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EXHIBIT 10.25
LICENSE AGREEMENT
This Agreement is made this 22nd day of August 2000, ("Effective Date") by and
between Micron Electronics, Inc. having its principal place of business at 900
E. Karcher Road, Nampa, Idaho 83687 (hereinafter referred to as "Licensor") and
Simple Technology, Inc., having its principal place of business at 3001 Daimler
Street, Santa Ana, CA 92705 (hereinafter referred to as "Licensee").
WHEREAS, Licensor has the right to provide a license under certain United States
patents as herein identified; and
WHEREAS, Licensee desires to obtain, and Licensor is willing to grant Licensee,
a non-exclusive license as hereafter defined and under the terms and conditions
herein specified.
NOW, THEREFORE, in consideration of the premises and mutual agreements herein
contained Licensor and Licensee AGREE AS FOLLOWS:
1. DEFINITIONS
1.1 "Subsidiary" shall mean any corporation, company, or other entity of
which Licensee now or hereafter owns or controls, directly or
indirectly, more than fifty percent (50%) of the outstanding shares of
stock entitled to vote for the election of directors. Any corporation,
company, or other entity which would at any time be a Subsidiary of
Licensee, by reason of the foregoing shall be considered a Subsidiary
only for so long as the percentage of ownership or control, directly
or indirectly, by Licensee meets the conditions set forth above.
1.2 "Memory Module" shall mean:
1.2.1. a memory module (a) compliant (as that term is used in the
memory module industry) with any of the following memory module
specifications, (b) labeled in substantial compliance with the
requirements of any of the following industry standard memory
module specifications, or (c) expressly offered for sale as being
in complete compliance with any of the following industry
standard memory module specifications: Intel Corporation's "PC
SDRAM Unbuffered DIMM Specification," Revision 1.0; Intel
Corporation's "PC SDRAM Registered DIMM Specification," Revision
1.0; Via Technologies' "PC133 SDRAM Unbuffered DIMM
Specification," Revision 0.4; Rambus, Inc.'s "Direct Rambus RIMM
Module Specification," version 0.9; or Rambus, Inc.'s "Rambus
SO-RIMM Module (with 128/144MB RDRAMs)," version 0.7; or
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1.2.2. a memory module containing a volatile memory device and a write
protectable SEEPROM and which:
1.2.2.1. allows the SEEPROM to be write protected via a write
protect or write control pin after the SEEPROM is installed
on the memory module; or
1.2.2.2. is write protected after the SEEPROM is installed onto
the memory module substrate by Licensee or on Licensee's
behalf; or
1.2.2.3. electrically couples the write protect pin of the
SEEPROM to an edge connector so that the write protect state
of the SEEPROM, i.e., write protected or write enabled, may
be modified by external circuitry after the SEEPROM is
installed on the substrate; and
1.2.3. a memory module that is covered by a claim of Patents that has
not been found to be invalid or unenforceable by a court of last
resort.
1.3 "Licensed Memory Module" shall mean a Memory Module for which a
royalty has been paid to Licensor by Licensee pursuant to Section 3 of
this Agreement.
1.4 "Patents" shall mean United States Patents Numbers 5,661,677,
5,859,792, 5,963,463 and any divisional, continuation, reexamination,
reissue, or foreign counterpart patents that may issue with respect to
any of the aforesaid patents.
2. LICENSE GRANT
2.1 Licensor grants to Licensee and Subsidiaries of Licensee a
non-exclusive, personal, non-transferable, except as specified in
Section 6.2, license under the Patents to test, make, use, sell, offer
to sell, lease or otherwise dispose of Licensed Memory Modules.
2.1.1. With respect to the licenses granted in Section 2.1, the right
to "make" shall include the right to have a third party make
Licensed Memory Modules for the use and benefit of Licensee or
Subsidiaries of Licensee, but only if (i) such Licensed Memory
Modules are sold by Licensee under the trademarks, trade names or
other commercial indicia of Licensee or Subsidiaries of Licensee,
and (ii) said Licensed Memory Modules are made by the third party
using manufacturing drawings and specifications (a) originated by
Licensee or Subsidiaries of Licensee or (b) originated by any
third party specifically and exclusively for Licensee or
Subsidiaries of Licensee.
2.2 Neither Licensee nor Subsidiaries of Licensee shall have any right to
sublicense the rights granted in Paragraph 2.1 or 2.1.1 to any third
party without the prior
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written consent of Licensor.
2.3 Except as stated in Paragraph 6.2, neither Licensee nor Subsidiaries
of Licensee shall assign or transfer any of its rights granted
hereunder without the prior written consent of Licensor which consent
shall not be unreasonably withheld.
