--------------------------------------------------------------------------------

Exhibit 10.156

[***]    DENOTES CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
 
INTEL/MICRON CONFIDENTIAL
 

 
 
THE INTERESTS EVIDENCED BY THIS DOCUMENT ARE SUBJECT TO RESTRICTIONS ON
ASSIGNMENT AND TRANSFER SET FORTH HEREIN. IN ADDITION, THE INTERESTS HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAW AND
MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNTIL REGISTERED OR UNTIL THE BOARD OF
MANAGERS HAS RECEIVED AN OPINION OF LEGAL COUNSEL, OR OTHER ASSURANCES
SATISFACTORY TO THAT BOARD, THAT AN INTEREST MAY LEGALLY BE SOLD OR OTHERWISE
TRANSFERRED WITHOUT REGISTRATION, ALL AS PROVIDED IN THIS DOCUMENT.
 
 

 

 
 
AMENDED AND RESTATED
 
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
 
OF
 
IM FLASH TECHNOLOGIES, LLC
 
BY AND BETWEEN
 
MICRON TECHNOLOGY, INC. AND INTEL CORPORATION
 
FEBRUARY 27. 2007
 

 

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TABLE OF CONTENTS
 
Page

ARTICLE 1.
 
ORGANIZATIONAL MATTERS
 
1
 
1.1
The Joint Venture Company
1
1.2
Name
1
1.3
Term
1
1.4
Purpose of the Joint Venture Company; Business
2
1.5
Principal Place of Business; Other Places of Business; Registered Office and
Agent
2
1.6
Fictitious Business Name Statement; Other Certificates
2
1.7
Admission of Members
3
1.8
 
Supply Agreements
 
3
 
ARTICLE 2.
 
CAPITALIZATION
 
3
 
2.1
Initial Capital Contributions of the Members
3
2.2
Initial Capital Contribution Reserve
3
2.3
Additional Capital Contributions
4
2.4
Shortfalls in Contributions
7
2.5
Miscellaneous Capital Provisions
9
2.6
 
Contributions After a Change in Consolidating Member
 
9
 
ARTICLE 3.
 
MEMBER DEBT FINANCING
 
10
 
3.1
Mandatory Member Debt Financing
10
3.2
Optional [***] Financing
12
3.3
Optional Other Member Debt Financing
14
3.4
Change In Committed Capital
14
3.5
Change in Consolidating Member
14
3.6
 
Loans Through Subsidiary
 
15
 
ARTICLE 4.
 
CAPITAL ACCOUNTS AND ALLOCATIONS
 
15
 
4.1
Capital Accounts
15
4.2
Allocations of Book Income and Loss
15
4.3
Tax Allocations
15
4.4
 
Restoration of Negative Balances
 
15
 
ARTICLE 5.
 
DISTRIBUTIONS
 
15
 
5.1
Distributions
15
5.2
Withholding Tax Payments and Obligations
17
5.3
 
Distribution Limitations
 
18
 
ARTICLE 6.
 
MANAGEMENT; BOARD OF MANAGERS
 
18
 
6.1
Management Power
18
6.2
Number of Managers; Appointment of Managers
18
6.3
Voting of Managers
20
6.4
Meetings of the Board of Managers; Quorum
23

 
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TABLE OF CONTENTS
(continued)
Page
 
6.5
Notice; Waiver
23
6.6
Action Without a Meeting; Meetings by Telecommunications
23
6.7
Alternate Managers
24
6.8
 
Compensation of Managers
 
24
 
ARTICLE 7.
 
MEMBERS
 
24
 
7.1
Rights of Members; Meetings
24
7.2
Limitations on the Rights of Members
25
7.3
Limited Liability of the Members
26
7.4
Voting Rights of Members
26
7.5
Defaulting Member
29
7.6
 
Cooperation
 
29
 
ARTICLE 8.
 
OFFICERS AND COMMITTEES
 
29
 
8.1
Intel Executive Officer
29
8.2
Micron Executive Officer
30
8.3
Lead Controller/Chief Financial Officer
30
8.4
Chief Executive Officer
31
8.5
General Provisions Regarding Officers
31
8.6
Intentionally Omitted
32
8.7
 
Waiver of Fiduciary Duties
 
32
 
ARTICLE 9.
 
EMPLOYEE MATTERS
 
33
 
9.1
Joint Venture Company Employees; Seconded Employees
33
9.2
Performance and Removal of Seconded Employees
33
9.3
Forms
34
9.4
 
Compensation and Benefits
 
35
 
ARTICLE 10.
 
RECORDS, ACCOUNTS AND REPORTS
 
36
 
10.1
Books and Records
36
10.2
Access to Information
36
10.3
Operations Reports
37
10.4
Financial Reports
37
10.5
Reportable Events
39
10.6
Tax Information
41
10.7
Tax Matters and Tax Matters Partner
42
10.8
Bank Accounts and Funds
42
10.9
 
Internal Controls
 
42
 
ARTICLE 11.
 
BUSINESS PLAN
 
44
 
11.1
Initial Business Plan; Initial Budgets
44
11.2
Subsequent Business Plans
47
11.3
Expenditures
51

11.4
Fab Criteria
51

 
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TABLE OF CONTENTS
(continued)
Page
11.5
Quarterly Business Plan
51
11.6
Operating Plan
51
11.7
Use of Member Names
52
11.8
 
Insurance
 
52
 
ARTICLE 12.
 
TRANSFER RESTRICTIONS
 
52
 
12.1
Restrictions on Transfer
52
12.2
Permitted Transfers
53
12.3
Additional Members
54
12.4
Certain Purchases
54
12.5
 
Purchase of Remaining Interest
 
55
 
ARTICLE 13.
 
DISSOLUTION AND LIQUIDATION
 
58
 
13.1
Dissolution
58
13.2
Determination of [***] Value
59
13.3
No Withdrawal
59
13.4
Micron [***] Reimbursement; [***] True-Up Payment
59
13.5
Intentionally Omitted
60
13.6
Intentionally Omitted
60
13.7
Intentionally Omitted
60
13.8
Intentionally Omitted
60
13.9
Intentionally Omitted
60
13.10
Intentionally Omitted
60
13.11
Auction of Remaining Assets
60
13.12
Winding Up
60
13.13
Liquidation
61
13.14
Supply Agreements
62
13.15
 
Employees
 
62
 
ARTICLE 14.
 
EXCULPATION AND INDEMNIFICATION
 
63
 
14.1
Exculpation
63
14.2
 
Indemnification
 
63
 
ARTICLE 15.
 
GOVERNMENTAL APPROVALS
 
64
 
15.1
 
Governmental Approvals
 
64
 
ARTICLE 16.
 
FORMATION OF ADDITIONAL ENTITIES
 
66
 
16.1
Formation of U.S. Subsidiaries
66
16.2
 
Intentionally Omitted
 
66
 
ARTICLE 17.
 
DEADLOCK; OTHER DISPUTE RESOLUTION; EVENT OF DEFAULT
 
66
 
17.1
Deadlock
66
17.2
Resolution of Deadlock
67

 
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TABLE OF CONTENTS
(continued)
Page
 
17.3
Definition of “Intel Matters.”
67
17.4
Definition of “Micron Matters.”
68
17.5
Other Dispute Resolution
68
17.6
Mediation
68
17.7
Event of Default
68
17.8
Specific Performance
69
17.9
 
Tax Matters
 
69
 
ARTICLE 18.
 
MISCELLANEOUS PROVISIONS
 
69
 
18.1
Notices
69
18.2
Waiver
70
18.3
Assignment
70
18.4
Third Party Rights
70
18.5
Choice of Law
71
18.6
Headings
71
18.7
Entire Agreement
71
18.8
Severability
71
18.9
Counterparts
71
18.10
Further Assurances
71
18.11
Consequential Damages
71
18.12
Jurisdiction; Venue
71
18.13
Confidential Information
72
18.14
Certain Interpretive Matters
72

APPENDICES
     
Appendix A
Definitions
Appendix B
Tax Matters
Appendix C
Initial Managers
Appendix D
Initial Capital Contributions
Appendix E
Intentionally Omitted.
   
SCHEDULES
     
Schedule 1
[***] Schedule
Schedule 2
Insurance
Schedule 3
Intentionally Omitted
Schedule 4
Intentionally Omitted
Schedule 5
Applicable Joint Ventures and Applicable Joint Venture Agreements
Schedule 6
Relatives

 

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TABLE OF CONTENTS
(continued)
Page

 
EXHIBITS
     
Exhibit A
Form of Mandatory Note
Exhibit B
Form of Optional [***] Note
Exhibit C
Form of Optional Other Note

-v-

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AMENDED AND RESTATED

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

OF

IM FLASH TECHNOLOGIES, LLC

This AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING AGREEMENT (this
“Agreement”) of IM Flash Technologies, LLC, a Delaware limited liability company
(the “Joint Venture Company”), is made and entered into as of this 27th day of
February, 2007, by and between Micron Technology, Inc., a Delaware corporation
(“Micron”), and Intel Corporation, a Delaware corporation (“Intel”) (Micron and
Intel are each referred to individually as a “Member,” and collectively as the
“Members”). Capitalized terms used in this Agreement shall have the respective
meanings ascribed to such terms in Appendix A to this Agreement or as otherwise
provided in Section 18.14.
 
RECITALS
 
A. Micron and Intel previously entered into that certain Limited Liability
Company Operating Agreement of IM Flash Technologies, LLC, dated January 6, 2006
(the “Original Agreement”).
 
B. Micron and Intel desire to amend and restate the terms and conditions of the
Original Agreement as set forth in this Agreement.
 
ARTICLE 1.  
ORGANIZATIONAL MATTERS
 
1.1  The Joint Venture Company. The Joint Venture Company is a limited liability
company organized under the Delaware Limited Liability Company Act (Del. Code
Ann. tit. 6 §§ 18-101 et seq.), as amended from time to time (the “Act”), and
governed by the terms and conditions set forth in this Agreement. The Joint
Venture Company is a Delaware limited liability company as a result of the
filing of a certificate of formation (the “Certificate”) in the office of the
Delaware Secretary of State in accordance with the Act.
 
1.2  Name. The name of the Joint Venture Company is “IM Flash Technologies,
LLC.”
 
1.3  Term. The initial term of the business of the Joint Venture Company shall
continue until the earlier of the tenth anniversary of the Effective Date and
the termination of the Joint Venture Company prior to such date in accordance
with this Agreement (the “Initial Term”). Such Initial Term may be extended by
mutual written agreement of the Members at least [***] prior to the expiration
of the Initial Term or any Renewal Term (any such extensions to be on such terms
and for such period as set forth in writing and agreed to by the Members) (each
such extended term, a “Renewal Term,” and together with the Initial Term, the
“Term”).
 

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1.4  Purpose of the Joint Venture Company; Business. The purpose of the Joint
Venture Company shall be (A) to engage in the business of manufacturing for the
Members NAND Flash Memory Products in various forms, including NAND Flash Memory
Wafers, and such other forms of memory products as may be determined by the
Board of Managers from time to time, and related memory product manufacturing
development activities, (B) to enter into any other lawful business, purpose or
activity in which a limited liability company may be engaged under Applicable
Law (including the Act), as the Members may determine from time to time, subject
to and in accordance with the terms and conditions of this Agreement, and (C) to
enter into any lawful transaction and engage in any lawful activities in
furtherance of the foregoing purposes and as may be necessary or incidental to,
connected with or arising out of the foregoing purposes in accordance with the
terms and conditions of this Agreement; provided, however, that a Member having
an Economic Interest above [***] percent ([***]%) may, in its sole discretion,
include the manufacture of other forms of memory products in the purpose of the
Joint Venture Company (other than (i) [***] if such Member is Intel and (ii)
Intel [***] if such Member is Micron), so long as the amount, delivery schedule,
pricing and terms of the other Member’s supply of Joint Venture Products remain
as they existed immediately prior to the time at which the decision to include
the manufacture of such other forms of memory products is made.
 
1.5  Principal Place of Business; Other Places of Business; Registered Office
and Agent.
 
(A)  The principal place of business and mailing address of the Joint Venture
Company shall be IM Flash Technologies, LLC, 1550 East 3400 North, Lehi, Utah
84043, or such other address within or outside of the State of Delaware as the
Board of Managers may from time to time designate. The Board of Managers may
change the principal place of business of the Joint Venture Company to such
other place or places within or outside the State of Delaware as the Board of
Managers may from time to time determine, in its sole and absolute discretion
and, if necessary, the Board of Managers shall cause the Certificate to be
amended in accordance with the applicable requirements of the Act to effectuate
the change in the principal place of business.
 
(B)  Other places of business of the Joint Venture Company shall initially be in
Boise, Idaho and Manassas, Virginia. The Joint Venture Company may maintain
offices and places of business at such other place or places within or outside
the State of Delaware as the Board of Managers may deem to be advisable.
 
(C)  The registered office of the Joint Venture Company in the State of Delaware
shall be Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
19801, and the initial registered agent for service of process at such
registered office shall be The Corporation Trust Company. The registered office
and the registered agent may be changed from time to time by the Board of
Managers, by causing the prescribed form, accompanied by the requisite filing
fee, to be filed with the Delaware Secretary of State in accordance with the
Act.
 
1.6  Fictitious Business Name Statement; Other Certificates. The Authorized
Officers, or the Chief Executive Officer, as applicable, shall, from time to
time, cause the Joint Venture Company to be registered as a foreign limited
liability company and to file fictitious or trade
 
2

--------------------------------------------------------------------------------

name statements or certificates in those jurisdictions and offices as the Board
of Managers considers necessary or appropriate. The Joint Venture Company may
engage in business activities under any fictitious business names selected by
the Board of Managers. The Authorized Officers, or the Chief Executive Officer,
as applicable, shall, from time to time, file or cause to be filed certificates
of amendment, certificates of cancellation, or other certificates as the Board
of Managers reasonably considers necessary or appropriate under the Act or under
the laws of any jurisdiction in which the Joint Venture Company is doing
business to establish and continue the Joint Venture Company as a limited
liability company or to protect the limited liability of the Members.
 
1.7  Admission of Members. Intel and Micron hereby confirm and agree to their
status as Members of the Joint Venture Company upon the execution of this
Agreement.
 
1.8  Supply Agreements. Intel and Micron have entered into the Supply Agreements
with the Joint Venture Company pursuant to which, subject to the terms and
conditions set forth in the applicable Supply Agreement, each Member shall
purchase from the Joint Venture Company, and the Joint Venture Company shall
supply to each Member, a percentage of the Joint Venture Company’s output of
Products equal to such Member’s Sharing Interest.
 
ARTICLE 2. 
CAPITALIZATION
 
2.1  Initial Capital Contributions of the Members.
 
(A)  Intel Initial Capital Contribution. The Members acknowledge and agree that
Intel delivered to the Joint Venture Company all of the Intel Initial
Contributed Assets, as identified on Appendix D. These transactions shall be
treated by Intel and the Joint Venture Company as the Initial Capital
Contribution by Intel of the Intel Initial Contributed Assets in the manner and
with a value as set forth on Appendix D.
 
(B)  Micron Initial Capital Contribution. The Members acknowledge and agree that
Micron delivered to the Joint Venture Company all of the Micron Initial
Contributed Assets, as identified on Appendix D. These transactions shall be
treated by Micron and the Joint Venture Company as the Initial Capital
Contribution by Micron of the Micron Initial Contributed Assets in the manner
and with a value as set forth on Appendix D.
 
2.2  Initial Capital Contribution Reserve. The Joint Venture Company shall use
all funds contributed (either in cash or pursuant to a promissory note, in
accordance with Appendix D) as Initial Capital Contributions before permitting
any Additional Capital Contributions. Moreover, the Intel Additional Cash and
the Micron Additional Cash shall be transferred to a reserve account promptly
after such funds are delivered to the Joint Venture Company. Such monies shall
be invested in such investment or investments as the Board of Managers may
hereafter designate and shall not be expended by the Joint Venture Company until
such time as all other funds contributed as Initial Capital Contributions of the
Members have been expended. Such amounts shall be deemed to be necessary
reserves for purposes of distributions under Section 5.1(A).
 
2.3  Additional Capital Contributions.
 
3

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(A)  [***] Capital Contributions. In addition to the Initial Capital
Contributions, each Member shall make Capital Contributions to the Joint Venture
Company equal to its [***] Capital Contributions; provided, however, that in no
event shall (1) Intel be obligated to make [***] Capital Contributions in the
aggregate in excess of the Intel Maximum Incremental Capital Amount, or (2)
Micron be obligated to make [***] Capital Contributions in the aggregate in
excess of the Micron Maximum Incremental Capital Amount. Such [***] Capital
Contributions shall be made in quarterly installments on the twenty-fifth (25th)
day of each Fiscal Quarter of the Joint Venture Company (or if such day is not a
Business Day, then on the next Business Day after such day) in amounts equal to
the sum of (a) the amounts required for the remainder of the Fiscal Quarter in
which the [***] Capital Contributions are made and (b) the amounts required for
the first twenty-five (25) days of the upcoming Fiscal Quarter (or if such day
is not a Business Day, then through the next Business Day after such day), each
as set forth in the Approved Business Plan in effect at the time of such
contribution.
 
(B)  [***] Capital Contributions. Except as mutually agreed in writing by both
Members, each Member may, but shall not be required to, make Capital
Contributions to the Joint Venture Company equal to its [***] Capital
Contribution. Such [***] Capital Contributions shall be made in quarterly
installments on the twenty-fifth (25th) day of each Fiscal Quarter of the Joint
Venture Company (or if such day is not a Business Day, then on the next Business
Day after such day) in an amount equal to the sum of (a) the amounts of the
[***] Capital Contributions scheduled for the remainder of the Fiscal Quarter in
which the [***] Capital Contributions are made and (b) the amounts of the [***]
Capital Contributions scheduled for the first twenty-five (25) days of the
upcoming Fiscal Quarter (or if such day is not a Business Day, then through the
next Business Day after such day), each as set forth in the Approved Business
Plan in effect at the time of such contribution.
 
(C)  Other Capital Contributions. Except as mutually agreed in writing by both
Members, each Member may, but shall not be required to, make Capital
Contributions (other than [***] Capital Contributions and [***] Capital
Contributions) to the Joint Venture Company equal to its [***] as set forth in
the Annual Budget included in the Approved Business Plan for the Fiscal Year in
which the contributions are to be made. Any such Capital Contributions shall be
made in quarterly installments on the twenty-fifth (25th) day of each Fiscal
Quarter of the Joint Venture Company (or if such day is not a Business Day, then
on the next Business Day after such day) in an amount equal to the sum of (a)
the amounts of such Capital Contributions scheduled for the remainder of the
Fiscal Quarter in which such Capital Contributions are made and (b) the amounts
of such Capital Contributions scheduled for the first twenty-five (25) days of
the upcoming Fiscal Quarter (or if such day is not a Business Day, then through
the next Business Day after such day), each as set forth in the Approved
Business Plan in effect at the time of such contribution. Such contributed funds
are hereinafter referred to as the “Other Capital Contributions” and, together
with the [***] Capital Contributions and the [***] Capital Contributions, the
“Additional Capital Contributions.”
 
(D)  No Other Contributions. Except as set forth in Sections 2.1 and 2.3(A), in
the Joint Venture Documents and such other contributions as the Members may
agree in writing shall be required, no Member shall be required to make any
Capital Contributions to the Joint Venture Company, and, except as contemplated
by Section 2.3(B), 2.3(C) and 2.4, in the Joint Venture Documents and such other
contributions as the Members may agree in writing may be
 
4

--------------------------------------------------------------------------------

made (and except for Make-Up Contributions and any deemed contributions of
amounts outstanding under Member Notes), no additional Capital Contribution to
the Joint Venture Company shall be made by either Member without the consent of
the other Member.
 
(E)  Coordination. The Members shall coordinate with each other regarding, and
provide each other with advance written notice of, the timing of their delivery
of each Additional Capital Contribution.
 
(F)  Partial Contributions. In the event that any Member determines to
contribute less than its [***] of any Additional Capital Contribution, such
Member shall provide notice of such determination specifying the amount of such
Additional Capital Contribution it intends to make, if any. Such notice shall be
provided to the Joint Venture Company and to the other Member as soon as
practicable after such determination is made, but in any event not less than ten
(10) Business Days prior to the date such Additional Capital Contribution is to
be made. Any failure or delay in providing such notice shall not affect the
right of any Member to refrain from providing such Additional Capital
Contribution, nor shall it result in any liability for damages. Subject to
Section 3.1, to the extent that a Member contributes less than its [***] of any
Additional Capital Contribution for a given Fiscal Quarter, the other Member
shall have the right to reduce its contribution proportionately. In the event
that such other Member has already remitted any amount in respect of its
Additional Capital Contribution, the Joint Venture Company shall, upon such
other Member’s request and at its option, return such amount or deem all or a
portion of such contribution to be Member Debt Financing hereunder. Any amount
so requested to be returned or refunded shall be remitted to the requesting
Member immediately by wire transfer of immediately available funds. The amount
contributed for such Fiscal Quarter by the non-contributing Member (and the
other Member, if its contribution is proportionately reduced) shall be applied
in the following order:
 
(1)  First, to satisfy the obligation of such Member to contribute its [***] of
any [***] Capital Contribution for such Fiscal Quarter;
 
(2)  Second, the remainder, if any, to fulfill the Member’s [***] of the amount,
if any, of any Other Capital Contribution for such Fiscal Quarter relating to an
Operational Fab;
 
(3)  Third, the remainder, if any, to fulfill the Member’s [***] of the amount,
if any, of any Other Capital Contribution for such Fiscal Quarter relating to
matters not addressed in the immediately preceding clause (2); and
 
(4)  Fourth, the remainder, if any, to fulfill the Member’s [***] of any amount
of the [***] Capital Contribution for such Fiscal Quarter to be applied to a
[***] under the [***] Budget, and if there is [***] such [***], each of such
[***] in the order in which they appear on the [***] Schedule.
 
(G)  Priority of Contributions. Each Member shall contribute [***] of the
cumulative aggregate [***] Capital Contributions theretofore due (and shall pay
any interest accrued thereon at the rate provided in Section 2.4(A)(3) as a
result of such Member’s failure to make such contributions at the times and in
the amounts required pursuant to Section 2.3(A))
 
5

--------------------------------------------------------------------------------

other than any [***] Capital Contributions as to which the obligation to
contribute has been terminated pursuant to Section 2.4(A)(2), before it may make
any other Capital Contributions, including any [***] Capital Contributions
(including by way of Make-Up Contributions), or any Other Capital Contribution
or any Member Debt Financing; provided, however, that for purposes of this
Section 2.3(G), a Member’s [***] of an Additional Capital Contribution shall be
deemed to exclude any shortfall of an [***] Capital Contribution (1) for which
the Joint Venture Company, or the other Member acting on its behalf, has not
demanded payment or pursued any claim for payment and (2) any portion of which
the Member is restricted from contributing, or the Joint Venture Company is
restricted from paying, under Article 2 or Article 3.
 
(H)  Interim Loan. Each remittance of funds in respect of a Member’s [***] of an
Additional Capital Contribution pursuant to this Section 2.3 shall, upon receipt
by the Joint Venture Company of such funds, be deemed to be a loan (which shall
bear no interest) to the Joint Venture Company of the entire amount so delivered
until the other Member remits funds in respect of its [***] of such Additional
Capital Contribution. At such time:
 
(1)  if both Members have remitted amounts equal to their respective [***] of
the Additional Capital Contribution in full, all such amounts shall be deemed
Additional Capital Contributions (whereupon the respective amounts remitted by
the Members shall no longer be deemed loans and shall be added to the Members’
respective Capital Contribution Balances);
 
(2)  if there is a Shortfall Amount, the amount actually remitted by the
Non-Funding Member shall be deemed an Additional Capital Contribution by such
Member (and such amount shall no longer be deemed a loan and shall be added to
the Non-Funding Member’s Capital Contribution Balance), and a portion of the
amount actually remitted by the Funding Member equal to the product of (a) the
Funding Member’s [***] of such Additional Capital Contribution (whether or not
contributed in full) multiplied by (b) a fraction, the numerator of which is the
amount actually remitted by the Non-Funding Member and the denominator of which
is the Non-Funding Member’s [***] of the Additional Capital Contribution shall
be deemed an Additional Capital Contribution (and such amount shall be added to
the Funding Member’s Capital Contribution Balance). In such event, the remainder
of the amount remitted by the Funding Member shall continue to be a loan to the
Joint Venture Company until: (i) the return of all or a portion of such
remaining funds upon the receipt by the Joint Venture Company of instructions
from such Member to return all or a portion of such funds to the Member pursuant
to Sections 2.3(F), 2.4(A)(1), 2.4(C) or 3.1(A); (ii) the Funding Member
instructs the Joint Venture Company to deem all or a portion of such remaining
funds an Additional Capital Contribution (whereupon all or such portion of such
funds shall be added to the Member’s Capital Contribution Balance); or (iii) the
Funding Member instructs the Joint Venture Company to deem all or a portion of
such funds to be Member Debt Financing; provided that if the Joint Venture
Company has not received instructions pursuant to subparagraphs (i), (ii) or
(iii) above within fifteen (15) days of the date the applicable Additional
Capital Contribution was due, the Joint Venture Company shall contact such
Member to request such instruction.
 
2.4  Shortfalls in Contributions.
 
6

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(A)  [***] Capital Contribution Shortfall.
 
(1)  If a Member fails to remit in full its [***] Capital Contribution, at the
time and in the amount required pursuant to Section 2.3(A), the other Member, if
it has remitted its [***] of such [***] Capital Contribution, may, at its
election, (a) require that the Joint Venture Company return the remitting
Member’s share of such [***] Capital Contribution to such remitting Member in
part or in full, (b) make a Capital Contribution to the Joint Venture Company of
any or all of the shortfall or (c) provide Optional [***] Financing in
accordance with Section 3.2.
 
(2)  To the extent the other Member elects to contribute or loan the shortfall
under Section 2.4(A)(1)(b) or (c) above, such other Member may elect, by written
notice to the Joint Venture Company and the non-contributing Member, to
terminate the right and obligation of the non-contributing Member to contribute
any unpaid portion of such non-contributing Member’s [***] of the [***] Capital
Contribution that the non-contributing Member failed to pay.
 
(3)  The other Member, if it has remitted its [***] of the [***] Capital
Contribution, may direct the Joint Venture Company under Section 7.5 to (or may,
on behalf of the Joint Venture Company) demand payment and pursue a claim
against the non-contributing Member for payment. The non-contributing Member
shall be obligated to pay interest (which interest shall not be treated as a
Capital Contribution) on such uncontributed amount at [***] (as in effect on the
date such contribution was scheduled to be made and adjusted every [***]),
compounded [***], from the date such [***] Capital Contribution is due until the
date it is paid. The Member that did not make an [***] Capital Contribution it
was required to make under the terms of this Agreement shall pay to the Joint
Venture Company and the other Member all costs, including attorneys’ fees,
incurred by the Joint Venture Company and the other Member, respectively, in
pursuing such claim for payment (which payments shall not be treated as Capital
Contributions). Such Member shall not be liable for any additional damages. If
the Joint Venture Company recovers against the non-contributing Member, the
funds collected from the non-contributing Member shall be applied first to the
payment in full of costs theretofore incurred by the Joint Venture Company or
the other Member in the pursuit of the claim for payment against the
non-contributing Member (and such amount shall not be treated as a Capital
Contribution), then to all accrued but unpaid interest on such payment (and such
amount shall not be treated as a Capital Contribution) and then to the payment
of the delinquent portion of the [***] Capital Contribution (and such amount
shall be added to the Capital Contribution Balance of the non-contributing
Member). In addition, upon such payment by the non-contributing Member, (a) if a
related Optional [***] Shortfall Note is then outstanding, the provisions of
Section 3.2(D) (subject to Section 3.2(E)) shall apply and (b) if no related
Optional [***] Shortfall Note is then outstanding, but the other Member has
remitted to the Joint Venture Company the amount that the non-contributing
Member was required to make, then the Joint Venture Company shall immediately
refund to the contributing Member an amount equal to the non-contributing
Member’s payment that was treated as a Capital Contribution, and the Capital
Contribution Balance of the contributing Member shall be reduced by such amount.
 
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(4)  If, after a failure by a Member to timely make a Capital Contribution of
its [***] of an [***] Capital Contribution that it was required to make under
the terms of this Agreement, such Member wishes to make any payment with respect
to such portion of the [***] Capital Contribution (and the ability to make such
contribution has not been terminated pursuant to Section 2.4(A)(2)), the Joint
Venture Company, with the consent of the other Member (which consent shall not
be necessary if an action to collect such amount has been commenced by or at the
direction of such other Member), shall accept such payment and apply it first to
the payment in full of costs theretofore incurred by the Joint Venture Company
or the other Member in the pursuit of a claim for payment against the
non-contributing Member (and such amount shall not be treated as a Capital
Contribution), then to all accrued but unpaid interest on such payment (and such
amount shall not be treated as a Capital Contribution) and then to the payment
of the delinquent portion of the [***] Capital Contribution (and such amount
shall be added to the Capital Contribution Balance of such Member). In addition,
upon such payment by the non-contributing Member, (a) if a related Optional
[***] Shortfall Note is then outstanding, the provisions of Section 3.2(D)
(subject to Section 3.2(E)) shall apply and (b) if no related Optional [***]
Shortfall Note is then outstanding, but the other Member has remitted to the
Joint Venture Company the amount that the non-contributing Member was required
to make, then the Joint Venture Company shall immediately refund to the
contributing Member an amount equal to the non-contributing Member’s payment
that was treated as a Capital Contribution, and the Capital Contribution Balance
of the contributing Member shall be reduced by such amount.
 
(5)  Notwithstanding any provision hereof to the contrary, the failure by a
Member to contribute in [***] of any [***] Capital Contribution shall not
constitute a Liquidating Event.
 
(B)  [***] Capital Contribution Shortfall. If a Member does not remit in [***]
of any [***] Capital Contribution at the time and in the full amount permitted
pursuant to Section 2.3(B), the provisions of Section 3.1 shall apply.
 
(C)  Other Capital Contribution Shortfall. If a Member does not remit [***] of
any Other Capital Contribution, at the time and in the full amount permitted
pursuant to Section 2.3(C), the other Member, if it has remitted its [***] of
such Other Capital Contribution may, at its election, (1) require that the Joint
Venture Company [***] of such Other Capital Contribution to the remitting Member
in part or in full, (2) make a [***] to the Joint Venture Company of any or all
of the shortfall or (3) provide Optional Other Financing in accordance with
Section 3.3.
 
2.5  Miscellaneous Capital Provisions.
 
(A)  Capital Contributions shall be credited to the Capital Account of the
contributing Member to the extent provided in Article 4 of this Agreement.
 
(B)  No interest shall be paid to a Member on Capital Contributions. A Member
shall not be entitled to withdraw any of its Capital Contributions except as
provided in Section 2.3(F), 2.4 or Section 3.1.
 
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(C)  Except as otherwise provided in Article 13 or as otherwise agreed in
writing by the Members, a Member receiving a return of all or any portion of its
Capital Contribution shall have no right to receive a particular type of
property or a particular asset.
 
(D)  Any Capital Contributions to the Joint Venture Company to be made in cash
shall be made by the Members by wire transfer of immediately available funds to
the Joint Venture Company or its designated agent.
 
(E)  Except as otherwise provided in Section 2.4 or Article 3 or for trade
credit for services or goods provided by a Member to the Joint Venture Company
under any Joint Venture Document or any other agreement that has been approved
as required in this Agreement, no Member shall advance funds or make loans to
the Joint Venture Company without the approval of the Board of Managers. Any
such approved advances or loans by a Member shall not be Capital Contributions
and shall not result in any increase in the amount of such Member’s Capital
Contribution Balance or entitle such Member to any increase in its Percentage
Interest, except as otherwise provided in Section 2.4 or Article 3. The amount
of such advances or loans shall be a debt of the Joint Venture Company to such
Member and (unless such loan is subject to a written guaranty or other written
agreement governing the liability of another party with respect thereto) shall
be payable or collectible only out of the assets of the Joint Venture Company.
 
(F)  Except as provided in Section 5.2(C), the Joint Venture Company shall not
make loans to, or guaranty any indebtedness of, any Member or any other Person
other than a U.S. Facilities Company; provided, however, that the provisions of
this Section 2.5(F) shall not prohibit the Joint Venture Company from providing
payment terms to the Members for Joint Venture Products manufactured by the
Joint Venture Company on behalf of the Members pursuant to any Joint Venture
Document or any other agreement that has been approved as provided in this
Agreement.
 
2.6  Contributions After a Change in Consolidating Member. Notwithstanding
anything in this Article 2 to the contrary, following a Change in Consolidating
Member:
 
(A)  with respect to any Additional Capital Contribution, (1) the amount of the
[***] Member’s [***] that the [***] Member is required or permitted to make
pursuant to this Article 2 shall be reduced to the amount that would not result
in the occurrence of [***] Member or in the reduction of the [***] Economic
Interest below the lesser of [***]% and the [***] Member’s then-existing
Economic Interest, and (2) the [***] Member shall become entitled to contribute
the [***] Contribution Amount; provided, however, that if the [***] Member fails
to make such Additional Capital Contribution (or provide Member Debt Financing,
if applicable) in an amount equal to the full [***] Contribution Amount then the
limitations set forth in this Section 2.6(A) shall not apply with respect to
such Additional Capital Contribution; and
 
(B)  any payment by the Joint Venture Company to such [***] Member shall not
equal or exceed the amount that would result in the occurrence of [***] Member
or in the reduction of the [***] Member’s Economic Interest below the lesser of
[***]% and the [***] Member’s then-existing Economic Interest.
 
