of  such  direct
sales components sold during the same period; and

           (ii) with respect to a DRAM component, the sum of

           (a)  MSI's gross revenues from direct sales in the
previous  fiscal  month  of any such component  meeting  MSI
databook specifications;

           (b)  MSI's  book  revenues  from   sales   by
distributors  in  the  previous fiscal  month  of  any  such
component meeting MSI databook specifications; and,

           (c)  MSI's gross revenues from direct sales  of
modules   in  the  previous  fiscal  month  less  applicable
assembly  changes relating to such module;

divided  by  the  total  number of direct,  distributor  and
module components sold during the same period.

2.   Sale  of  Components.  MSI hereby grants to  MCMS  the
right to purchase all of MSI's Components and to resale  the
Components  upon the terms and conditions set forth  herein.
Accordingly,  MSI  shall not sell Components  to  any  third
party  whether in the form of components, modules  or  board
level  products  

without first offering such Components  for sale  to  MCMS  
in accordance with this Agreement.   Nothing contained  
herein  shall obligate MSI to produce  Components for  sale  
to MCMS, or obligate MCMS to purchase  Components made 
available for sale by MSS.

3.   Component  Recovery.  MSI hereby grants  to  MCMS  the
right  to  enter  onto  MSI's  premises  at  all  reasonable
business  hours to recover Components from MSI.  This  right
shall  include  the  right  by MCMS  personnel  directly  or
indirectly,  with  or  without  MSI's  assistance,  (i)   to
retrieve  Components form MSI's Probe area; (ii)  to  select
and  assemble Components retrieved from MSI's Probe area for
submission   to   MSI's   Assembly   area   for    packaging
(encapsulation)  by  MSS;  (iii)  to  retrieve  from   MSI's
Assembly area Components packaged by MSI for MCMS, and  (iv)
to  retrieve Components directly from MSI's Test area.   for
the  purpose  of  allowing  MCMS  personnel  to  select  and
assemble  Components for packaging by MS in  MSI's  Assembly
area,  MSI  agrees  to make available to  MCMS  at  no  cost
approximately  300 square feet of Assembly  cleanroom  floor
space  for  use  by MCMS personnel and equipment;  provided,
however, that MSI may for reasonable business purposes  deny
MCMS  access to MSI's manufacturing site, recover Components
and  provide such Components to MCMS off-site at MSI's cost.
All   risk  of  loss  and  all  costs  associated  with  the
fabrication,  probe, assembly and testing of  Components  by
MSI, including Components selected by MCMS for packaging  by
MSI,  shall  be borne by MSI up to the point of delivery  to
MCMS.    Except  as otherwise provided above, the  point  of
delivery shall be deemed to be the point of  shipment by MSI
at MSI's manufacturing site or the point of direct retrieval
by   MCMS   personnel  of  packaged  Components   at   MSI's
manufacturing site.

4.   Revenue Sharing.  In consideration of the sale to MCMS
of  the  components, MCMS hereby agrees to pay  to  MSI  and
amount  equal to fifty percent (50%) of the total amount  of
net  revenues obtained by MCMS from sales of the  Components
to  third parities and affiliated companies and derived from
intracompany  sales to MCMS's contract assembly  operations.
For  the  purpose  of  determining revenues  from  sales  to
affiliated  companies  and  intracompnay  sales  to   MCMS's
contract  assembly  operations, prices for  such  components
shall  be based on MSI's Average Sales Price and established
in  accordance with the transfer price schedule set forth in
Schedule A attached hereto.

5.    Payment  of Revenue Sharing Amount.  Unless  otherwise
provided herein, MSI's share of revenues derived from  sales
to third parities and intracompany sales of Components shall
be  paid  by MCMS to MSI net forty-five (45) days after  the
end  of each MCMS fiscal month.  Any amount not received  by
MSI  when due shall be subject to a service charge  of  1.5%
per  month from the due date.  MCMS shall pay all  of  MSI's
costs and expenses (including reasonable attorneys' fees) to
enforce MSI's rights under this Section.