2.4 Any activity by Licensee or Subsidiaries of Licensee not expressly
licensed herein and which constitutes an infringement of any claim of
the Patents shall be deemed an unauthorized patent infringement. No
right or license is granted hereby under any patent, patent
application or patent claim, except as specifically and expressly
provided herein.
3. ROYALTY AND PAYMENTS
3.1 Licensee agrees to pay Licensor a continuing royalty, throughout the
term of this Agreement, equal to forty cents ($0.40) per unit
("Royalty Rate") for each Memory Module (a) made, used, sold, leased,
or otherwise disposed of by Licensee or Subsidiaries of Licensee in
the United States or (b) imported into the United States by or for
Licensee or Subsidiaries of Licensee, if and only if such Memory
Module is covered by a claim of Patents that has not been held invalid
or unenforceable by a court of last resort, so long as a royalty for
each such unit was not previously paid by a third party in accordance
with a license or other agreement with Licensor.
3.2 To the extent that Licensee may obtain Memory Modules from a third
party, which has been licensed by Licensor to (a) make, use, sell, or
otherwise distribute within the United States Memory Modules falling
within the scope of any claim of the Patents or to (b) import such
Memory Modules into the United States, then Licensee shall have no
obligation to pay to Licensor any Royalty Rate based upon Licensee's
use, sale, leasing, or other distribution of those Memory Modules.
3.3 Licensee agrees to pay Licensor the sum calculated by multiplying the
total number of Memory Modules (a) made, used, sold, leased, or
otherwise disposed of by Licensee or Subsidiaries of Licensee in the
United States or (b) imported into the United States by or for
Licensee or Subsidiaries of Licensee between October 27, 1999 and the
Effective Date hereof by the Royalty Rate, if and only if such Memory
Module is covered by a claim of Patents that has not been held invalid
or unenforceable by a court of last resort. Said sum shall be payable
on or before August 30, 2000, so long as a royalty for each such
Memory Module was not previously paid by a third party in accordance
with a license or other agreement with Licensor.
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4. REPORTS
4.1 Licensee shall keep manufacturing, shipping and sales records of all
Memory Modules (a) made, used, sold, leased, or otherwise disposed of
by Licensee or Subsidiaries of Licensee in the United States or (b)
imported into the United States by or for Licensee or Subsidiaries of
Licensee during the term of this Agreement, such records shall be
sufficient to permit verification of the accuracy and completeness of
the information and the royalties required to be reported and paid
under this Agreement. Licensee shall not be required to keep such
records beyond three (3) years after each due date for payment of
royalty for such Memory Modules.
4.2 On or before the last day of January, April, July, and October of each
year during the term hereof, and on the thirtieth (30th) day after
termination hereof, Licensee shall send Licensor a written report,
certified by an officer of Licensee as to its correctness to the best
of the officer's belief, showing separately the total number of Memory
Modules (a) made, used, sold, leased, or otherwise disposed of by
Licensee or Subsidiaries of Licensee in the United States or (b)
imported into the United States by or for Licensee or Subsidiaries of
Licensee during the preceding calendar quarter, and computing the
amount due Licensor for the preceding calendar quarter. Each such
report shall be accompanied in the manner provided for in Paragraph
4.5 by the proper amount then payable to Licensor as shown in such
report.
4.2.1. All such written reports shall be mailed to Licensor at the
following address:
Micron Electronics, Inc.
Patent Department
900 E. Karcher Road
Nampa, ID 83687
4.3 In the event that any report and payment are not made by Licensee by
the date provided under this Agreement, interest shall be payable on
the past due amounts at the rate of the prime lending rate as
published in the Wall Street Journal from time to time plus 2%,
compounded quarterly, from the date payment was due pursuant hereto to
the date of payment, which interest shall be in addition to any other
remedy provided Licensor by law or by this Agreement.
4.4 Licensor shall have the right, during reasonable business hours and
upon sixty (60) days advance notice, to have the correctness of any
such report and/or payment audited, at Licensor's expense, by a firm
of independent public accountants, selected by Licensor, and
reasonably acceptable to Licensee, which shall examine Licensee's
records only on matters pertinent to this Agreement. No more than one
such audit shall be performed per annum, unless Licensee has
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underreported as provided in the following sentence. In the event it
shall be determined by the independent public accountants, at any
time, that Licensee has underreported and/or underpaid in an amount in
excess of five percent (5%) of the royalties properly due with respect
to one or more reports or payments, Licensee, in addition to any other
remedy provided Licensor by law or by this Agreement, shall:
4.4.1. reimburse Licensor's full cost and expense associated with such
audit; and
4.4.2. pay Licensor an amount equal to two times that which Licensee
has failed to report or pay, with interest at the prime rate of
the prime lending rate as published in the Wall Street Journal
from time to time plus 2%, compounded quarterly, calculated from
the date each royalty accrued to the date of payment under this
section. Any payments due under this Paragraph shall be due and
payable ten (10) days following notice from Licensor of such
failure, breach or default.