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ARTICLE 3. 
MEMBER DEBT FINANCING
 
3.1  Mandatory Member Debt Financing.
 
(A)  This Section 3.1 shall apply if (1) there occurs a Shortfall Amount in
respect of a [***] Capital Contribution pursuant to Section 2.4(B), (2) the
Non-Funding Member has contributed its [***] of all previously required [***]
Capital Contributions and (3) the other Member has become the “Funding Member”
as a result of (a) such other Member’s timely remittance of its [***] of such
[***] Capital Contribution (after giving effect to the return of any amount so
remitted which such Member requests or any increase in such amount contributed
by such Member, up to its [***] of such [***] Capital Contribution, after
receiving notice from the Joint Venture Company that the other Member has not
timely delivered its [***] of the [***] Capital Contribution), or (b) if neither
Member has timely remitted the amount of its [***] of such [***] Capital
Contribution, such other Member’s remittance of a greater percentage of its
[***] of such [***] Capital Contribution than the other Member (after giving
effect to the return of any amount so remitted which such Member requests or any
increase in such amount contributed by such Member, up to its [***] of such
[***] Capital Contribution, after receiving notice from the Joint Venture
Company that neither Member has timely delivered its [***] of the [***] Capital
Contribution). In such event, the Funding Member shall (y) promptly provide
Member Debt Financing to the Joint Venture Company in an amount equal to the
Loan Amount and (z) the Funding Member Portion shall be deemed to have been
provided as Member Debt Financing, rather than as a Capital Contribution, to the
Joint Venture Company. However, if the Shortfall Amount is less than $[***],
then the Funding Member may elect not to provide the Mandatory Member Debt
Financing and, in such case, the Joint Venture Company shall return to each
Member the portion of the [***] Capital Contribution actually remitted by such
Member. Furthermore, a Funding Member shall not be required to provide Mandatory
Member Debt Financing with respect to a [***] Capital Contribution under a [***]
that is part of a Disputed Approved Business Plan proposed by the Non-Funding
Member. No Funding Member shall be obligated to provide more than $[***] of
Mandatory Member Debt Financing outstanding at any time (not including any
Mandatory Equalization Note) with respect to Shortfall Amounts caused by a given
Non-Funding Member.
 
(B)  In exchange for the Mandatory Member Debt Financing, the Joint Venture
Company shall issue to the Funding Member two convertible notes, one having a
principal balance equal to the Loan Amount (the “Mandatory Shortfall Note”), and
the other having a principal balance equal to the Funding Member Portion (the
“Mandatory Equalization Note” and, together with the related Mandatory Shortfall
Note, the “Mandatory Notes”), in the form attached hereto as Exhibit A.
 
(C)  Each Mandatory Note issued in accordance with this Section 3.1 shall have
[***] term, subject to Section 3.1(E). For the first [***] of the term of a
Mandatory Shortfall Note, such Mandatory Shortfall Note shall bear interest at
[***] (as in effect on the issue date (the “Issuance Date”) thereof and adjusted
every [***]),[***] basis points per annum, compounded [***]. Thereafter, until
the end of the [***] term, such Mandatory Shortfall Note shall bear interest at
[***], adjusted every [***], compounded [***]. No Mandatory Equalization Note
shall [***].
 
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(D)  (1) At any time after the Issuance Date of a Mandatory Shortfall Note in
accordance with this Section 3.1 and prior to the expiration of the [***] term
of such Mandatory Shortfall Note, the Non-Funding Member may, upon three (3)
Business Days’ notice to the Joint Venture Company and the Funding Member, make
one or more Make-Up Contributions to the Joint Venture Company in an aggregate
amount up to the outstanding principal balance of the Mandatory Shortfall Note.
Each Make-Up Contribution shall be accompanied by a payment equal to the accrued
interest on the corresponding Mandatory Shortfall Note, which interest payment
shall not be deemed to be a Capital Contribution. If the Make-Up Contribution is
less than the entire amount of principal and accrued interest on a Mandatory
Shortfall Note, the Make-Up Contribution shall be deemed to be a payment applied
first to all accrued interest and then to principal on such Mandatory Shortfall
Note (and the amount so treated as a payment with respect to accrued interest
shall not be treated as a Capital Contribution). If a Member is the Non-Funding
Member with respect to more than one Mandatory Shortfall Note outstanding at the
time of such contribution, the Non-Funding Member shall specify the Mandatory
Shortfall Note to which a Make-Up Contribution applies (or, if no such
specification is made, the Make-Up Contribution will be used to repay the
Mandatory Shortfall Note that is closest to its maturity date). Upon receipt of
such funds, the Joint Venture Company shall immediately repay to the Funding
Member the portion of the outstanding principal balance of and accrued interest
on the Mandatory Shortfall Note in an amount equal to the Make-Up Contribution
plus any accrued interest on the amount of such Make-Up Contribution. At such
time, the following shall occur: (a) the amount of the Make-Up Contribution
equal to the principal balance of the Mandatory Shortfall Note so repaid shall
be deemed to be a Capital Contribution by the Non-Funding Member and such amount
shall be added to the Capital Contribution Balance of the Non-Funding Member;
and (b) a percentage of the outstanding principal balance of the related
Mandatory Equalization Note equal to the percentage of the principal balance of
the Mandatory Shortfall Note repaid shall convert into a Capital Contribution by
the Funding Member, whereupon such amount shall be added to the Capital
Contribution Balance of the Funding Member.
 
(2)  To the extent excess cash is available in accordance with Section 5.1 at
any time to make payments on any Mandatory Notes, if the Funding Member elects,
by written notice executed by its chief executive officer and delivered to the
Joint Venture Company prior to the making of the distributions under Section
5.1, to receive such payments, the Joint Venture Company shall make payments on
the outstanding principal of and accrued interest on the Mandatory Shortfall
Notes (with any such payment being applied first to the payment in full of
accrued interest and then, to the extent of any remaining amount of such
payment, to the repayment of principal) and the outstanding principal of the
Mandatory Equalization Notes; provided, however, that any payment by the Joint
Venture Company on the unpaid principal of a Mandatory Shortfall Note must be
accompanied by a payment by the Joint Venture Company of an equal percentage of
the unpaid principal of the related Mandatory Equalization Note. Upon the
Funding Member’s receipt of funds from the Joint Venture Company to be applied
to the repayment of principal on the Mandatory Notes, the principal portions of
the Mandatory Notes that were so repaid by the Joint Venture Company shall no
longer be outstanding.
 
(E)  To the extent any amount of a Mandatory Shortfall Note remains outstanding
upon its maturity for any reason, the Funding Member shall elect to do one of
the
 
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following: (1) transfer to the Joint Venture Company as a Capital Contribution
all or a portion of the obligations owing to the Funding Member for (a) the
unpaid principal of and accrued interest on the Mandatory Shortfall Note and (b)
the unpaid principal of the Mandatory Equalization Note, whereupon an amount
equal to the sum of (a) and (b) shall be added to the Capital Contribution
Balance of the Funding Member; or (2) permit the Mandatory Notes to become a
continuing note that will remain outstanding, have a principal amount equal to
the sum of (a) the principal of and accrued interest on the former Mandatory
Shortfall Note and (b) the principal of the former Mandatory Equalization Note
and be convertible at any time thereafter at the option of the Funding Member (a
“Continuing Mandatory Note”), which Continuing Mandatory Note shall bear no
interest and shall mature on the Liquidation Date. In the event that the Funding
Member fails to make an election, the Funding Member shall be deemed to have
elected to permit the Mandatory Notes to become a Continuing Mandatory Note.
Upon conversion of a Continuing Mandatory Note by the Funding Member, the amount
of principal of such Continuing Mandatory Note shall be added to the Capital
Contribution Balance of the Funding Member. To the extent excess cash is
available in accordance with Section 5.1 at any time to make payments on any
Continuing Mandatory Note, if the Funding Member elects to receive such
payments, by written notice executed by its chief executive officer and
delivered to the Joint Venture Company prior to the making of the distributions
under Section 5.1, the Joint Venture Company shall make such payments on the
outstanding principal of the Continuing Mandatory Note. Upon the Funding
Member’s receipt of funds from the Joint Venture Company, the portion of the
Continuing Mandatory Note that was paid by the Joint Venture Company shall no
longer be outstanding.
 
3.2  Optional [***] Financing.
 
(A)  In the event of a Shortfall Amount in respect of an [***] Capital
Contribution, the Funding Member may, in its sole discretion, elect to extend
Member Debt Financing to the Joint Venture Company (the “Optional [***]
Financing”) consisting of all or a portion of the Shortfall Amount and the
related Funding Member Portion of such [***] Capital Contribution (the aggregate
amount so loaned, the “Optional [***] Loan Amount”).
 
(B)  In exchange for the Optional [***] Financing, the Joint Venture Company
shall issue to the Funding Member two convertible notes, one having a principal
amount equal to the amount loaned by the Funding Member in respect of the
Shortfall Amount (the “Optional [***] Shortfall Note”) and the other having a
principal amount equal to the Funding Member Portion (the “Optional [***]
Equalization Note” and, together with the related Optional [***] Shortfall Note,
the “Optional [***] Notes”), in the form attached hereto as Exhibit B.
 
(C)  The Optional [***] Shortfall Notes issued in accordance with this
Section 3.2 will mature on the [***] and shall bear interest at [***] (as in
effect on the Issuance Date thereof and adjusted every [***]), compounded [***].
The Optional [***] Equalization Notes issued in accordance with this Section 3.2
shall bear [***] interest and will mature on the [***]. The Optional [***] Notes
shall be convertible at any time. Upon conversion of the Optional [***] Notes by
the Funding Member, the sum of (a) the unpaid principal of and accrued interest
on the Optional [***] Shortfall Note and (b) the unpaid principal of the
Optional [***] Equalization Note shall be added to the Capital Contribution
Balance of the Funding Member.
 
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(D)  If the Joint Venture Company or the Funding Member, on the Joint Venture
Company’s behalf, demands payment and determines to pursue a collection action
with respect to the Non-Funding Member’s failure to deliver the Shortfall Amount
relating to the [***] Capital Contribution and the Joint Venture Company
recovers from the Non-Funding Member, the funds collected from the Non-Funding
Member shall be applied first to the payment to the Joint Venture Company and
the Funding Member, in full of the costs theretofore incurred by the Joint
Venture Company or the Funding Member, respectively, in the pursuit of the claim
for payment against the Non-Funding Member (and such amount shall not be treated
as a Capital Contribution), then to all accrued but unpaid interest on such
payment (and such amount shall not be treated as a Capital Contribution) and
then to the payment of an Optional [***] Shortfall Note to the extent funds are
available. At such time, the following shall occur: (1) a portion of the Make-Up
Contribution recovered from the Non-Funding Member equal to the principal
balance of the Optional [***] Shortfall Note so repaid shall be deemed to be a
Capital Contribution by the Non-Funding Member, and such amount shall be added
to the Capital Contribution Balance of the Non-Funding Member and (2) a
percentage of the outstanding principal balance of the related Optional [***]
Equalization Note equal to the percentage of the principal balance of the
Optional [***] Shortfall Note repaid shall convert into a Capital Contribution
by the Funding Member, and such amount shall be added to the Capital
Contribution Balance of the Funding Member.
 
(E)  To the extent excess cash is available in accordance with Section 5.1 at
any time to make payments on any Optional [***] Notes, if the Funding Member
elects to receive such payments, by written notice executed by its chief
executive officer and delivered to the Joint Venture Company prior to the making
of the distribution under Section 5.1, the Joint Venture Company shall make
payments on the outstanding principal of and accrued interest on the Optional
[***] Shortfall Notes (with any such payment being applied first to the payment
in full of accrued interest and then, to the extent of any remaining amount of
such payment, to the repayment of principal) and the outstanding principal of
the Optional [***] Equalization Notes; provided, however, that any payment by
the Joint Venture Company on the unpaid principal on an Optional [***] Shortfall
Note must be accompanied by a payment by the Joint Venture Company of an equal
percentage of the unpaid principal of the related Optional [***] Equalization
Note. Upon the Funding Member’s receipt of funds from the Joint Venture Company,
the portion of the Optional [***] Shortfall Note and related Optional [***]
Equalization Note that was paid by the Joint Venture Company shall no longer be
outstanding.
 
3.3  Optional Other Member Debt Financing.
 
(A)  In the event of a Shortfall Amount in respect of an Other Capital
Contribution, the Funding Member may, in its sole discretion, elect to extend
Member Debt Financing to the Joint Venture Company (the “Optional Other
Financing”), consisting of all or a portion of the Shortfall Amount and the
related Funding Member Portion of such Other Capital Contribution.
 
(B)  In exchange for the Optional Other Financing, the Joint Venture Company
shall issue to the Funding Member a convertible note (the “Optional Other
Shortfall Note”), in the form attached hereto as Exhibit C. The Optional Other
Shortfall Note shall bear [***] interest, shall mature on the [***] and shall be
convertible at any time.
 
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3.4  Change In Committed Capital. Each time there is a change in a Member’s
Committed Capital, as a result of the making of a Capital Contribution or a loan
evidenced by a Member Note, a payment on a Member Note, or otherwise, each
Member’s respective Percentage Interest, Economic Interest and Sharing Interest
shall be immediately recalculated in accordance with the definitions of such
terms, taking into account any delay provided for in the definition of Sharing
Interest; provided, however, that in accordance with Section 2.3(H) an
adjustment to the Percentage Interests of the Members relating to any funds
remitted in respect of an Additional Capital Contribution to be made pursuant to
Article 2 shall be made when contemplated by Section 2.3(H).
 
3.5  Change in Consolidating Member. Following a Change in Consolidating Member
(as a result of which the Non-Funding Member becomes the Former Consolidating
Member), any (A) Make-Up Contribution made by the Non-Funding Member to the
Joint Venture Company or (B) payment on a Member Note by the Joint Venture
Company from excess funds available in accordance with Section 5.1 shall not
equal or exceed the amount that would result in the occurrence of another Change
in Consolidating Member or in the reduction of the Consolidating Member’s
Economic Interest below the lesser of [***]% and the [***] Member’s
then-existing Economic Interest.
 
3.6  Loans Through Subsidiary. Notwithstanding any provision of this Article 3,
in lieu of providing any Member Debt Financing permitted or required of a
Member, such Member may elect to provide such Member Debt Financing through a
Wholly-Owned Subsidiary of such Member; provided, however, that the Member,
rather than such Wholly-Owned Subsidiary of the Member, shall own the Economic
Interest, Sharing Interest and Committed Capital related to such Member Debt
Financing and shall have all rights against the Joint Venture Company related to
such Member Debt Financing.
 
ARTICLE 4.  
CAPITAL ACCOUNTS AND ALLOCATIONS
 
4.1  Capital Accounts. Each Member shall have a capital account maintained in
accordance with the terms of Article 2 of Appendix B to this Agreement (a
“Capital Account”).
 
4.2  Allocations of Book Income and Loss. Book income and Book loss for any
Fiscal Year shall be allocated to the Members in the manner provided in
Article 3 of Appendix B.
 
4.3  Tax Allocations. All items of income, gain, loss, and deduction shall be
allocated among the Members for federal income tax purposes in the manner
provided in Article 4 of Appendix B.
 
4.4  Restoration of Negative Balances. No Member with a deficit balance in its
Capital Account shall have any obligation to the Joint Venture Company, to any
other Member or to any third party to restore or repay said deficit balance.
This Section 4.4 shall not affect any of the other rights or obligations of the
Members under this Agreement or any other agreement.
 
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ARTICLE 5.  
DISTRIBUTIONS
 
5.1  Distributions.
 
(A)  Unless otherwise unanimously agreed in writing by the Members, the Joint
Venture Company shall not make any distributions until after the first
anniversary of the Effective Date. Thereafter, subject to Articles 6, 7 and 13
and the provisions of the Act and after giving effect to all Capital
Contributions or Member Debt Financing to be made on the same date under
Article 2 and Article 3, respectively, the Joint Venture Company shall, subject
to Section 5.1(C), make distributions of cash to the Members as set forth in
this Section 5.1(A), on a [***] basis on the [***] day of each Fiscal [***] (or
if such day is not a Business Day, then on the first Business Day after such
day) to the extent that the Joint Venture Company’s cash as of the end of the
immediately preceding Fiscal [***] is in excess of the sum of (y) any amounts
that have been contributed as a Capital Contribution or loaned to the Joint
Venture Company as Member Debt Financing and that are being held for the purpose
of making capital or operating expenditures in the current Fiscal [***] or the
first twenty-five (25) days of the immediately succeeding Fiscal [***] (or if
such day is not a Business Day, then on the first Business Day after such day)
and (z) all reserves that are considered reasonably necessary by the Board of
Managers to pay other expenditures that are reasonably likely to be payable in
the period described in clause (y) above, and in any event including the reserve
established under Section 2.2 and amounts remaining in the Accumulated
Distributions Accounts; provided, however, that the Board of Managers shall
cause the Joint Venture Company to use any cash available for distribution as
follows:
 
(1)  first, to pay in full all amounts outstanding under any outstanding
Mandatory Shortfall Notes and related Mandatory Equalization Notes (provided any
holder thereof has requested such payment by written notice executed by its
chief executive officer and delivered to the Joint Venture Company prior to the
distribution thereof under this Section 5.1) in order of their respective
maturity dates;
 
(2)  second, to pay any outstanding Continuing Mandatory Notes (provided any
holder thereof has requested such payment by written notice executed by its
chief executive officer and delivered to the Joint Venture Company prior to the
distribution thereof under this Section 5.1) in the order that the respective
maturity dates of the related Mandatory Shortfall Notes and Mandatory
Equalization Notes occurred;
 
(3)  third, to pay in full all amounts outstanding under any other outstanding
Member Notes (provided any holder thereof has requested such payment by written
notice executed by its chief executive officer and delivered to the Joint
Venture Company prior to the distribution thereof under this Section 5.1);
 
(4)  fourth, to make a distribution to a Member whose aggregate, cumulative
distributions (not including any payments made pursuant to Sections 5.1(A)(1),
(2) and (3)) immediately prior to such distribution are less than the amount
equal to the Member’s Sharing Interest (as such Sharing Interest is determined
immediately after any payments made under Sections 5.1(A)(1), (2) and (3))
multiplied
 
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by the aggregate, cumulative distributions (not including any payments made
pursuant to Sections 5.1(A)(1), (2) and (3)) of the Joint Venture Company
immediately prior to such distribution, until such Member’s aggregate,
cumulative distributions (not including payments made pursuant to
Sections 5.1(A)(1), (2) and (3), but including such distribution pursuant to
this Section 5.1(A)(4)) are equal to its Distribution Entitlement; and
 
(5)  finally, to make distributions pro rata to the Members in accordance with
their respective Sharing Interests (as such Sharing Interests are determined
immediately after any payments made under Sections 5.1(A)(1), (2) and (3)).
 
(B)  Distributions of cash are only to be made to the extent cash is available
to the Joint Venture Company without requiring (1) the sale of Joint Venture
Company assets (other than in the ordinary course of business) or the pledge of
Joint Venture Company assets at a time or on terms that the Board of Managers
believes are not in the best interests of the Joint Venture Company or (2) a
reduction in reserves that the Board of Managers believes are reasonably
necessary for Joint Venture Company purposes for the then-current Fiscal [***]
and the first twenty-five (25) days of the immediately succeeding Fiscal [***]
(or if such day is not a Business Day, then through the first Business Day after
such day).
 
(C)  The Joint Venture Company shall maintain in its books of account for each
Member a special purpose account (the “Accumulated Distributions Accounts”) for
purposes of recording amounts that would be distributed to such Member under
Section 5.1(A) but for the application of this Section 5.1(C). Notwithstanding
anything to the contrary in this Section 5.1, in lieu of actually making the
cash distributions contemplated by this Section 5.1, the Joint Venture Company
shall (except to the extent a Member requests direct payment to the Member)
increase each Member’s Accumulated Distributions Account by the amount of such
cash that was to have been distributed to such Member. Subsequently, when a
Member is required to, or desires to, make a Capital Contribution required or
permitted by this Agreement, in lieu of making such Capital Contribution such
Member may instruct the Joint Venture Company to reduce such Member’s
Accumulated Distributions Account in an amount (not to exceed the amount in such
Member’s Accumulated Distributions Account) up to the amount of such Capital
Contribution, which shall be treated for all purposes (including for purposes of
the definition of Capital Contribution Balance) as if such Member had made such
Capital Contribution at the time designated in such instruction. A Member may,
at any time, demand payment of, and the Joint Venture Company shall immediately
pay, the full amount of such Member’s Accumulated Distributions Account, in
which event the amount so paid shall reduce the Member’s Accumulated
Distributions Account.
 
5.2  Withholding Tax Payments and Obligations. In the event that withholding
taxes are paid or required to be paid in respect of payments made to or by the
Joint Venture Company, or allocations to a Member, such withholding shall be
treated as follows:
 
(A)  Payments to the Joint Venture Company. If the Joint Venture Company
receives proceeds in respect of which a tax has been withheld, the Joint Venture
Company shall be treated as having received cash in an amount equal to the
amount of such withheld tax, and, for all purposes of this Agreement, each
Member shall be treated as having received a
 
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distribution pursuant to Section 5.1 equal to the portion of the withholding tax
allocable to such Member, as reasonably determined by the Board of Managers.
Such amounts shall not be treated as Joint Venture Company expenses.
 
(B)  Payments by the Joint Venture Company. The Joint Venture Company is
authorized to withhold, and the Tax Matters Partner shall take any actions
reasonably necessary to withhold, from any payment made to, or any distributive
share of, a Member any taxes required by law to be withheld, and in such event,
such taxes shall be treated as if an amount equal to such withheld taxes had
been distributed to such Member pursuant to Section 5.1 (or, as provided in
Section 5.2(C), loaned to such Member).
 
(C)  Certain Withheld Taxes Treated as Demand Loans. Any taxes withheld pursuant
to Sections 5.2(A) or 5.2(B) hereof shall be treated as if distributed to the
relevant Member pursuant to Section 5.1 to the extent an amount equal to such
withheld taxes would then be distributable to such Member, and, to the extent in
excess of such distributable amounts, as a demand loan payable by the Member to
the Joint Venture Company with interest at a rate equal to [***] (or, if less,
the maximum rate allowed by law), compounded and adjusted [***], commencing five
(5) days after written demand therefor on behalf of the Joint Venture Company is
made by any other Member.
 
5.3  Distribution Limitations. Notwithstanding anything in this Agreement to the
contrary, the Joint Venture Company shall not make any distribution of cash or
other property to any Member if the distribution would violate any agreement to
which the Joint Venture Company or any of its Subsidiaries is a party or by
which it or any of them is bound.
 
ARTICLE 6. 
MANAGEMENT; BOARD OF MANAGERS
 
6.1  Management Power. Except as specifically provided in Article 7, Article 8,
and Sections 11.1, 11.2 and 11.3, the business, property, affairs and
operations, including the control over the details of the manufacturing process,
of the Joint Venture Company shall be managed by or under the direction of a
board of Managers (the “Board of Managers”), and, except as provided in Article
7, Article 8 and Sections 11.1, 11.2 and 11.3, no Member shall have any right to
participate in or exercise control or management power over the business and
affairs of the Joint Venture Company or otherwise to bind, act or purport to act
on behalf of the Joint Venture Company in any manner. Subject to the limitations
set forth in this Agreement, the Board of Managers shall have all the rights and
powers that may be possessed by a manager under the Act, including the power to
incur indebtedness for trade payables and equipment leases, the power to enter
into agreements and commitments of all kinds, the power to manage, acquire and
dispose of Joint Venture Company assets, and all ancillary powers necessary or
convenient as to the foregoing. No individual Manager, in his or her capacity as
such, may act on behalf of the Board of Managers or bind the Joint Venture
Company.
 
6.2  Number of Managers; Appointment of Managers.
 
(A)  The Board of Managers shall consist of six (6) individuals (each such
individual, a “Manager”). Subject to Section 6.2(B), one half of the Managers
shall be
 
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appointed by Micron and one half of the Managers shall be appointed by Intel.
The initial Managers appointed by Micron are listed on Appendix C, and the
initial Managers appointed by Intel are listed on Appendix C. Each Member having
the right to appoint a Manager or Managers in accordance with this Section shall
also have the right, in its sole discretion, to remove such Manager or Managers
at any time by delivery of written notice to the other Member(s) and the Joint
Venture Company. Any vacancy in the office of a Manager for any reason other
than pursuant to Section 6.2(B) (including as a result of such Manager’s death,
resignation, retirement or removal pursuant to this Section) shall be filled by
the Member that appointed the relevant Manager. Unless a Manager resigns, dies,
retires or is removed in accordance with this Section, each Manager shall hold
office until a successor shall have been duly appointed by the appointing
Member.
 
(B)  Effect of Change in Percentage Interest on Managers. While a Member’s
Percentage Interest is below [***] percent ([***]%) but at least [***] percent
([***]%), the number of Managers such Member is entitled to appoint to the Board
of Managers shall be reduced to [***] ([***]), and the number of Managers the
other Member is entitled to appoint to the Board of Managers shall be increased
to [***] ([***]). While a Member’s Percentage Interest is below [***] percent
([***]%) but at least [***] percent ([***]%), the number of Managers such Member
is entitled to appoint to the Board of Managers shall be reduced to [***]
([***]), and the number of Managers the other Member is entitled to appoint to
the Board of Managers shall be increased to [***] ([***]). While a Member’s
Percentage Interest is below [***] percent ([***]%), the number of Managers such
Member is entitled to appoint to the Board of Managers shall be reduced to [***]
([***]), and the other Member shall be entitled to appoint [***] Managers to the
Board of Managers; provided, however, that the Member with a Percentage Interest
of less than [***] percent ([***]%) shall be entitled to designate, from time to
time, an individual who shall not be a member of, and shall have no right to
vote at any meeting of, the Board of Managers, but who shall have the right to
receive notice of, attend, and act as an observer for such Member at, any
meeting of the Board of Managers, and who shall receive all materials delivered
to the Board of Managers in connection with any such meetings. If either
Member’s Percentage Interest should be below any of the threshold levels set
forth above and if such Member (the “Appointing Member”) then has more designees
serving on the Board of Managers than the number to which it is entitled, such
Appointing Member shall immediately identify by written notice to the other
Member the designee or designees on the Board of Managers that will cease
serving on the Board of Managers and each such designee shall thereupon cease to
be a Manager or member of the Board of Managers. If such Appointing Member fails
to make such designation within five (5) Business Days after written demand by
the other Member, the other Member may designate by written notice to the
Appointing Member one or more (as appropriate) of the Appointing Member’s
designees on the Board of Managers that will cease serving on the Board of
Managers and each such designee shall thereupon cease to be a Manager or member
of the Board of Managers. The other Member who is entitled to appoint one or
more additional Managers to serve on the Board of Managers may immediately
appoint such additional Managers by written notice to the other Member
designating such Managers. Similarly, if a Member whose Percentage Interest fell
below any threshold level set forth in this Section 6.2(B) subsequently
increases its Percentage Interest above any such level, the process shall be
reversed.
 
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(C)  Chairman of the Board of Managers. Until the end of the Fiscal Year ending
in 2007, Micron shall have the right to designate one of its designated Managers
as chairman of the Board of Managers (the “Chairman”), and thereafter, for each
subsequent Fiscal Year of the Joint Venture Company, the right to designate the
Chairman (from among its designated Managers) shall alternate between Intel and
Micron; provided, however, that while the Percentage Interest of a Member is
below [***] percent ([***]%), the Chairman of the Board will be appointed by the
other Member. The Chairman shall preside at all meetings of the Board of
Managers and shall have such other duties and responsibilities as may be
assigned to him or her by the Board of Managers. The Chairman may delegate to
any Manager authority to chair any meeting, either on a temporary or a permanent
basis. The Chairman must include any item submitted by a Member or Manager for
consideration at a meeting of the Board of Managers, may not cut off debate on
any matter being considered by the Board of Managers and shall call for a vote
on any matter at the request of any Manager, including any matter described in
Section 6.3(B).
 
(D)  Presence of Certain Officers at Meetings of Board of Managers. Each of the
Authorized Officers, or the Chief Executive Officer, as applicable, each of whom
shall not be a member of the Board of Managers, may attend, but shall have no
right to vote at, all meetings of the Board of Managers; provided, however, that
the Board of Managers may exclude the Authorized Officers, or the Chief
Executive Officer, as applicable, from such meetings or such portions of
meetings at which the compensation or performance of, or any issue involving,
either of the Authorized Officers, or the Chief Executive Officer, as
applicable, is discussed as the Board of Managers, in its sole discretion, deems
appropriate. If either Authorized Officer is excluded from any meeting or
portion of a meeting of the Board of Managers, the other Authorized Officer
shall also be excluded from such meeting or portion of such meeting.
 
6.3  Voting of Managers.
 
(A)  Each Manager shall be entitled to one (1) vote, and Managers shall not be
entitled to cast their votes through proxies (except as provided in
Section 6.7). Subject to Sections 6.3(B) and 6.3(C), all actions, determinations
or resolutions of the Board of Managers shall require the affirmative vote or
consent of a majority of the Board of Managers present at any meeting at which a
quorum is present (i.e., the affirmative vote of four (4) Managers if the total
number of Managers is six (6)), which majority must include at least [***]
appointed by each Member at all times that each Member has at least [***] to the
Board of Managers; provided, however, that any matter that is a Micron Matter
shall be deemed approved upon the approval of a majority of the Managers
appointed by Micron, and any matter that is an Intel Matter shall be deemed
approved upon the approval of a majority of the Managers appointed by Intel.
Except as specifically provided in Article 7, Article 8 and Sections 11.1, 11.2
and 11.3, the Board of Managers shall have the right, power and authority to
take all actions of the Joint Venture Company, including the following, and in
no event shall any of the following actions be taken without the approval of the
Board of Managers (which approval may be obtained through the adoption of an
Undisputed Approved Business Plan by the Board of Managers in accordance with
Sections 11.1 and 11.2, provided that the relevant Undisputed Approved Business
Plan sets forth such action in reasonable detail), by or with respect to the
Joint Venture Company or any Subsidiary of the Joint Venture Company:
 
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(1)  entering into any agreement or making any modification or amendment to, or
terminating, any agreement between (a) the Joint Venture Company or any
Subsidiary of the Joint Venture Company and (b) any Member or an Affiliate of a
Member;
 
(2)  selecting attorneys, accountants, auditors and financial advisors for the
Joint Venture Company or any of its Subsidiaries;
 
(3)  adopting, or making any material modification, amendment or termination of,
material accounting and tax policies, procedures and principles applicable to
the Joint Venture Company or any of its Subsidiaries other than those made in
accordance with Section 10.9 (provided, however, that the right, power and
authority of the Board of Managers with respect to tax policies, procedures and
principles granted under this Section 6.3 shall be subject to the provisions of
Section 10.7 hereof);
 
(4)  adopting or making any material changes to any employee benefit plan,
including any incentive compensation plan;
 
(5)  setting any distribution to the Members not required under Article 5;
 
(6)  subject to Section 6.3(B)(1)(b), commencing or settling litigation, except
routine employment litigation matters;
 
(7)  making any material purchase, sale or lease (as lessor or lessee) of any
real property (except for any such purchase or lease to effectuate an Intel
Matter that is approved by a majority of the Intel Managers then in office or a
Micron Matter that is approved by a majority of the Micron Managers then in
office);
 
(8)  acquiring securities or any equity ownership interest in any Person, other
than a Wholly-Owned Subsidiary of the Joint Venture Company established to hold
a Fab or assets of the Joint Venture Company or any of its Subsidiaries;
 
(9)  making any public announcement by the Joint Venture Company or any
Subsidiary of the Joint Venture Company of any material non-public information
not previously approved for public announcement by the Board of Managers;
 
(10)  entering into or amending any collective bargaining arrangements or
waiving any material provision or requirement thereof;
 
(11)  approving any Proposed Business Plan, or amending or modifying any
Approved Business Plan (or any modification thereof), subject to Sections
11.1(C), 11.2(D) and 11.2(E);
 
(12)  making any filing with, public comments to, or negotiation or discussion
with, any Governmental Entity (excluding regular operating filings and other
routine administrative matters and other than any such filing, public comments,
or negotiation or discussion relating to an Intel Matter that is approved by a
majority of the
 
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Intel Managers then in office or relating to a Micron Matter that is approved by
a majority of the Micron Managers then in office); and
 
(13)  establishing, overseeing and modifying the investment policies of the
Joint Venture Company with respect to funds held by the Joint Venture Company,
including funds reserved pursuant to Section 2.2 pending the use of such funds
in accordance with any applicable Approved Business Plan.
 
(B)  (1) Notwithstanding the foregoing, any action of the Board of Managers with
respect to any of the following matters relating to a Member (the “Interested
Member”) shall be deemed approved by the Board of Managers if approved either by
the affirmative vote at a meeting of the Board of Managers of a majority of the
Managers appointed by the other Member (the “Independent Member”) with respect
to such action or by written consent of a majority of the Managers appointed by
such Independent Member:
 
(a)  any determination to grant indemnification to the Interested Member for any
matter not contemplated by Section 14.2 hereof; or
 
(b)  the pursuit of any remedy by the Joint Venture Company or a Subsidiary of
the Joint Venture Company against the Interested Member or Affiliate of the
Interested Member (excluding any Applicable Joint Venture and any Wholly-Owned
Subsidiary of any Applicable Joint Venture) in accordance with Section 7.5; or
 
(c)  any other matter (other than a matter provided for in Section 6.3(B)(2)) in
which the interests of the Joint Venture Company or a Subsidiary of the Joint
Venture Company and the Interested Member, or an officer, director, controlling
stockholder or Affiliate of the Interested Member (excluding any Applicable
Joint Venture and any Wholly-Owned Subsidiary of any Applicable Joint Venture),
are adverse.
 
