EXHIBIT 10.140

 

[Translation]

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

RESEARCH AND DEVELOPMENT ENGINEERING SERVICES AGREEMENT

 

This Research and Development Engineering Services Agreement (this “Agreement”)
is entered into as of July 31, 2013 by and between Micron Technology, Inc., a
Delaware corporation, with its principal place of business at 8000 S. Federal
Way, Boise, Idaho 83707 (“Recipient”) and Elpida Memory, Inc., a corporation
organized and operating under the laws of Japan with its principal place of
business at 2-1, Yaesu 2-chome, Chuo-ku, Tokyo, 104-0028, Japan (“Provider”). 
Each of Recipient and Provider may be referred to individually as a “Party” and
collectively as the “Parties”.

 

WHEREAS, Provider filed a petition for commencement of corporate reorganization
proceedings with the Court under the Corporate Reorganization Act of Japan on
February 27, 2012, and on March 23, 2012, the Court issued an order to commence
the Reorganization Proceedings;

 

WHEREAS, on July 2, 2012, Recipient and the Trustees of Provider entered into
the Sponsor Agreement (as hereinafter defined), which provides for, among other
things, Recipient’s acquisition of Provider and Recipient’s support of
Provider’s proposed plan of reorganization in connection with the Reorganization
Proceedings;

 

WHEREAS, as contemplated by the Sponsor Agreement, the proposed plan of
reorganization was initially submitted to the Court on August 21, 2012, the
Court approved submission of the proposed plan to creditors on October 31, 2012,
the creditors approved the plan on February 26, 2013 and on February 28, 2013,
the Court issued an order approving the proposed plan (such plan, as so
approved, and as may be amended from time to time, the “Reorganization Plan”);

 

WHEREAS, as of the date hereof, pursuant to the Sponsor Agreement and the
Reorganization Plan, Recipient has become owner of one-hundred per cent (100%)
of the equity of Provider, and as a result, Provider has become part of a
multinational group of companies of which Recipient is also a member, and which
group is a leading provider of semiconductor solutions;

 

WHEREAS, the Sponsor Agreement contemplates that promptly following the Closing
Date, and subject to receipt of any required approvals from the Trustees and the
Court, Recipient will implement the transition of Provider’s business as
promptly as practicable consistent with an orderly business transition and
integration process to a cost plus model as described in Attachment 7-1 and
Attachment 7-2 thereto (estimated to be completed within [*] after the Closing
Date) with the goal of generating more stable operating cash flows to meet the
requirements of Provider’s business, including for payment of the Installment
Payment obligations under the Reorganization Plan;

 

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[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

WHEREAS, the transition of Provider to the cost-plus model entails a number of
steps including, among other things, (i) the transfer of certain intellectual
property by Provider to Recipient pursuant to that certain Intellectual Property
Assignment Agreement, dated as of the date hereof (as it may be amended from
time to time, the “IP Assignment Agreement”), (ii) execution and delivery by
Provider and Recipient’s subsidiary Micron Semiconductor Asia Pte. Ltd. (“MSA”)
of that certain Front-End Manufacturing Supply Agreement, as of the date hereof
(as it may be amended from time to time, the “Supply Agreement”),
(iii) execution and delivery by Provider and MSA of that certain General
Services Agreement, as of the date hereof (as it may be amended from time to
time, the “General Services Agreement”), (iv) execution and delivery by Provider
and MSA of a back-end manufacturing services agreement, as of the date hereof,
(v) execution and delivery by Provider and Akita Elpida Memory, Inc. (“Akita”)
of a back-end manufacturing services agreement, as of the date hereof, in
substitution for the existing agreement between such parties, which will be
terminated, and a general services agreement, as of the date hereof,
(vi) execution and delivery by Akita and Recipient of a research and development
engineering services agreement, as of the date hereof, (vii) except as otherwise
agreed by the Parties, the termination or assignment to MSA or one of its
Affiliates, on or prior to the Supply Commencement Date (defined below), of all
of Provider’s and its subsidiaries’ other commitments for the sale of products
to third parties, (viii) the sale of inventory held by Provider’s subsidiaries,
wherever located, and the sale of finished goods owned by Provider and located
in Japan, in each case as of the Supply Commencement Date, to Recipient or
Recipient’s Affiliates on or promptly following the Supply Commencement Date
under separate agreements, (ix) the consolidation of Provider’s sales and
marketing subsidiaries, including Provider’s U.S. subsidiaries, with Recipient’s
global operations through merger, consolidation or transfer of all or
substantially all their respective assets, as the case may be, (x) the transfer
of all or substantially all of the assets and liabilities of Semiconductor
Patent Corporation to Provider prior to the IP Transfer Date (as defined herein)
and (xi) execution and delivery by Provider and Recipient of this Agreement;

 

WHEREAS, Recipient desires to obtain certain research and development services
from Provider commencing on the date hereof, along with all newly-created
Intellectual Property Rights associated with such services; and

 

WHEREAS, Provider desires to provide such research and development services to
Recipient and assign ownership of all Intellectual Property Rights and other
outputs of such services to Recipient.