4.5 All payments called for under this Agreement shall be in United States
currency, without deductions of taxes of any kind, payable to Licensor
at U.S. Bank of Oregon, 555 S.W. Oak Street, Suite 400, Portland,
Oregon 97204, U.S.A. by wire transfer to:
Micron Electronics, Inc.
Patent Department
Account #: 153607639637
ABA/Routing # 123000220
or to any other account that Licensor may request in writing.
4.6 If a Subsidiary of Licensee that (a) has made, used, sold, leased, or
otherwise disposed of License Memory Modules in the United States or
(b) has imported or has had imported Licensed Memory Modules into the
United States, is for any reason no longer a Subsidiary of Licensee,
then Licensee shall notify Licensor in writing that such entity is no
longer a Subsidiary of Licensee within thirty (30) days of the date
that such entity is no longer a Subsidiary of Licensee.
5. TERM AND TERMINATION
5.1 All grants, obligations and provisions herein shall continue in full
force and effect, unless sooner terminated as hereinafter provided,
until May 15, 2016, the expiration date of the Patents.
5.2 Licensor may terminate this Agreement upon written notice to Licensee
if:
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5.2.1. Licensee remains in default in making any payment or report
required hereunder for a period of sixty (60) days or fails to
comply with any other provision hereof for a period of sixty (60)
days, in each case after written notice of such default or
failure is given by Licensor to Licensee; provided that if
Licensee shall be in default in making any two successive
payments or reports required hereunder on timely basis, Licensor
shall be entitled to terminate this Agreement upon written notice
to Licensee, unless a genuine and good faith dispute exists as to
the amount due and any amounts not in dispute are timely paid.
5.2.2. Licensee shall become insolvent, make an assignment for the
benefit of creditors, or commit any act of bankruptcy, or any
order for the compulsory liquidation of Licensee shall be made by
any court.
5.2.3. Licensee shall be determined by a court of competent
jurisdiction to have willfully or deliberately violated any
provision of this Agreement, or to have concealed from Licensor
any failure to comply with this Agreement including, but not
limited to, the deliberate or willful understatement of royalties
payable or the refusal to timely pay royalties, or shall be
determined to have acted other than in good faith in breaching
any provision of this Agreement; in such event, the termination
shall be effective as of the date of notice given by Licensor.
5.3 Any termination of this Agreement shall not relieve Licensee of
liability for any payments accrued or owing prior to the effective
date of such termination, or for any royalty.
5.4 Licensee agrees that should it, during the term of the Agreement,
contest the validity of any of the Patents by filing or causing others
to file any legal action or any proceeding for reexamination, then
Licensor shall have the right to immediately terminate this Agreement
and/or any and all rights and licenses granted to Licensee and
Subsidiaries of Licensee by this Agreement, to the extent that the
exercise of such right to terminate is permitted under the law of the
United States.
5.5 If each and every claim of the Patents that read on Memory Modules are
held invalid by a court of last resort, then Licensee shall have no
duty to pay any additional royalties to Licensor after the date that
such court holds the last of such claims invalid.
6. ASSIGNMENTS
6.1 This Agreement may, at any time, upon written notice and without
Licensee's consent, be assigned by Licensor without such assignment
operating to terminate, impair, or in any way change any obligations
or rights which Licensor would
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have had, or any of the obligations or rights which Licensee would
have had, if such assignment had not occurred. From, and after, the
making of any such assignment by Licensor, the assignee shall be
substituted for Licensor as a party hereto and Licensor shall no
longer be bound hereby.
6.2 This Agreement shall inure to the benefit of, and be binding upon, the
successors and assigns of all parties, but no purported assignment or
transfer by Licensee of this Agreement or any part thereof, except an
assignment as part of a sale or other conveyance of substantially all
of the business of Licensee, shall have any force or validity
whatsoever, except, unless and until approved in writing by Licensor.
7. REPRESENTATIONS AND WARRANTIES
7.1 Licensor warrants that (a) it does not own any patents or applications
for patent, other than the Patents, which are necessary to make, use,
or sell Licensed Memory Modules; (b) it has the entire right, title
and interest in and to the Patents; (c) it has the right to enter into
this Agreement; and (d) there are no liens, conveyances, mortgages,
assignments, encumbrances or other agreements to which Licensor is a
party or by which it is bound, which would prevent or impair the full
exercise of all substantive rights granted to Licensee by Licensor
pursuant to the terms and conditions of this Agreement.