(2)  The entry into, modification of, amendment to, or termination by the Joint
Venture Company of any agreement or other transaction between the Joint Venture
Company or any Subsidiary of the Joint Venture Company, on the one hand, and the
Interested Member or an officer, director, controlling stockholder or Affiliate
of the Interested Member (excluding any Applicable Joint Venture and any
Wholly-Owned Subsidiary of any Applicable Joint Venture ), on the other hand,
(an “Interested Member Transaction”) shall be permitted only if:
 
(a)  The material facts as to the relationship or interest of the Interested
Member (and its officers, directors, controlling stockholders and Affiliates
(excluding any Applicable Joint Venture and any Wholly-Owned Subsidiary of any
Applicable Joint Venture)) as to the Interested Member Transaction are disclosed
or are known to the Board of Managers and the Independent Member, and the Board
of Managers in good faith authorizes the Interested Member Transaction by the
affirmative votes of a majority of the
 
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Managers appointed by the Independent Member, even though the Managers appointed
by the Independent Member may be less than a quorum; or
 
(b)  The material facts as to the relationship or interest of the Interested
Member (and its officers, directors, controlling stockholders and Affiliates) as
to the Interested Member Transaction are disclosed or are known to the
Independent Member, and the Interested Member Transaction is specifically
approved in writing by the Independent Member; or
 
(c)  The Interested Member Transaction is authorized, approved or ratified by
the Board of Managers and is fair as to the Joint Venture Company or the
applicable Subsidiary of the Joint Venture Company and the Independent Member as
of the time it is so authorized, approved or ratified by the Board of Managers.
 
(3)  Managers appointed by the Interested Member may be counted in determining
the presence of a quorum at a meeting of the Board of Managers which authorizes
the Interested Member Transaction.
 
(C)  Notwithstanding anything in this Agreement to the contrary, if a Member has
only [***] to the Board of Managers as a result of its Percentage Interest
falling below the requisite threshold set forth in Section 6.2(B), the following
actions will require the approval of a majority of the members of the Board of
Managers, including the Manager appointed by such Member:
 
(1)  any material modification, amendment or termination of material accounting
and tax policies, procedures and principles applicable to the Joint Venture
Company or any of its Subsidiaries, other than those made in accordance with
Section 10.9 (provided, however, that the right, power and authority of the
Board of Managers with respect to tax policies, procedures and principles
granted under this Section 6.3 shall be subject to the provisions of Section
10.7 hereof); and
 
(2)  except for any litigation matter subject to Section 6.3(B)(1)(b), any
settlement of a litigation matter or a group of related litigation matters,
other than routine litigation matters not involving current or former members of
management, where the amount of damages payable by the Joint Venture Company or
any of its Subsidiaries exceeds $[***] or that results in disparate treatment of
the Members.
 
6.4  Meetings of the Board of Managers; Quorum. The Board of Managers shall hold
meetings at least once per Fiscal Quarter. Subject to a Manager’s right to
appoint an alternate Manager in accordance with Section 6.7, the presence of at
least a majority of the Managers (four (4) while the number of Managers is six
(6)), in person or by telephone conference or by other means of communications
acceptable to the Board of Managers, shall be necessary and sufficient to
constitute a quorum for the purpose of taking action by the Board of Managers at
any meeting of the Board of Managers; provided, that such quorum shall consist
of at least a majority of the Managers appointed by each Member that appoints an
odd number of Managers greater than one, and at least half of the Managers
appointed by each Member that appoints an
 
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even number of Managers. No action taken by the Board of Managers at any meeting
shall be valid unless the requisite quorum is present.
 
6.5  Notice; Waiver. The regular quarterly meetings of the Board of Managers
described in Section 6.4 shall be held upon not less than ten (10) days’ written
notice. Additional meetings of the Board of Managers shall be held (A) at such
other times as may be determined by the Board of Managers, (B) at the request of
at least two (2) Managers or either Authorized Officer, or the Chief Executive
Officer, as applicable, upon not less than five (5) Business Days’ written
notice or (C) in accordance with Section 17.1, following a failure by the Board
of Managers to adopt or reject a proposal for action presented to it. For
purposes of this Section, notice may be provided via facsimile, email or any
other manner provided in Section 18.1, or telephonic notice to each Manager
(which notice shall be provided to the other Managers by the requesting
Managers). The presence of any Manager at a meeting (including by means of
telephone conference or other means of communications acceptable to the Board of
Managers) shall constitute a waiver of notice of the meeting with respect to
such Manager, unless such Manager declares at the meeting that such Manager
objects to the notice as having been improperly given. The Board of Managers
shall cause written minutes to be prepared of all actions taken by the Board of
Managers and shall cause a copy thereof to be delivered to each Manager within
fifteen (15) days of each meeting.
 
6.6  Action Without a Meeting; Meetings by Telecommunications.
 
(A)  On any matter that is to be voted on, consented to or approved by the Board
of Managers, the Board of Managers may take such action without a meeting,
without prior notice and without a vote if a consent or consents in writing,
setting forth the action so taken, shall be signed by the Managers having not
less than the minimum votes that would be necessary to authorize or take such
action, in accordance with the terms of this Agreement, at a meeting at which
all the Managers were present and voted.
 
(B)  Unless the Act otherwise provides, members of the Board of Managers shall
have the right to participate in all meetings of the Board of Managers by means
of a conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other at the same time
and participation by such means shall constitute presence in person at a
meeting.
 
6.7  Alternate Managers. Each Manager shall have the right to designate an
individual to attend and vote at meetings of the Board of Managers as the proxy
of such regularly appointed Manager.
 
6.8  Compensation of Managers. The Managers, in their capacity as such, shall
not receive compensation from the Joint Venture Company. Each Member shall bear
the cost and expenses incurred by its appointed Managers in connection with the
Joint Venture Company’s business while such Managers are serving in such
capacity.
 
ARTICLE 7. 
MEMBERS
 
7.1  Rights of Members; Meetings.
 
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(A)  The Members shall be the members of the Joint Venture Company under the
Act, and shall be entitled to the following: (1) receive financial reports and
tax reporting information referenced in Sections 10.4 and 10.6; (2) receive
(y) the then-current Approved Business Plans, as updated from time to time in
accordance with Section 11.1 or Section 11.2 and any Proposed Business Plan and
(z) the then-current Operating Plan; (3) receive such additional information of
the Joint Venture Company or any of its Subsidiaries as may reasonably be
requested by a Member; (4) copies of any third party audit findings from any
audit of the Joint Venture Company or any Subsidiary of the Joint Venture
Company, any subcontractor for the Joint Venture Company or any Subsidiary of
the Joint Venture Company or any Person that provides services to the Joint
Venture Company or any Subsidiary of the Joint Venture Company (including a
Member in such capacity but only to the extent contemplated by the applicable
service agreement with such Member); and (5) such additional rights as are
elsewhere provided in this Agreement or by mandatory requirements of Applicable
Law, including mandatory requirements of the Act.
 
(B)  At any time, and from time to time, the Board of Managers may, but shall
not be required to, call meetings of the Members.
 
(1)  Special meetings of the Members for any proper purpose or purposes may be
called at any time by either Member. Each meeting of the Members shall be
conducted by the Authorized Officers, or the Chief Executive Officer, as
applicable, or any mutually agreeable designee of the Authorized Officers or
designee of the Chief Executive Officer, as applicable, and shall be held at the
principal offices of the Joint Venture Company or at such other place as may be
agreed upon from time to time by the Members. The Authorized Officers or their
designee, or the Chief Executive Officer or his or her designee, as applicable,
shall include any item submitted by a Member for consideration at a meeting of
the Members, may not cut off debate on any matter being considered by the
Members and shall call for a vote on any matter at the request of any Member.
Meetings may be held by telephone if both Members so consent.
 
(2)  Except as otherwise required by Applicable Law, written notice (which may
be provided via facsimile or electronic mail with receipt confirmation) of each
meeting of the Members of the Joint Venture Company shall be given not less than
five (5) nor more than thirty-five (35) days before the date of such meeting.
 
(3)  The presence, either in person or by proxy, of Members whose combined
Percentage Interests equal one hundred percent (100%) is required to constitute
a quorum at any meeting of the Members.
 
(4)  Each Member may authorize any Person (provided such Person is an officer of
the Member) to act for it or on its behalf on all matters in which the Member is
entitled to participate. Each proxy must be signed by a duly authorized officer
of the Member. All other provisions governing, or otherwise relating to, the
holding of meetings of the Members shall be established from time to time as
mutually agreed by the Members.
 
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(5)  The Members shall be entitled to vote on any matter submitted to a vote of
the Members in proportion to their Percentage Interests. Members may vote either
in person or by proxy at any meeting. Each Member shall be entitled to cast one
(1) vote for each full percentage of the Percentage Interest held by such
Member. Fractional votes shall be permitted.
 
(6)  Any action permitted or required by the Act, the Certificate, or this
Agreement to be taken at a meeting of Members may be taken without a meeting if
a consent in writing, setting forth the action to be taken, is signed by the
Member or Members whose vote or approval is required for the taking of such
action under this Agreement. Such consent shall have the same force and effect
as if such action was approved by vote at a meeting at which all the Members
were present and voted and may be stated as such in any document or instrument
filed with the Secretary of State of Delaware, and the execution of such consent
shall constitute attendance or presence in person at a meeting of Members.
 
7.2  Limitations on the Rights of Members.
 
(A)  Subject to any mandatory requirements of Applicable Law, including
mandatory requirements under the Act, except as provided in this Agreement or as
otherwise agreed in writing by the Members, no Member (in its capacity as a
Member) has the right to take any part whatsoever in the management and control
of the business of the Joint Venture Company, sign for or bind the Joint Venture
Company or any of its Subsidiaries, compel a sale or appraisal of the Joint
Venture Company’s or any of its Subsidiaries’ assets, or sell or assign its
Interest in the Joint Venture Company or any of its Subsidiaries.
 
(B)  No Member may, without the prior written consent of the other Member: (1)
confess any judgment against the Joint Venture Company or any of its
Subsidiaries; (2) act for, enter into any agreement on behalf of or otherwise
purport to bind the other Member, the Joint Venture Company or any of its
Subsidiaries; (3) do any acts in contravention of this Agreement or any of the
Affiliate Agreements; (4) except as contemplated by the Affiliate Agreements,
dispose of the goodwill or the business of the Joint Venture Company or any of
its Subsidiaries; (5) Transfer its Interest in the Joint Venture Company (except
as provided in Sections 12.2, 12.4(A), 12.4(B) or 12.5); or (6) assign the
property of the Joint Venture Company or any of its Subsidiaries in trust for
creditors or on the assignee’s promise to pay any indebtedness of the Joint
Venture Company or any of its Subsidiaries.
 
7.3  Limited Liability of the Members. Except to the extent expressly set forth
in Article 2 of this Agreement or otherwise in a written instrument executed by
the Member against whom any liability is asserted in favor of the Person
asserting such liability, the Members (solely in their capacity as Members) have
no obligation to contribute to the Joint Venture Company or any of its
Subsidiaries and shall not be liable for any debt, obligation or liability of
the Joint Venture Company or any of its Subsidiaries. Any liability to return
distributions made by the Joint Venture Company is limited to mandatory
requirements of the Act or of any other Applicable Law.
 
7.4  Voting Rights of Members.
 
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(A)  Notwithstanding anything in this Agreement to the contrary, for so long as
a Member’s Percentage Interest is greater than [***] ([***]%), the following
actions shall require the unanimous approval of the Members:
 
(1)  any amendment, restatement or revocation of the Certificate, except (a) as
provided in Section 1.5(A) to effectuate a change in the principal place of
business of the Joint Venture Company, (b) to change the name of the Joint
Venture Company, (c) as required by Applicable Law, or (d) to accomplish any
action that would be allowed under the terms and conditions of this Agreement
where the only prohibition on the performance of such action is the terms of the
Certificate;
 
(2)  any material change in the business purpose of the Joint Venture Company or
any of its Subsidiaries, other than a change in accordance with the proviso to
Section 1.4;
 
(3)  any Transfer of any Interest to any Person, except as expressly permitted
by Sections 12.2, 12.4(A), 12.4(B) or 12.5;
 
(4)  any agreement with respect to all present or former Members to extend the
period for assessing any tax which is attributable to any Joint Venture Company
item or item of any of the Joint Venture Company’s Subsidiaries;
 
(5)  any approval of the inclusion within the business purpose of the Joint
Venture Company or any of its Subsidiaries the manufacture of memory products
other than NAND Flash Memory Products, subject to the proviso to Section 1.4;
 
(6)  any approval or setting of any distribution to any Member (other than
distributions of cash in accordance with Article 5); provided, however, that a
Member’s consent for the purposes of this Section 7.4(A)(6) shall not be
unreasonably withheld; and
 
(7)  the sale, license, assignment or other transfer of any intellectual
property owned or in the possession of the Joint Venture Company or any
Subsidiary of the Joint Venture Company (including any technology or know-how,
whether or not patented, any trademark, trade name or service mark, any
copyright or any software or other method or process) to any Person other than a
Wholly-Owned Subsidiary of the Joint Venture Company or a U.S. Facilities
Company or an Applicable Joint Venture or a Wholly-Owned Subsidiary of an
Applicable Joint Venture, except as provided in the Joint Venture Documents or
as otherwise agreed in writing by the Members.
 
(B)  Notwithstanding anything in this Agreement to the contrary, and in addition
to the provisions of Section 7.4(A), for so long as a Member’s Percentage
Interest is at least [***] percent ([***]%), the following actions shall require
the unanimous approval of the Members:
 
(1)  the incurrence of any indebtedness for borrowed money, other than (i) as
provided in Article 2 or Article 3 and (ii) any third-party equipment financing;
 
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(2)  any sale, lease, pledge (other than pledges of equipment under a permitted
third-party equipment financing), assignment, transfer (other than transfers to
a Wholly-Owned Subsidiary of the Joint Venture Company) or other disposition of
any asset of the Joint Venture Company or any of its Subsidiaries or group of
assets in each case other than in the ordinary course, unless approved in an
Undisputed Approved Business Plan or unless made in connection with a
dissolution of the Joint Venture Company as contemplated by Article 13;
provided, however, that unanimous approval will not be required if the aggregate
amount of such sales, leases, pledges (other than pledges of equipment under a
permitted third-party equipment financing), assignments, transfers (other than
transfers to a Wholly-Owned Subsidiary of the Joint Venture Company) and other
dispositions not in the ordinary course do not exceed the amount provided for in
an Undisputed Approved Business Plan by more than $[***] in any Fiscal Year;
 
(3)  any purchase, lease or other acquisition, in any single transaction or in a
series of related transactions, of personal property or services or capital
equipment inconsistent with an Approved Business Plan (after taking into account
any general overrun provisions contained in such Approved Business Plan);
 
(4)  any capital expenditures or series of related capital expenditures, that
exceed the amount provided therefor in the most recently Approved Business Plan
(after taking into account any general spending overrun provisions contained in
such Approved Business Plan) or any commitment by the Joint Venture Company or
any Subsidiary of the Joint Venture Company to make expenditures in any
development project in an amount greater than the amount set forth in the most
recently Approved Business Plan (after taking into account any general spending
overrun provisions contained in such Approved Business Plan);
 
(5)  any merger, consolidation or other business combination to which the Joint
Venture Company or any Subsidiary of the Joint Venture Company is a party, or
any other transaction to which the Joint Venture Company or any Subsidiary of
the Joint Venture Company is a party (other than where the Joint Venture Company
is merged or combined with or consolidated into a Wholly-Owned Subsidiary of the
Joint Venture Company), resulting in a change of control of the Joint Venture
Company or any Subsidiary of the Joint Venture Company, other than a change of
control that may occur pursuant to Article 2 or Article 3;
 
(6)  (a) the voluntary commencement or the failure to contest in a timely and
appropriate manner any involuntary proceeding or the filing of any petition
seeking relief under bankruptcy, insolvency, receivership or similar laws,
(b) the application for or consent to the appointment of a receiver, trustee,
custodian, conservator or similar official for the Joint Venture Company or any
Subsidiary of the Joint Venture Company, or for a substantial part of their
property or assets, (c) the filing of an answer admitting the material
allegations of a petition filed against the Joint Venture Company or any
Subsidiary of the Joint Venture Company in any proceeding described above,
(d) the consent to any order for relief issued with respect to any proceeding
described in this subsection (6), (e) the making of a general assignment for the
benefit of creditors, or
 
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(f) the admission in writing of the Joint Venture Company’s inability, or the
failure of the Joint Venture Company or of any Subsidiary of the Joint Venture
Company generally, to pay its debts as they become due or the taking of any
action for the purpose of effecting any of the foregoing;
 
(7)  the acquisition of any business or entry into any joint venture or
partnership;
 
(8)  the creation of any direct or indirect Subsidiary of the Joint Venture
Company other than a U.S. Facilities Company or any other Wholly-Owned
Subsidiary of the Joint Venture Company; and
 
(9)  negotiating external sources of additional wafer manufacturing capacity for
Joint Venture Products.
 
In addition, such Member shall have the right to review and comment on any
public announcement by the Joint Venture Company or any Subsidiary of the Joint
Venture Company.
 
(C)  Notwithstanding anything in this Agreement to the contrary, and in addition
to the provisions of Sections 7.4(A) and 7.4(B), for so long as a Member’s
Percentage Interest is at least [***] percent ([***]%), the following actions
shall require the unanimous approval of the Members:
 
(1)  the purchase, license or other acquisition of rights to third party
intellectual property other than routine software licenses in connection with
the Joint Venture Company’s or any of its Subsidiaries’ ongoing operations.
 
7.5  Defaulting Member. Notwithstanding anything in this Agreement to the
contrary, in no event shall the pursuit of any remedy by the Joint Venture
Company or any of its Subsidiaries against a Defaulting Member pursuant to
Section 17.7 require the consent of such Defaulting Member. The Non-Defaulting
Member shall have the right to control the Joint Venture Company’s pursuit of
any such claim against the Defaulting Member.
 
7.6  Cooperation.
 
(A)  Intel may take action on behalf of the Joint Venture Company with respect
to any Intel Matter and shall cooperate with and keep Micron regularly informed
with respect to any Intel Matter.
 
(B)  Micron may take action on behalf of the Joint Venture Company with respect
to any Micron Matter and shall cooperate with and keep Intel regularly informed
with respect to any Micron Matter.
 
ARTICLE 8.  
OFFICERS AND COMMITTEES
 
8.1  Intel Executive Officer.
 
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(A)  Until the [***] anniversary of the Effective Date (the “Management
Conversion Date”), the Joint Venture Company shall have an executive officer
appointed by Intel (the “Intel Executive Officer”) who, together with the Micron
Executive Officer, shall have responsibility for the day-to-day management and
control of the business and affairs of the Joint Venture Company and its
Subsidiaries and overseeing the implementation of the strategic direction of the
Joint Venture Company and its Subsidiaries. The Intel Executive Officer shall
perform such duties and have such powers specifically delegated to the Intel
Executive Officer by the Board of Managers. The Intel Executive Officer shall be
an employee of Intel seconded to the Joint Venture Company by Intel, subject to
the consent of Micron, which consent shall not be unreasonably withheld or
delayed. Intel shall have the right to remove the Intel Executive Officer at any
time, with or without cause, provided that it provides at least ten (10) days
written notice of such removal to Micron and the Joint Venture Company. Intel
shall have the right to fill any vacancy in the position of Intel Executive
Officer for any reason (including as a result of the Intel Executive Officer’s
death, resignation, retirement or removal pursuant to this Section), subject to
the consent of Micron, which consent shall not be unreasonably withheld or
delayed. The Intel Executive Officer shall report directly to the Board of
Managers.
 
(B)  The Board of Managers shall determine, from time to time, the incentive
compensation for which the Intel Executive Officer may be eligible based upon
the Joint Venture Company’s operational success.
 
8.2  Micron Executive Officer.
 
(A)  Until the Management Conversion Date, the Joint Venture Company shall have
an executive officer appointed by Micron (the “Micron Executive Officer”) who,
together with the Intel Executive Officer, shall have responsibility for the
general management and control of the day-to-day business and affairs of the
Joint Venture Company and its Subsidiaries and overseeing the implementation of
the strategic direction of the Joint Venture Company and its Subsidiaries. The
Micron Executive Officer shall perform such duties and have such powers
specifically delegated to the Micron Executive Officer by the Board of Managers.
The Micron Executive Officer shall be an employee of Micron seconded to the
Joint Venture Company by Micron, subject to the consent of Intel, which consent
shall not be unreasonably withheld or delayed. Micron shall have the right to
remove the Micron Executive Officer at any time, with or without cause, provided
that it provides at least ten (10) days written notice of removal to Intel and
the Joint Venture Company. Micron shall have the right to fill any vacancy in
the position of Micron Executive Officer for any reason (including as a result
of the Micron Executive Officer’s death, resignation, retirement or removal
pursuant to this Section), subject to the consent of Intel, which consent shall
not be unreasonably withheld or delayed. The Micron Executive Officer shall
report directly to the Board of Managers.
 
(B)  The Board of Managers shall determine, from to time, the incentive
compensation for which the Micron Executive Officer may be eligible based upon
the Joint Venture Company’s operational success.
 
8.3  Lead Controller/Chief Financial Officer.
 
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(A)  The Joint Venture Company shall have a financial manager (the “Lead
Controller”) who shall serve as the principal financial officer of the Joint
Venture Company and shall have responsibility for and authority over the
day-to-day financial matters of the Joint Venture Company and its Subsidiaries.
The Lead Controller shall perform such duties and have such powers specifically
delegated to the Lead Controller by the Board of Managers. The Lead Controller
shall be an employee of Micron seconded to the Joint Venture by Micron, or
another individual selected by Micron, subject to the consent of Intel, which
consent shall not be unreasonably withheld or delayed. Micron shall have the
right to remove the Lead Controller at any time, with or without cause, provided
that it provides at least ten (10) days written notice of removal to Intel and
the Joint Venture Company. Micron shall have the right to fill any vacancy in
the position of Lead Controller for any reason (including as a result of the
Lead Controller’s death, resignation, retirement or removal pursuant to this
Section), subject to the consent of Intel, which consent shall not be
unreasonably withheld or delayed. The Lead Controller shall report directly to
the Board of Managers.
 
(B)  The Board of Managers shall determine, from time to time, the incentive
compensation for which the Lead Controller may be eligible based upon the Joint
Venture Company’s operational success.
 
(C)  For so long as there is a Lead Controller who is seconded to the Joint
Venture Company by a Member, the other Member shall be entitled to second to the
Joint Venture Company a senior finance officer to assist the Lead Controller in
the execution of his or her duties set forth in this Section 8.3. The Board of
Managers shall determine, from time to time, the incentive compensation for
which such officer may be eligible based upon the Joint Venture Company’s
operational success.
 
(D)  Upon the Management Conversion Date, the position of the Lead Controller
shall terminate and the Board of Managers shall appoint a Chief Financial
Officer (the “Chief Financial Officer”) who shall be an employee of the Joint
Venture Company and shall report directly to the Chief Executive Officer. The
Chief Financial Officer shall have the responsibilities specifically delegated
to the Lead Controller by the Board of Managers, shall perform all other duties
and shall have all powers that are delegated to him or her by the Board of
Managers or the Chief Executive Officer, and shall be selected by the Board of
Managers. For purposes of this Agreement, the Lead Controller and the Chief
Financial Officer are referred to interchangeably as the “Financial Officer.”
 
8.4  Chief Executive Officer. Upon the Management Conversion Date, the Board of
Managers shall appoint a Chief Executive Officer (the “Chief Executive
Officer”), who shall have responsibility for the day-to-day general management
and control of the business and affairs of the Joint Venture Company and its
Subsidiaries and overseeing the implementation of the strategic direction of the
Joint Venture Company and its Subsidiaries. The Chief Executive Officer shall
perform or oversee those duties that were specifically delegated to the Intel
Executive Officer and Micron Executive Officer by the Board of Managers prior to
the Management Conversion Date and shall perform all other duties and have all
powers that are that are commonly incident to the office of chief executive
officer or that are specifically delegated to him or her by the Board of
Managers. The Chief Executive Officer shall be an employee of the Joint Venture
Company, selected by the Board of Managers, subject to the consent of any
 
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Member whose Percentage Interest is at least [***] percent ([***]%), which
consent shall not be unreasonably withheld or delayed. The Board of Managers
shall have the right to remove any Chief Executive Officer at any time, with or
without cause, subject to the terms of any employment contract between the Joint
Venture Company and the Chief Executive Officer.
 
8.5  General Provisions Regarding Officers.
 
(A)  There shall be one or more site managers of the Joint Venture Company who
shall serve as officers of the Joint Venture Company and shall have such
authority and perform or oversee those duties that are delegated to such
officers by the Board of Managers or the Authorized Officers or Chief Executive
Officer, as applicable. The Board of Managers may, from time to time, designate
other officers of the Joint Venture Company, delegate to such officers such
authority and duties as the Board of Managers may deem advisable and assign
titles to any such officers. Except as otherwise provided in this Agreement,
prior to the Management Conversion Date, officers may either be employees of the
Joint Venture Company or Seconded Employees. Unless the Board of Managers
otherwise determines or unless otherwise provided by this Agreement, if the
title assigned to an officer of the Joint Venture Company is one commonly used
for officers for businesses of comparable size in the same industry, then,
subject to the terms of this Agreement, the assignment of such title shall
constitute the delegation to such officer of the authority and duties that are
customarily associated with such office for businesses of comparable size in the
same industry. Except as otherwise provided in this Agreement, any number of
titles may be held by the same individual.
 
(B)  Subject to all rights, if any, under any contract of employment, any
officer to whom a delegation is made pursuant to Section 8.5(A) shall serve in
the capacity delegated unless and until such delegation is revoked by the Board
of Managers for any reason or no reason whatsoever, with or without cause, or
such officer resigns.
 
8.6  Intentionally Omitted.
 
8.7  Waiver of Fiduciary Duties.
 
(A)  In connection with the determination of any and all matters presented for
action to the Members or the Board of Managers, as applicable, the Members
acknowledge and agree that each Member will be acting on its own behalf and each
Representative serving on the Board of Managers will be acting on behalf of the
Member that appointed such Representative.
 
(B)  Each Member may act, and, to the fullest extent permitted by Applicable
Law, will be protected for acting, in its own interest (subject to the express
terms of any contract entered into by such Member) without regard to the
interest of the other Member or the Joint Venture Company or any of its
Subsidiaries, and, subject to Section 8.7(D), each Representative may act, and,
to the fullest extent permitted by Applicable Law, will be protected for acting
at the direction or control of, or in a manner that such Representative believes
is in the best interest of, the Member that appointed the Representative without
regard to the interest of the other Member or the Joint Venture Company or any
of its Subsidiaries. Further, each Member may, to the fullest extent permitted
by Applicable Law (subject to the express terms of any contract entered into by
such Member), make decisions and exercise direction and control over the
 
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decisions of the Representatives appointed by such Member without duty to or
regard for the interests of the other Member or the Joint Venture Company or any
of its Subsidiaries.
 
(C)  The Joint Venture Company, on its own behalf and on behalf of each of its
Subsidiaries, and each Member waives, to the fullest extent permitted by
Applicable Law, (1) any claim or cause of action against any Member or Manager
based on the determination of any and all matters presented for action to the
Members or the Board of Managers, as applicable, (2) breach of fiduciary duty,
duty of care, duty of loyalty or any other duty or (3) breach of the Act;
provided, however, the foregoing will not limit any Member’s obligation under or
liability for breach of the express terms of this Agreement or any other
agreement that they have entered into with the Joint Venture Company or any of
its Subsidiaries or the other Member; and provided further, however, that no
Member shall negotiate or enter into or request or otherwise cause the Joint
Venture Company to negotiate or enter into any agreement or transaction that
would result in such Member or any of its Subsidiaries receiving any financial
consideration or other tangible property incentive, payment or other form of
financial consideration or other tangible property consideration from any
Governmental Entity or Person based upon the Joint Venture Company’s taking an
action (including hiring any employees, undertaking any construction or
purchasing any equipment) or entering into such agreement or transaction other
than as a Member of the Joint Venture Company pursuant to this Agreement, and
any Member who receives any such consideration or other tangible property
incentive, payment or other form of financial consideration or other tangible
property consideration from any Governmental Entity or Person in respect of the
Joint Venture Company’s activities, shall promptly convey such consideration or
other tangible property incentive, payment or other form of financial
consideration or other tangible property consideration from any Governmental
Entity or Person to the Joint Venture Company without any adjustment in the
Capital Contribution Balance of such Member.
 
(D)  The term “Representative” shall mean, with respect to a Member and the
Managers and the employees, agents and other representatives of such Member
including the Seconded Employees of such Member, but not including, only for
purposes of Section 8.7(C)(2), the Chief Executive Officer, the Intel Executive
Officer, the Micron Executive Officer, the Lead Controller, the Chief Financial
Officer or any other officer or site manager of the Joint Venture Company (and
each such officer shall be bound by such fiduciary and other duties (including
the duty of care and the duty of loyalty) as would apply to an officer having
comparable authority and duties under the DGCL).
 
ARTICLE 9.
EMPLOYEE MATTERS
 
9.1  Joint Venture Company Employees; Seconded Employees. The Joint Venture
Company shall employ its own personnel and shall be their exclusive employer. In
addition, certain other persons who are employed by Micron or its Relatives or
Intel or its Relatives may be seconded by Micron or Intel, respectively, to work
for the Joint Venture Company for a given period of time (“Seconded Employees”)
pursuant to the terms and conditions of the Micron Personnel Secondment
Agreement or the Intel Personnel Secondment Agreement, respectively. Seconded
Employees may be utilized to provide services to the Joint Venture Company until
(1) the time specified in Article 8 for certain Seconded Employees, if any,
acting as officers of the
 
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Joint Venture Company, (2) with respect to Seconded Employees employed by Micron
or its Relatives, until the time determined under the terms of the Micron
Personnel Secondment Agreement, or (3) with respect to Seconded Employees
employed by Intel or its Relatives, until the time determined under the terms of
the Intel Personnel Secondment Agreement. Notwithstanding the foregoing, no
Seconded Employee will become employed by the Joint Venture Company or any of
its Subsidiaries unless agreed among the Joint Venture Company and the Members.
 
9.2  Performance and Removal of Seconded Employees. The Intel Executive Officer
and Micron Executive Officer shall consult with one another with respect to any
Seconded Employee, regardless of origin, who is not adequately performing or
adequately adapting to the team environment of the Joint Venture Company, and
discuss appropriate action. If a decision is made by the Intel Executive
Officer, in the case of a Seconded Employee seconded by Intel or its Relatives,
or the Micron Executive Officer, in the case of a Seconded Employee seconded by
Micron or its Relatives, that such employee should be reassigned to duties other
than with the Joint Venture Company, the Intel Executive Officer or the Micron
Executive Officer, as the case may be, will make reasonably prompt efforts to
request the seconding Member or Relative, as applicable, to reassign such
employee to duties other than with the Joint Venture Company as such seconding
Member or Relative, as applicable, shall determine in its sole discretion. In no
event will the Intel Executive Officer or Micron Executive Officer have (i) the
authority to reassign any Seconded Employee of the other Member or its Relatives
(either within the Joint Venture Company or to any other assignment), or (ii)
the ability to terminate the employee relationship between a Seconded Employee
of the other Member or its Relatives and his or her employer. Intel and Micron
shall each determine in its own sole discretion with regard to its Seconded
Employees and those of its Relatives whether or not, and if so under what
conditions, the Intel Executive Officer (in the case of Intel) or the Micron
Executive Officer (in the case of Micron) may either reassign the duties of
(either within the Joint Venture Company or to any other assignment) or
terminate the employment relationship with its Seconded Employees or those of
its Relatives.
 
For avoidance of doubt, this Section 9.2 shall not apply to the Intel Executive
Officer, the Micron Executive Officer, or the Lead Controller whose performance
shall be subject to review by the Board of Managers. Furthermore, the Board of
Managers shall possess the authority to require that a Seconded Employee be
reassigned by the seconding Member or its Relatives, as the case may be, to
duties other than with the Joint Venture Company. Subject to the terms of the
Intel Personnel Secondment Agreement and the Micron Personnel Secondment
Agreement, as the case may be, the Chief Executive Officer shall possess the
authority to require that a Seconded Employee be reassigned by the seconding
Member or its Relatives, as the case may be, to duties other than with the Joint
Venture Company.
 
9.3  Forms. (A) The Joint Venture Company and each of its Subsidiaries shall
have policies applicable to, and ensure that all of its officers, employees and
third-party independent contractors, third-party consultants, and other
third-party service providers enter into appropriate agreements with respect to,
(1) protection of confidential information of the Joint Venture Company and its
Subsidiaries, (2) compliance with Applicable Laws, and (3) other matters related
to the delivery of services to, or employment of such Person by, the Joint
Venture Company or its Subsidiaries. The Joint Venture Company and each of its
Subsidiaries shall have
 
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policies applicable to, and ensure that all of its officers and employees enter
into appropriate agreements with respect to intellectual property assignment,
including invention disclosures, pursuant to which ownership to any intellectual
property created in the course of employment with the Joint Venture Company or
any of its Subsidiaries shall be assigned to the Joint Venture Company. The
Joint Venture Company and each of its Subsidiaries shall have policies
applicable to, and ensure that all of its third-party independent contractors,
third-party consultants, and other third-party service providers that create
intellectual property in the course of performing services for the Joint Venture
Company or any of its Subsidiaries, enter into appropriate agreements with the
Joint Venture Company with respect to the Joint Venture Company’s ownership of,
or the Joint Venture Company’s and its Subsidiaries’ right to use, such
intellectual property. The forms referred to in this Section 9.3 are
collectively referred to as the “Service Provider Related Forms.”
 