 

NOW THEREFORE, the Parties agree as follows:

 

1.                                      Definitions.  In addition to the terms
defined elsewhere in this Agreement, capitalized terms used in this Agreement
shall have the respective meanings set forth below.  In addition, any
capitalized term used herein but not defined shall have the meaning ascribed to
such term in the Sponsor Agreement, unless the context otherwise requires.

 

1.1.                            “Affiliate” means, with respect to any specified
Person, any other Person that directly or indirectly, including through one or
more intermediaries, controls, or is controlled by, or is under common control
with such specified Person.

 

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[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

1.2.                            “Arm’s Length Profit Percentage” means such
appropriate mark-up as mutually agreed upon from time-to-time by the Parties in
writing (electronic, facsimile or otherwise) in accordance with arm’s length
principles and the most recent transfer pricing comparable analysis obtained by
Recipient, and in a manner consistent and in accordance with the Sponsor
Agreement.  Factors to be considered in determining the Arm’s Length Profit
Percentage shall include overall market conditions, the profitability of
comparable independent enterprises engaged in comparable transactions and the
functions performed, risks assumed, and assets utilized by each Party,
respectively.  The Parties agree that the initial Arm’s Length Profit Percentage
as of the Supply Commencement Date will be set by Recipient based on and
consistent with a recent transfer pricing comparable analysis obtained by
Recipient and shall be at least [*]%.  Any subsequent adjustments to the Arm’s
Length Profit Percentage will be made in accordance with Sections 3.3 and 3.4.

 

1.3.                            “Confidential Information” has the meaning
assigned to such term in the Confidentiality Agreement, as modified by
Section 10.

 

1.4.                            “Confidentiality Agreement” has the meaning set
forth in Section 10.

 

1.5.                            “Governmental Entity” means any governmental
authority or entity, including any agency, board, bureau, commission, court,
municipality, department, subdivision or instrumentality thereof, or any
arbitrator or arbitration panel.

 

1.6.                            “Intellectual Property Rights” means any or all
of the following and all rights in, arising out of, or associated therewith:
(i) any and all U.S. and foreign patents issued by the patent-granting authority
in any country in the world, together with any and all reissues, divisionals,
renewals, extensions, provisionals, continuations, continuations-in-part,
reexaminations, post-grant reviews, foreign counterparts or equivalents of any
of the foregoing, wherever and whenever existing; (ii) all inventions,
developments, discoveries, improvements, trade secrets, proprietary information,
know-how, technology, software, technical data, and all documentation embodying
or evidencing any of the foregoing; (iii) copyrights (including the rights under
Articles 27 and 28 of the Japanese Copyright Act), copyright registrations and
applications therefor and all other rights corresponding thereto throughout the
world; (iv) mask works, mask work registrations and applications therefor, and
any equivalent or similar rights in semiconductor masks, layouts, architectures
or topology; (v) industrial designs and any registrations and applications
therefor throughout the world; (vi) all rights in databases and data collections
throughout the world; and (vii) any similar, corresponding or equivalent rights
to any of the foregoing anywhere in the world.

 

1.7.                            “IP Transfer Date” has the meaning given to such
term in the IP Assignment Agreement.

 

1.8.                            “Licensed Products” shall mean all apparatuses,
devices and products of whatever kind or nature.

 

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[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

1.9.                            “Person” means any natural person, corporation,
joint stock company, limited liability company, association, partnership, firm,
joint venture, organization, business, trust, estate or any other entity or
organization of any kind or character.

 

1.10.                     “R&D Costs” means all of Provider’s research and
development expenses incurred by Provider in connection with the Services, based
on Japanese statutory accounting principles and in accordance with Provider’s
internal accounting policies and procedures, (a) including, without duplication,
the costs described in Section 3(a) of Exhibit A of Attachment 7-1 of the
Sponsor Agreement and (b) excluding the following expense items and other income
items:

 

(i)            Interest income or expense;

(ii)           Income taxes; and

(iii)          Reimbursable Costs (as defined below).

 

1.11.                     “R&D Services Fee” means the fee to be paid by
Recipient to Provider in accordance with Section 3.1.

 

1.12.                     “R&D Services Fee Offsets” means, with respect to any
particular period, any credits or grants from any Governmental Entity or other
Third Party, including non-recurring engineering (NRE) arrangements, in each
case, attributable to such period, received or recognized after the date of this
Agreement, to the extent not previously applied in reduction of the R&D Services
Fee, and only to the extent such amounts are not included as Manufacturing
Supply Fee Offsets (as such term is defined in the Supply Agreement) or as
General Services Fee Offsets (as defined in the General Services Agreement).

 

1.13.                     “Reimbursable Costs” means (i) all subcontracting
costs in respect of research and development services procured by Provider from
a permitted Third Party or a subsidiary in connection with the Services and
(ii) all damages paid by Provider arising under or relating to its performance
or breach of obligations hereunder.

 

1.14.                     “Services” has the meaning set forth in Section 2.1.