7.2 Licensor makes no representation or warranty that Licensed Memory
Modules will not infringe, directly, contributorily or by inducement
under the laws of the United States, any patent or other intellectual
property right of a third party.
7.3 In any dispute arising under this Agreement, Licensee will personally
submit itself to the jurisdiction of a court of lawful jurisdiction in
the State of Idaho if and when sued by Licensor in such court; that
Licensee will accept, as lawful and sufficient, service of process by
certified or registered mail directed to the company President, by
title or name, at the regular place of business for the Licensee; and
that Licensee will waive any objection they may have to venue.
7.4 In the event of any dispute between the parties, the prevailing party
will be entitled to all reasonable attorney's fees and all reasonable
costs incurred in enforcing this agreement.
7.5 Each party represents and warrants that this Agreement and the
transactions contemplated hereby do not violate any agreements each
party has with its agents, employees, or third parties.
7.6 Each party further represents and warrants that in executing this
Agreement, it does not rely on any promises, inducements, or
representations made by any
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party or third party with respect to this Agreement or any other
business dealings with any party or third party, now or in the future.
7.7 Each party represents and warrants that it is not presently the
subject of a voluntary or involuntary petition in bankruptcy or the
equivalent thereof, does not presently contemplate filing any such
voluntary petition, and does not presently have reason to believe that
such an involuntary petition will be filed against it.
7.8 Other than the express warranties of this Article, there are no other
warranties, express or implied.
8. GENERAL PROVISIONS
8.1 All notices to, demands, consents or communications which any party
may desire or may be required to give to the other must be in writing,
shall be effective upon receipt in the United States after having been
sent by registered or certified mail or sent by facsimile
transmission, and shall be effective upon receipt outside the United
States after having been delivered prepaid to a reputable
international delivery service or courier or sent by facsimile
transmission and addressed to such address as shall have been
designated by notice from the addressee for addressing of notices to
it, or if no such designation shall have been made, then to the
address of the party appearing above. Receipt shall be presumed on the
date of proper transmission as to facsimile transmission and otherwise
within three (3) Days as to notices given within the United States and
ten (10) Days as to notices given outside the United States.
8.2 No failure or delay to act upon any default or to exercise any right,
power or remedy hereunder will operate as a waiver of any such
default, right, power or remedy.
8.3 This Agreement constitutes the entire understanding of the parties
with respect to its subject matter and supersedes all prior and
contemporaneous oral or written negotiations, agreements and
understandings. This Agreement may not be modified or amended except
in writing duly signed by authorized persons on behalf of the parties
hereto.
8.4 If any provision of this Agreement is or becomes or is deemed invalid,
illegal or unenforceable under the applicable laws or regulations of
the United States, the State of Idaho or any other jurisdiction, such
provision will be deemed amended to the extent necessary to conform to
applicable laws or regulations or, if it cannot be so amended without
materially altering the intention of the parties, it will be stricken,
and the remainder of this Agreement will remain in full force and
effect.
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8.5 The validity, construction, interpretation and performance of this
Agreement, and any disputes or legal actions arising thereunder or
therefrom, shall be governed by the laws and regulations of the United
States of America and the State of Idaho, as applied to contracts made
and to be performed entirely within the State of Idaho.
8.6 This Agreement does not constitute that either party hereto is an
agent of the other party for any purpose whatsoever, nor does either
party hereto have the right or authority to assume, create or incur
any liability of any kind, express or implied, against or in the name
or on behalf of the other party.
8.7 The English language form of this Agreement shall control and
determine its interpretation.
8.8 Within two weeks of the Effective Date, Licensor shall dismiss with
prejudice, each party to bear its own attorneys' fees, costs and
expenses, any and all lawsuits against Licensee, including but not
limited to the lawsuit MICRON ELECTRONICS, INC. V. AMERICAN COMPUTER
AND DIGITAL COMPONENTS, INC., ET AL., Civil Case No. C00 01201 SBA,
filed in the U.S. District Court for the Northern District of
California. Within one week thereafter, Licensor shall provide a
file-stamped copy of the notice of dismissal to Licensee.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective duly authorized officers as of the Effective Date.
LICENSOR
Date: August 22, 2000
By:
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Printed Name: Steven P. Arnold
Title: Vice President, General Counsel
LICENSEE
Date: August 22, 2000
By:
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Printed Name: Manouch Moshayedi
Title: CEO
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