(B)  Notwithstanding any preceding provisions in this Section 9.3 or elsewhere,
no Seconded Employee shall be required to sign any Service Provider Related
Forms, except with respect to acknowledgement of and agreement regarding
policies of the Joint Venture Company addressing conduct while performing
services at the premises of the Joint Venture Company, such as workplace safety,
but excluding matters relating to protection of confidential information of the
Joint Venture Company and its Subsidiaries and intellectual property assignment,
which issues have been addressed in other documents. The Joint Venture Company
shall be responsible for providing those appropriate Service Provider Related
Forms, if any, prepared by the Joint Venture Company for Seconded Employees to
the appropriate Seconded Employees, following up to make sure they are signed
and for properly storing such forms; however, Intel and Micron shall each
require that their Seconded Employees sign the applicable Service Provider
Related Forms when requested to do so by the Joint Venture Company.
 
9.4  Compensation and Benefits.
 
(A)  The Joint Venture Company and its Subsidiaries shall have compensation and
benefits programs for the employees of the Joint Venture Company and its
Subsidiaries (excluding, for this purpose, Seconded Employees) at its locations
consistent with local practices in each respective geographic area, as
determined by the Intel Executive Officer and Micron Executive Officer, or the
Chief Executive Officer, as applicable, and, to the extent required by law or
this Agreement, approved by the Board of Managers, which may initially be
modeled after Micron’s local compensation and benefits programs if deemed to be
appropriate and competitive by the Intel Executive Officer and the Micron
Executive Officer (or the Chief Executive Officer, when applicable) and, if
applicable, the Board of Managers. Incentive compensation programs for Joint
Venture Company employees and the employees of any Subsidiary of the Joint
Venture Company will be tied to the Joint Venture Company’s operational success,
as determined by the Intel Executive Officer and the Micron Executive Officer
(or the Chief Executive Officer, when applicable) and approved by the Board of
Managers.
 
(B)  It is the intention of Micron to offer employees of Micron and its
Relatives who transfer to the Joint Venture Company the option to transfer up to
[***] hours of their current accrued Time Off Plan (“TOP”) hours balance to the
comparable plan of the Joint
 
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Venture Company to be administered in accordance with the terms of such plan. If
Micron and its Relatives allow such a transfer and if an employee so elects, the
Joint Venture Company shall credit the employee’s Joint Venture Company TOP (or
similar time bank) account with the transferred hours and Micron shall pay the
Joint Venture Company an amount equal to the person’s base hourly rate (or a
calculated base hourly rate in case of salaried employees) multiplied by the TOP
hours transferred.
 
(C)  It is the intention of Intel to offer employees of Intel and its Relatives
who transfer to the Joint Venture Company the option to transfer up to [***]
hours of their current accrued vacation and personal absence hours balance to
the comparable plan of the Joint Venture Company to be administered in
accordance with the terms of such plan. If Intel and its Relatives allow such a
transfer and if an employee so elects, the Joint Venture Company shall credit
the employee’s Joint Venture Company TOP (or similar time bank) account with the
transferred hours and Intel shall pay the Joint Venture Company an amount equal
to the person’s base hourly rate (or a calculated base hourly rate in case of
salaried employees) multiplied by the vacation and personal absence hours
transferred.
 
ARTICLE 10. 
RECORDS, ACCOUNTS AND REPORTS
 
10.1  Books and Records. The Authorized Officers, or the Chief Executive
Officer, as applicable, shall keep or cause to be kept adequate books and
records with respect to the Joint Venture Company’s and each of its
Subsidiaries’ business, including the following:
 
(A)  a current list of the full name and last known business address of each
Member and its appointed Managers and all officers and Representatives;
 
(B)  copies of records that would enable a Member to determine the relative
Committed Capital, Percentage Interests, Sharing Interests, Economic Interests,
Member Debt Financing, Capital Contribution Balances and Accumulated
Distributions Accounts of the Members;
 
(C)  a copy of the Certificate together with any amendments;
 
(D)  copies of the Joint Venture Company’s and each of its Subsidiaries’ federal
and state income tax returns and reports, if any, for the longer of (1) five (5)
years from the time of filing or (2) with respect to any such tax return of the
Joint Venture Company, until the expiration of the statute of limitations on the
assessment of income tax liabilities for the taxable year of each Member in
which the income required to be shown on such tax return of the Joint Venture
Company is required to be included (and each Member shall promptly respond to
requests from the officers of the Joint Venture Company in order to determine
whether such statute of limitations has expired);
 
(E)  a copy of this Agreement, together with any amendments;
 
(F)  copies of any financial statements of the Joint Venture Company and its
Subsidiaries for the greater of its seven (7) most recent years or all open
taxable years;
 
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(G)  copies of all Proposed Business Plans, Approved Business Plans, Member
Business Plans and Operating Plans;
 
(H)  minutes of meetings of the Members, the Board of Managers, and any other
committee appointed by the Board of Managers from time to time and all written
consents in lieu of a meeting; and
 
(I)  any other records required to be maintained by the Act.
 
10.2  Access to Information.
 
(A)  To the extent not in violation of Applicable Law, each Member and its
agents (which may include employees of the Member or the Member’s independent
certified accountants) shall have the right, at any reasonable time, to inspect,
review, copy and audit (or cause to be audited) at the expense of the inspecting
Member any and all properties, assets, books of account, corporate records,
contracts, documentation and any other material of the Joint Venture Company or
any of its Subsidiaries, at the request of the inspecting Member. Upon such
request, the Joint Venture Company and each of its relevant Subsidiaries shall
use reasonable efforts to make available to such inspecting Member the Joint
Venture Company’s accountants and key employees for interviews to verify
information furnished or to enable such Member to otherwise review the Joint
Venture Company or any of its Subsidiaries and their operations. Such
availability is conditioned upon the terms and conditions of the Confidentiality
Agreement.
 
(B)  The Members recognize that the Joint Venture Company may, from time to
time, be in possession of Competitively Sensitive Information belonging to a
Member or its Relatives, and in no event shall a Member be entitled to access
any Competitively Sensitive Information of the other Member or its Relatives in
the possession of the Joint Venture Company. The Joint Venture Company shall
maintain procedures reasonably acceptable to both Members (including requiring
that the Members use reasonable efforts to label or otherwise identify
Competitively Sensitive Information as such) to ensure that the Joint Venture
Company will not disclose or provide Competitively Sensitive Information of one
Member or its Relatives to the other Member (other than to a Joint Venture
Company employee or to a Seconded Employee of the other Member to the extent
required for such employee or Seconded Employee to perform his or her duties for
the Joint Venture Company) or any third party unless such disclosure is
specifically requested by the Member or its Relatives providing such
Competitively Sensitive Information. The Joint Venture Company shall not be
liable for inadvertent disclosures of Competitively Sensitive Information that
was not labeled or identified as such.
 
(C)  Upon request, each Member agrees to use reasonable efforts to provide the
other Member and the Joint Venture Company with reasonable access to those
portions of its facilities and to those items of its equipment that are being
used to provide services to the Joint Venture Company, and to those employees
who are providing services to the Joint Venture Company, to verify information
regarding such operations or enable such Member and the Joint Venture Company to
otherwise review the services being provided to the Joint Venture Company.
 
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10.3  Operations Reports. Subject to Section 10.2(B), the Joint Venture Company
and each of its Subsidiaries shall provide both Members with all quarterly,
monthly and weekly reporting packages containing such manufacturing and
production reports as may be required to be delivered under any agreement with,
or otherwise requested by, either Member.
 
10.4  Financial Reports. The Joint Venture Company and each of its Subsidiaries
shall provide the Members the following:
 
(A)  Monthly Reports.
 
(1)  for each Fiscal Month, the Joint Venture Company, and if requested, each of
its Subsidiaries, shall provide each Member with the following monthly reports
prepared in accordance with Modified GAAP consistently applied, in each case
within the time period specified below:
 
(a)  Monthly Flash Report within eight (8) days after the end of each Fiscal
Month;
 
(b)  monthly cash flow report within fifteen (15) days after the end of each
Fiscal Month;
 
(c)  month-end balance sheet within fifteen (15) days after the end of each
Fiscal Month;
 
(d)  monthly profit and loss statement within fifteen (15) days after the end of
each Fiscal Month;
 
(e)  monthly operational spending summary within fifteen (15) days after the end
of each Fiscal Month; and
 
(f)  such other reports as may be required to be delivered under any agreement
with, or otherwise reasonably requested by, either Member.
 
(2)  With respect to each of the monthly reports set forth in
Section 10.4(A)(1), each Member may provide a sample format for such monthly
report as is necessary and appropriate.
 
(B)  Quarterly Reports. (1) As soon as available, but not later than twenty (20)
days after the end of each Fiscal Quarter (other than Fiscal Quarters ending on
the last day of a Fiscal Year, provided that the information required by this
Section 10.4(B) will be included in the reports delivered pursuant to Section
10.4(C) below for the Fiscal Year ending on such date), the Joint Venture
Company shall provide to each Member a consolidated balance sheet of the Joint
Venture Company as of the end of such period and consolidated statements of
income, cash flows and changes in Members’ equity, as applicable, for such
Fiscal Quarter and for the period commencing at the end of the previous Fiscal
Year and ending with the end of such period, setting forth in each case in
comparative form the corresponding figures for the corresponding period of the
preceding Fiscal Year, and including comparisons to the Approved Business Plan,
each prepared in accordance with Modified GAAP. The Financial Officer shall
discuss with the
 
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Members such quarterly financial data and the business outlook of the Joint
Venture Company and its Subsidiaries and shall be available to respond to
questions from the Members regarding such data and outlook.
 
(2)  In addition, as soon as available, but not later than thirty (30) days
after the end of each Fiscal Quarter, the Joint Venture Company shall provide to
each Member a consolidated balance sheet of the Joint Venture Company as of the
end of each Fiscal Quarter and consolidated statements of income and changes in
Members’ equity, as applicable, for such Fiscal Quarter and for the period
commencing at the end of the previous Fiscal Year and ending with the end of
such period, setting forth in each case in comparative form the corresponding
figures for the corresponding period of the preceding Fiscal Year (to the extent
such comparison is appropriate), each prepared in accordance with GAAP. The
Joint Venture Company shall also provide a reconciliation that describes and
quantifies the differences between the consolidated financial statements
prepared in accordance with GAAP and the consolidated financial statements
prepared in accordance with Modified GAAP. The non-Consolidating Member may
reasonably request that the Consolidating Member use its reasonable efforts to
engage the Consolidating Member’s external auditor to perform certain
agreed-upon procedures with respect to such reconciliation. Upon such request,
the Consolidating Member shall not unreasonably deny or delay such request. The
non-Consolidating Member shall promptly reimburse the Consolidating Member for
the incremental costs incurred by the Consolidating Member with respect to the
performance of such agreed-upon procedures by the Consolidating Member’s
external auditor.
 
(C)  Annual Audit. As soon as available, but not later than ninety (90) days
after the end of the first Fiscal Year of the Joint Venture Company ended August
31, 2006, and not later than sixty (60) days after the end of each Fiscal Year
of the Joint Venture Company thereafter, audited consolidated financial
statements of the Joint Venture Company and its Subsidiaries, which shall
include statements of revenues and expenses, of cash flows and of changes in
Members’ equity, as applicable, for such Fiscal Year and a balance sheet as of
the last day thereof, each prepared in accordance with Modified GAAP,
consistently applied, and accompanied by the report of a firm of independent
certified public accountants selected from time to time by the Board of Managers
(the “Accountants”).
 
(D)  Right to Audit. Either Member may conduct a separate audit of the Joint
Venture Company’s financial statements and internal controls over financing
reporting at its own expense, and the Members agree to use all reasonable
efforts to coordinate the timing of any separate audits that any Member elects
to conduct.
 
10.5  Reportable Events.
 
(A)  The Joint Venture Company shall provide notice to the Members of any Member
Reportable Event as soon as possible and in any event no later than [***]
([***]) days following the occurrence of said event. The following events shall
be “Member Reportable Events”:
 
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(1)  any action by the Joint Venture Company or a Subsidiary of the Joint
Venture Company that will result in recording an impairment of assets of the
Joint Venture Company or any of its Subsidiaries, including without limitation,
intangibles, goodwill, fixed assets, accounts receivable and inventory, that is
expected to exceed $[***], individually or when aggregating other similar assets
impaired at the same time;
 
(2)  any decision to shutdown a business unit, close a facility, dispose of
long-lived assets or terminate employees (in a FAS 146 plan of termination)
whereby the Joint Venture Company or a Subsidiary of the Joint Venture Company
may incur an accounting charge that would exceed $[***];
 
(3)  entry by the Joint Venture Company or a Subsidiary of the Joint Venture
Company into any off-balance sheet arrangement (unconsolidated transactions with
a third party under which the entity retains or has a contingent interest in
transferred assets or is obligated under derivative instruments classified in
equity, or with a third party that constitutes a “variable interest entity”
under FIN 46);
 
(4)  the execution, amendment or termination of a contract that meets one of the
following thresholds:
 
(a)  patent, copyright or trademark license requiring payment of more than
$[***];
 
(b)  technology licenses requiring payment of more than $[***];
 
(c)  contracts for supply of equipment or materials (i) from either a sole
source (single qualified source or true sole source), a supplier with only one
site, or a supplier located only in a “high risk” geographic area and (ii) where
interruption of supply may cause a key Joint Venture Product to experience a
launch delay or production interruption with revenue impact of more than $[***]
in a ninety (90)-day period; and
 
(d)  other contracts with a value in excess of $[***]; and
 
(5)  entry into any short-term debt (payable within one year), long-term debt,
capital lease, operating lease or guaranty in excess of $[***].
 
(B)  The Joint Venture Company shall provide notice to the Members of any Joint
Venture Reportable Event as soon as possible and in any event no later than
[***] ([***]) days after the Joint Venture Company becomes aware of such Joint
Venture Reportable Event. The following events shall be “Joint Venture
Reportable Events”:
 
(1)  receipt by the Joint Venture Company or any of its Subsidiaries of an offer
to buy an Interest in the Joint Venture Company or any of its Subsidiaries or a
significant amount of its assets or to merge or consolidate with the Joint
Venture Company or any of its Subsidiaries, or any indication of interest from
any Person with respect to any such transaction;
 
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(2)  the commencement, or threat delivered in writing, of any lawsuit involving
the Joint Venture Company or any of its Subsidiaries;
 
(3)  the receipt by the Joint Venture Company or any of its Subsidiaries of a
notice that the Joint Venture Company or any of its Subsidiaries is in default
under any loan agreement to which the Joint Venture Company or any of its
Subsidiaries is a party;
 
(4)  any breach by the Joint Venture Company or any of its Subsidiaries or a
Member or an Affiliate of a Member of any contract, agreement or understanding
between the Joint Venture Company or any of its Subsidiaries and a Member or an
Affiliate of a Member;
 
(5)  any recall of, or other significant alleged product defects with respect
to, any product manufactured by the Joint Venture Company or any of its
Subsidiaries, whether or not as a result of a request or order by any
Governmental Entity;
 
(6)  any material adverse change with respect to the current status of any item
of intellectual property rights owned by the Joint Venture Company or any of its
Subsidiaries (“Intellectual Property Rights”), including receipt of any adverse
notice from any Governmental Entity with respect to such item of Intellectual
Property Rights and notice of any action taken or threatened by any third party
that could affect the validity of any item of Intellectual Property Rights;
 
(7)  the removal or resignation of the Accountants for the Joint Venture
Company, or any adoption, or material modification, of any significant
accounting policy or tax policy other than those required by GAAP; or
 
(8)  any other event that has had, or could reasonably be expected to have, a
material adverse effect on the business, results of operations, financial
condition or assets of the Joint Venture Company or any of its Subsidiaries.
 
10.6  Tax Information.
 
(A)  Estimated Tax Information. The Financial Officer shall deliver the
following information to each Member, as provided below:
 
(1)  on or prior to the date that is ninety (90) days following the end of each
Joint Venture Company taxable year, an estimate of the United States federal and
material state taxable income of the Joint Venture Company for such taxable
year; and
 
(2)  on or prior to the date that is thirty (30) days following the end of each
Joint Venture Company taxable quarter, an estimate of the United States federal
and material state taxable income of the Joint Venture Company for the taxable
year of the Joint Venture Company as of the end of such taxable quarter.
 
(B)  Tax Returns. The Financial Officer shall deliver to each Member, on or
prior to the date that is one hundred twenty (120) days following the end of
each Joint Venture
 
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Company taxable year, a draft of the United States federal and material state
income tax returns (and related attachments including Schedule K-1) of the Joint
Venture Company for such taxable year. Each Member shall have fifteen (15) days
to review such tax returns and provide written comments thereon to the Joint
Venture Company, and to the extent the Joint Venture Company does not intend to
incorporate such comments into such tax returns the Joint Venture Company and
the Members shall attempt to resolve any disagreements within fifteen (15) days
after the delivery of such comments to the Joint Venture Company. If the Members
and the Joint Venture Company are unable to resolve any disputes regarding the
content of such tax returns within such fifteen (15)-day period, the issue or
issues shall be referred for resolution to a partner at a “Big 4” accounting
firm (or other nationally recognized accounting firm) reasonably acceptable to
the Members and the Joint Venture Company, who shall be requested to resolve
open issues, on the basis of the position most likely to be sustained if
challenged in a court having initial jurisdiction over the matter (which for
federal income tax issues shall be deemed to be the United States Tax Court), no
later than one hundred eighty (180) days following the end of such taxable year.
The decision of such accounting firm shall be final and binding on the Members
and the Joint Venture Company, and the costs of such accounting firm shall be
Joint Venture Company costs. The Joint Venture Company shall deliver final
income tax returns (including related schedules) to the Members within two
hundred twenty (220) days after the end of each taxable year of the Joint
Venture Company, but not prior to the resolution of disputes among the Members
and the Joint Venture Company with respect to such tax returns; provided that if
such tax returns become due (taking into account extensions of time to file,
which the Joint Venture Company shall seek as necessary to avoid the delinquent
filing of its tax returns) they shall be filed as determined by the Joint
Venture Company and shall be amended and re-filed as required by the outcome of
the referral to the accounting firm as provided herein.
 
10.7  Tax Matters and Tax Matters Partner. The [***] at the end of a given
taxable year (or, if there is no [***] at such time, the Member that served as
the Tax Matters Partner for the prior year) shall serve as the “Tax Matters
Partner” under the Code and in any similar capacity under state, local or
foreign law for such year. The Tax Matters Partner shall supply such information
to the Internal Revenue Service as may be necessary to cause the other Member to
be a “notice partner” as defined in Code Section 6231(a)(8). The Tax Matters
Partner shall keep each Member informed of any administrative or judicial
proceeding relative to any adjustment or proposed adjustment at the Joint
Venture Company level of Joint Venture Company items, and shall provide the
other Member with notice and an opportunity to participate in significant
meetings or other proceedings (both in person and by telephone), preparation of
correspondence and other significant events with respect to taxes pertaining to
the Joint Venture Company. Without the prior written approval of all Members,
the Tax Matters Partner shall not (a) enter into any settlement agreement with
the Internal Revenue Service which purports to bind or otherwise could adversely
affect Persons other than the Tax Matters Partner and any Members who agree in
writing to be bound by such agreement, (b)  file a petition as contemplated by
Sections 6226(a) or 6228 of the Code, (c) intervene in any action as
contemplated by Section 6226(b) of the Code, (d) file any request as
contemplated by Section 6227(c) of the Code, (e) enter into an agreement
extending the period of limitation as contemplated by Section 6229(b)(1)(B) of
the Code, (f) take any actions comparable to those described in clauses (a)
through (e) under state, local or foreign tax law or (g) take any other action
in its capacity as Tax Matters Partner that could significantly affect the tax
liability of the other Member.
 
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10.8  Bank Accounts and Funds. Except as otherwise provided in Section 2.2,
Joint Venture Company funds, including cash Capital Contributions, shall be
deposited in an interest-bearing account or accounts in the name of the Joint
Venture Company and shall not be commingled with the funds of any Member,
Manager or any other Person. All checks, orders or withdrawals shall be signed
by any one or more Persons as authorized by the Board of Managers and subject to
the approval rights set forth in Section 10.9(E).
 
10.9  Internal Controls.
 
(A)  The Joint Venture Company shall have in place a system of internal controls
over financial reporting in accordance with the policies of the Consolidating
Member as of the Effective Date, the design and operation of which shall be
monitored and approved by the Board of Managers and the Financial Officer.
Changes to the Joint Venture Company’s system of internal controls over
financial reporting shall be made at the request of either Member (and if
requested by the non-Consolidating Member, the non-Consolidating Member shall
reimburse the Joint Venture Company for its reasonable costs incurred in
implementing the changes), subject to the other Member’s approval, which
approval shall not be unreasonably withheld, and, subject to the approval of the
Board of Managers and the approval of the Financial Officer, which shall not be
unreasonably withheld; provided, however, that in the event of a Change of
Consolidating Member, the internal controls over financial reporting and
accounting systems of the Joint Venture Company shall, at the Joint Venture
Company’s expense, be modified as necessary to satisfy the new Consolidating
Member’s requirements relating to internal controls over financial reporting,
and such Member shall be entitled to receive the information and perform the
testing that either it or such Member’s auditors deem necessary or advisable to
satisfy their responsibilities related thereto.
 
(B)  Each Member shall be entitled, at its own expense, to have one or more
internal auditors (not to exceed three (3) internal auditors at any single
Facility) located on site at the offices and facilities of the Joint Venture
Company with full access to all of the Joint Venture Company’s financial and
manufacturing records and reporting systems; provided, however, that such
internal auditors shall be required to abide by the procedures maintained by the
Joint Venture Company pursuant to Section 10.2(B) for preventing the
inappropriate sharing of such information.
 
(C)  The Consolidating Member shall provide to the non-Consolidating Member such
information as the non-Consolidating Member may reasonably request in connection
with the assessment of whether a Change of Consolidating Member has occurred or
may occur. The Consolidating Member, if it is the Non-Funding Member with
respect to any outstanding Member Notes, shall promptly notify the
non-Consolidating Member if it has determined that it is reasonably likely to
not contribute to the Joint Venture Company any amounts to be used to repay any
such Member Notes in accordance with Article 3.
 
(D)  The Consolidating Member shall make available to the non-Consolidating
Member the findings of the external auditor of the Consolidating Member with
respect to the Consolidating Member’s annual audit and of its internal control
over financial reporting to the extent such findings are applicable to the
internal control over financial reporting of the Joint Venture Company. The
non-Consolidating Member may reasonably request that the
 
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Consolidating Member use its reasonable efforts to engage the Consolidating
Member’s external auditor to perform certain agreed-upon procedures with respect
to such internal control over financial reporting of the Joint Venture Company.
Upon such request, the Consolidating Member shall not unreasonably deny or delay
such request. The non-Consolidating Member shall promptly reimburse the
Consolidating Member for the incremental costs incurred by the Consolidating
Member with respect to the performance of such agreed-upon procedures by the
Consolidating Member’s external auditor.
 
(E)  The internal controls over financial reporting referenced in this
Section 10.9 shall provide, among other things, that prior to the Management
Conversion Date, Joint Venture Company expenditures greater than $[***] shall
require approval of both Authorized Officers and shall thereafter require the
approval of the Chief Executive Officer; provided, however, that a decision to
approve or disapprove any such expenditure shall be made in a manner consistent
with the [***] Budget and [***] Budget or Annual Budget, as applicable, included
in the then-effective Approved Business Plan.
 
ARTICLE 11. 
BUSINESS PLAN
 
11.1  Initial Business Plan; Initial Budgets.
 
(A)  Initial Approved Business Plan. As of the Effective Date, the Members
agreed upon an initial Approved Business Plan (the “Initial Business Plan”) of
the Joint Venture Company and its Subsidiaries covering the operations of the
Joint Venture Company and its Subsidiaries from the Effective Date through
[***], which is the end of the Applicable Fiscal Quarter (the “Initial Period”).
The Initial Business Plan shall be deemed to be an Undisputed Approved Business
Plan. Notwithstanding anything to the contrary in this Agreement (including,
without limitation, all budgets, plans, schedules, exhibits, appendices,
ancillary or related agreements relating to this Agreement, each as may have
been amended), the [***] Budget, as far as it relates to the [***], shall be
null and void for all purposes; provided, however, that any funds previously
contributed to the Joint Venture Company and its Subsidiaries by any Member,
including any funds contributed with respect to the [***], shall be retained by
the Joint Venture Company and its Subsidiaries for use in accordance with the
terms of this Agreement.
 
(B)  Initial Budgets. The Initial Business Plan includes an [***] budget (the
“[***] Budget”) in accordance with which the Joint Venture Company’s and each of
its Subsidiaries’ operating and capital expenditures relating to matters not
covered by the [***] Budget shall be made during the Initial Period and the
Capital Contributions that will be needed from the Members during each Fiscal
Quarter of the Initial Period to fund the [***] Budget. Such operating and
capital expenditures will be funded by the Members’ Initial Capital
Contributions and by [***] Capital Contributions, which [***] Capital
Contributions shall not, in the aggregate, exceed the Maximum Incremental
Capital Amount. Subject to the last sentence of Section 11.1(A), the Initial
Business Plan also includes a budget (the “[***] Budget”) in accordance with
which the Joint Venture Company’s and each of its Subsidiaries’ operating and
capital expenditures for [***] shall be made during the Initial Period and the
Capital
 
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Contributions that will be needed from the Members during each Fiscal Quarter of
the Initial Period to fund [***] Budget.
 
(C)  Modification of Initial Business Plan. Except as otherwise provided in this
Section 11.1(C), the Initial Business Plan shall not be amended, updated,
modified or superseded without the unanimous written consent of the Members.
 
(1)  Annual Review of Initial Business Plan. At least ninety (90) days prior to
the beginning of each of the [***] and [***] Fiscal [***] of the Initial Period
and the Applicable Fiscal Quarter, the Board of Managers shall (in consultation
with the Authorized Officers or the Chief Executive Officer, as applicable, and
with the Financial Officer) review the Initial Business Plan and determine
whether any amendment thereto is necessary. Subject to Section 6.3(A)(11), upon
a determination by the Board of Managers that an amendment to the Initial
Business Plan is necessary or appropriate, the Board of Managers may approve
such amendment (and the Initial Business Plan as so amended shall be an
Undisputed Approved Business Plan) and the Authorized Officers, or the Chief
Executive Officer, as applicable, shall thereupon implement such amendment to
the Initial Business Plan as promptly as commercially practicable; provided,
however, that any failure of the Board of Managers to approve any amendment to
the Initial Business Plan shall result in the continuation of the Initial
Business Plan, subject to (a) any prior amendment approved by the Board of
Managers and (b) Section 11.1(C)(2).
 
(2)  Member Modification of Initial Business Plan. In addition to any amendment
to the Initial Business Plan that may be approved by the Board of Managers
pursuant to Section 11.1(C)(1), during the Initial Period:
 
(a)  (i)   Each Member shall have the right from time to time to request that
the Board of Managers review the Initial Business Plan to consider whether the
[***] Budget should be amended to, among other things, adjust the Capital
Contribution schedule set forth in the [***] Budget.  No such amendment shall
cause the [***] Capital Contributions to be made by Micron in accordance with
the [***] Budget, as amended, to exceed the Micron Maximum Incremental Capital
Amount, nor shall such amendment cause the [***] Capital Contributions to be
made by Intel in accordance with the [***] Budget, as amended, to exceed, in the
aggregate, the Intel Maximum Incremental Capital Amount. Upon such request, the
Board of Managers shall, at the next scheduled meeting of the Board of Managers,
or at a special meeting called for such purpose, review the Initial Business
Plan and determine whether such amendment to the [***] Budget is necessary or
appropriate. If the Board of Managers approves such amendment to the [***]
Budget in accordance with Section 6.3(A)(11), such amended [***] Budget shall
become an approved amendment to the Initial Business Plan (and the Initial
Business Plan as so amended shall be an Undisputed Approved Business Plan), and
the Authorized Officers, or the Chief Executive Officer, as applicable, shall
implement the amended Initial Business Plan as promptly as commercially
practicable. Subject to clause (ii) of this Section 11.1(C)(2)(a), any failure
of the
 
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Board of Managers to approve any amendment to the [***] Budget shall result in
the continuation of the Initial Business Plan without the proposed amendment.
 
(ii)  If the Board of Managers fails to approve such amendment to the [***]
Budget requested by a Member, then such Member may submit a proposed amendment
to the Initial Business Plan to adjust the Capital Contribution schedule for the
[***] Budget (a “Member [***] Budget”) to the Board of Managers (with a copy
delivered to the other Member) for approval. The other Member may, within twenty
(20) days thereof, submit an alternate Member [***] Budget to the Board of
Managers for approval. In no event shall a Member [***] Budget call for
aggregate [***] Capital Contributions to be made by Micron in excess of the
Micron Maximum Incremental Capital Amount or by Intel in excess of the Intel
Maximum Incremental Capital Amount. If, within twenty (20) days after such
twenty (20)-day period, the Board of Managers approves any Member [***] Budget,
such Member [***] Budget shall become an approved amendment to the Initial
Business Plan (and the Initial Business Plan as so amended shall be an
Undisputed Approved Business Plan), and the Authorized Officers, or the Chief
Executive Officer, as applicable, shall implement the amended Initial Business
Plan as promptly as commercially practicable. If the Board of Managers fails to
approve a Member [***] Budget within such twenty (20)-day period, then the
matter shall be referred to the Members’ Authorized Representatives for
resolution. If such referral results in an agreement on a Member [***] Budget,
such Member [***] Budget shall become an approved amendment to the Initial
Business Plan (and the Initial Business Plan as so amended shall be an
Undisputed Approved Business Plan), and the Authorized Officers, or the Chief
Executive Officer, as applicable, shall implement the amended Initial Business
Plan as promptly as commercially practicable. If such referral does not result
in an agreement on a Member [***] Budget within ten (10) days of such referral,
then the [***] shall become an approved amendment to the Initial Business Plan
(and the Initial Business Plan as so amended shall be a Disputed Approved
Business Plan), and the Authorized Officers, or the Chief Executive Officer, as
applicable, shall implement the amended Initial Business Plan as promptly as
commercially practicable.
 
(b)  (i)   Each Member shall have the right from time to time to request that
the Board of Managers review the Initial Business Plan to consider whether the
[***] Budget should be amended to, among other things, adjust the [***] Budget
and the Capital Contribution schedule set forth therein. Upon such request, the
Board of Managers shall, at the next scheduled meeting of the Board of Managers,
or at a special meeting called for such purpose, review the Initial Business
Plan and determine whether such [***] Budget or the amendment thereto is
necessary or appropriate. If the Board of Managers approves such [***] Budget or
the amendment thereto in accordance with Section 6.3(A)(11), such [***] Budget
or amended [***] Budget shall become an approved amendment to
 
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the Initial Business Plan (and the Initial Business Plan as so amended shall be
an Undisputed Approved Business Plan), and the Authorized Officers, or the Chief
Executive Officer, as applicable, shall implement the amended Initial Business
Plan as promptly as commercially practicable. Subject to clause (ii) of this
Section 11.1(C)(2)(b), any failure of the Board of Managers to approve any
amendment to the [***] Budget shall result in the continuation of the Initial
Business Plan without the proposed [***] Budget or amendment thereto.
 
(ii)  If the Board of Managers fails to approve such [***] Budget or the
amendment thereto requested by a Member, then either Member may submit a
proposed amendment to the Initial Business Plan to add a [***] Budget or to
adjust a previously adopted [***] Budget and the Capital Contribution schedule
contained therein (a “Member [***] Budget”) to the Board of Managers (with a
copy delivered to the other Member) for approval. If a Member submits a Member
[***] Budget, the other Member shall have twenty (20) days to present an
alternate Member [***] Budget to the Board of Managers for approval. If, within
thirty (30) days after such twenty (20)-day period, the Board of Managers
approves any Member [***] Budget, such Member [***] Budget shall become an
approved amendment to the Initial Business Plan (and the Initial Business Plan
as so amended shall be an Undisputed Approved Business Plan), and the Authorized
Officers, or the Chief Executive Officer, as applicable, shall implement the
amended Initial Business Plan as promptly as commercially practicable. If the
Board of Managers fails to approve a Member [***] Budget within such thirty
(30)-day period, then the matter shall be referred to the Members’ Authorized
Representatives for resolution. If such referral results in an agreement on a
Member [***] Budget, such Member [***] Budget shall become an approved amendment
to the Initial Business Plan (and the Initial Business Plan as so amended shall
be an Undisputed Approved Business Plan), and the Authorized Officers, or the
Chief Executive Officer, as applicable, shall implement the amended Initial
Business Plan as promptly as commercially practicable. If such referral does not
result in an agreement on a Member [***] Budget within ten (10) days of such
referral, then [***] shall become an approved amendment to the Initial Business
Plan (and the Initial Business Plan as so amended shall be a Disputed Approved
Business Plan), and the Authorized Officers, or the Chief Executive Officer, as
applicable, shall implement the amended Initial Business Plan as promptly as
commercially practicable; provided that, except as contemplated by Section
11.2(D)(3) below, such Member [***] Budget set forth in any Disputed Approved
Business Plan shall not be inconsistent with the [***]; and provided further
that the most recently adopted Disputed Approved Business Plan may be amended
from time to time in accordance with Section 11.2(E).
 