6.   Inspection of Records.  MCMS shall keep full, clear and
accurate   records   with  respect  to   third   party   and
intracompany  sales  of Components.  MSI  shall  keep  full,
clear and accurate records with respect to the Average Sales
Price  used  for  the purpose of calculating  the  price  of
Components.   Each  party's records shall  be  kept  at  the
party's principal place of business and shall be open at all
reasonable  times during the term of this Agreement  to  the
inspection  of  a mutually agreeable third  party.   Neither
party  hereto  shall unreasonably withhold  from  the  other
information necessary to confirm compliance with  the  terms
of  this  Agreement, including by not limited to information
pertaining  to  intellectual property rights and  agreements
pertaining to the Components.  In the event a party requests
and inspection as provided herein, such party shall bear all
costs  and expenses associated with such inspection,  unless
such inspection reveals noncompliance with the terms of this
Agreement by the other party, in which case the noncomplying
party shall bear all such costs and expenses.

7.   Intellectual Property Rights.  Each party hereby grants
to  the  other party the right to use and make available  as
reasonably requested the intellectual property of the other,
including  but  not limited to patents, patent applications,
software programs, and copyrighted materials, as appropriate
to  identify, recover and sell the Components.  In  addition
to  bearing  all  costs of development  and  manufacture  of
Components,  MSI  shall  bear sole responsibility  for,  and
shall promptly pay when due, all royalty obligations arising
from  patent  license agreements entered  into  by  MSI,  or
Micron  Technology,  Inc. on behalf of MSI,  

and  associated with  sales  of the Components to and by MCMS.   
MSI  hereby agrees  to  indemnify MCMS for any damages incurred  
in  the event  of nonpayment by MSI of any such royalty obligations,
provided that such indemnification royalties arising form  a
bona  fide  dispute by MSI regarding the terms or extent  of
such obligations.

8.   Confidentiality.  Each party acknowledges that it will
have  access to certain information and materials concerning
the business, plans, customers, technology, and products  of
the other pertaining to the subject matter of this Agreement
that  are confidential and of substantial value to the other
party.   Each  party agrees that it will  not  at  any  time
disclose such confidential information to any third party.


10.   Limitation on Liability.  Except as otherwise provided
herein,  in  the  event of termination by  either  party  in
accordance  with  any of he provisions  of  this  Agreement,
neither  party  shall  by liable of he  provisions  of  this
Agreement,  neither  party shall  be  liable  to  the  other
because of such termination, for compensation, reimbursement
or  damages on account of the loss of prospective profits or
anticipated  sales,  or on account of  any  expenditures  or
commitments  in connection with the business or goodwill  of
either party.

11.  Patent Indemnity.  MSI represents and warrants that the
delivery  and sale of components hereunder will not infringe
any  patent, trademark or other intellectual property rights
of  third  parities.   MSI  shall indemnify  and  hold  MCMS
harmless  of and from any and all losses, including  without
limitation   loss  of  good  will  and  loss   of   business
opportunities,  costs,  claims,  liabilities  and  expenses,
including attorneys' fees, incurred by MCMS with respect  to
any  such  infringement of any patent,  trademark  or  other
intellectual   property   rights,   provided    that    such
indemnification shall not exceed that amount equal to  MSI's
share of he net revenues derived from the sale by MCMS of he
infringing  products.  MCMS shall have the right  to  offset
against  payments  due to MSI hereunder the  amount  to  any
indemnification owed by MS and to MCMS under this Section.

12.  Term and Termination.

     12.1  Term.  The term of this Agreement shall commence
on  the Effective Date and shall continue thereafter  for  a
period of three (3) full fiscal years from the fiscal  year-
end  next  following the Effective Date, subject to  earlier
termination  in  accordance  with  the  provisions  of  this

     12.2  Termination by Mutual Agreement.  This Agreement
may  by  terminated  at  any time upon  the  mutual  written
agreement of the parties.

     12.3  Survival of certain Terms.  Upon any termination
of  this Agreement, any provision of this Agreement which by
its  terms  appears to be applicable to periods  or  actions
occurring  after termination of the Agreement, shall  remain
in full force and effect.