 

1.15.                     “Sponsor Agreement” means that Agreement on Support of
Reorganization Companies by and between Recipient and Nobuaki Kobayashi and
Yukio Sakamoto as trustees of the Reorganization Company (as defined therein)
and the Akita Reorganization Company (as defined therein), dated July 2, 2012,
as amended through the date hereof, and as may be further amended from time to
time in accordance with its terms.

 

1.16.                     “Supply Commencement Date” means the first date on
which both: (i) the manufacturing, sales and other operational computing systems
in use at Provider as of the date of this Agreement have been converted to
Recipient’s Enterprise Resources Planning System, as reasonably determined by
Recipient (such conversion estimated to be completed within [*] after the
Closing Date); and (ii)

 

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[*]Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

all required approvals from the Trustees and the Court for the transition to the
cost-plus model and related integration actions have been obtained (or receipt
of such approvals has been waived by Recipient).

 

1.17.                     “Third Party” means any Person other than Provider,
Recipient, and their respective Affiliates.

 

1.18.                     “Trustees” means the Initial Trustees, for so long as
they are serving as trustees of Both Reorganization Companies, and any other
person appointed by Both Companies’ Courts as a trustee of Both Reorganization
Companies after the Execution Date, but excluding the Business Trustee.

 

2.                                      Services; Warranty; Exclusivity.

 

2.1.                            Services.  During the term of this Agreement,
commencing on the IP Transfer Date, (i) from time-to-time, and not less than
each month, Recipient agrees that it will direct Provider to perform for the
benefit of Recipient certain research and development services (the “Services”)
and (ii) Provider agrees that it will perform the Services as reasonably
directed by Recipient.  Provider may engage its wholly-owned subsidiaries to
assist in the provision of the Services so long as such subsidiaries have
assigned all Intellectual Property Rights arising from such engagement to
Provider and are under an obligation of confidentiality at least as protective
of Recipient’s Confidential Information as the confidentiality provisions in
this Agreement.  For clarification and avoidance of doubt, any services for
which Recipient pays Provider’s R&D Costs under this Agreement will be deemed
Services, including any research and/or development undertaken by Provider
pursuant to any joint/collaborative development programs.  Provider warrants
that when performing the Services, it will exercise that degree of care, skill
and judgment that is commensurate with that which is normally exercised by
prominent firms of international reputation performing services of a similar
nature, but in no event less than reasonable care.  During the term of this
Agreement, Provider agrees to dedicate the entirety of its research and
development resources, and to cause its wholly owned subsidiaries to dedicate
the entirety of their research and development resources, to the Services and
agrees not to provide, and to cause such subsidiaries not to provide, research
and development services to any Third Party without consent from Recipient.
Additionally, Provider shall not, and agrees that it will not, engage any
contractors in connection with the Services without Recipient’s prior written
approval in each instance.

 

2.2.                            Cost Reduction Efforts.  During the term of this
Agreement, Provider agrees to undertake commercially reasonable steps to
maximize the value of the Services to Recipient by, among other things:

 

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[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

(i)            Instituting and maintaining internal programs to reduce the costs
of providing the Services;

(ii)           Complying with Recipient’s reasonable direction on capital
investment, software and hardware procurement, and other issues intended to
ensure compatibility of the Services with Recipient’s global operations;

(iii)          Instituting and maintaining Recipient’s reasonable cost reduction
initiatives generally applied to Recipient’s global operations; and

(iv)          Instituting and maintaining Recipient’s reasonable targeted cost
reduction measures applied to Provider’s operations.

 

3.              Payment of Fees.

 

3.1                               Price and Invoicing.  Provider shall invoice
Recipient the R&D Services Fee at each month end. The R&D Services Fee with
respect to each month shall be equal to (i) R&D Costs, plus (ii) an Arm’s Length
Profit Percentage applied to the R&D Costs, plus (iii) Reimbursable Costs, minus
(iv) the R&D Services Fee Offsets, in each case, for such month.

 

3.2                               Time of Payments.  Recipient shall pay
Provider’s invoice within [*] days of the invoice date.  All invoices and
payments shall be made in United States Dollars. On any amounts not paid within
[*] days of when due, Provider may charge interest at the higher of (i) [*] or
(ii) [*] whichever is higher, unless a lower rate is required under applicable
law, in which event Provider may charge such lower rate.

 

3.3                               Arm’s Length Profit Adjustments.  The Parties
agree to periodically review the appropriateness of the Arm’s Length Profit
Percentage in a manner consistent with the Sponsor Agreement, taking into
account all relevant facts and circumstances, including those factors set forth
in Section 1.2 above.  If the Parties mutually agree to change the Arm’s Length
Profit Percentage, they shall memorialize such changes in writing (electronic,
facsimile or otherwise).  The Parties may make such adjustments prospectively or
retrospectively as necessary so that the profit earned will be based on the
arm’s length principle as defined in the most recent transfer pricing comparable
analysis obtained by Recipient.

 

The Parties will periodically review the R&D Services Fee paid in relation to
the actual R&D Costs and shall make any appropriate adjustments to the R&D
Services Fee and profits earned to comply with the terms of this Section 3.3. 
Additional payments, a refund, or a credit against future payments may be made
in a subsequent period or periods, if necessary, to ensure consistency and
compliance with the arm’s length principles.