11.2  Subsequent Business Plans. This Section 11.2 shall apply with respect to
any Fiscal Year or Fiscal Quarter ending after the Initial Period (except that
to the extent a Proposed
 
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Business Plan covers the Applicable Fiscal Quarter, the portion of the Proposed
Business Plan covering the [***] Budget for such Applicable Fiscal Quarter shall
be governed by Section 11.1).
 
(A)  Proposed Business Plan. For each Fiscal Year ending after the end of the
Initial Period, the Authorized Officers, or the Chief Executive Officer, as
applicable, and the Financial Officer shall prepare a proposed three-year
business plan (the “Proposed Business Plan”) at least ninety (90) days prior to
the beginning of the applicable Fiscal Year, which shall address, for the
Proposed Business Plan period, (1) [***] by the Joint Venture Company and its
Subsidiaries, (2) [***] of Joint Venture Products for sale to the Members,
(3) [***] needs, (4) [***] proposed and expected to be incurred, (5) the Joint
Venture Company’s and its Subsidiaries’ [***], (6) [***] needs and sources of
the Joint Venture Company and its Subsidiaries, (7) forecasted [***], together
with all supporting assumptions, (8) the forecasted [***] expected to be [***]
of the Joint Venture Company and its Subsidiaries, (9) the forecasted [***] of
the Joint Venture Company and its Subsidiaries, (10) such other business
activities as shall be necessary and appropriate and (11) any [***] Approved
Business Plan with respect any of the above.
 
(B)  Annual Budgets. Each Proposed Business Plan shall include a fixed budget
(the “Annual Budget”) in accordance with which the Joint Venture Company’s and
each of its Subsidiaries’ [***] are proposed to be made for [***], and a [***]
for the Joint Venture Company’s and each of its Subsidiaries’ [***], subject to
the Proposed Business Plan becoming an Approved Business Plan in accordance with
Section 11.2(D). The Annual Budget may include (1) a budget for [***], which
shall set forth in detail the amount of funds expected to be required for [***]
and for [***], (2) a budget for any [***], which shall set forth in detail the
amount of funds expected to be required for [***] and for [***] for any [***]
included in the Proposed Business Plan and (3) another budget, which shall set
forth in detail the amount of funds expected to be required for any other
purpose of the Joint Venture Company consistent with its Certificate and Section
1.4, and in each case including provision [***], each as necessary to effectuate
the applicable Proposed Business Plan. Any Proposed Business Plan approved in
accordance with Section 11.2(D) (as may be amended pursuant to Section 11.2(E))
shall include [***].
 
(C)  Participation in the Development of the Proposed Business Plan. In
preparing the Proposed Business Plan, the Authorized Officers, or the Chief
Executive Officer, as applicable, and the Financial Officer shall be advised by
the Manufacturing Committee.
 
(D)  Submission of Proposed Business Plan for Approval by Board of Managers. The
Authorized Officers, or the Chief Executive Officer, as applicable, and the
Financial Officer shall submit the Proposed Business Plan to the Board of
Managers [***]. The Board of Managers shall review the Proposed Business Plan,
including the Annual Budget included in such Proposed Business Plan.
 
(1)  If the Proposed Business Plan receives the approval of the Board of
Managers, such Proposed Business Plan shall be approved (the
“Undisputed Approved Business Plan”); provided, however, that the most recently
adopted Undisputed Approved Business Plan may be amended from time to time in
accordance with Section 11.2(E).
 
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(2)  If the Board of Managers fails to approve the Proposed Business Plan within
thirty (30) days of the submission of such Proposed Business Plan to the Board
of Managers, then each Member may, within twenty (20) days after the earlier of
the end of such thirty (30)-day period or the date on which the Board of
Managers rejects the Proposed Business Plan, submit its own proposed business
plan (a “Member Business Plan”) to the Board of Managers for approval. If,
within twenty (20) days after the submission of a Member Business Plan, the
Board of Managers approves any Member Business Plan or any other Proposed
Business Plan, such Member Business Plan or other Proposed Business Plan shall
become an Undisputed Approved Business Plan. If the Board of Managers fails to
approve any Member Business Plan or other Proposed Business Plan within such
twenty (20)-day period, then the matter shall be referred to the Members’
Authorized Representatives for resolution. If such referral results in an
agreement on a Member Business Plan or any other Proposed Business Plan, such
Member Business Plan or other Proposed Business Plan, as applicable, shall be an
Undisputed Approved Business Plan. Subject to compliance with the limitations
set forth in paragraph (3) below, if such referral does not result in an
agreement on a Member Business Plan or any other Proposed Business Plan within
ten (10) days of such referral, then the Member Business Plan with the [***], if
any, shall be deemed to be the then-adopted Approved Business Plan (such
Approved Business Plan, a “Disputed Approved Business Plan”); provided that,
except as contemplated by paragraph (3) below, such Annual Budget set forth in
any Disputed Approved Business Plan shall not be inconsistent with the [***]
Schedule; and provided further that the most recently adopted Disputed Approved
Business Plan may be amended from time to time in accordance with
Section 11.2(E).
 
(3)  The [***] Schedule, which sets forth the [***] timing for the [***]s, is
attached hereto as Schedule 1. The [***] Schedule shall not be amended or
modified without the unanimous written consent of the Members; provided,
however, that, if a Member’s Economic Interest is at least [***] percent
([***]%), such Member may submit a Member Business Plan that includes an Annual
Budget providing for capital expenditures relating to the [***] and [***] with
[***] for a [***] that deviates from the [***] Schedule.
 
(E)  Modification of Approved Business Plan.
 
(1)  Each Member, the Authorized Officers, or the Chief Executive Officer, as
applicable, or the Financial Officer shall have the right from time to time to
request that the Board of Managers review the Joint Venture Company’s and its
Subsidiaries’ operating results and business prospects, the progress to date of
the Joint Venture Company’s and its Subsidiaries’ [***] capital projects, any
changes in the requirements for such projects, and the then-current market
conditions for the Joint Venture Products, to consider whether the
then-effective Approved Business Plan should be amended.
 
(2)  In the event that any material milestone set forth in, or any other
material provision of, the Approved Business Plan is not achieved or is achieved
earlier than contemplated under the Approved Business Plan, or the occurrence of
any event
 
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having a material effect on the assets, business, operations, earnings,
prospects, properties or condition (financial or otherwise) of the Joint Venture
Company or its Subsidiaries, each Member, the Authorized Officers, or the Chief
Executive Officer, as applicable, or the Financial Officer shall have the right
to require that the then-effective Approved Business Plan be reviewed by the
Board of Managers to consider whether the then-effective Approved Business Plan
should be amended.
 
(3)  Upon such request or requirement pursuant to Sections 11.2(E)(1) or (2),
the Board of Managers shall, at the next scheduled meeting of the Board of
Managers, or at a special meeting called for such purpose, review the
then-effective Approved Business Plan and determine whether such amendment is
necessary or appropriate. If the Board of Managers approves such amendment to
the Approved Business Plan in accordance with Section 6.3(A)(11), such amendment
shall become an approved amendment to the Approved Business Plan (and the
Approved Business Plan as so amended shall be an Undisputed Approved Business
Plan), and the Authorized Officers, or the Chief Executive Officer, as
applicable, shall implement the amended Approved Business Plan as promptly as
commercially practicable; provided, however, that any failure of the Board of
Managers to approve any amendment to the Approved Business Plan shall, subject
to Section 11.2(E)(4), result in the continuation of such Approved Business Plan
without the proposed amendment.
 
(4)  In the event a Member wishes to propose amendments to the Approved Business
Plan for any reason or the Board of Managers fails to approve an amendment to an
Approved Business Plan under Section 11.2(E)(3), either Member may submit a
proposed amendment to the Approved Business Plan (a “Member Plan Amendment”) to
the Board of Managers (with a copy delivered to the other Member) for approval.
If a Member submits a Member Plan Amendment, the other Member shall have twenty
(20) days to present an alternative Member Plan Amendment. If, within thirty
(30) days after such twenty (20)-day period, the Board of Managers approves any
Member Plan Amendment, such Member Plan Amendment shall become an approved
amendment to the Approved Business Plan (and the Approved Business Plan as so
amended shall be an Undisputed Approved Business Plan), and the Authorized
Officers, or the Chief Executive Officer, as applicable, shall implement such
amendment to the Approved Business Plan as promptly as commercially practicable.
If the Board of Managers fails to approve a Member Plan Amendment within such
thirty (30)-day period, then the matter shall be referred to the Members’
Authorized Representatives for resolution. If such referral results in an
agreement on a Member Plan Amendment, such Member Plan Amendment shall become an
approved amendment to the Approved Business Plan (and the Approved Business Plan
as so amended shall be an Undisputed Approved Business Plan), and the Authorized
Officers, or the Chief Executive Officer, as applicable, shall implement such
amendment to the Approved Business Plan as promptly as commercially practicable.
If such referral does not result in an agreement on a Member Plan Amendment
within ten (10) days of such referral, then the Member Plan Amendment with the
[***] for the remainder of the then-current Fiscal Year (or the Member Plan
Amendment, if there is only one) shall be deemed to be an approved amendment to
the Approved Business Plan (and the Approved Business Plan as so amended shall
be a Disputed Approved Business Plan), and the Authorized Officers, or
 
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the Chief Executive Officer, as applicable, shall implement such amendment to
the Approved Business Plan as promptly as commercially practicable. Except as
contemplated by Section 11.2(D)(3), the Annual Budget (or portion thereof for
the remainder of the then-current Fiscal Year) shall not be inconsistent with
the [***] Schedule.
 
11.3  Expenditures. All operating expenditures and all capital expenditures of
the Joint Venture Company and its Subsidiaries shall be made in accordance with
the [***] Budget, the [***] Budget or the Annual Budget, as applicable, set
forth in the applicable Approved Business Plan (each as may be modified or
updated in accordance with this Article 11) for the Fiscal Year in which such
expenditures are made.
 
11.4  Fab Criteria. Notwithstanding anything to the contrary in this Agreement,
no Approved Business Plan may, without the unanimous consent of the Members,
[***].
 
11.5  Quarterly Business Plan. At least fifteen (15) days prior to the end of
each Fiscal Quarter, a quarterly business plan addressing at least the next six
(6) full Fiscal Quarters on a rolling basis (which shall be consistent in all
material respects with the then-effective Approved Business Plan) shall be
prepared by the officers of the Joint Venture Company in a manner consistent
with the Joint Venture Company’s financial statements and Modified GAAP and
reviewed and approved by the Authorized Officers, or the Chief Executive
Officer, as applicable, and the Financial Officer.
 
11.6  Operating Plan.
 
(A)  The Joint Venture Company shall prepare and update an operating plan on a
monthly basis (the “Operating Plan”). The Operating Plan shall contain a [***],
[***] and [***].
 
(1)  The [***] shall address (1) Joint Venture Products [***] by the Joint
Venture Company and its Subsidiaries during the [***] (which shall be derived
from the [***] developed by the [***]), (2) [***] of [***] during the applicable
[***], (3) target [***] during the [***], (4) Joint Venture [***] qualifications
and (5) such other [***] activities as shall be necessary and appropriate.
 
(2)  The [***] shall address (1) strategy and capability for [***] by the Joint
Venture Company, its Subsidiaries, and subcontractors during the [***] (which
shall be derived from the [***] developed by the [***]), (2) [***] of [***]
during the [***], (3) target [***] by [***] during the [***], (4) [***]
qualifications and (5) such other [***] activities as shall be necessary and
appropriate.
 
(3)  The [***] shall address (1) strategy and capability for [***] by the Joint
Venture Company, its Subsidiaries and subcontractors during the [***] (which
shall be derived from the [***] developed by the [***]), (2) [***] of [***]
during the [***], (3) [***] during the [***], (4) [***] qualifications and (5)
such other [***] activities as shall be necessary and appropriate.
 
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(4)  The Joint Venture Company shall prepare a report on a monthly basis, which
report will include information on the operations of the Joint Venture Company,
its Subsidiaries and its subcontractors in respect of the topics addressed in
the Operating Plan (the “Monthly Operating Report”).
 
(B)  Participation in the Development of the Operating Plan. The Operating Plan,
unless otherwise determined by the Board of Managers, shall incorporate Micron’s
Process of Record and Model of Record, as amended from time to time by Micron.
 
11.7  Use of Member Names. Except as may be expressly provided in the Joint
Venture Documents, nothing in this Agreement shall be construed as conferring on
the Joint Venture Company, any Subsidiary of the Joint Venture Company or either
Member the right to use in advertising, publicity, marketing or other
promotional activities any name, trade name, trademark, servicemark or other
designation, or any derivation thereof, of the Members (in the case of a Member,
the other Member).
 
11.8  Insurance. The Joint Venture Company shall at all times be covered by
insurance of the types and in the amounts set forth on Schedule 2 hereto. Such
insurance coverage may be provided through the coverage under one or more
insurance policies maintained by either Member.
 
ARTICLE 12.  
TRANSFER RESTRICTIONS
 
12.1  Restrictions on Transfer. No Member may, directly or indirectly, by
operation of law or otherwise, sell, assign or transfer or otherwise encumber
(whether by pledge or otherwise), or create a class of tracking stock or other
derivative security in respect of (each of the foregoing, a “Transfer”) all or
any portion of its Interest in the Joint Venture Company or any of its
Subsidiaries or any Member Note, or any interest therein, and the Joint Venture
Company and its Subsidiaries shall not recognize any Transfer of a Member’s
Interest in the Joint Venture Company or any of its Subsidiaries or any Member
Note, other than a Transfer permitted in accordance with Sections 12.2, 12.4(A),
12.4(B) and 12.5. Neither (A) a Transfer of securities issued by a Member nor
(B) a Member Change of Control shall constitute a Transfer prohibited by this
Section 12.1; provided, however, that in the event of a Member Change of
Control, the provisions of Section 13.1(A)(7)(ii) shall apply.
 
12.2  Permitted Transfers. Notwithstanding the restrictions on Transfer set
forth in Section 12.1, a Member may Transfer all, but not less than all, of its
Interest in the Joint Venture Company and any Member Note (including the right
to receive any accrued interest thereon) to a Wholly-Owned Subsidiary of such
Member, provided that, (i) such Wholly-Owned Subsidiary is established,
organized or incorporated within the United States, (ii) while such Wholly-Owned
Subsidiary holds such Interest or any Member Note it remains a Wholly-Owned
Subsidiary of the original Member established, organized or incorporated in the
United States, (iii) such transferring Member shall remain liable for its
Subsidiary’s failure to perform the obligations associated with such transferred
Interest (including the obligations set forth in this Agreement), and (iv) prior
to the effectiveness of any permitted Transfer, the transferring Member shall
 
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deliver to the Board of Managers and all of the other Members of the Joint
Venture Company the following:
 
(A)  a certificate of the transferring Member that the Transfer will not, and
could not reasonably be expected to, cause an adverse effect on the Joint
Venture Company or any of its Subsidiaries or the non-transferring Member,
including any adverse effect on, or resulting loss of, any of the Intellectual
Property Rights of the Joint Venture Company or any of its Subsidiaries;
 
(B)  evidence reasonably satisfactory to the other Member that all of the
following conditions have been satisfied:
 
(1)  the transferring Member and its Affiliates (excluding any Applicable Joint
Venture and any Wholly-Owned Subsidiary of any Applicable Joint Venture unless
the material breach by such Applicable Joint Venture or Wholly-Owned Subsidiary
of any Applicable Joint Venture was caused, directly or indirectly, by the
transferring Member) are not in material breach of any provision of this
Agreement or any agreement with the Joint Venture Company or any of its
Subsidiaries (collectively, the “Affiliate Agreements”);
 
(2)  the transferee of the Member’s Interest or any Member Note is financially
capable of carrying out the obligations and paying any liabilities of the
transferring Member pursuant to this Agreement and the Affiliate Agreements;
 
(3)  notwithstanding the continuing liability of the transferring Member
described above, the transferee has agreed in writing to assume all of the
obligations of the transferring Member relating to the transferred Interest or
any Member Note, including the obligations set forth in this Agreement and any
Affiliate Agreement it properly assumes;
 
(4)  the transferee executes and becomes a party to the Confidentiality
Agreement;
 
(5)  the Transfer will not result in material adverse tax consequences to the
Joint Venture Company or to the other Member (unless the Member engaging in such
Transfer reimburses the other Member or the Joint Venture Company, as the case
may be, for such tax consequences, which reimbursement and payment shall not
affect the Capital Contributions of the Members);
 
(6)  the Transfer will not result in a Liquidating Event, or in an event or
condition that with the giving of notice or the passage of time or both would
constitute a breach or default, by either the transferring Member or the
transferee, under this Agreement or any of the Affiliate Agreements; and
 
(7)  the transferring Member shall have, and shall have caused each of its
Relatives to have, amended any Applicable Joint Venture Agreements to which it
is a party in order to add the transferee as a Relative under such Applicable
Joint Venture Agreement.
 
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12.3  Additional Members. No Person shall be admitted to the Joint Venture
Company as a Member other than Intel, Micron or any substitute Member for Intel
or Micron (as provided in Section 12.2).
 
12.4  Certain Purchases.
 
(A)  Purchase of Additional Interest. During the period commencing on the two
(2)-year anniversary of the Effective Date and at any time that Intel is a
Member and its Economic Interest (without taking into account in the Committed
Capital of such Member or in the aggregate Committed Capital of all Members, the
outstanding amount under any Mandatory Note payable to Intel) is less than 51%
but at least 49%, Intel shall have the right to purchase from Micron, and upon
the exercise of such right Micron shall sell to Intel, an Interest representing
a percentage (the “Option Percent”) of the Members’ aggregate Interests
necessary to bring Intel’s Economic Interest to 51% (computed by shifting from
the Capital Contribution Balance (and Committed Capital) of Micron to the
Capital Contribution Balance (and Committed Capital) of Intel the minimum sum
necessary to raise the Economic Interest of Intel to 51%). The purchase price to
be paid by Intel for such Interest shall be an amount in cash equal to the [***]
Value; provided, however, that the purchase price shall in no event be (i) lower
than an amount equal to the Option Percent [***] by the [***] of the [***] of
the Joint Venture Company and its Subsidiaries (the “Floor Amount”), or
(ii) greater than the product of [***], multiplied by the Floor Amount (the “Cap
Amount”). If the Purchase Value is determined to be lower than the Floor Amount,
or greater than the Cap Amount, then the purchase price shall be an amount equal
to the Floor Amount or the Cap Amount, respectively. Intel may exercise this
purchase right by delivering a written notice of its intent to exercise to the
Joint Venture Company and Micron. The closing of the purchase and sale shall
take place on a date agreed to by the Joint Venture Company, Micron and Intel,
but in no event later than thirty (30) days following the date the notice is
delivered. Such closing shall take place at the principal office of the Joint
Venture Company, or at such other location as the Joint Venture Company, Micron
and Intel may mutually determine. At the closing, the Joint Venture Company
shall record in its books and records the contemplated shift in the Members’
Capital Contribution Balances, and the appropriate changes to the Capital
Accounts of the Members, and Intel shall pay to Micron the purchase price for
such Option Percent by wire transfer of immediately available funds.
 
(B)  Purchase of Additional Interest to Effect a Change in Consolidating Member.
Subject to the terms and conditions of this Section, Intel shall have the right
to effect a Change in Consolidating Member. Intel may exercise this right to
effect a Change in Consolidating Member by delivering a written notice of its
intent to exercise to the Joint Venture Company and Micron; provided, however,
that the exercise of such right by Intel shall be subject to the prior written
consent of Micron. Upon the exercise of such right, Intel shall purchase from
Micron, and Micron shall sell to Intel, an Interest representing a percentage
(the “Consolidating Option Percent”) of the Members’ aggregate Interests
necessary to bring Intel’s Economic Interest to 51% (computed by shifting from
the Capital Contribution Balance (and Committed Capital) of Micron to the
Capital Contribution Balance (and Committed Capital) of Intel the minimum sum
necessary to raise the Economic Interest of Intel to 51%). The purchase price to
be paid by Intel for such Interest shall be an amount in cash equal to the [***]
Value; provided, however, that the purchase price shall in no event be lower
than an amount equal to the Consolidating Option Percent [***] by the [***] of
the [***] of the Joint Venture Company and
 
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 its Subsidiaries (the “Consolidating Floor Amount”). If the Purchase Value is
determined to be lower than the Consolidating Floor Amount then the purchase
price shall be an amount equal to the Consolidating Floor Amount. The closing of
the purchase and sale shall take place on a date agreed to by the Joint Venture
Company, Micron and Intel, but in no event later than thirty (30) days following
the date the notice is delivered. Such closing shall take place at the principal
office of the Joint Venture Company, or at such other location as the Joint
Venture Company, Micron and Intel may mutually determine. At the closing, the
Joint Venture Company shall record in its books and records the contemplated
shift in the Members’ Capital Contribution Balances, and the appropriate changes
to the Capital Accounts of the Members, and Intel shall pay to Micron the
purchase price for such Consolidating Option Percent by wire transfer of
immediately available funds.
 
12.5  Purchase of Remaining Interest.
 
(A)  If the Economic Interest of a Member (the “Minority Member”) drops to ten
percent (10%) or less and remains at or below ten percent (10%) for more than
six (6) consecutive months, the other Member or a Subsidiary thereof (such other
Member or Subsidiary thereof, the “Majority Member”) shall have the option,
exercisable at any time prior to the day that is six (6) months prior to the end
of the Initial Term, to purchase all of the remaining Interest of, and
outstanding Member Notes payable to, the Minority Member at a cash purchase
price equal to the Option Price, subject to the terms and conditions set forth
in Section 12.5(C). The Majority Member may exercise this purchase option by
delivering a written notice of its intent to exercise to the Minority Member.
The closing of the purchase and sale of the Minority Member’s remaining Interest
and any outstanding Member Notes held by the Minority Member (the “Minority
Closing”) shall take place as of the last day of the Fiscal Month in which the
notice is delivered (unless such notice is delivered within the last ten (10)
days of the end of a Fiscal Month, in which case the Minority Closing shall take
place on the last day of the first full Fiscal Month thereafter). Such Minority
Closing shall take place at the principal office of the Joint Venture Company,
or at such other location as the Majority Member and the Minority Member may
mutually determine. At the Minority Closing, (i) the Minority Member shall
transfer its remaining Interest in the Joint Venture Company and outstanding
Member Notes held by the Minority Member to the Majority Member, free and clear
of any liens or encumbrances, (ii) the Majority Member shall pay the Minority
Member the Minority Closing Price by wire transfer of immediately available
funds and (iii) the Minority Member shall deliver to the Majority Member such
instrument of conveyance as the Majority Member reasonably requests.
 
(B)  Upon the Minority Closing, the Majority Member shall pay to the Minority
Member a sum (the “Minority Closing Price”) equal to the [***] of (i) the [***]
of (a) the [***] of the [***] of the Joint Venture Company and its Subsidiaries
as of the last day of the Fiscal Month immediately prior to the Minority
Closing, [***] (b) the [***] of all [***] of the Joint Venture Company and its
Subsidiaries as of the last day of the Fiscal Month immediately prior to the
Minority Closing (excluding, however, any liabilities with respect to Member
Notes), and (ii) the Economic Interest of the Minority Member at the time the
option provided for in Section 12.5(A) is exercised. Within five (5) Business
Days after the month-end balance sheet (prepared in accordance with Modified
GAAP consistently applied) as of the date of the Minority Closing becomes
available, the Minority Closing Price shall be recalculated using the [***] of
the [***] of the Joint Venture Company and its Subsidiaries as of such date
 
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and the [***] of the [***] of the Joint Venture Company and its Subsidiaries as
of such date (excluding any liabilities with respect to Member Notes) (such
recalculated sum, the “Option Price”). If the Option Price is greater than the
Minority Closing Price, the Majority Member shall deliver the difference to the
Minority Member by wire transfer of immediately available funds within three (3)
Business Days of such recalculation. If the Option Price is less than the
Minority Closing Price, the Minority Member shall refund the difference to the
Majority Member by wire transfer of immediately available funds within three (3)
Business Days of such recalculation.
 
(C)  Upon an election of the Majority Member to purchase the Minority Member’s
remaining Interest and the outstanding Member Notes held by such Minority Member
pursuant to Section 12.5(A), if the Minority Member is Micron, then the
following shall apply:
 
(1)  Micron shall, at its option, exercisable by written notice to Intel not
more than five (5) days after the exercise of the option contemplated by
Section 12.5(A), purchase either (i) the [***] or (ii) all of the equity
interest in any U.S. Facilities Company that owns or leases only the [***]. The
purchase price shall be the [***] of the [***] or of such [***] Facilities
Company, as applicable (excluding, for purposes of this determination, any [***]
attributable to the [***]). The closing of the purchase and sale provided for in
this Section 12.5(C)(1) (the “Micron Minority Closing”) shall take place on the
same date, at the same time and at the same location as the Minority Closing. At
the Micron Minority Closing, (x) the Joint Venture Company shall transfer the
purchased assets, rights and equity interest to Micron, free and clear of any
liens or encumbrances other than liens securing indebtedness exclusively
associated with the Fab located at the [***], (y) Micron shall pay the Joint
Venture Company the purchase price determined in accordance with this Section
12.5(C)(1) by wire transfer of immediately available funds and (z) the Joint
Venture Company shall deliver to Micron such instrument(s) of conveyance as
Micron reasonably requests.
 
(2)  Micron shall pay to the Joint Venture Company an amount equal to the [***].
 
(3)  The [***] shall terminate at the time of the Micron Minority Closing with
no payment obligation, other than as contemplated by Section 12.5(C)(2),
thereunder by Micron; provided, however, that in the event that Micron fails to
acquire the [***] under Section 12.5(C)(1), the [***] shall continue for a
reasonable period of time to allow the Joint Venture Company to remove the [***]
from the [***], and Micron shall permit the Joint Venture Company to have
reasonable access to the [***], for a reasonable period and on a reasonable
basis, in order to remove such [***] from the [***].
 
(4)  The Boise Supply Agreement shall continue for the remainder of its term, if
any, but shall be modified such that a percentage of the products to be sold
thereunder equal to the Sharing Interest of Micron at the time of the exercise
of the option under Section 12.5(A) shall be retained by Micron and the
remaining portion shall be sold to the Joint Venture Company (which may then
assign its rights and obligations thereunder to Intel).
 
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(5)  Micron may, at its option, cause to continue in effect any existing supply
agreements it has with the Joint Venture Company or any Subsidiary of the Joint
Venture Company for [***]from the Minority Closing with the same amounts and at
the same delivery schedule, pricing and terms as are in effect on the date of
the Minority Closing; provided, however, that the quantity of Products Micron
shall be entitled to purchase thereunder, measured in 300 millimeter
equivalents, shall be the [***] between (i) the quantity (determined based on
the three (3)-month period immediately preceding the Minority Closing) of
Products Micron would have been permitted to purchase had the option provided
for in Section 12.5(A) not been exercised, and (ii) the [***] of (a) the
quantity of Products that the assets acquired by Micron in accordance with
Section 12.5(C)(1) have been producing in the ordinary course as determined
based on the three (3)-month period immediately preceding the Minority Closing
and (b) the quantity of Products that is retained by Micron under
Section 12.5(C)(4). Such quantity will be [***] for the first year and then will
[***] of such fixed quantity per Fiscal Quarter to [***] over the next [***]
Fiscal Quarters. The Members will work together in good faith so that such
supply arrangements minimize disruption to the business of the Joint Venture
Company and the Members and to maintain, subject to such decline in amount,
substantially the same supply of custom Products and substantially the same
composition of types of Products as Micron had obtained from the Joint Venture
Company immediately prior to the Minority Closing.
 
ARTICLE 13.  
DISSOLUTION AND LIQUIDATION
 
13.1  Dissolution.
 
(A)  Upon the occurrence of any of the following events (each, a “Liquidating
Event”), the Joint Venture Company shall dissolve and commence winding up and
liquidation activities in accordance with this Article 13 and any other
covenants unanimously agreed in writing by the Members, whether or not the event
would cause a dissolution under the Act:
 
(1)  the expiration of the Term in accordance with Section 1.3;
 
(2)  the unanimous agreement in writing of the Members to wind up the Joint
Venture Company;
 
(3)  the election by a Member with a Percentage Interest of at least [***]% to
wind up the affairs of the Joint Venture Company (which election shall not
require the consent of the other Member), upon delivery of written notice of
such election to the Joint Venture Company and the other Member;
 
(4)  the election of Intel to dissolve the Joint Venture Company in the event of
one or more breaches by Micron of either or both of (i) the [***], dated as of
the Effective Date, between the Joint Venture Company and Micron or (ii) with
respect to any obligations of Micron to [***]or [***]that are [***] at [***],
the [***] and [***] Services Agreement, dated as of the Effective Date, between
the Joint Venture Company and Micron that remain uncured after any applicable
cure period set forth in such
 
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agreement, provided that all such breaches described in clauses (i) and (ii)
from the Effective Date to the date of such election result in [***] damages to
the Joint Venture Company of [***] (that would be recoverable [***] under such
agreements) (without taking into account the effect of the dissolution, winding
up and liquidation of the Joint Venture Company under this Article 13 and any
other covenants unanimously agreed in writing by the Members);
 
(5)  the occurrence of any other event that, under the Act, makes it unlawful,
impossible or impractical to carry on the business of the Joint Venture Company;
 
(6)  the election by either Member to wind up the affairs of the Joint Venture
Company upon (i) the occurrence of a Bankruptcy of the Joint Venture Company of
the type described in clause (iv) of the definition of the term “Bankruptcy,”
provided that the Member making such election is not in default of any payment
obligation to the Joint Venture Company or (ii) the Bankruptcy (as hereinafter
defined), dissolution or liquidation of a Member, and further provided that, in
either event, such election shall be made only after entry by the court
presiding over the Bankruptcy of an order granting relief from the automatic
stay to make such election to the Member making such election;
 
(7)  the election by a Member to wind up the affairs of the Joint Venture
Company, if (i) the Joint Venture Company ceases operations for more than [***]
or (ii) the other Member undergoes a Member Change of Control; or
 
(8)  Intentionally Omitted.
 
(9)  Intentionally Omitted.
 
(10)  Intentionally Omitted.
 
(11)  the election of a Member by written notice to the Joint Venture Company
and the other Member to wind up the affairs of the Joint Venture Company.
 
(B)  For the purposes of this Section 13.1, the term “Bankruptcy” shall mean
(i) the entry of a decree or order for relief of the Person by a court of
competent jurisdiction in any involuntary case involving the Person under any
bankruptcy, insolvency or other similar law now or hereafter in effect; (ii) the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or other similar agent for the Person or for any substantial part
of the Person’s assets or property; (iii) the ordering of the winding up or
liquidation of the Person’s affairs; (iv) the filing with respect to the Person
of a petition in any such involuntary bankruptcy case, which petition remains
undismissed for a period of sixty (60) days or which is dismissed or suspended
pursuant to Section 305 of the U.S. Bankruptcy Code (or any corresponding
provision of any future U.S. bankruptcy law); (v) the commencement by the Person
of a voluntary case under any bankruptcy, insolvency or other similar law now or
hereafter in effect; (vi) the consent by the Person to the entry of an order for
relief in an involuntary case under any such law or to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar agent for the Person or for any substantial part
of the Person’s assets
 
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or property; (vii) the making by the Person of any general assignment for the
benefit of creditors; or (viii) the failure by the Person generally to pay its
debts as such debts become due.
 
13.2  Determination of [***] Value. Upon the occurrence of a Liquidating Event,
the Members shall promptly proceed to determine the [***] Value of the [***] and
each other Facility or U.S. Facilities Company (the date of receipt of the last
such determination, the “[***] Determination Date”). The Members and the Joint
Venture Company shall use reasonable efforts to cause the determination to be
made as promptly as practicable, but not later than [***] after the Liquidating
Event or, in the case of a Liquidating Event under Section 13.1(A)(1), not later
than such Liquidating Event.
 
13.3  No Withdrawal. No Member shall have any right to withdraw from the Joint
Venture Company. No event that would constitute a withdrawal of a Member under
the Act shall in any way be deemed to be a withdrawal under this Agreement or
cause a dissolution of the Joint Venture Company.
 
13.4  Micron [***] Reimbursement; [***] True-Up Payment.
 
(A)  If a Liquidating Event occurs before the [***] becomes an Operational Fab,
Micron shall not be obligated to reimburse the Joint Venture Company for any
unused portion of the pre-paid rent under the [***] transferred to the Joint
Venture Company by Micron as described in Section 2.1(B). If a Liquidating Event
occurs after the [***] becomes an Operational Fab, Micron shall reimburse the
Joint Venture Company for any unused portion of the prepaid rent under the [***]
transferred to the Joint Venture Company determined as of the day of closing of
the Micron [***] Purchase Option, if exercised, or following the sale of the
last Facility, or the sale of equity interests in the U.S. Facilities Company
that owns or leases the last Facility, to be sold if such option is not
exercised and based on the assumption that, for the [***], such prepaid rent was
being amortized on a straight line basis over a ten (10)-year period. Such
reimbursement shall be paid by Micron to the Joint Venture Company no later than
the Liquidation Date and, if not so paid, shall be deducted from the amount to
be distributed to Micron under this Article 13.
 