13.  Application to Subsidiaries.  The obligations of either
party hereunder shall be applicable to subsidiaries of  each
such party.  "subsidiary" shall mean any entity owned 50% or
more by a party.


14.  General Provisions.

     14.1  Governing Law.  This Agreement shall be governed
by  and construed under the laws of the State of Idaho.  The
federal and sate courts within the State of Idaho shall have
exclusive jurisdiction to adjudicate any dispute arising out
of this Agreement.

     14.2  Entire Agreement.  This Agreement sets forth the
entire  agreement and understanding of the parities relating
to   the   subject  matter  herein  and  merges  all   prior
discussions  between them.  No modification of or  amendment
to  this Agreement, nor any waiver of any rights under  this
Agreement,  shall be effective unless in writing  signed  by
the party to be charged.

     14.3   Notices.  Any notice required or  permitted  by
this  Agreement  shall be in writing and shall  be  sent  by
prepaid   registered  or  certified  mail   return   receipt
requested, addressed to the other party at the address shown
at  the beginning of this Agreement or at such other address
for  which  such party give notice hereunder.   Such  notice
shall  be  deemed to have been given three  (3)  days  after
deposit in the mail.

     14.4   Force Majeure.  Nonperformance of either  party
shall  be excused to the extent that performance is rendered
impossible  by  strike, fire, flood,  governmental  acts  or
orders or restrictions, or any other reason where failure to
perform  is  beyond  the  control  and  not  caused  by  the
negligence of the nonperforming party.

    14.5  Nonassignability and Binding Effect.   The rights
and  obligation of each party hereunder may not be  assigned
or  transferred  directly or indirectly  without  the  prior
written consent of the other party, which consent shall  not
be  unreasonably  withheld.  Subject to the foregoing,  this
Agreement shall be binding upon and inure to the benefit  of
the parities hereto, their successors and assigns.

     14.6  Counterparts.  This Agreement may be executed in
two  or more counterparts, each of which shall be deemed  an
original  and  all  of which together shall  constitute  one

                                  SERVICES, INC.

By: /s/ Steven R. Appleton        By: /s/ Joseph M. Daltoso
   ------------------------          ---------------------------

Title:  President                 Title:  Chairman and President
      ---------------------             ------------------------


                                   Schedule A
                           Intercompany Transfer Price
                    MCMS                            MCMS           
                  Purchase          MCMS          Purchase          MCMS
     MSI            Price         Purchase          Price         Purchase  
  Previous         for Full         Price        for Printer        Price
   Fiscal       Specification    for Systems     Buffer Grade     for Audio 
 Month's ASP        Parts        Grade Parts        Parts       Grade Devices 
------------    -------------    -----------     ------------   -------------
      X            .975(X)        .8288(X)         .70(X)          .25(X)


                         COMPONENT RECOVERY AGREEMENT

     THIS AMENDMENT NUMBER 1 (this "Amendment") is entered into by and between
Micron Technology, Inc., a Delaware corporation ("MTI") and Micron Electronics,
Inc., a Minnesota corporation ("MEI").

     WHEREAS, MTI and MEI entered into that certain Amended and Restated
Component Recovery Agreement with an effective date of September 2, 1999 (the

     WHEREAS, MTI and MEI desire to amend the Agreement in accordance with the
terms set forth below:

     NOW THEREFORE, MTI and MEI agree as follows:

1. Amendment.  Section 11 of the Agreement is amended by adding the following
as the last sentence thereof:

     A party desiring to exercise its option under this Section 11 shall provide
     the other party with not less than thirty (30) days written notice prior to
     the effective date of the exercise of the option; provided, however, that
     such written notice requirement shall not be construed to extend the term
     of this Agreement as provided in Section 17.1 herein.

2. No Further Modification.  Except as set forth herein, the provisions of the
Agreement remain unmodified and in full force and effect.

     IN WITNESS WHEREOF, the parties have caused this Amendment to be effective
as of the date of the last signature set forth below.


By:  /s/                            By:  /s/

Name:  Roderic W. Lewis             Name:  Steven Arnold

Title:  VP Legal Affairs            Title:  VP, General Counsel

Date:  November 13, 2000            Date:  November 16, 2000