 

3.4                               Adjustments by Tax Authorities.  Should the
relevant tax authorities determine that the R&D Services Fee does not represent
an arm’s length compensation, both Parties will work with such tax authorities
to adjust the compensation in accordance with arm’s-length principles acceptable
by each Party’s respective tax

 

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[*]Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

authorities.  The Parties agree to negotiate, in good faith, an equitable
adjustment should such adjustments for prior years be required.

 

4.                                      Information.  Recipient shall provide to
Provider any reasonably necessary information concerning its business to allow
Provider to perform the Services.  Likewise, Provider shall provide promptly to
Recipient information relating to the Services rendered by Provider, including
all associated documentation, reasonably necessary or useful for Recipient to
properly conduct its business and to obtain the full value of the Services.

 

5.                                      [Reserved]

 

6.                                      Term of Agreement.

 

6.1                               Term.  This Agreement shall be effective from
the date hereof until terminated in accordance with the terms hereof; provided,
that the operative terms hereof shall only become effective upon the IP Transfer
Date.

 

6.2                               Termination.  This Agreement may be terminated
by the Parties only as provided in Section 6.2(i) through 6.2(ix) or 17.2.2
below.

 

(i)            Mutual Agreement.  The Parties may terminate this Agreement at
any time by mutual agreement in writing.

 

(ii)           Material Breach.  Recipient may terminate this Agreement if
Provider (x) unreasonably fails to take any action or actions required to comply
with any provision of this Agreement or (y) fails to take any action or actions
consistent with the reasonable guidance and direction provided by Recipient or
its Affiliates that directly or indirectly relates to manufacturing operations,
products or supply, which failure or failures, individually or in the aggregate,
(I) materially and adversely affect, or is or are reasonably likely to
materially and adversely affect, (a) Provider’s manufacturing operations or the
products produced by Provider, in each case, taken as a whole, or (b) the supply
of products by Provider to Recipient, taken as a whole, or (II) results or is
reasonably likely to result in Recipient not receiving material benefits to
which it is entitled under any material provision hereunder, which failure or
failures continue for 90 days following written notice of such failure or
failures from Recipient.  For avoidance of doubt, for purposes of this
Section 6.2(ii), (i) the unreasonableness of any failure to take any action or
actions required to comply with any provision of this Agreement and the
reasonableness of any guidance and direction provided by Recipient or its
Affiliate will be subject to and determined in accordance with the applicable
provisions of the Sponsor Agreement (including Article 17), including whether
such action or inaction is a violation of applicable law or legal regulation, 
(ii) this Section 6.2(ii) shall not apply to any failure to take any action that
occurs during a period when either (X) there is no Business Trustee designated
by Recipient unless Recipient has petitioned the Court for the appointment of a
reasonably qualified Business

 

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[*]Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

Trustee without success, or (Y) there is a Business Trustee designated by
Recipient unless Recipient has petitioned the Court to replace such Business
Trustee with a reasonably qualified candidate without success, and (iii) an
omission to act shall be deemed to be an action.

 

In the event Recipient has given Provider notice of failure or failures pursuant
to the preceding paragraph, Recipient and Provider shall engage in discussions,
which may include consultation with the Trustees, in a good faith effort to
resolve the circumstances giving rise to such claimed failure or failures during
the 90 day period following delivery of such notice.

 

(iii)          Change of Control.  If, other than as a result of the voluntary
transfer by Recipient of shares (including pursuant to a pledge of or other
grant of a security interest in shares by Recipient and attachment of shares by
a Third Party), the issued and outstanding shares of Provider undergo a change
in control, so that its status as a corporation owned or controlled, directly or
indirectly, by Recipient, ceases, or if Recipient’s direct or indirect ownership
or control of Provider is materially and adversely impacted by extraordinary
governmental action or by operation of law (it being understood that the
restrictions on Recipient’s rights as a shareholder of Provider under the
Corporate Reorganization Act and the Reorganization Plan do not constitute lack
of control for purposes of this Section 6.2(iii) and actions in accordance with
the Sponsor Agreement or the Reorganization Plan shall not constitute
extraordinary government action or operation of law that gives rise to a right
for Recipient to terminate this Agreement pursuant to this Section 6.2(iii)),
Recipient may, in its sole discretion, terminate this Agreement.

 

(iv)          Reorganization Plan.  Recipient may terminate this Agreement if
the Reorganization Plan is amended, without Recipient’s prior written consent,
in a manner that is, or would reasonably be expected to be, materially adverse
to the interests of Recipient or its Affiliates (including Provider),
individually or in the aggregate.  Unless otherwise agreed in writing by the
Recipient and Provider, this Agreement will terminate automatically if the order
approving the Reorganization Plan is revoked or cancelled or if an order of
abolition (haishi) of the Reorganization Proceedings is issued.

 

(v)           Termination of Sponsor Agreement.  Unless otherwise agreed in
writing by Recipient and Provider, this Agreement will terminate automatically
upon the termination of the Sponsor Agreement pursuant to Article 24.1(3) or
Article 24.6 of the Sponsor Agreement.