(B)  If a Liquidating Event occurs pursuant to Section 13.1(A)(1), Micron shall,
on the Liquidation Date, make a one-time true-up payment to the Joint Venture
Company in an amount equal to the [***] as of the date of the termination of the
[***]. A real estate appraiser mutually selected by the Members shall determine
such [***] on a final and conclusive basis. Such appraiser shall be instructed
to consider all factors that in his or her professional opinion may affect the
[***].
 
13.5  Intentionally Omitted.
 
13.6  Intentionally Omitted.
 
13.7  Intentionally Omitted.
 
13.8  Intentionally Omitted.
 
13.9  Intentionally Omitted.
 
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13.10  Intentionally Omitted.
 
13.11  Auction of Remaining Assets. As soon as reasonably practicable following
the sale or other disposition of the assets of the Joint Venture Company
pursuant to any procedures unanimously agreed in writing by the Members, but not
later than [***] ([***]) days after the Buyout Determination Date, the Board of
Managers shall cause the Joint Venture Company and its Subsidiaries to sell, in
an auction process reasonably designed to maximize the price, all of the assets,
other than cash, remaining in the Joint Venture Company and its Subsidiaries
(the “Remaining Assets”). Each of the Members shall be entitled to participate
as a bidder in the auction. The Remaining Assets shall be sold to the Person
providing the best bid.
 
13.12  Winding Up. Following the conclusion of any sale conducted in accordance
with Section 13.11, the Joint Venture Company shall continue solely for the
purposes of winding up its affairs in an orderly manner, liquidating its assets,
and satisfying the claims of its creditors and Members. To the extent not
inconsistent with the foregoing, all covenants and obligations in this Agreement
shall continue in full force and effect until such time as the Joint Venture
Company’s property has been distributed pursuant to this Section 13.12 and
Section 13.13 and the Joint Venture Company has been dissolved in accordance
with the Act.
 
13.13  Liquidation. (A) Upon the occurrence of a Liquidating Event and following
the completion of (i) the consummation of any sale of assets in accordance with
any covenants unanimously agreed in writing by the Members and (ii) the auction
of assets contemplated by Section 13.11 (the date on which all such events have
been completed, the “Liquidation Date”), the Board of Managers shall act as the
liquidating committee of the Joint Venture Company. The liquidating committee
shall liquidate the Joint Venture Company’s remaining assets and terminate its
business in accordance with this Section 13.13. The liquidating committee shall
promptly prepare or cause to be prepared, at the expense of the Joint Venture
Company, a statement setting forth the assets and liabilities of the Joint
Venture Company as of the date of dissolution and shall furnish that statement
to all Members. The liquidating committee shall proceed to liquidate any assets
of the Joint Venture Company that remain unsold after the auction contemplated
by Section 13.11 and to terminate the Joint Venture Company’s business as
promptly as practicable but shall be allowed a reasonable time for the orderly
liquidation of Joint Venture Company assets and the discharge of liabilities to
creditors (including Members who are creditors) in order to minimize losses
normally incident to a liquidation. The liquidating committee shall have full
power and authority to operate Joint Venture Company properties in the ordinary
course of business for the account of the Joint Venture Company.
 
(B)  At least ten (10) days prior to the first distribution of assets or other
proceeds of the liquidation under Section 13.13(C) (which distribution shall
occur no earlier than the Liquidation Date), the liquidating committee shall
deliver written notice of such pending first liquidating distribution to both
Members. Prior to the time of such first liquidating distribution, (i) any
Member that is the Funding Member with respect to any Member Note outstanding at
such time may, by delivering written notice to the Joint Venture Company,
convert the outstanding principal balance of and accrued interest on such Member
Note into a Capital Contribution and (ii) any Member that is the Non-Funding
Member with respect to any Member Note outstanding at such time may, by
delivering written notice to the Joint Venture Company, cause the Joint Venture
Company to convert the outstanding principal balance of and accrued
 
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interest on any such Member Note into a Capital Contribution. Any conversion of
a Member Note made pursuant to this Section 13.13(B) shall be effective prior to
the commencement of the first liquidating distribution pursuant to
Section 13.13(C).
 
(C)  The assets and other proceeds of the liquidation, as and when available,
shall be applied and distributed in the following order and priority:
 
(1)  first, to the payment of all debts and liabilities of the Joint Venture
Company, excluding debts and liabilities to Members and former Members;
 
(2)  second, to the setting up of reserves that the liquidating committee deems
reasonably necessary for contingent, unmatured or unforeseen liabilities or
obligations of the Joint Venture Company;
 
(3)  third, to the payment of all debts and liabilities to Members and any
former Members; and
 
(4)  fourth, to the Members in accordance with Section 5.1.
 
(D)  In the event that, at the time of a liquidating distribution in accordance
with Section 13.13(C), there exists any outstanding obligation of a Member to
the Joint Venture Company (including, but not limited to, any amounts owed by
such Member to the Joint Venture Company as a result of purchasing assets from
the Joint Venture Company in accordance with any covenants unanimously agreed in
writing by the Members that remains unpaid), all amounts to be distributed to
such Member under Section 13.13(C) shall be subject to offset, and no
distribution shall be made to such Member until after all such obligations have
been satisfied in full.
 
13.14  Supply Agreements. Notwithstanding the occurrence of a Liquidating Event,
the Boise Supply Agreement shall remain in effect for the remainder of its term,
if any, but shall be modified as described in Section 12.5(C)(4) based on the
Members’ respective Sharing Interests at the time of such Liquidating Event, and
the Products to be sold thereunder to, and purchased by, the Joint Venture
Company instead shall be sold to, and purchased by, Intel. If a Liquidating
Event has occurred, then, from and after the consummation of a sale of assets by
the Joint Venture Company in accordance with any covenants unanimously agreed in
writing by the Members, each Member shall enter into a supply agreement with the
other Member, on substantially the same terms (including amount, delivery
schedule, pricing terms and other terms) as the Supply Agreement that the Member
entered into with the Joint Venture Company as of the Effective Date, under
which each Member agrees to provide the other Member with its Sharing Interest
on the date of the Liquidating Event of the output of each type of Product from
each of the Facilities purchased by that Member. The quantity (determined based
on the three (3)-month period immediately preceding the effectiveness of the
contemplated Supply Agreement) of Product, measured in 300 millimeter diameter
equivalents (excluding Product provided to either Member under the Boise Supply
Agreement) that a Member shall be obligated to provide from each Facility under
that Member’s supply agreement will be fixed for the first year after the
consummation of a sale of assets by the Joint Venture Company or any of its U.S.
Facilities Companies in accordance with any covenants unanimously agreed in
writing by the
 
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Members and then will decline by [***] ([***]) of such fixed quantity per Fiscal
Quarter to [***] ([***]) over the next [***] ([***]) Fiscal Quarters. The
Members will work together in good faith so that such supply agreements minimize
disruption to the business of the Members and to maintain, subject to such
decline in amount, substantially the same supply of custom Products and
substantially the same composition of types of Products as the Members had
obtained from the Joint Venture Company immediately prior to the date of the
Liquidating Event.
 
13.15  Employees. Each Member shall be free to offer employment to or continue
the employment of any or all of the Joint Venture Company employees whose
primary place of employment is at a Facility owned or leased by the Joint
Venture Company or by any of its U.S. Facilities Companies if such Facility or
the equity of such U.S. Facilities Company that owns or leases such Facility is
purchased by that Member.
 
ARTICLE 14.  
EXCULPATION AND INDEMNIFICATION
 
14.1  Exculpation. No Manager (or alternate Manager) shall be liable to the
Joint Venture Company, any Subsidiary of the Joint Venture Company or the
Members (in their capacities as members of the Joint Venture Company) for
monetary damages for breach of fiduciary duty as a Manager or otherwise liable,
responsible or accountable to the Joint Venture Company, any Subsidiary of the
Joint Venture Company or the Members (in their capacities as members of the
Joint Venture Company) for monetary damages or otherwise for any acts performed,
or for any failure to act, except that this provision shall not eliminate or
limit the liability of a Manager (or alternate Manager) (i) for acts or
omissions that involve willful or intentional misconduct or gross negligence or
(ii) for any transaction from which the Manager (or alternate Manager) received
any improper personal benefit.
 
14.2  Indemnification.
 
(A)  The Joint Venture Company shall, to the fullest extent permitted by
Applicable Law, indemnify, defend and hold harmless (1) each Manager and
alternate Manager and (2) the Chief Executive Officer, the Intel Executive
Officer, the Micron Executive Officer, the Financial Officer and any other
officer or site manager of the Joint Venture Company (each, an “Executive
Indemnified Party” and collectively with the Managers, the “Indemnified Party”),
against any losses, claims, damages or liabilities to which such Indemnified
Party may become subject in connection with any matter arising out of or
incidental to any act performed or omitted to be performed by any such
Indemnified Party in connection with this Agreement or the Joint Venture
Company’s or any of its Subsidiaries’ business or affairs; provided, however,
that in the case of an Executive Indemnified Party, such act or omission was
taken in good faith and was reasonably believed by the Executive Indemnified
Party, as applicable, to be within the scope of authority granted to such
Executive Indemnified Party; and provided further, however, that in the case of
any Indemnified Party such act or omission was not attributable in whole or in
part to the fraud, bad faith, willful misconduct or gross negligence of such
Indemnified Party. If an Indemnified Party becomes involved in any capacity in
any action, proceeding or investigation in connection with any matter arising
out of or in connection with this Agreement or the Joint Venture Company’s or
any of its Subsidiaries’ business or affairs, the Joint Venture
 
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Company shall reimburse such Indemnified Party for its reasonable legal and
other reasonable out-of-pocket expenses (including the cost of any investigation
and preparation) as they are incurred in connection therewith, provided that
such Indemnified Party shall promptly repay to the Joint Venture Company the
amount of any such reimbursed expenses paid to it if it shall ultimately be
determined that such Indemnified Party was not entitled to be indemnified by the
Joint Venture Company in connection with such action, proceeding or
investigation. If for any reason (other than the fraud, bad faith, willful
misconduct or gross negligence of such Indemnified Party) the foregoing
indemnification is unavailable to such Indemnified Party, or insufficient to
hold it harmless, then the Joint Venture Company shall contribute to the amount
paid or payable by such Indemnified Party as a result of such loss, claim,
damage, liability or expense in such proportion as is appropriate to reflect the
relative benefits received by the Joint Venture Company or any of its
Subsidiaries on the one hand and such Indemnified Party on the other hand or, if
such allocation is not permitted by Applicable Law, to reflect not only the
relative benefits referred to above but also any other relevant equitable
considerations. Any indemnity under this Section 14.2(A) shall be paid solely
out of and to the extent of the Joint Venture Company’s and its Subsidiaries’
assets and shall not be a personal obligation of any Member and in no event will
any Member be required or permitted, without the consent of the other Member, to
contribute additional capital under Article 2 to enable the Joint Venture
Company to satisfy any obligation under this Section 14.2.
 
(B)  The provisions of this Section 14.2 shall survive for a period of two (2)
years from the date of dissolution of the Joint Venture Company, provided that
(1) if at the end of such period there are any actions, proceedings or
investigations then pending, an Indemnified Party may so notify the Joint
Venture Company and the Members at such time (which notice shall include a brief
description of each such action, proceeding or investigation and the liabilities
asserted therein) and the provisions of this Section 14.2 shall survive with
respect to each such action, proceeding or investigation set forth in such
notice (or any related action, proceeding or investigation based upon the same
or similar claim) until such date that such action, proceeding or investigation
is finally resolved and (2) the obligations of the Joint Venture Company under
this Section 14.2 shall be satisfied solely out of Joint Venture Company assets,
including the assets of any Subsidiary of the Joint Venture Company.
 
ARTICLE 15.
GOVERNMENTAL APPROVALS
 
15.1  Governmental Approvals. In the event that either Member takes any action
contemplated by this Agreement that could reasonably be expected to result in an
event or transaction, including without limitation (i) the purchase by either
Member of an Interest pursuant to Sections 12.4(A), 12.4(B) or 12.5, (ii) the
purchase by either Member of a Facility or U.S. Facilities Company that owns or
leases such Facility pursuant to any covenants unanimously agreed in writing by
the Members, (iii) a Change of Consolidating Member, (iv) the making of a
Capital Contribution, (v) the conversion of a Member Note or (vi) the creation
or acquisition of interests in a U.S. Facilities Company, which event or
transaction, as to each of the foregoing, would require either Member to make a
filing, notification or any other required or requested submission under the HSR
Act or any other applicable Competition Law (any such event or transaction, a
“Filing Event” and any such filing, notification, or any such other required or
requested submission, a “Filing”), then:
 
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(A)  the Member taking such action, in addition to complying with any other
applicable notice provisions under this Agreement, shall promptly notify the
other Member of such Filing Event, which notification shall include an
indication that Filings under the HSR Act or any other applicable Competition
Law will be required;
 
(B)  notwithstanding any provision to the contrary in this Agreement, a Filing
Event may not occur or close until after any applicable waiting period
(including any extension thereof) under the HSR Act or any other Competition
Law, as applicable to such Filing Event, shall have expired or been terminated,
and all approvals under antitrust regulatory Filings in any jurisdiction that
shall be necessary for such Filing Event to occur or close shall have been
obtained, and any applicable deadline for the occurrence or closing of such
Filing Event contained in this Agreement shall be delayed, so long as both
Members are proceeding diligently in accordance with this Section 15.1 to seek
any such expiration, termination or approval, and so long as there are no other
outstanding conditions preventing the occurrence or closing of the Filing Event;
 
(C)  the Members shall, and shall cause any of their relevant Affiliates to:
 
(1)  as promptly as practicable, make their respective Filings under the HSR Act
or any other applicable Competition Law;
 
(2)  promptly respond to any requests for additional information from the
Federal Trade Commission, the Department of Justice or any other Governmental
Entity;
 
(3)  subject to Applicable Laws, use commercially reasonable efforts to
cooperate with each other in the preparation of, and coordinate, such Filings
(including the exchange of drafts between each party’s outside counsel) so as to
reduce the length of any review periods;
 
(4)  subject to Applicable Laws, cooperate and use their respective commercially
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary under Applicable Laws in connection with
such Filing Event, including using commercially reasonable efforts to provide
information, obtain necessary exemptions, rulings, consents, clearances,
authorizations, approvals and waivers, and effect necessary registrations and
filings;
 
(5)  subject to Applicable Laws, use their commercially reasonable efforts to
(a) take actions that are necessary to prevent the Federal Trade Commission, the
Antitrust Division of the Department of Justice, or any other Governmental
Entity, as the case may be, from filing an action with a court or Governmental
Entity that, if the Governmental Entity prevailed, would restrict, enjoin,
prohibit or otherwise prevent or materially delay the consummation of the Filing
Event, including an action by any such Governmental Entity seeking a requirement
to (i) sell, license or otherwise dispose of, or hold separate and agree to sell
or otherwise dispose of, assets, categories of assets or businesses of either
Member, the Joint Venture Company or its respective Subsidiaries; (ii) terminate
existing relationships and contractual rights and obligations of either
 
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Member, the Joint Venture Company or its respective Subsidiaries;
(iii) terminate any relevant venture or other arrangement; or (iv) effectuate
any other change or restructuring of either Member or the Joint Venture Company
(as to each of the foregoing, a “Divestiture Action”), and (b) contest and
resist any action, including any legislative, administrative or judicial action,
and to have vacated, lifted, reversed or overturned any order that restricts,
enjoins, prohibits or otherwise prevents or materially delays the occurrence or
closing of such Filing Event; and
 
(6)  subject to Applicable Laws, prior to the making or submission of any
analysis, appearance, presentation, memorandum, brief, argument, opinion or
proposal by or on behalf of either Member in connection with proceedings under
or relating to the HSR Act or any other applicable Competition Law, consult and
cooperate with one another, and consider in good faith the views of one another,
in connection with any such analyses, appearances, presentations, memoranda,
briefs, arguments, opinions and proposals, and will provide one another with
copies of all material communications from and filings with, any Governmental
Entities in connection with any Filing Event;
 
(D)  notwithstanding anything to the contrary in this Section 15.1, nothing in
this Section 15.1 shall require either Member or its respective Affiliates, or
the Joint Venture Company to take any Divestiture Action; and
 
(E)  if the Filing Event is prevented from occurring or closing as a result of
any applicable Competition Laws, after exhausting all efforts permitted under
this Section 15.1 to obtain the necessary approval of any applicable
Governmental Entity, then the Members shall negotiate in good faith to agree
upon an alternative event or transaction that would be permissible under
applicable Competition Laws, and would approximate, as closely as possible, the
intent and contemplated effect of the original Filing Event.
 
ARTICLE 16.
FORMATION OF ADDITIONAL ENTITIES
 
16.1  Formation of U.S. Subsidiaries. The Members agree that each Facility
located in the United States may be held through a Wholly-Owned Subsidiary of
the Joint Venture Company, where such Wholly-Owned Subsidiary is established,
organized or incorporated within the United States (each, a “U.S. Facilities
Company”). Unless the Members agree in writing otherwise, each U.S. Facilities
Company shall be owned directly or indirectly by the Joint Venture Company. Each
U.S. Facilities Company shall be an entity that may elect, and shall elect, to
be treated as a disregarded entity or a partnership for U.S. federal income tax
purposes, as appropriate. The Members agree that the charter and other
organizational documents of each U.S. Facilities Company and all contractual and
other arrangements between the Joint Venture Company and such U.S. Facilities
Company, and between the Members and the U.S. Facilities Company, shall have
such terms and conditions as shall be necessary to achieve the purposes of the
Members in entering into this Agreement and the Joint Venture Documents and to
achieve as closely as practicable the same beneficial results (including with
respect to Joint Venture Products produced by such U.S. Facilities Company and
the pricing thereof; tax matters, financial accounting matters, assets to be
distributed, and rights provided, on dissolution and liquidation; profits;
losses; distributions; governance; control and the like) for the
 
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Members as would be achieved if the Facility held by such U.S. Facilities
Company were held directly by the Joint Venture Company.
 
16.2  Intentionally Omitted.
 
ARTICLE 17.  
DEADLOCK; OTHER DISPUTE RESOLUTION; EVENT OF DEFAULT
 
17.1  Deadlock. “Deadlock” shall occur with respect to any matter for which an
affirmative vote by at least one Manager appointed by each Member is required
for approval, and such matter is not approved as a result of a vote in which a
majority of the Managers appointed by one Member (or the sole Manager appointed
by a Member, if there is only one) have voted against the matter and a majority
of the Managers appointed by the other Member (or the sole Manager appointed by
the other Member, if there is only one) have voted for the matter other than an
Intel Matter or a Micron Matter (a “Tie Vote”) on a matter submitted to it at a
meeting or in the form of a proposed written consent, and during the [***]
period following this Tie Vote, the Board of Managers is unable or fails to
break the Tie Vote (if the matter is presented in the form of a proposed written
consent, the [***] period shall commence on the date that the Manager who was
last to receive the proposal received it). During this [***] period, the Board
of Managers shall seek in good faith to hold at least [***] ([***]) additional
meetings at which it shall make a good faith effort to break the Deadlock. To
the extent practicable, the Board of Managers shall seek to resolve the matter
in a manner consistent with the Joint Venture Company’s then-current Approved
Business Plan. The additional meetings shall be held at the time and place
agreed to by the Managers, or if the Managers are unable to agree, at a time and
place determined by the Authorized Officers, or the Chief Executive Officer, as
applicable, on at least two (2) days’ written notice.
 
17.2  Resolution of Deadlock.
 
(A)  If a Deadlock occurs, (i) if the matter is an Intel Matter, the matter
shall be resolved in the manner specified by the Authorized Representative of
Intel, whose decision shall be final and binding on the Joint Venture Company
and its Subsidiaries, (ii) if the matter is a Micron Matter, the matter shall be
resolved in the manner specified by the Authorized Representative of Micron,
whose decision shall be final and binding on the Joint Venture Company and its
Subsidiaries, and (iii) if the matter is neither an Intel Matter nor a Micron
Matter, the Joint Venture Company shall (a) first submit the matter that was the
subject of the Deadlock to the Authorized Representatives of the Members by
providing notice of the Deadlock to the Members, and the Authorized
Representatives of the Members shall then make a good faith effort to resolve
the dispute and break the Deadlock within [***] of the Members’ receiving notice
of the Deadlock and (b) next, if the Deadlock is still not resolved, submit the
matter to the Senior Authorized Representatives for each of the Members, who
shall then make a good faith effort to resolve the Deadlock within [***] of
submission to the Senior Authorized Representatives. If the matter remains
unresolved, then the Members shall submit the Deadlock to non-binding mediation.
Either Member may initiate the non-binding meditation by providing to JAMS and
the other Member a written request for mediation, setting forth the subject of
the Deadlock. The Members will cooperate with JAMS and with one another in
selecting a retired judge from JAMS panel of neutrals, and in scheduling the
mediation proceedings. The Members
 
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covenant that they will participate in the mediation in good faith, and that
they will share equally in its costs. The provisions of this Section 17.2 may be
enforced by any court of competent jurisdiction, and the Member seeking
enforcement shall be entitled to an award of all costs, fees and expenses,
including attorneys’ fees, to be paid by the Member against whom enforcement is
ordered.
 
(B)  Notwithstanding the foregoing, if the Board of Managers fails to approve a
specific loading plan for a given Fab, then the Members may designate the
loading for such Fab in accordance with their respective Sharing Interests.
 
17.3  Definition of “Intel Matters.” For purposes of this Agreement, “Intel
Matter” means any matter that is unanimously agreed in writing by the Members to
be an Intel Matter.
 
17.4  Definition of “Micron Matters.” For purposes of this Agreement, “Micron
Matter” means any matter that is unanimously agreed in writing by the Members to
be a Micron Matter.
 
17.5  Other Dispute Resolution. In the event of any other dispute over a
purported breach of this Agreement (a “Dispute”), the Members shall endeavor to
settle, through their respective designees to the Board of Managers, the
Dispute. All Disputes arising under this Agreement that are not resolved by the
Board of Managers shall be resolved as follows: the Joint Venture Company shall
first submit the matter to the Authorized Representatives of the Members by
providing notice of the Dispute to the Members. The Authorized Representatives
of the Members shall then make a good faith effort to resolve the Dispute. If
they are unable to resolve the Dispute within [***] of receiving notice of the
Dispute, the matter shall then be submitted to the Senior Authorized
Representatives of the Members, who shall then make a good faith effort to
resolve the Dispute. If the Dispute cannot be resolved within [***] of
submission of the matter to the Senior Authorized Representatives of the
Members, then a civil action with respect to the Dispute may be commenced, but
only after the matter has been submitted to JAMS for mediation as contemplated
by Section 17.6.
 
17.6  Mediation. If there is a Dispute, either Member may commence mediation by
providing to JAMS and the other Member a written request for mediation, setting
forth the subject of the Dispute and the relief requested. The Members will
cooperate with JAMS and with one another in selecting a mediator from JAMS panel
of neutrals, and in scheduling the mediation proceedings. The Members covenant
that they will participate in the mediation in good faith, and that they will
share equally in its costs. All offers, promises, conduct and statements,
whether oral or written, made in the course of the mediation by any of the
Members, their agents, employees, experts and attorneys, and by the mediator and
any JAMS employees, are confidential, privileged and inadmissible for any
purpose, including impeachment, in any litigation or other proceeding involving
the Members, provided that evidence that is otherwise admissible or discoverable
shall not be rendered inadmissible or non-discoverable as a result of its use in
the mediation. Either Member may seek equitable relief prior to the mediation to
preserve the status quo pending the completion of that process. Except for such
an action to obtain equitable relief, neither Member may commence a civil action
with respect to a Dispute until after the completion of the initial mediation
session, or [***] after the date of filing the written request for mediation,
whichever occurs first. Mediation may continue after the
 
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commencement of a civil action, if the Members so desire. The provisions of this
Section may be enforced by any court of competent jurisdiction, and the Member
seeking enforcement shall be entitled to an award of all costs, fees and
expenses, including attorneys’ fees, to be paid by the Member against whom
enforcement is ordered.
 
17.7  Event of Default.
 
(A)  An “Event of Default” shall occur if a Member (the “Defaulting Member”)
fails to perform any material obligation under this Agreement or any of the
Joint Venture Documents to which it is a party.
 
(B)  Upon the occurrence of an Event of Default, the Joint Venture Company and
the other Member (the “Non-Defaulting Member”) shall each have the right to
deliver to the Defaulting Member notice (a “Notice of Default”). The Notice of
Default shall set forth the nature of the obligations that the Defaulting Member
has failed to perform. If the Defaulting Member fails to cure the Event of
Default within the Cure Period, the Non-Defaulting Member may take any of the
actions set forth in Section 17.7(C). For purposes hereof, “Cure Period” means a
period commencing on the date that the Notice of Default is provided by the
Non-Defaulting Member or the Joint Venture Company and ending (i) thirty (30)
days after Notice of Default is so provided, or (ii) in the case of any
obligation (other than an obligation to pay money) which cannot reasonably be
cured within such thirty (30) day period, such longer period not to exceed one
hundred twenty (120) days after the Notice of Default as is necessary to effect
a cure of the Event of Default, so long as the Defaulting Member diligently
attempts to effect a cure throughout such period.
 
(C)  Upon the occurrence of an Event of Default and the expiration of the Cure
Period set forth in Section 17.7(B), the Non-Defaulting Member may request the
Joint Venture Company to pursue all legal and equitable rights and remedies
against the Defaulting Member available to it (subject to any limitations in the
agreement containing the obligation that was not performed) or may pursue its
own legal and equitable rights and remedies against the Defaulting Member
(subject to any limitations in the agreement containing the obligation that was
not performed); provided, however, that the Non-Defaulting Member may seek
dissolution of the Joint Venture Company under such circumstances only if
expressly permitted pursuant to Section 13.1(A)(4). The Defaulting Member shall
pay all costs, including attorneys’ fees, incurred by the Joint Venture Company
and the other Member in pursuing such legal remedies.
 
17.8  Specific Performance. The Parties agree that irreparable damage will
result if this Agreement is not performed in accordance with its terms, and the
parties agree that any damages available at law for a breach of this Agreement
would not be an adequate remedy. Therefore, the provisions hereof and the
obligations of the parties hereunder shall be enforceable in a court of equity,
or other tribunal with jurisdiction, by a decree of specific performance, and
appropriate preliminary or permanent injunctive relief may be applied for and
granted in connection therewith. Except as otherwise limited by this Agreement,
such remedies and all other remedies provided for in this Agreement shall,
however, be cumulative and not exclusive and shall be in addition to any other
remedies that a party may have under this Agreement; provided, however, that in
no event shall the dissolution of the Joint Venture Company be permitted unless
it is expressly permitted by Section 13.1(A).
 
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17.9  Tax Matters. Notwithstanding anything in this Article 17 to the contrary,
the resolution of disputes concerning tax matters governed by Section 10.6(B)
shall be governed by Section 10.6(B) of this Agreement.
 
ARTICLE 18.  
MISCELLANEOUS PROVISIONS
 
18.1  Notices. All notices to the Joint Venture Company shall be sent addressed
to the Authorized Officers, or the Chief Executive Officer, as applicable, at
the Joint Venture Company’s principal place of business. All notices to a Member
shall be sent addressed to such Member at the address as may be specified by the
Member from time to time in a notice to the Joint Venture Company, provided that
the initial notice address for each Member is as follows:
 
(A)  if to Intel:
 
Intel Corporation
2200 Mission College Blvd.
Mailstop SC4-203
Santa Clara, CA 95054
Attention: General Counsel
Facsimile: (408) 653-8050
 
with a copy to:
 
Intel Corporation
2200 Mission College Blvd.
Mailstop RN6-46
Santa Clara, CA 95054
Attention: [***]
Facsimile: [***]
 
(B)  if to Micron:
 
Micron Technology, Inc.
8000 S. Federal Way
Mail Stop 1-507
Boise, ID 83716
Attn: General Counsel
Facsimile: (208) 368-4537
 
All notices to a Manager shall be sent addressed to such Manager at the address
as may be specified by the Manager from time to time in a notice to the Joint
Venture Company. All notices are effective the next day, if sent by recognized
overnight courier or facsimile, or five (5) days after deposit in the United
States mail, postage prepaid, properly addressed and return receipt requested.
 
18.2  Waiver. The failure at any time of a Member to require performance by any
other Member of any responsibility or obligation required by this Agreement
shall in no way affect a
 
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Member’s right to require such performance at any time thereafter, nor shall the
waiver by a Member of a breach of any provision of this Agreement by any other
Member constitute a waiver of any other breach of the same or any other
provision nor constitute a waiver of the responsibility or obligation itself.
 
18.3  Assignment. This Agreement shall be binding upon and inure to the benefit
of the successors and permitted assigns of each party hereto. Except as
otherwise specifically provided in this Agreement, neither this Agreement nor
any right or obligation hereunder may be assigned or delegated in whole or in
part to any other Person.
 
18.4  Third Party Rights. Nothing in this Agreement, whether express or implied,
is intended or shall be construed to confer, directly or indirectly, upon or
give to any Person other than the Joint Venture Company and the Members any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any covenant, condition or other provision contained herein.
 
18.5  Choice of Law. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Delaware, without
giving effect to the principles of conflict of laws thereof.
 
18.6  Headings. The headings of the Articles and Sections in this Agreement are
provided for convenience of reference only and shall not be deemed to constitute
a part hereof.
 
18.7  Entire Agreement. This Agreement, together with the Appendices, Exhibits
and Schedules hereto and the agreements (including the Confidentiality
Agreement) and instruments expressly provided for herein, together with any
written agreements entered into contemporaneously with this Agreement, as all of
the foregoing may be amended from time to time, constitute the entire agreement
of the parties hereto with respect to the subject matter hereof and supersede
all prior agreements and understandings, oral and written, among the parties
hereto with respect to the subject matter hereof.
 
18.8  Severability. Should any provision of this Agreement be deemed in
contradiction with the laws of any jurisdiction in which it is to be performed
or unenforceable for any reason, such provision shall be deemed null and void,
but this Agreement shall remain in full force in all other respects. Should any
provision of this Agreement be or become ineffective because of changes in
Applicable Law or interpretations thereof, or should this Agreement fail to
include a provision that is required as a matter of law, the validity of the
other provisions of this Agreement shall not be affected thereby. If such
circumstances arise, the parties hereto shall negotiate in good faith
appropriate modifications to this Agreement to reflect those changes that are
required by Applicable Law.
 
18.9  Counterparts. This Agreement may be executed in several counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
 
18.10  Further Assurances. Each Member shall execute such deeds, assignments,
endorsements, evidences of transfer and other instruments and documents and
shall give such further assurances as shall be necessary to perform such
Member’s obligations hereunder. The
 
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obligations of the Members set forth in this Section 18.10 shall survive the
termination of this Agreement.
 
18.11  Consequential Damages. No party shall be liable to any other party under
any legal theory for indirect, special, incidental, consequential or punitive
damages, or any damages for loss of profits, revenue or business, even if such
party has been advised of the possibility of such damages.
 
18.12  Jurisdiction; Venue. Any suit, action or proceeding seeking to enforce
any provision of, or based on any matter arising out of or in connection with,
this Agreement shall be brought in a state or federal court located in Delaware
and each of the parties to this Agreement hereby consents and submits to the
exclusive jurisdiction of such courts (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives, to the
fullest extent permitted by Applicable Law, any objection which it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
in any such court or that any such suit, action or proceeding which is brought
in any such court has been brought in an inconvenient forum. Process in any such
suit, action or proceeding may be served on any party anywhere in the world,
whether within or without the jurisdiction of any such court.
 
18.13  Confidential Information.
 
(A)  The Members shall abide by the terms of that certain Mutual Confidentiality
Agreement between Micron, Intel and the Joint Venture Company dated as of the
Effective Date, and as may be amended or replaced from time to time (the
“Confidentiality Agreement”), which agreement is incorporated herein by
reference with respect to the Joint Venture Company, its Subsidiaries and the
Facilities Companies and the activities of the Joint Venture Company, its
Subsidiaries and the Facilities Companies. The Members agree that the
Confidentiality Agreement shall govern the confidentiality and non-disclosure
obligations between the Members respecting the information provided or disclosed
pursuant to this Agreement as such information relates to the Joint Venture
Company, its Subsidiaries and the Facilities Companies and their activities.
 
(B)  If the Confidentiality Agreement is terminated or expires and is not
replaced, such Confidentiality Agreement shall continue with respect to
confidential information provided in connection with this Agreement,
notwithstanding such expiration or termination, for the duration of the term of
this Agreement or until a new Confidentiality Agreement is entered into between
the Members. To the extent there is a conflict between this Agreement and the
Confidentiality Agreement, the terms of this Agreement shall control.
 
(C)  The terms and conditions of this Agreement shall be considered
“Confidential Information” under the Confidentiality Agreement for which each of
Micron and Intel is considered a “Receiving Party” under such Confidentiality
Agreement.
 
18.14  Certain Interpretive Matters.
 
(A)  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 of the Schedules will
apply only to the
 
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corresponding Section or subsection of this Agreement, (3) each accounting term
not otherwise defined in this Agreement has the meaning commonly applied to it
in accordance with GAAP, except as modified by the definition of “Modified GAAP,
“ (4) words in the singular include the plural and visa versa, (5) the term
“including” means “including without limitation,” (6) the terms “herein,”
“hereof,” “hereunder” and words of similar import shall mean references to this
Agreement as a whole and not to any individual section or portion hereof, and
(7) capitalized terms followed by phrases such as “under any Applicable Joint
Venture Agreement” or “pursuant to any Applicable Joint Venture Agreement” shall
have the respective meanings ascribed to such terms under the Applicable Joint
Venture Agreement. All references to “$” or dollar amounts will be to lawful
currency of the United States of America. All references to “$” or dollar
amounts, or “%” or percent or percentages, shall be to precise amounts and not
rounded up or down. All references to “day” or “days” will mean calendar days.
All references to matters “unanimously agreed in writing by the Members” refer
to other written agreements that remain effective that were entered into on or
prior to the date hereof or written agreements entered into by the Members at
some later date.
 
(B)  No provision of this Agreement will be interpreted in favor of, or against,
any of the parties by reason of the extent to which any such party or its
counsel participated in the drafting thereof or by reason of the extent to which
any such provision is inconsistent with any prior draft of this Agreement or
such provision.
 
[Signature Page Follows]

 

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IN WITNESS WHEREOF, the undersigned being all of the Members of IM Flash
Technologies, LLC organized under the Act, have executed this Agreement as of
the date and year first above written.
 

 
INTEL CORPORATION
 
 
By: __/s/ Ravi Jacob_______________   
 
Name: ___Ravi Jacob______________
 
Title:   _Vice President FES, Treasurer___
   
MICRON TECHNOLOGY, INC.

 
By:  /s/ W.G. Stover, Jr.____________  
 
Name: ___W.G. Stover, Jr._________   
 
Title:   V.P. of Finance and CFO______

THIS IS THE SIGNATURE PAGE FOR THE
AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING AGREEMENT OF IM FLASH
TECHNOLOGIES, LLC
ENTERED INTO BY AND BETWEEN
INTEL CORPORATION AND MICRON TECHNOLOGY, INC.

--------------------------------------------------------------------------------

APPENDIX A
 
IM FLASH TECHNOLOGIES, LLC

 
DEFINITIONS
 
“[***] Fab” means a Fab that has [***] construction, Tool Install and equipment
and process qualification, including all related facilities necessary to
commence production of semiconductor devices and such production output has
reached a minimum level of [***]% of its intended high volume output level (as
measured in Wafer Starts per week).
 
“Accountants” shall have the meaning set forth in Section 10.4(C) of this
Agreement.
 
“Accumulated Distributions Account” shall have the meaning set forth in Section
5.1(C) of this Agreement.
 
“Act” shall have the meaning set forth in Section 1.1 of this Agreement.
 
“Additional Capital Contributions” shall have the meaning set forth in
Section 2.3(C) of this Agreement.
 
“Adjusted Contribution Amount” means, after a Change in Consolidating Member, an
amount equal to the sum of (i) the Consolidating Member’s Pro Rata Share of a
given Additional Capital Contribution and (ii) the portion of the Former
Consolidating Member’s Pro Rata Share of such Additional Capital Contribution
that such Former Consolidating Member is not [***].
 
“Affiliate” means a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the Person specified.
 
“Affiliate Agreements” shall have the meaning set forth in Section 12.2(B)(1) of
this Agreement.
 
“Agreement” shall have the meaning set forth in the preamble of this Agreement.
 
“Annual Budget” shall have the meaning set forth in Section 11.2(B) of this
Agreement.
 
“Applicable Fiscal Quarter” means Micron’s first fiscal quarter in its [***]
fiscal year.
 
“Applicable Joint Venture” or “Applicable Joint Ventures” means the entities
listed on Schedule 5, as such Schedule may be amended from time to time by the
unanimous written agreement of the Members.
 
“Applicable Joint Venture Agreements” means the agreements listed on Schedule 5,
as such Schedule may be amended from time to time by the unanimous written
agreement of the Members.
 
“Applicable Law” means any laws, statutes, rules, regulations, ordinances,
orders, codes, arbitration awards, judgments, decrees or other legal
requirements of any Governmental Entity.
 
Appendix A-1

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“Appointing Member” shall have the meaning set forth in Section 6.2(B) of this
Agreement.
 
“Appraiser” means two nationally recognized investment banking firms (one to be
selected by each Member) and a manufacturing equipment reseller (mutually agreed
upon by the two investment banking firms).
 
“Approved Business Plan” means either an Undisputed Approved Business Plan or a
Disputed Approved Business Plan, as in effect from time to time.
 
“Assembly Plan” means an assembly plan set forth in the Operating Plan, as more
particularly described in Section 11.6(A)(2) of this Agreement.
 
“Associated Assets” means, with respect to any Fab, the Joint Venture Equipment,
inventory and other tangible personal property owned by the Joint Venture
Company or any of its Subsidiaries and located at that Fab on the date of the
Liquidating Event or thereafter and all rights and obligations pursuant to
contracts, permits, governmental approvals and governmental concessions and
incentives associated with such Fab, Joint Venture Equipment, inventory or other
tangible personal property, including all liabilities exclusively associated
with such Fab, except for assets sold or disposed of in any of the following
transactions that occurs after the Liquidating Event: (a) the sale of inventory
in the ordinary course; (b) the sale or other disposition of obsolete or surplus
equipment or other assets to third parties in the ordinary course in
arm’s-length transactions; and (c) the sale of any other asset with the approval
of the Board of Managers. Any transfer of Associated Assets under this Agreement
shall include the assumption by the transferee of the liabilities exclusively
associated with such Fab.
 
“Authorized Officers” means both the Intel Executive Officer and the Micron
Executive Officer.
 
“Authorized Representative” means the principal executive officer of either
Member or any other individual unanimously agreed in writing by the Members to
be an authorized representative of a given Member.
 
“Bankruptcy” shall have the meaning set forth in Section 13.1(B) of this
Agreement.
 
“Board of Managers” shall have the meaning set forth in Section 6.1 of this
Agreement.
 
“Boise Supply Agreement” means that certain agreement, dated as of the Effective
Date, between Micron and the Joint Venture Company to supply products to the
Joint Venture Company.
 
“Book” shall have the meaning set forth in Appendix B to this Agreement.
 
“Business Day” means a day that is not a Saturday, Sunday or other day on which
commercial banking institutions in the State of New York are authorized or
required by Applicable Law to be closed.
 
Appendix A-2

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“Buyout Determination Date” shall have the meaning set forth in Section 13.2 of
this Agreement.
 
“[***] Value” means either (a) or (b) below, determined as follows: each Member
shall select its own Appraiser and the two Appraisers shall mutually select a
third Appraiser. Each Appraiser shall conduct its own independent appraisal to
determine the [***] Value, and the average of the two (2) determinations that
are the closest in value shall be the [***] Value.
 
(a)  With respect to any Facility or U.S. Facilities Company that owns or leases
such Facility ( [***], which are provided for in (b) below), the [***] of the
applicable Facility or [***] of the applicable U.S. Facilities Company, as the
case may be, as of the date [***]. The Appraisers shall be instructed to
consider all factors that in their professional opinion may affect [***] of the
applicable Facility or U.S. Facilities Company, as the case may be, but in any
event [***] Member or the Joint Venture Company.
 
(b)  With respect to [***], or the [***] in the U.S. Facilities Company that
[***], the [***] thereof, as of the date [***] (and the Appraisers shall be
instructed to consider all factors that in their professional opinion may affect
the [***] of the [***] or the [***] in the U.S. Facilities Company that [***]);
provided, however, that if [***], the [***] Value of the [***], or the [***] in
the U.S. Facilities Company that [***], shall be the [***], as of the [***].
 
“Cap Amount” shall have the meaning set forth in Section 12.4(A) of this
Agreement.
 
“Capital Account” shall have the meaning set forth in Section 4.1 of this
Agreement.
 
“Capital Contribution” means, for each Member, any amount contributed or deemed
to be contributed to the Joint Venture Company as a capital contribution,
including (without duplication of any capital contribution in clauses (i) -
(v)):
 

(i)  
the Initial Capital Contribution made by such Member;

 

(ii)  
any Additional Capital Contributions (including any contributions made under
Section 2.4) made by such Member;

 

(iii)  
any portion of a Make-Up Contribution made by such Member equal to the amount of
the principal balance of the Member Note repaid with the Make-Up Contribution;

 

(iv)  
any other capital contributions made by such Member to the Joint Venture Company
as the Members may agree in writing or as provided in the Joint Venture
Documents; and

 

(v)  
any capital contribution deemed made by such Member upon conversion,
contribution or transfer to the Joint Venture Company of a Member Note.

 
“Capital Contribution Balance” means, for each Member, the sum of all Capital
Contributions made to the Joint Venture Company by such Member, minus the sum of
any capital contributions returned or refunded to such Member pursuant to
Article 2 or Article 3. As
 
Appendix A-3

--------------------------------------------------------------------------------

 of the Effective Date, each Member shall, for purposes of determining its
Capital Contribution Balance, receive full credit for its Initial Capital
Contribution.
 
“Certificate” shall have the meaning set forth in Section 1.1 of this Agreement.
 
“Chairman” shall have the meaning set forth in Section 6.2(C) of this Agreement.
 
“Change in Consolidating Member” means a change in the Member that is required
under GAAP to consolidate the financial results of the Joint Venture Company
with its financial results.
 
“Chief Executive Officer” shall have the meaning set forth in Section 8.4 of
this Agreement.
 
“Chief Financial Officer” shall have the meaning set forth in Section 8.3(D) of
this Agreement.
 
“Code” means the Internal Revenue Code of 1986, as amended.
 
“Committed Capital” means, for a Member, on a given date, the sum of (1) the
Capital Contribution Balance of such Member through such date and (2) the
principal and accrued interest (provided, that for purposes of this definition,
accrued interest shall be accrued only on the first day of each Fiscal Month)
owed to such Member under any Member Debt Financing outstanding on such date.
 
“Competition Laws” means the Sherman Antitrust Act of 1890, as amended, the
Clayton Act of 1914, as amended, the HSR Act, the Federal Trade Commission Act,
as amended, and all other domestic or foreign Applicable Laws issued by a
domestic or foreign Governmental Entity that are designed or intended to
prohibit, restrict or regulate actions having the purpose or effect of
monopolization or restraint of trade or lessening of competition through merger
or acquisition.
 
“Competitively Sensitive Information” means any information, in whatever form,
that has not been made publicly available relating to products and services that
a Member sells in competition with the other Member at the execution of this
Agreement or thereafter during the Term including, without limitation, NAND
Flash Memory Product, to the extent such information of the Member selling such
products and services includes price or any element of price, customer terms or
conditions of sale, Member-specific costs, volume of sales, output (but not
including the Joint Venture Company’s output), or bid terms of the foregoing
type and such similar information as is specifically identified electronically
or in writing to the Joint Venture Company by a Member as competitively
sensitive information.
 
“Completion” with respect to a Fab, means the time at which the Fab has
successfully completed Process Qualification/Certification and is capable of
manufacturing completed semiconductor devices.
 
“Confidentiality Agreement” shall have the meaning set forth in Section 18.13 of
this Agreement.
 
Appendix A-4

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“Conforming Wafer” means a NAND Flash Memory Wafer with greater than [***]
percent ([***]%) functional die, or that is otherwise accepted by a Member.
 
“Consolidating Floor Amount” shall have the meaning set forth in Section 12.4(B)
of this Agreement.
 
“Consolidating Member” means the Member that is required to consolidate the
financial results of the Joint Venture Company with its financial results under
GAAP.
 
“Consolidating Option Percent” shall have the meaning set forth in Section
12.4(B) of this Agreement.
 
“Continuing Mandatory Notes” shall have the meaning set forth in Section 3.1(E)
of this Agreement.
 
“Cure Period” shall have the meaning set forth in Section 17.7(B) of this
Agreement.
 
“Deadlock” shall have the meaning set forth in Section 17.1 of this Agreement.
 
“Defaulting Member” shall have the meaning set forth in Section 17.7(A) of this
Agreement.
 
“DGCL” means the Delaware General Corporation Law (Del. Code Ann. tit. 8 §§101
et seq.).
 
“Dispute” shall have the meaning set forth in Section 17.5 of this Agreement.
 
“Disputed Approved Business Plan” shall have the meaning set forth in
Section 11.2(D)(2) of this Agreement.
 
“Distribution Entitlement” means with respect to any proposed distribution under
Section 5.1(A)(4) to a Member, the amount, if any, equal to the Member’s Sharing
Interest (as such Sharing Interest is determined immediately after any payments
made under Sections 5.1(A)(1), (2) and (3)) multiplied by the aggregate,
cumulative distributions (not including any payments made pursuant to Sections
5.1(A)(1), (2) and (3) but including the amount to be distributed to such Member
in such proposed distribution under Section 5.1(A)(4)).
 
“Divestiture Action” shall have the meaning set forth in Section 15.1(C)(5) of
this Agreement.
 
“DRAM” has the meaning set forth in that certain [***] Agreement, dated [***],
between Intel and Micron.
 
“Economic Interest” means, for each Member, a percentage determined from time to
time by dividing the Committed Capital of such Member at the time of
determination by the aggregate Committed Capital of all Members at the time of
determination.
 
“Effective Date” shall mean January 6, 2006.
 
Appendix A-5

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“Event of Default” shall have the meaning set forth in Section 17.7(A) of this
Agreement.
 
“Executive Indemnified Party” shall have the meaning set forth in
Section 14.2(A) of this Agreement.
 
“[***] Budget” shall have the meaning set forth in Section 11.1(B) of this
Agreement.
 
“[***] Capital Contribution” shall mean an Additional Capital Contribution of
funds required by the Joint Venture Company as set forth in the [***] Budget of
the Initial Business Plan, as it may be modified in accordance with Section
11.1(C)(2).
 
“Fab” means a manufacturing facility for manufacturing NAND Flash Memory Wafers
and shall include the related automated material handling system (AMHS), process
tools, and support tools/fixtures used for manufacturing NAND Flash Memory
Wafers in the cleanroom, sub fab and all related laboratories. It also includes
all non-clean support equipment and gas and chemical delivery systems required
to support the production tools in the Fab.
 
“Fab Criteria” means a Fab capable of producing a minimum of [***] and a maximum
of [***] Wafer Starts per week.
 
“Facilities Company” means a U.S. Facilities Company or a Foreign Facilities
Company.
 
“Facility” means a Fab and its Associated Assets that are owned or leased by the
Joint Venture Company or any of its Subsidiaries.
 
“Filing” shall have the meaning set forth in Section 15.1 of this Agreement.
 
“Filing Event” shall have the meaning set forth in Section 15.1 of this
Agreement.
 
“Financial Officer” shall have the meaning set forth in Section 8.3(D) of this
Agreement.
 
“First Singapore Fab” means the initial Fab that is, or is to be, located in
Singapore and owned or leased by the Singapore Joint Venture Company as
contemplated by the Singapore Initial Business Plan existing on the date of the
Singapore Agreement.
 
“Fiscal Month” means the fiscal month of the Joint Venture Company as determined
by the Board of Managers from time to time, and, initially, the period
commensurate with Micron’s fiscal month; provided that, if the Member with whom
the Joint Venture Company’s financial statements are consolidated changes prior
to the end of any Fiscal Month, the Fiscal Month shall, at such Member’s
discretion, change to be commensurate with the Fiscal Month of such Member at
such time as such Member may thereafter specify.
 
“Fiscal Quarter” means the fiscal quarter of the Joint Venture Company as
determined by the Board of Managers from time to time, and, initially, the
period commensurate with Micron’s fiscal quarter; provided that, if the Member
with whom the Joint Venture Company’s financial statements are consolidated
changes prior to the end of any Fiscal Quarter, the Fiscal
 
Appendix A-6

--------------------------------------------------------------------------------

Year shall, at such Member’s discretion, change to be commensurate with the
Fiscal Quarter of such Member at such time as such Member may thereafter
specify.
 
“Fiscal Year” means the fiscal year of the Joint Venture Company as determined
by the Board of Managers from time to time, and corresponding to the fiscal year
of the Member having the greater Percentage Interest, initially, the period
commencing as of the Effective Date and ending August 31, 2006 and thereafter a
fifty-two (52) or fifty-three (53) week period ending on the Thursday closest to
August 31 of each year; provided that, if the Member with whom the Joint Venture
Company’s financial statements are consolidated changes prior to the end of any
Fiscal Year, the Fiscal Year shall, at such Member’s discretion, change to be
commensurate with the Fiscal Year of such Member at such time as such Member may
thereafter specify.
 
“Flash Memory Integrated Circuit” means a non-volatile memory integrated circuit
that contains memory cells that are electrically programmable and electrically
erasable whereby the memory cells consist of one or more transistors that have a
floating gate, charge-trapping regions or any other functionally equivalent
structure utilizing one or more different charge levels (including binary or
multi-level cell structures) with or without any on-chip control, I/O and other
support circuitry.
 
“Floor Amount” shall have the meaning set forth in Section 12.4(A) of this
Agreement.
 
“Foreign Facilities Company” means a separate legal entity that owns or leases a
Facility outside of the United States, the equity of which is owned by the
Members or their Relatives.
 
“Former Consolidating Member” means the Member that was required to consolidate
the financial results of the Joint Venture Company with its financial results
under GAAP immediately prior to a Change in Consolidating Member.
 
“Funding Member” shall have the meaning set forth in Section 3.1(A) of this
Agreement.
 
“Funding Member Portion” means that portion of the amount of a Funding Member’s
Additional Capital Contribution that is deemed to be a loan (rather than a
Capital Contribution) as part of a Member Debt Financing, which amount is
determined by [***] the Funding Member’s [***] of such Additional Capital
Contribution (whether or not contributed in full) [***] is the amount actually
loaned to the Joint Venture Company by the Funding Member in respect of the
Shortfall Amount and the [***] is the Non-Funding Member’s [***] of the
Additional Capital Contribution.
 
“GAAP” means United States generally accepted accounting principles as in effect
from time to time.
 
“Governmental Entity” means any governmental authority or entity, including any
agency, board, bureau, commission, court, department, subdivision or
instrumentality thereof, or any arbitrator or arbitration panel.
 
Appendix A-7

--------------------------------------------------------------------------------

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
 
“Indemnified Party” shall have the meaning set forth in Section 14.2(A) of this
Agreement.
 
“Independent Member” shall have the meaning set forth in Section 6.3(B)(1) of
this Agreement.
 
“Initial Business Plan” shall have the meaning set forth in Section 11.1(A) of
this Agreement.
 
“Initial Capital Contribution” means the total amount of money or other property
initially contributed or agreed to be contributed to the Joint Venture Company
by a Member pursuant to Section 2.1, as set forth on Appendix D.
 
“Initial Period” shall have the meaning set forth in Section 11.1(A) of this
Agreement.
 
“Initial Term” shall have the meaning set forth in Section 1.3 of this
Agreement.
 
“Intel” shall have the meaning set forth in the preamble of this Agreement.
 
“Intel Additional Cash” shall have the meaning set forth on Appendix D.
 
“Intel Executive Officer” shall have the meaning set forth in Section 8.1(A) of
this Agreement.
 
“Intel Initial Contributed Assets” means the total amount of money or other
property contributed or agreed to be contributed to the Joint Venture Company by
Intel as of the Effective Date, as described on Appendix D.
 
“Intel Matter” shall have the meaning set forth in Section 17.3 of this
Agreement.
 
“Intel Maximum Incremental Capital Amount” means $[***]. Such amount does not
include any funds contributed as part of Intel’s Initial Capital Contribution.
 
“Intel Personnel Secondment Agreement” means that certain Intel Personnel
Secondment Agreement, dated as of the Effective Date, by and between the Joint
Venture Company and Intel, as amended.
 
“Intel [***]” has the meaning set forth in that certain [***] Agreement, dated
[***], between Intel and Micron.
 
“Intellectual Property Rights” shall have the meaning set forth in Section
10.5(B)(6) of this Agreement.
 
“Interest” means the ownership interest of a Member in the Joint Venture
Company, including any and all benefits to which a Member may be entitled under
this Agreement and the obligations of a Member under this Agreement, including,
without limitation, the right to vote or
 
Appendix A-8

--------------------------------------------------------------------------------

to participate in the management of the Joint Venture Company, and the right to
information concerning the business and affairs of the Joint Venture Company and
its Subsidiaries.
 
“Interested Member” shall have the meaning set forth in Section 6.3(B)(1) of
this Agreement.
 
“Interested Member Transaction” shall have the meaning set forth in Section
6.3(B)(2) of this Agreement.
 
“Issuance Date” shall have the meaning set forth in Section 3.1(C) of this
Agreement.
 
“JAMS” means Judicial Arbitration and Mediation Services.
 
“Joint Development Committee” shall have the meaning ascribed to such term in
the Joint Development Program Agreement, dated as of the Effective Date, between
Micron and Intel.
 
“Joint Venture Company” shall have the meaning set forth in preamble of this
Agreement.
 
“Joint Venture Documents” shall have the meaning ascribed to such term in the
Master Agreement.
 
“Joint Venture Equipment” means all of the personal property, equipment and
tangible assets owned by the Joint Venture Company or any of its Subsidiaries.
 
“Joint Venture Products” means all NAND Flash Memory Products and any other
memory products that the Joint Venture Company and its Subsidiaries shall
produce.
 
“Joint Venture Reportable Event” shall have the meaning set forth in
Section 10.5(B) of this Agreement.
 
“Lead Controller” shall have the meaning set forth in Section 8.3(A) of this
Agreement.
 
“Lehi Fab” means the Fab to be built out by the Joint Venture Company or one of
its Subsidiaries at Lehi, Utah.
 
“Lehi Lease” shall have the meaning ascribed to such term in the Master
Agreement.
 
“Lehi Property” means the Lehi Contributed Property (as defined in the Lehi
Lease) and all personal property, equipment and other tangible assets that are
conveyed to the Joint Venture Company pursuant to the Lehi Bill of Conveyance.
 
“[***]” means the [***] in effect from time to time (as reported in the [***]).
 
“Liquidating Event” shall have the meaning set forth in Section 13.1(A) of this
Agreement.
 
Appendix A-9

--------------------------------------------------------------------------------

“Liquidation Date” shall have the meaning set forth in Section 13.13(A) of this
Agreement.
 
“Loan Amount” means [***] (1) the [***] of (a) the Non-Funding Member’s full Pro
Rata Share of an Additional Capital Contribution, [***] (b) a [***] is the
amount of the Additional Capital Contribution actually contributed by the
Funding Member and the [***] is the Funding Member’s [***] of such Additional
Capital Contribution and (2) the amount of such Additional Capital Contribution
actually contributed by the Non-Funding Member.
 
“Majority Member” shall have the meaning set forth in Section 12.5(A) of this
Agreement.
 
“Make-Up Contribution” means a Capital Contribution made by a Non-Funding Member
in respect of a Shortfall Amount (but not including any interest thereon).
 
“Management Conversion Date” shall have the meaning set forth in Section 8.1(A)
of this Agreement.
 
“Manager” shall have the meaning set forth in Section 6.2(A) of this Agreement.
 
“Mandatory Equalization Note” shall have the meaning set forth in Section 3.1(B)
of this Agreement.
 
“Mandatory Member Debt Financing” means Member Debt Financing made in accordance
with Section 3.1 of this Agreement.
 
“Mandatory Notes” shall have the meaning set forth in Section 3.1(B) of this
Agreement.
 
“Mandatory Shortfall Note” shall have the meaning set forth in Section 3.1(B) of
this Agreement.
 
“Manufacturing Committee” means a manufacturing committee established by the
unanimous written agreement of the Members.
 
“Manufacturing Plan” means a manufacturing plan set forth in the Operating Plan,
as described more particularly in Section 11.6(A)(1) of this Agreement.
 
“Master Agreement” means that certain Master Agreement, by and between Intel and
Micron, dated as of November 18, 2005.
 
“Maximum Incremental Capital Amount” means $[***]. Such amount does not include
any funds contributed as Initial Capital Contributions.
 
“Member” or “Members” shall have the meaning set forth in the preamble of this
Agreement.
 
“Member Business Plan” shall have the meaning set forth in Section 11.2(D)(2) of
this Agreement.
 
Appendix A-10

--------------------------------------------------------------------------------

“Member Change of Control” means (i) any consolidation, merger,
recapitalization, liquidation or other extraordinary transaction involving a
Member pursuant to which such Member’s stockholders immediately prior to such
consolidation, merger, recapitalization, liquidation or other extraordinary
transaction own, immediately after such consolidation, merger, recapitalization,
liquidation or other extraordinary transaction securities representing less than
50% of the combined voting power of all voting securities of the surviving
entity; (ii) any transaction or series of related transactions as a result of
which securities representing 50% or more of the combined voting power of all
voting securities of such Member are sold, conveyed, transferred, assigned or
pledged, either directly or indirectly, to persons other than such Member’s
stockholders immediately prior to such transaction or series of transactions; or
(iii) the sale, conveyance, transfer or assignment, either directly or
indirectly, of all or substantially all of the assets of such Member, in one
transaction or a series of related transactions, to a person that does not
control, is not controlled by and is not under common control with such Member.
 
“Member Debt Financing” as of any date shall mean all loans to the Joint Venture
Company under Article 3 of this Agreement.
 
“Member [***] Budget” shall have the meaning set forth in
Section 11.1(C)(2)(a)(ii) of this Agreement.
 
“Member [***] Budget” shall have the meaning set forth in
Section 11.1(C)(2)(b)(ii) of this Agreement.
 
“Member Notes” means any promissory notes issued under Article 3 of this
Agreement, including a Mandatory Shortfall Note, Mandatory Equalization Note,
Continuing Mandatory Note, Optional [***] Shortfall Note, Optional [***]
Equalization Note or Optional Other Shortfall Note outstanding pursuant to the
terms of this Agreement.
 
“Member Plan Amendment” shall have the meaning set forth in Section 11.2(E)(4)
of this Agreement.
 
“Member Reportable Events” shall have the meaning set forth in Section 10.5(A)
of this Agreement.
 
“Micron” shall have the meaning set forth in the preamble of this Agreement.
 
“Micron Additional Cash” shall have the meaning set forth on Appendix D.
 
“Micron Executive Officer” shall have the meaning set forth in Section 8.2(A) of
this Agreement.
 
“Micron Initial Contributed Assets” means the total amount of money or other
property contributed or agreed to be contributed to the Joint Venture Company by
Micron as of the Effective Date, as described on Appendix D.
 
“Micron Matter” shall have the meaning set forth in Section 17.4 of this
Agreement.
 
Appendix A-11

--------------------------------------------------------------------------------

“Micron Maximum Incremental Capital Amount” means $1,457,904,917. Such amount
does not include any funds contributed as part of Micron’s Initial Capital
Contribution.
 
“Micron Minority Closing” shall have the meaning set forth in Section 12.5(C)(1)
of this Agreement.
 
“Micron [***] Purchase Option” means any covenant unanimously agreed in writing
by the Members that grants Micron the right to purchase the [***] or the [***]
of the U.S. Facilities Company that [***].
 
“Micron Personnel Secondment Agreement” means that certain Micron Personnel
Secondment Agreement, dated as of the Effective Date, by and between the Joint
Venture Company and Micron, as amended.
 
“Minority Closing” shall have the meaning set forth in Section 12.5(A) of this
Agreement.
 
“Minority Closing Price” shall have the meaning set forth in Section 12.5(B) of
this Agreement.
 
“Minority Member” shall have the meaning sent forth in Section 12.5(A) of this
Agreement.
 
“Model of Record” or “MOR” means a representation of the POR and TOR for use in
determining the number of tools required to produce a specific number of
semiconductor wafers. The MOR includes assumptions used to model overall tool
throughput and productivity as well as assumptions on process yield.
 
“Modified GAAP” means United States generally accepted accounting principles as
in effect from time to time, except that: (i) stock-related expenses (including
stock options, restricted stock, stock appreciation rights, restricted stock
units, stock purchase programs or any award based on equity of Micron or Intel)
associated with the seconded individuals to the Joint Venture Company will not
be recorded or disclosed in the financial statements of the Joint Venture
Company; and (ii) the value of any asset contributed or otherwise transferred to
the Joint Venture Company from a Member shall be the value as agreed upon by the
Members at the time of the contribution or transfer, as applicable, and, if such
asset is to be depreciated or amortized under GAAP, the useful life and method
of depreciation or amortization for such assets shall be determined by applying
the accounting policies used by the Joint Venture Company for like assets.  The
value of the [***], the [***] and the [***] shall be the value specified with
respect to such items in Appendix D.
 
“Monthly Flash Report” means operating performance metrics reasonably acceptable
to each Member for the most recent month.
 
“Monthly Operating Report” shall have the meaning set forth in
Section 11.6(A)(4) of this Agreement.
 
“MTV Assets” means the Associated Assets at the Fab located at the [***].
 
Appendix A-12

--------------------------------------------------------------------------------

“MTV Lease” shall have the meaning ascribed to such term in the Master
Agreement.
 
“NAND Flash Memory Die” means a discrete integrated circuit die, wherein such
die includes at least one NAND Flash Memory Integrated Circuit and such die is
designed, developed, marketed and used primarily as a non-volatile memory die.
 
“NAND Flash Memory Die Package” means a discrete integrated circuit package for
a NAND Flash Memory Die, including TSOP, COB, BOC, BGA and FBGA or other type
package, wherein such package contains only one or more NAND Flash Memory Die
but no other die.
 
“NAND Flash Memory Integrated Circuit” means a Flash Memory Integrated Circuit
wherein the memory cells included in the Flash Memory Integrated Circuit are
arranged in groups of serially connected memory cells (each such group of
serially connected memory cells called a “string”) in which the drain of each
memory cell of a string (other than the first memory cell in the string) is
connected in series to the source of another memory cell in such string, the
gate of each memory cell in such string is directly accessible, and the drain of
the uppermost bit of such string is coupled to the bitline of the memory array.
 
“NAND Flash Memory Product” means any NAND Flash Memory Wafer, NAND Flash Memory
Die or NAND Flash Memory Die Package.
 
“NAND Flash Memory Wafer” means a prime wafer that has been processed to the
point of containing multiple NAND Flash Memory Die and that has undergone Probe
Testing, but before singulation of said die into individual semiconductor die.
 
“Net Book Value” means, with respect to (i) any assets, the value thereof, net
of accumulated depreciation, amortization and other adjustments, as would be
included in a consolidated balance sheet of the entity owning such assets
prepared in accordance with Modified GAAP, (ii) any liabilities, the amount
thereof as would be included in a consolidated balance sheet of the entity
having the liabilities prepared in accordance with Modified GAAP and (iii) any
equity security of a U.S. Facilities Company or other entity, (a) the value of
the assets of such entity, net of accumulated depreciation, amortization or
other adjustments, as would be included in a consolidated balance sheet of the
entity prepared in accordance with Modified GAAP, minus the amount of the
liabilities of such entity, as would be included in a consolidated balance sheet
of such entity prepared in accordance with Modified GAAP, multiplied by (b) a
percentage equal to the percentage of the equity of such entity represented by
such equity security.
 
“[***]” means any Fab that is, or is to be, owned or leased by the Joint Venture
Company, any of its Subsidiaries or any Facilities Company other than the [***].
 
“[***] Budget” shall have the meaning set forth in Section 11.1(B).
 
“[***] Capital Contribution” shall mean any Additional Capital Contribution to
be made by the Members, as contemplated by an Approved Business Plan, to make
[***] an Operational Fab, but only in the event that the [***] for [***] is
reasonably expected to begin before [***].
 
Appendix A-13

--------------------------------------------------------------------------------

“[***]” means the first Fab that is, or is to be, owned or leased by the Joint
Venture Company, any of its Subsidiaries or any Facilities Company other than
[***].
 
“Non-Defaulting Member” shall have the meaning set forth in Section 17.7 of this
Agreement.
 
“Non-Funding Member” shall be the Member that is determined not to be the
Funding Member in accordance with Section 3.1(A) of this Agreement.
 
“Notice of Default” shall have the meaning set forth in Section 17.7(B) of this
Agreement.
 
“Operating Plan” shall have the meaning set forth in Section 11.6(A) of this
Agreement
 
“Operational Fab” means a Fab that has completed construction, Tool Install and
equipment and process qualification, including all related facilities necessary
to commence production of semiconductor devices and such production output has
reached a minimum level of [***]% of its intended high volume output level (as
measured in [***]).
 
“Option Percent” shall have the meaning set forth in Section 12.4(A) of this
Agreement.
 
“Option Price” shall have the meaning set forth in Section 12.5(B) of this
Agreement.
 
“Optional [***] Equalization Note” shall have the meaning set forth in
Section 3.2(B) of this Agreement.
 
“Optional [***] Financing” shall have the meaning set forth in Section 3.2(A) of
this Agreement.
 
“Optional [***] Loan Amount” shall have the meaning set forth in Section 3.2(B)
of this Agreement.
 
“Optional [***] Notes” shall have the meaning set forth in Section 3.2(B) of
this Agreement.
 
“Optional [***] Shortfall Note” shall have the meaning set forth in
Section 3.2(B) of this Agreement.
 
“Optional Other Financing” shall have the meaning set forth in Section 3.3(A) of
this Agreement.
 
“Optional Other Shortfall Note” shall have the meaning set forth in Section
3.3(B) of this Agreement.
 
“Original Agreement” shall have the meaning set forth in Recital A of this
Agreement.
 
“Other Capital Contributions” shall have the meaning set forth in Section 2.3(C)
of this Agreement.
 
Appendix A-14

--------------------------------------------------------------------------------

“Percentage Interest” means, at any time of determination, with respect to any
Member, a percentage determined by dividing such Member’s Capital Contribution
Balance at the time of determination by the aggregate Capital Contribution
Balances of all Members at the time of determination.
 