 

(vi)          Completion of Installment Payments.  Recipient may terminate this
Agreement (a) at any time following payment in full of all Installment Payments
or (b) subject to Court approval of such termination, after such time as
sufficient funds have been provided to the Trustee from Provider, Recipient, any
of their respective Affiliates, or a combination thereof to enable the payment
in full of all

 

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[*]Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

Installment Payments.

 

(vii)         Payment Guarantee.  Subject to Court approval of such termination,
Recipient may terminate this Agreement at any time after Recipient has provided
a payment guarantee of the remaining Installment Payments under the Both
Companies’ Reorganization Plans (in form and substance reasonably acceptable to
the Trustees and the Court).

 

(viii)        Cross-Termination.  Recipient may terminate this Agreement if
either (a) the Supply Agreement is terminated in accordance with its terms or
(b) the General Services Agreement is terminated in accordance with its terms. 
If the Supply Agreement or the General Services Agreement is terminated by
Provider, in each case, in accordance with its terms, Provider may terminate
this Agreement.

 

(ix)          Notice of Termination.  Any termination of this Agreement at the
election of a Party pursuant to this Section 6.2 or Section 17.2.2 shall be
effective upon delivery of written notice of such termination to the other
Party.

 

6.3                               Survival; No Further Obligations

 

(i)            [RESERVED].

 

(ii)           Survival of Certain Terms.  The provisions of Sections 6 through
17 shall survive the termination or expiration of this Agreement for any
reason.  All other rights and obligations of the Parties under this Agreement
shall cease upon termination or expiration of this Agreement except for
Recipient’s obligation to pay for the Services provided during the term of this
Agreement.

 

7.                                      Relationship of the Parties.  The
relationship of the Parties hereunder is that of independent contractors, and
neither Party is an employee, agent, partner or joint venture of the other Party
by virtue of this Agreement.  All persons employed by Provider, Provider’s
subsidiaries or by permitted subcontractors of Provider to perform the Services
shall be the employees or agents of the Provider and not the employees or agents
of Recipient.  Provider shall not have the authority to make any commitment or
enter into any contract on behalf of Recipient, without Recipient’s prior
express written authorization.  All financial obligations associated with
Recipient’s business are the sole responsibility of Recipient.  All financial
obligations associated with Provider’s business are the sole responsibility of
Provider.

 

8.                                      Assignment.  Neither Party may assign or
delegate its rights or obligations under this Agreement without the prior
written consent of the other Party; provided, however, Recipient may assign its
rights and obligations to an Affiliate of Recipient but shall not be released
from its obligations under this Agreement.  Subject to such limitation, this
Agreement shall be binding on the successors and assigns of the Parties.

 

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[*]Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

9.                                      Governing Law.  This Agreement shall be
governed by and construed in accordance with the laws of Japan, without giving
effect to its conflicts of law principles.  The Parties agree that any court
located in Tokyo, Japan shall provide the exclusive judicial venue for any
disputes concerning this Agreement or either Party’s performance hereunder.

 

10.                               Confidentiality. Information disclosed by
Recipient and Provider hereunder shall be deemed to be “Confidential
Information” under, and as such shall be subject to the terms and conditions of,
the Micron Wholly-Owned Subsidiary Mutual Nondisclosure Agreement between
Recipient, on the one hand, and Provider, on the other hand, effective on even
date herewith, as may be replaced or amended from time to time (the
“Confidentiality Agreement”).  Work Product IP shall be deemed to be “Micron
Confidential Information” under, and as such shall be subject to the terms and
conditions of, the Confidentiality Agreement.  All Confidential Information
disclosed by Recipient to Provider shall remain the exclusive property of
Recipient.  Except as otherwise provided by the Confidentiality Agreement,
Provider shall not use the Confidential Information for any purpose other than
to perform its obligations under this Agreement or otherwise for the benefit of
Recipient.  The obligations hereunder shall be in addition to and not reduce the
obligations under the Confidentiality Agreement. If the Confidentiality
Agreement expires without being replaced prior to the expiration of this
Agreement, the Confidentiality Agreement shall remain in effect with respect to
Confidential Information disclosed hereunder.

 

11.                               Liability and its Limitations.  IN THE EVENT
OF TERMINATION OF THIS AGREEMENT IN ACCORDANCE WITH ITS TERMS, NEITHER PARTY
SHALL BE LIABLE TO THE OTHER PARTY BECAUSE OF SUCH TERMINATION FOR COMPENSATION,
REIMBURSEMENT OR DAMAGES INCLUDING ON ACCOUNT OF THE LOSS OF PROSPECTIVE PROFITS
OR ANTICIPATED SALES OR ON ACCOUNT OF EXPENDITURES, INVESTMENTS, LEASES OR
COMMITMENTS IN CONNECTION WITH THE BUSINESS OR GOODWILL OF PROVIDER OR
RECIPIENT.  SUBJECT TO THE FOREGOING, ANY TERMINATION OF THIS AGREEMENT SHALL
NOT AFFECT ANY RIGHTS OR LIABILITIES OF THE PARTIES WHICH HAVE ACCRUED UNDER THE
TERMS OF THIS AGREEMENT PRIOR TO THE DATE OF SUCH TERMINATION, INCLUDING, BUT
NOT LIMITED TO, LIABILITIES TO COMPENSATE DAMAGES ACCRUED PRIOR TO THE DATE OF
SUCH TERMINATION ARISING UNDER OR RELATING TO PERFORMANCE OR BREACH OF
OBLIGATIONS UNDER THIS AGREEMENT.  For the avoidance of doubt, this Section 11
shall not prevent a Party from claiming for damages accrued arising under or
relating to the other Party’s performance or breach of obligations under this
Agreement, subject to the foregoing limitations; provided, further, that in no
event shall any Party or its representatives (which, in the case of the
Provider, shall include the Trustees under the Sponsor Agreement) receive a
double recovery under this Agreement and any other agreement in connection with
the same set of facts and circumstances.

 

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[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

12.                               Intellectual Property.

 

12.1        Work Product.  All new or original Intellectual Property Rights
created hereunder, and all Intellectual Property Rights obtained or acquired
hereunder (including obtained or acquired through services provided by
Provider’s subsidiaries and/or permitted contractors) (collectively, “Work
Product IP”), shall be deemed created, obtained, and/or acquired exclusively for
and on behalf of Recipient, and Recipient shall own all rights, title and
interests thereto without further consideration by Recipient.  Provider hereby
assigns, transfers and conveys to Recipient all rights, title and interests in
and to the foregoing Work Product IP. For the avoidance of doubt, the Parties
acknowledge that any Intellectual Property Rights created, obtained or acquired
by Provider after termination of this Agreement will not be deemed Work Product
IP hereunder.

 

12.2        Further Actions.  During and after the term of this Agreement, upon
the request of Recipient and without further consideration, Provider shall take
such further actions including the execution and delivery of instruments of
conveyance and the securing of all waivers of and agreements not to exercise any
moral (or equivalent) rights as Recipient might deem appropriate to give full
effect to this Section 12.  Provider shall not exhibit, deliver or disclose any
of the work created hereunder to any Third Party or use such work, or any part
thereof, for any other purpose, without Recipient’s advance written consent.

 

12.3        Third Party Infringement.

 

12.3.1           If at any time during the term of this Agreement, Provider
becomes aware of a Third Party challenging or infringing upon any of Recipient’s
or any of its Affiliates’ Intellectual Property Rights, Provider shall
immediately notify Recipient or an Affiliate of Recipient designated by
Recipient (the “Designated Affiliate”) in writing of such action, and shall, as
requested by and at the expense of Recipient or its Designated Affiliate,
cooperate with Recipient or its Designated Affiliate in the defense of
Recipient’s or any of its Affiliates’ Intellectual Property Rights.

 

12.3.2           Should Provider receive notice that the Products or any
manufacturing process used to manufacture the Products infringes or
misappropriates any Third Party proprietary or intellectual property rights,
including any offer of a license to Provider for any Third Party intellectual
property, Provider shall immediately provide such notice to Recipient or its
Designated Affiliate.  Upon receipt of such notice by Recipient or its
Designated Affiliate, Recipient or its Designated Affiliate shall take
responsibility for responding to such notice, and Recipient or its Designated
Affiliate, subject to the following terms and conditions, will defend Provider,
at its own expense, against any claim or suit brought against Provider by any
Third Party alleging that the Products or any manufacturing process used to
manufacture the Products, infringes or misappropriates any Third Party
proprietary or intellectual property rights (“IP Claim”).

 

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[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

12.3.3           Provider agrees that Recipient or its Designated Affiliate
shall have the sole right to defend and/or settle all IP Claims, in litigation
or otherwise, and Provider shall provide Recipient or its Designated Affiliate
with all reasonably requested assistance and cooperation in the defense of any
IP Claim.

 

12.4      Retained License.

 

12.4.1           Notwithstanding the assignment, transfer, and conveyance of the
Work Product IP by Provider to Recipient set forth in Section 12.1, Provider
shall retain, as of the date hereof and up to the Supply Commencement Date, a
worldwide, irrevocable, royalty free, non-transferable, non-exclusive license,
without the right to sublicense Third Parties under all Work Product IP, to
make, use, sell, offer for sale, and import or export Licensed Products made by
or, subject to 12.4.3, for Provider, and to use any method or process in the
manufacture of such Licensed Products.

 

12.4.2           The retained license described in Section 12.4.1 above, shall
endure as to all Licensed Products made by or for Provider, or with respect to
products with respect to which substantial preparations were made for their
manufacture by or for Provider, prior to the Supply Commencement Date.

 

12.4.3           The retained license described in Section 12.4.1, above, shall
not include the retention of any right for Provider to have products made by any
Third Party other than Rexchip Electronics Corporation (“Rexchip”), and in the
case of Rexchip, such have made right shall be limited to the manufacture by
Rexchip of products, the complete design for which is provided by Provider to
Rexchip, and which products are marked by Rexchip with Provider trademarks,
trade names or other commercial indicia, and thereafter shipped directly to
Provider, or to customers of Provider pursuant to purchase orders or other
contracts entered into by and between Provider and such customers.

 

13.                               Amendments to Agreement.  Amendment to or
modification of any provision whatsoever of this Agreement is valid only in case
where it has been executed in a writing affixed with the name and seal of, or
signature of, the representative of each of the Parties and has been approved by
the Court, provided that no such Court approval shall be required for any such
amendment or modification entered into in the ordinary course of business.  For
avoidance of doubt, and without limitation, amendments and modifications that
pertain to ordinary course of business activities under this Agreement will be
considered “entered into in the ordinary course of business.”

 

14.                               Notices.  Any notice, communication or
statement relating to this Agreement shall be in writing and deemed effective
when delivered in person, by verified facsimile transmission, or by registered
or certified mail, postage prepaid, return receipt requested, to the address of
the respective Party below:

 

If to Provider:

 

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[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

Elpida Memory, Inc.

2-1, Yaesu 2-chome

Chuo-ku, Tokyo

104-0028

Attn: [*]

Fax: [*]

 

and if to Recipient:

 

Micron Technology, Inc.

8000 S. Federal Way,

Boise, Idaho 83707

Attn: [*]

Fax: [*]

 

A copy of any notice delivered in accordance with Section 6.2(ii) or
6.2(ix) hereunder will be provided by the terminating party to the Trustee at
Kobayashi & Associates Law Office, Kioicho Building 14F, 3-12, Kioicho,
Chiyoda-ku, Tokyo 102-0094, Japan, facsimile:  [*].

 

15.                               [Reserved]

 

16.                               Force Majeure.  Provider shall not be liable
for any delay in performance directly or indirectly caused by or resulting from
any act of God, fire, flood, earthquake, tsunami, accident, riot, war, act of
terrorism, act of government, embargo, or other significant difficulty which
significant difficulty is beyond the reasonable control and without the fault or
negligence of Provider.  For purposes of this Section 16, the Parties agree that
fluctuations in currency exchange rates or in DRAM prices, strike, lockout or
other labor dispute, or general deterioration in the economy or in the economic
conditions prevalent in the semiconductor memory industry shall not constitute a
“difficulty which is beyond the reasonable control” of Provider.

 

17.                               General Provisions.

 

17.1.                     No Waiver.  If in one or more instances either Party
fails to insist that the other Party perform any of the terms of this Agreement,
such failure shall not be construed as a waiver by such Party of any past,
present, or future right granted under this Agreement, and the obligations of
both Parties shall continue in full force and effect.

 

17.2.                     Severability.

 

17.2.1.           The invalidity or unenforceability of any provision or any
covenant of this Agreement in any jurisdiction shall not affect the validity or
enforceability of such

 

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[*]Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

provision or covenant in any other jurisdiction or of any other provision or
covenant hereof or herein contained, and any invalid provision or covenant shall
be deemed to be severable.  The Parties shall negotiate in good faith to replace
any provision declared invalid or unenforceable with a new valid and enforceable
provision that preserves the original intention of the Parties.

 

17.2.2.           The Parties acknowledge and agree that the provisions of
Section 12.1 hereof relating to Recipient’s ownership of all rights, title and
interest in and to all of the Work Product IP, and Provider’s assignment,
transfer and conveyance of all rights, title and interest in and to the Work
Product IP to Recipient pursuant to said Section 12.1, constitute fundamental
consideration for Recipient’s willingness to enter this Agreement.  If said
Section 12.1, or any portion thereof, is deemed to be invalid or unenforceable,
and the Parties are unable to agree to a replacement provision as contemplated
by the last sentence of Section 17.2.1 hereof, then Recipient may elect to
terminate this Agreement by delivery of written notice thereof to Provider as
contemplated by Section 6.2(ix) hereof.

 

17.3.                     Taxes.  All taxes or other levies must be settled by
the Party liable for payment in accordance with the provisions of this
Agreement, or, if not provided for, in accordance with the applicable laws.

 

17.4.                     Headings; Interpretation.  All section headings herein
are for convenience only and are in no way to be construed as part of this
Agreement or as a limitation of the scope of the particular sections to which
they refer.  Unless the context requires otherwise, (1) all references to
Sections, Articles, Exhibits, Appendices or Schedules are to Sections, Articles,
Exhibits, Appendices or Schedules of or to this Agreement, (2) each accounting
term not otherwise defined in this Agreement has the meaning commonly applied to
it in accordance with Japanese statutory accounting principles, (3) words in the
singular include the plural and vice versa, (4) the terms “include,” “includes”
or “including” shall be deemed to be followed by the words “without limitation,”
and (5) the terms “herein,” “hereof,” “hereunder” and words of similar import
mean references to this Agreement as a whole and not to any individual section
or portion hereof.  Unless otherwise denoted, all references to $ or dollar
amounts are to the lawful currency of the United States of America, and all
references to ¥ and yen are to the lawful currency of Japan.  All references to
“day” or “days” mean calendar days.

 

17.5.                     Compliance with Laws and Regulations.  Provider shall
observe all pertinent laws, ordinances, rules and regulations related to the
delivery of the Services and shall procure and maintain in full force, at its
sole expense, all registrations, permits, licenses and approvals that are
required by law or governmental authority to perform the Services.  Provider
agrees to fully comply with Micron’s Code of Business Conduct and Ethics as set
forth at www.micron.com.  Provider acknowledges and agrees Provider will
maintain compliance with the Electronic Industry Code of Conduct as set forth at
www.eicc.info, and agrees to apply the

 

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[*]Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

principles set forth therein with respect to performance of this Agreement and
in particular with reference to non-discrimination of employees, combating
bribery of domestic and foreign public officials, protection of international
human rights and environmental responsibility.  Provider agrees that violation
of the Electronic Industry Code of Conduct will be a material breach of this
Agreement.

 

17.6.                     Foreign Corrupt Practices Act Compliance.  Neither
Party, its subcontractors nor any of its officers, directors, employees or
agents, shall make any payment or give anything of value, directly or
indirectly, to any government official (including any director, employee or
agent of any government department, agency or instrumentality, political party
or candidate or government or state-owned enterprise) or official of any
international organization, to influence his, her or its decision, or to gain
any other advantage for such Party in connection with this Agreement.  In
addition, each Party represents and warrants that it does not act as a provider,
agent or representative for, and is otherwise not affiliated with, any
government, government official, political party, or government or state-owned
enterprise and shall advise the other Party promptly in writing prior to
entering into any such relationship. Both Parties shall provide, or shall cause
to be provided, anti-corruption training to all of its officers, employees,
agents and subcontractors involved with performance of this Agreement and notify
them of the requirements of this Section 17.6.

 

Each Party shall immediately notify the other Party if it has any reason to
believe that a violation of this Section 17.6 has occurred or may likely occur. 
The Parties shall cooperate fully in any investigation of any such potential
violation.  If a violation has occurred, the violating Party shall immediately
pay to the other Party an amount equal to the amount of the payment or the value
of the gift that gives rise to such violation.  The violating Party shall also
indemnify, defend and hold harmless the other Party for all costs, losses and
expenses arising out of such violation. Either Party may, either directly or
through its authorized representatives, audit any and all of the other Party’s
records relating to the performance of this Agreement and interview any of the
other Party’s officers, employees and agents for the purpose of determining
whether there has been compliance with this Section 17.6.  Either Party may also
disclose this Agreement, and any facts relating to this Agreement, to any
governmental body including the United States government and the government of
the country where services are to be provided under this Agreement in connection
with any investigations or inquiries into compliance with this Section 17.6.

 

17.7.                     Integration.  This Agreement is being entered into
pursuant to Recipient’s commitments under Section 7.1 of the Sponsor Agreement,
and does not purport to supersede any provision of the Sponsor Agreement. 
Subject to the foregoing, this Agreement sets forth the entire agreement and
understanding between the Parties as to the subject matter hereof and supersedes
and replaces all prior or contemporaneous agreements, written or oral, regarding
such subject matter.  In the event of any conflict between the provisions of
this Agreement and any prior

 

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[*]Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

agreement between the Parties governing the disposition of Intellectual Property
Rights, this Agreement shall control to the extent necessary to resolve such
conflict.

 

17.8.                     Language.  This Agreement is executed in the Japanese
language, and shall be construed in accordance with the rules of grammar
commonly associated with the construction of legal documents in the Japanese
language (except as expressly provided herein).  Even if this Agreement is
translated into a language other than the Japanese language, only the Japanese
language version is the official version of this Agreement, the Japanese
language version shall always prevail over any translation in any language other
than the Japanese language, and the translation may not be used as the basis for
any interpretation of this Agreement.

 

17.9.                     Other Contractual Obligations between the Parties. 
The Parties acknowledge they have or may have in the future other contractual
relationships between them. It is both Parties’ intention to keep separate the
different contractual relationships between the Parties.  Accordingly, except as
expressly provided herein, the matters regulated in this Agreement shall in no
way be affected by any term or condition other than those set forth in this
Agreement.  Notwithstanding the foregoing or any other provision herein to the
contrary, in no event will any costs or expenses of Provider that are paid to
Provider by Recipient hereunder be recovered or recoverable by Provider from
Recipient or any of its Affiliates under any other agreement.

 

[The remainder of this page is intentionally blank.]

 

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[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date set
forth above.

 

MICRON TECHNOLOGY, INC.

 

ELPIDA MEMORY, INC.

 

 

 

 

 

 

/s/ Mark Durcan

 

/s/ Yukio Sakamoto

Signature

 

Signature

 

 

 

D. Mark Durcan

 

Yukio Sakamoto

Print name

 

Print name

 

 

 

Chief Executive Officer

 

Trustee

Print title

 

Print title

 

 

 

 

 

 

 

 

/s/ Nobuaki Kobayashi

 

 

Signature

 

 

 

 

 

Nobuaki Kobayashi

 

 

Print name

 

 

 

 

 

Trustee

 

 

Print title

 

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