“Person” or “Persons” means any natural person and any corporation, firm,
partnership, trust, estate, limited liability company, or other entity resulting
from any form of association.
 
“Premises” shall have the meaning ascribed to such term in the [***].
 
“Probe Testing” means testing, using a wafer test program as set forth in the
applicable specifications, of a wafer that has completed all processing steps
deemed necessary to complete the creation of the desired NAND Flash Memory
Integrated Circuits in the die on such wafer, the purpose of which test is to
determine how many and which of the die meet the applicable criteria for such
die.
 
“Process of Record” or “POR” means documents and/or systems that specify a
series of operations that a semiconductor wafer must process through. The POR
includes the process recipes and parameters at each operation for the specified
Tool of Record.
 
“Product” shall have the meaning set forth in the Supply Agreements.
 
“Product Design Committee” shall have the meaning set forth in the Product
Design Committee Agreement.
 
“Product Design Committee Agreement” shall mean the Product Design Committee
Agreement, dated as of the Effective Date, by and between Micron and Intel, as
amended.
 
“Product Design Roadmap” shall have the meaning set forth in the Product Design
Committee Agreement.
 
“Proposed Business Plan” shall have the meaning set forth in Section 11.2(A) of
this Agreement.
 
“Pro Rata Share” means the pro rata share of a Member determined in accordance
with the Members’ respective Percentage Interests at the time of the
determination.
 
“Purchase Value” means an amount equal to the [***] value to Micron of the right
to purchase under the terms of the Supply Agreement - Micron the output of the
Joint Venture Product that will be shifted from Micron to Intel as a result of
the adjustment in the Sharing Interests of the Members following the exercise of
the purchase right (and the resulting shift in the Members’ Capital Contribution
Balances) provided for in either Section 12.4(A) or Section 12.4(B), such
[***]value to be determined by a nationally recognized investment bank that is
mutually agreeable to the Members.
 
“Relative” or “Relatives” means, with respect to each Member, the entities
listed as such Member’s Relatives on Schedule 6, as such Schedule may be amended
from to time by (i) the unanimous agreement in writing of the Members or (ii) as
necessary to reflect any transferee in a
 
Appendix A-15

--------------------------------------------------------------------------------

Transfer under any Applicable Joint Venture Agreement permitted by and in
accordance with Section 12.2 of any of the Applicable Joint Venture Agreement.
 
“Remaining Assets” shall have the meaning set forth in Section 13.11 of this
Agreement.
 
“Renewal Term” shall have the meaning set forth in Section 1.3 of this
Agreement.
 
“Representative” shall have the meaning set forth in Section 8.7(D) of this
Agreement.
 
“Seconded Employees” shall have the meaning set forth in Section 9.1 of this
Agreement.
 
“Senior Authorized Representative” means any individual unanimously agreed in
writing by the Members to be a senior authorized representative of a given
Member.
 
“Service Provider Related Forms” shall have the meaning set forth in Section
9.3(A) of this Agreement.
 
 
“Sharing Interest” means, with respect to any Member, the percentage determined
by dividing (1) such Member’s Committed Capital at the time of determination, by
(2) the aggregate Committed Capital of all Members at the time of determination;
provided, however, that, for purposes of this definition only, Committed Capital
shall be adjusted as follows:
 

(a)  [***]% of any [***] Capital Contribution that has been made by such Member,
but that was not timely made, shall be deducted from that Member’s Committed
Capital and added to the other Member’s Committed Capital;
 
(b)  any [***] Capital Contribution made, and any loans made or deemed made that
are represented by Mandatory Notes, within the twelve months prior to the time
of determination shall be deducted from Committed Capital; and
 
(c)  any Other Capital Contributions made, and any loans made or deemed made
that are represented by Optional Other Shortfall Notes shall be deducted from
Committed Capital, but the exclusion under this subparagraph (c) shall apply
only to such Capital Contributions and such loans made within (i) the [***]
prior to the time of determination if the Capital Contribution or loan related
to [***] Fab, other than the [***], that was not a [***] at the time the
contribution was due or (ii) the [***] prior to the time of determination if the
Other Capital Contribution made, or loan made or deemed made that is represented
by an Optional Other Shortfall Notes relates to any operating expenditure,
capital expenditure or other expenditure not subject to the [***] period in the
immediately preceding clause (i) and provided, further, however, that a Make-Up
Contribution shall be deemed made on the date on which the related Shortfall
Amount first arose, so that the applicable [***] and [***] periods shall apply
from the date the Shortfall Amount occurred. Notwithstanding the foregoing,
subparagraphs (b) and (c) of this definition shall not apply with respect to any
use
 
Appendix A-16

--------------------------------------------------------------------------------

of the term “Sharing Interests” in connection with a distribution under
Section 13.13(C)(4) of this Agreement.
 
“Shortfall Amount” means any uncontributed dollar amount of any Member’s [***]
of an Additional Capital Contribution.
 
“Singapore Joint Venture Company” means IM Flash Singapore, LLP, a limited
liability partnership organized under the laws of Singapore.
 
“Subsidiary” means as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person.
 
“Supply Agreement - Intel” means that certain Supply Agreement, dated as of the
Effective Date, by and between the Joint Venture Company and Intel, as amended.
 
“Supply Agreement - Micron” means that certain Supply Agreement, dated as of the
Effective Date, by and between the Joint Venture Company and Micron, as amended.
 
“Supply Agreements” means the Supply Agreement - Intel and the Supply Agreement
- Micron.
 
“Tax Matters Partner” shall have the meaning set forth in Section 10.7 of this
Agreement.
 
“Technology Committees” means the Product Design Committee and the Joint
Development Committee.
 
“Term” shall have the meaning set forth in Section 1.3 of this Agreement.
 
“Testing Plan” means a testing plan set forth in the Operating Plan, as more
particularly described in Section 11.6(A)(3) of this Agreement.
 
“Tie Vote” shall have the meaning set forth in Section 17.1 of this Agreement.
 
“Tool Install” means the installation of the automated material handling system
(AMHS), process tools, and support tools/fixtures used for semiconductor
manufacturing (including sort) in the cleanroom and in all related laboratories
in the Fab.
 
“Tool of Record” or “TOR” means the specified tool required to modify, handle,
or otherwise fulfill its intended purpose in the manufacture of a semiconductor
process pursuant to the POR. The TOR encompasses the tool purchase price,
configuration and associated documentation required to procure, conduct
acceptance testing and administer service contracts.
 
Appendix A-17

--------------------------------------------------------------------------------

“TOP” shall have the meaning set forth in Section 9.4(B) of this Agreement.
 
“Transfer” shall have the meaning set forth in Section 12.1 of this Agreement.
 
“Treasury Regulation” shall have the meaning set forth in Section 1.1 of
Appendix B to this Agreement.
 
“Unamortized MTV Lease Value” means for purposes of [***], an [***] to (i) the
[***] of the [***], based on [***], assuming that such value were amortized on a
[***] beginning on [***], with respect to [***] to the [***], (ii) [***] with
respect to a [***], (iii) [***] with respect to [***], and (iv) [***] with
respect to [***].
 
“Undisputed Approved Business Plan” shall have the meaning set forth in
Section 11.2(D)(1) of this Agreement. The Initial Business Plan approved by the
Members shall be deemed to be an Undisputed Approved Business Plan.
 
“U.S. Facilities Company” shall have the meaning set forth in Section 16.1 of
this Agreement.
 
“Wafer” means a silicon wafer.
 
“Wafer Start” means the initial Wafer introduction to a process flow. When the
context requires reference to a quantity of “Wafer Starts,” such term shall be
expressed in 300 millimeter diameter equivalents.
 
“Wholly-Owned Subsidiary” of a Person means a Subsidiary, all of the shares of
stock or other ownership interests of which are owned, directly or indirectly
through one or more intermediaries, by such Person, other than a nominal number
of shares or a nominal amount of other ownership interests issued in order to
comply with requirements that such shares or interests be held by one or more
other Persons, including requirements for directors’ qualifying shares or
interests, requirements to have or maintain two or more stockholders or equity
owners or other similar requirements.
 
 

Appendix A-18

--------------------------------------------------------------------------------

 
APPENDIX B
 
IM FLASH TECHNOLOGIES, LLC
 
TAX MATTERS

 
This Appendix B is attached to and is a part of the AMENDED AND RESTATED LIMITED
LIABILITY COMPANY OPERATING AGREEMENT (the “Agreement”) of IM FLASH
TECHNOLOGIES, LLC, a Delaware limited liability company (the “Joint Venture
Company”), dated as of this 27th day of February, 2007. The parties to the
Agreement intend that the Joint Venture Company be classified as a partnership
for federal income tax purposes pursuant to section 7701(a)(2) of the Code and
the regulations thereunder. The provisions of this Appendix are intended to
effect an allocation of tax items of the Joint Venture Company that are in
accordance with the Members' "interests in the partnership" (i.e., the Joint
Venture Company) within the meaning of Treas. Reg. § 1.704-1(b)(3) by utilizing
the principles of allocation contained in Treas. Reg. § 1.704-1(b)(2)(iv) and
Treas. Reg. § 1.704-2 with respect to maintenance of capital accounts and
allocations, and shall be interpreted and applied accordingly. For purposes of
applying the provisions of this Appendix, it shall be assumed that the Joint
Venture Company satisfies the requirements of Treas. Reg. §
1.704-1(b)(2)(ii)(b)(2) and (3), notwithstanding that the Joint Venture Company
does not satisfy such requirements.
 
ARTICLE 1
DEFINITIONS
 
1.1  Definitions. For purposes of this Appendix, the capitalized terms listed
below shall have the meanings indicated. Capitalized terms not listed below and
not otherwise defined in this Appendix shall have the meanings specified in the
Agreement.
 
“Account Reduction Item” means (i) any adjustment described in Treas. Reg. §
1.704-1(b)(2)(ii)(d)(4); (ii) any allocation described in Treas. Reg. §
1.704-1(b)(2)(ii)(d)(5), other than a Nonrecourse Deduction or a Member
Nonrecourse Deduction; or (iii) any distribution described in Treas. Reg. §
1.704-1(b)(2)(ii)(d)(6).
 
“Adjusted Capital Account Balance” means, as of any date, a Member’s Capital
Account balance as of such date (and if such date is other than the last day of
the taxable year of the Joint Venture Company, determined as if the taxable year
of the Joint Venture Company ended on such date), taking into account all
contributions made by such Member and distributions made to such Member during
such taxable year and any special allocations or other adjustments required by
Sections 3.2, 3.3, 3.4(A), (B), and (D), 3.5, 3.6 and 3.7, and 5.2(B) and 5.9 of
this Appendix, and increased by the sum of (i) such Member’s share of Joint
Venture Company Minimum Gain and (ii) such Member’s share of Member Nonrecourse
Debt Minimum Gain, both determined after taking into account any such special
allocations and other adjustments.
 
“Adjusted Fair Market Value” of an item of Joint Venture Company property means
the greater of (i) the fair market value of such property as reasonably
determined by the Board of
 
Appendix B-1

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Managers (provided, that in the case of any sale of Joint Venture Company
property, such amount shall be presumed to be the sales price realized by the
Joint Venture Company on such sale) or (ii) the amount of any nonrecourse
indebtedness to which such property is subject within the meaning of section
7701(g) of the Code.
 
“Book” means the method of accounting prescribed for compliance with the capital
account maintenance rules set forth in Treas. Reg. § 1.704-1(b)(2)(iv) as
reflected in Articles 1 and 2 of this Appendix, as distinguished from any
accounting method which the Joint Venture Company may adopt for other purposes
such as financial reporting.
 
“Book Value” means, with respect to any item of Joint Venture Company property,
the book value of such property within the meaning of Treas. Reg. §
1.704-1(b)(2)(iv)(g)(3); provided, however, that if the Joint Venture Company
adopts the remedial allocation method described in Treas. Reg. § 1.704-3(d) with
respect to any item of Joint Venture Company property, the Book Value of such
property shall be its book basis determined in accordance with Treas. Reg. §
1.704-3(d)(2).
 
“Deemed Liquidation” means a liquidation of the Joint Venture Company that is
deemed to occur pursuant to Treas. Reg. § 1.708-1(b)(1)(iv) in the event of a
termination of the Joint Venture Company pursuant to section 708(b)(1)(B) of the
Code.
 
“Excess Deficit Balance” means the amount, if any, by which the balance in a
Member’s Capital Account as of the end of the relevant taxable year is more
negative than the amount, if any, of such negative balance that such Member is
treated as obligated to restore to the Joint Venture Company pursuant to Treas.
Reg. § 1.704-1(b)(2)(ii)(c), Treas. Reg. § 1.704-1(b)(2)(ii)(h), Treas. Reg. §
1.704-2(g)(1), and Treas. Reg. § 1.704-2(i)(5). Solely for purposes of computing
a Member’s Excess Deficit Balance, such Member’s Capital Account shall be
reduced by the amount of any Account Reduction Items that are reasonably
expected as of the end of such taxable year.
 
“Excess Nonrecourse Liabilities” means excess nonrecourse liabilities within the
meaning of Treas. Reg. § 1.752-3(a)(3).
 
“Joint Venture Company Minimum Gain” means partnership minimum gain determined
pursuant to Treas. Reg. § 1.704-2(d) and Section 5.3 of this Appendix.
 
“Member Nonrecourse Debt” means any “partner nonrecourse debt” as such term is
defined in Treas. Reg. § 1.704-2(b)(4).
 
“Member Nonrecourse Debt Minimum Gain” means minimum gain attributable to Member
Nonrecourse Debt pursuant to Treas. Reg. § 1.704-2(i)(3).
 
“Member Nonrecourse Deduction” means any item of Book loss or deduction that is
a partner nonrecourse deduction within the meaning of Treas. Reg. §
1.704-2(i)(1) and (2).
 
“Member Nonrecourse Distribution” means a distribution to a Member that is
allocable to a net increase in such Member’s share of Member Nonrecourse Debt
Minimum Gain pursuant to Treas. Reg. § 1.704-2(i)(6).
 
Appendix B-2

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“Nonrecourse Deduction” means a nonrecourse deduction determined pursuant to
Treas. Reg. § 1.704-2(b)(1) and Treas. Reg. § 1.704-2(c).
 
“Nonrecourse Distribution” means a distribution to a Member that is allocable to
a net increase in Joint Venture Company Minimum Gain pursuant to Treas. Reg. §
1.704-2(h)(1).
 
“Regulatory Allocation” means any allocation made pursuant to Section 3.2, 3.3,
3.4 or 3.5 of this Appendix.
 
“Related Person” means, with respect to a Member, a Person that is related to
such Member pursuant to Treas. Reg. § 1.752-4(b).
 
“Revaluation Event” means (i) a liquidation of the Joint Venture Company (within
the meaning of Treas. Reg. § 1.704-1(b)(2)(ii)(g) but not including a Deemed
Liquidation); (ii) a contribution of more than a de minimis amount of money or
other property to the Joint Venture Company by a Member or a distribution of
more than a de minimis amount of money or other property to a retiring or
continuing Member where such contribution or distribution alters the Sharing
Interest of any Member; or (iii) the grant of an interest in the Joint Venture
Company as consideration for the provision of services to or for the benefit of
the Joint Venture Company.
 
“Section 705(a)(2)(B) Expenditures” means nondeductible expenditures of the
Joint Venture Company that are described in section 705(a)(2)(B) of the Code,
and organization and syndication expenditures and disallowed losses to the
extent that such expenditures or losses are treated as expenditures described in
section 705(a)(2)(B) of the Code pursuant to Treas. Reg. § 1.704-1(b)(2)(iv)(i).
 
“Section 751 Property” means unrealized receivables and substantially
appreciated inventory items within the meaning of Treas. Reg. § 1.751-1(a)(1).
 
“Target Balance” means, for any Member as of any date, the amount that would be
distributable to such Member on such date pursuant to Section 5.1 of the
Agreement if (i) all the assets of the Company were sold for cash equal to their
respective Book Values as of such date, (ii) all liabilities of the Company
(other than any liabilities under outstanding Member Notes) were paid in full
(except that in the case of a nonrecourse liability, such payment would be
limited to the Book Value of the asset or assets securing such liability), and
(iii) all remaining cash were distributed to the Members pursuant to Section 5.1
(assuming, for this purpose, that the holders of any Member Notes have converted
such Member Notes immediately prior to such distribution).
 
“Tax Basis” means, with respect to any item of Joint Venture Company property,
the adjusted basis of such property as determined in accordance with the Code.
 
“Treasury Regulation” or “Treas. Reg.” means the temporary or final
regulation(s) promulgated pursuant to the Code by the U.S. Department of the
Treasury, as amended, and any successor regulation(s).
 
Appendix B-3

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ARTICLE 2  
CAPITAL ACCOUNTS
 
2.1  Maintenance.
 
(A)  A single Capital Account shall be maintained for each Member in accordance
with this Article 2.
 
(B)  Each Member’s Capital Account shall from time to time be increased by:
 

(i)  
the amount of money contributed by such Member to the Joint Venture Company in
accordance with the Agreement (including the amount of any Joint Venture Company
liabilities which the Member is deemed to assume as provided in Treas. Reg. §
1.704-1(b)(2)(iv)(c), and including the principal amount paid for any Member
Notes, but excluding liabilities assumed in connection with the distribution of
Joint Venture Company property and excluding increases in such Member’s share of
Joint Venture Company liabilities pursuant to section 752 of the Code);

 

(ii)  
the fair market value of property, as reasonably determined by the Board of
Managers, contributed by such Member to the Joint Venture Company (net of any
liabilities secured by such property that the Joint Venture Company is
considered to assume or take subject to pursuant to section 752 of the Code);
provided, that for this purpose the fair market value of (A) the Lehi Property
contributed by Micron (net of liabilities) is equal to the value set forth with
respect thereto on Appendix D (it being understood that the [***]shall not be
treated as property for purposes of this clause (ii)), and (B) the amount
credited to the Capital Account of a Member with respect to any Capital
Contribution taking the form of a contribution of a promissory note shall equal
the principal payments made by such Member with respect to such promissory note;
and, provided, further, that nothing in this Appendix B shall be deemed to
increase or limit the amount treated as a Capital Contribution for purposes
other than this Appendix B;

 

(iii)  
the amount recognized as gross income by Micron with respect to the [***]as
described in Section 5.10 of this Appendix; and

 

(iv)  
allocations to such Member of Joint Venture Company Book income and gain (or the
amount of any item or items of income or gain included therein).

 
(C)  Each Member’s Capital Account shall from time to time be reduced by:

(i)  
the amount of money distributed to such Member by the Joint Venture Company
(including the amount of such Member’s individual liabilities which the Joint
Venture Company is deemed to assume as provided in Treas. Reg. §
1.704-1(b)(2)(iv)(c)), including the amount of any amount

 

Appendix B-4

--------------------------------------------------------------------------------

paid or accrued on any Member Note that is not treated as a guaranteed payment
pursuant to Section 5.2 of this Appendix B;
 

(ii)  
the fair market value, as reasonably determined by the Board of Managers, of
property distributed to such Member by the Joint Venture Company (net of any
liabilities secured by such property that such Member is considered to assume or
take subject to pursuant to section 752 of the Code); and

 

(iii)  
allocations to such Member of Joint Venture Company Book loss and deduction (or
items thereof);

 
(D)  The Joint Venture Company shall make such other adjustments to the Capital
Accounts of the Members as are necessary to comply with the provisions of Treas.
Reg. § 1.704-1(b)(2)(iv).
 
2.2  Revaluation of Joint Venture Company Property.
 
(A)  Upon the occurrence of a Revaluation Event, the Board of Managers may
revalue all Joint Venture Company property (whether tangible or intangible) for
Book purposes to reflect the Adjusted Fair Market Value of Joint Venture Company
property immediately prior to the Revaluation Event. In the event that Joint
Venture Company property is so revalued, the Capital Accounts of the Members
shall be adjusted in accordance with Treas. Reg. § 1.704-1(b)(2)(iv)(f) as
provided in Section 3.1 of this Appendix.
 
(B)  Upon the distribution of Joint Venture Company property to a Member, the
property to be distributed shall be revalued for Book purposes to reflect the
Adjusted Fair Market Value of such property immediately prior to such
distribution, and the Capital Accounts of all Members shall be adjusted in
accordance with Treas. Reg. § 1.704-1(b)(2)(iv)(e).
 
2.3  Transfers of Interests. Upon the transfer of a Member’s entire interest in
the Joint Venture Company in accordance with Section 12.2 of the Agreement, the
Capital Account of such Member shall carry over to the transferee.
 
ARTICLE 3  
ALLOCATION OF BOOK INCOME AND LOSS
 
3.1  Book Income And Loss.
 
(A)  The Book income or loss of the Joint Venture Company for purposes of
determining allocations to the Capital Accounts of the Members shall be
determined in the same manner as the determination of the Joint Venture
Company’s taxable income, except that (i) items that are required by section
703(a)(1) of the Code to be separately stated shall be included; (ii) items of
income that are exempt from inclusion in gross income for federal income tax
purposes shall be treated as Book income; (iii) Section 705(a)(2)(B)
Expenditures shall be treated as deductions; (iv) items of gain, loss,
depreciation, amortization, or depletion that would be computed for federal
income tax purposes by reference to the Tax Basis of an item of Joint Venture
Company property shall be determined by reference to the Book Value of such item
of
 
Appendix B-5

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property in accordance with Section 3.1(B) hereof; and (v) the effects of upward
and downward revaluations of Joint Venture Company property pursuant to Section
2.2 of this Appendix shall be treated as Book gain or loss respectively from the
sale of such property.
 
(B)  In the event that the Book Value of any item of Joint Venture Company
property differs from its Tax Basis, the amount of Book depreciation, depletion,
or amortization for a period with respect to such property shall be computed so
as to bear the same relationship to the Book Value of such property as the
depreciation, depletion, or amortization computed for tax purposes with respect
to such property for such period bears to the Tax Basis of such property. If the
Tax Basis of such property is zero, the Book depreciation, depletion, or
amortization with respect to such property shall be computed by using a method
consistent with the method that would be used for tax purposes if the Tax Basis
of such property were greater than zero and the property were placed in service
on the date it is acquired by the Joint Venture Company.
 
(C)  The Book income and loss of the Joint Venture Company for any taxable year
shall be allocated in such a manner as to cause the Adjusted Capital Account
Balances of the Members as nearly as possible to equal their respective Target
Balances as of the end of such taxable year.
 
3.2  Allocation of Nonrecourse Deductions. Notwithstanding any other provisions
of the Agreement, Nonrecourse Deductions shall be allocated among the Members in
proportion to their respective Sharing Interests as of the end of the taxable
year in which such deductions arise.
 
3.3  Allocation of Member Nonrecourse Deductions. Notwithstanding any other
provisions of the Agreement, any item of Member Nonrecourse Deduction with
respect to a Member Nonrecourse Debt shall be allocated to the Member or Members
who bear the economic risk loss for such Member Nonrecourse Debt in accordance
with Treas. Reg. § 1.704-2(i).
 
3.4  Chargebacks of Income And Gain. Notwithstanding any other provisions of the
Agreement:
 
(A)  Joint Venture Company Minimum Gain. In the event that there is a net
decrease in Joint Venture Company Minimum Gain for a taxable year of the Joint
Venture Company, then before any other allocations are made for such taxable
year, each Member shall be allocated items of Book income and gain for such year
(and, if necessary, for subsequent years) to the extent provided by Treas. Reg.
§ 1.704-2(f).
 
(B)  Member Nonrecourse Debt Minimum Gain. In the event that there is a net
decrease in Member Nonrecourse Debt Minimum Gain for a taxable year of the Joint
Venture Company, then after taking into account allocations pursuant to
paragraph (a) immediately preceding, but before any other allocations are made
for such taxable year, each Member with a share of Member Nonrecourse Debt
Minimum Gain at the beginning of such year shall be allocated items of Book
income and gain for such year (and, if necessary, for subsequent years) to the
extent provided by Treas. Reg. § 1.704-2(i)(4).
 
(C)  [Reserved.]
 
Appendix B-6

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(D)  Qualified Income Offset. In the event that any Member unexpectedly receives
any Account Reduction Item that results in an Excess Deficit Balance at the end
of any taxable year after taking into account all other allocations and
adjustments under this Agreement , then items of Book income and gain for such
year (and, if necessary, for subsequent years) will be reallocated to each such
Member in the amount and in the proportions needed to eliminate such Excess
Deficit Balance as quickly as possible.
 
3.5  Reallocation To Avoid Excess Deficit Balances. Notwithstanding any other
provisions of the Agreement, no Book loss or deduction shall be allocated to any
Member to the extent that such allocation would cause or increase an Excess
Deficit Balance in the Capital Account of such Member. Such Book loss or
deduction shall be reallocated away from such Member and to the other Members in
accordance with the Agreement, but only to the extent that such reallocation
would not cause or increase Excess Deficit Balances in the Capital Accounts of
such other Members.
 
3.6  Corrective Allocation. Subject to the provisions of Sections 3.2, 3.3, 3.4,
and 3.5 of this Appendix, but notwithstanding any other provision of the
Agreement, in the event that any Regulatory Allocation is made pursuant to this
Appendix for any taxable year, then remaining Book items for such year (and, if
necessary, Book items for subsequent years) shall be allocated or reallocated in
such amounts and proportions as are appropriate to restore the Adjusted Capital
Account Balances of the Members to the position in which such Adjusted Capital
Account Balances would have been if such Regulatory Allocation had not been
made. Adjustments pursuant to this Section 3.6 shall only be made if such
Regulatory Allocations are not reasonably expected to be reversed with
offsetting allocations in subsequent taxable years. The Members intend that the
allocations of Book income and loss pursuant to this Appendix shall result in
Adjusted Capital Account Balances of the Members, as of the end of each taxable
year of the Joint Venture Company and after all allocations pursuant to this
Appendix have been made, equaling their Target Balances. This Appendix shall be
interpreted in a manner consistent with such intent.
 
3.7  Other Allocations.
 
(A)  If during any taxable year of the Joint Venture Company there is a change
in any Member’s interest in the Joint Venture Company, allocations of Book
income or loss for such taxable year shall take into account the varying
interests of the Members in the Joint Venture Company in a manner consistent
with the requirements of Section 706 of the Code and Section 5.2(B) hereof.
 
(B)  If and to the extent that any distribution of Section 751 Property to a
Member in exchange for the distributee Member’s interest in property other than
Section 751 Property is treated as a sale or exchange of such Section 751
Property by the Joint Venture Company pursuant to Treas. Reg. § 1.751-1(b)(2),
any Book gain or loss attributable to such deemed sale or exchange shall be
allocated only to Members other than the distributee Member in a manner
consistent with such Treasury Regulation.
 
(C)  If and to the extent that any distribution of property other than Section
751 Property to a Member in exchange for the distributee Member’s interest in
Section 751 Property is
 
Appendix B-7

--------------------------------------------------------------------------------

treated as a sale or exchange of such other property by the Joint Venture
Company pursuant to Treas. Reg. § 1.751-1(b)(3), any Book gain or loss
attributable to such deemed sale or exchange shall be allocated only to Members
other than the distributee Member in a manner consistent with such Treasury
Regulation.
 
ARTICLE 4  
ALLOCATION OF TAX ITEMS
 
4.1  In General. Except as otherwise provided in this Article 4, all items of
income, gain, loss, and deduction shall be allocated among the Members for
federal income tax purposes in the same manner as the corresponding allocation
for Book purposes.
 
4.2  Section 704(c) Allocations.
 
(A)  In the event that the Book Value of an item of Joint Venture Company
property differs from its Tax Basis, allocations of depreciation, depletion,
amortization, gain, and loss with respect to such property will be made for
federal income tax purposes in a manner that takes account of the variation
between the Tax Basis and Book Value of such property in accordance with section
704(c)(1)(A) of the Code and Treas. Reg. § 1.704-1(b)(4)(i). The Board of
Managers may select as the method for making such allocations, either the method
described in Treas. Reg. § 1.704-3(c) or (d); provided, however, that the method
selected for any asset shall be one that minimizes the effect of the “ceiling
rule” on allocations to the Member that did not contribute such asset.
 
(B)  For purposes of complying with Section 263A of the Code, depreciation,
amortization and cost recovery deductions of the Joint Venture Company that are
included in the capitalized cost of the Joint Venture Company’s inventory shall
be determined based on the Book Values of the Joint Venture Company’s assets,
and any difference between such amounts and the corresponding amounts as
computed for U.S. federal income tax purposes shall be allocated separately to
the Members pursuant to Section 704(c) of the Code.
 
4.3  Tax Credits. Tax credits shall be allocated among the Members in accordance
with Treas. Reg. § 1.704-1(b)(4)(ii).
 
ARTICLE 5
OTHER TAX MATTERS
 
5.1  Excess Nonrecourse Liabilities. For the purpose of determining the Members’
shares of the Joint Venture Company’s Excess Nonrecourse Liabilities pursuant to
Treas. Reg. §§ 1.752-3(a)(3) and 1.707-5(a)(2)(ii), and solely for such purpose,
the Members’ interests in profits are hereby specified to be their respective
Sharing Interests.
 
5.2  Treatment of Loan Transactions.
 
(A)  The Members agree that amounts outstanding under Member Notes (which for
purposes of this Appendix B includes amounts outstanding under loans made
pursuant to Section 2.3(H) of the Agreement) shall be treated for federal and
applicable state income tax purposes as equity and not as debt for U.S. federal
income tax purposes. To the extent a Non-
 
Appendix B-8

--------------------------------------------------------------------------------

Funding Member makes a Make-Up Contribution together with accrued interest, such
interest (solely for purposes of this Appendix B) shall be treated as a capital
contribution, the payment of such interest to the Funding Member on the related
Member Note shall be treated as a guaranteed payment pursuant to Section 707(c)
of the Code, and the deduction of the Joint Venture Company in respect of such
guaranteed payment shall be specially allocated to the Non-Funding Member. To
the extent accrued interest on a Member Note has not been paid as of the end of
a taxable year of the Joint Venture Company, the Members shall consult with each
other to determine the appropriate income tax treatment of such accrued
interest, and if they are unable to agree on such treatment the dispute
resolution provisions of Section 10.6(B) shall apply.
 
(B)  Upon a change in the Members’ Sharing Interests, the Members agree that the
Capital Accounts of the Members shall be adjusted so that to the greatest extent
possible, but consistent with the goal of minimizing the adverse tax
consequences to the Member whose interest increased (as reasonably determined by
such Member)(other than adverse consequences resulting solely from receiving
allocations of income or loss in accordance with its revised Sharing Interest),
the Adjusted Capital Account Balances of the Members will equal their Target
Balances immediately following the conversion.
 
5.3  Treatment of Certain Distributions. (A) In the event that (i) the Joint
Venture Company makes a distribution that would (but for this Subsection (A)) be
treated as a Nonrecourse Distribution; and (ii) such distribution does not cause
or increase a deficit balance in the Capital Account of the Member receiving
such distribution as of the end of the Joint Venture Company’s taxable year in
which such distribution occurs; then the Board of Managers may treat such
distribution as not constituting a Nonrecourse Distribution to the extent
permitted by Treas. Reg. § 1.704-2(h)(3).
 
(B)  In the event that (i) the Joint Venture Company makes a distribution that
would (but for this Subsection (B)) be treated as a Member Nonrecourse
Distribution; and (ii) such distribution does not cause or increase a deficit
balance in the Capital Account of the Member receiving such distribution as of
the end of the Joint Venture Company’s taxable year in which such distribution
occurs; then the Board of Managers may treat such distribution as not
constituting a Member Nonrecourse Distribution to the extent permitted by Treas.
Reg. § 1.704-2(i)(6).
 
5.4  Reduction of Basis. In the event that a Member’s interest in the Joint
Venture Company may be treated in whole or in part as depreciable property for
purposes of reducing such Member’s basis in such interest pursuant to section
1017(b)(3)(C) of the Code, the Board of Managers may, upon the request of such
Member, make a corresponding reduction in the basis of its depreciable property
with respect to such Member. Such request shall be submitted to the Joint
Venture Company in writing, and shall include such information as may be
reasonably required in order to effect such reduction in basis. The costs of the
Joint Venture Company in making and implementing any such adjustments shall be
borne by the Member making such request.
 
5.5  Entity Classification. Neither the Joint Venture Company nor any Member
shall file or cause to be filed any election, the effect of which would be to
cause the Joint Venture
 
Appendix B-9

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Company to be classified as other than a partnership for federal income tax
purposes, without the prior written consent of all Members.
 
5.6  Unified Audit Election. The Joint Venture Company will elect, pursuant to
section 6231(a)(1)(B)(ii) of the Code, to be subject to the unified audit rules
of sections 6221-6234 of the Code, and all Members agree to sign such election.
 
5.7  Application of Section 707(b) of the Code. For purposes of determining the
Members’ respective interests in capital or profits of the Joint Venture Company
under Section 707(b) of the Code, the Members agree that, unless otherwise
agreed in writing, such interests shall be computed as of each date of
determination as follows: (a) the Joint Venture Company shall be deemed to have
a hypothetical taxable year that began with the beginning of its actual taxable
year including such date of determination and ended as of such date of
determination, with a closing of the Joint Venture Company’s books as of such
date (provided that deductions such as depreciation, amortization and the like
that are computed on an annual basis shall be prorated on a daily basis so as to
take into account only the portion attributable to the period up to that date),
(b) the interests in profits of each Member as of such date shall equal the
percentage of Book income or loss (excluding amounts, if any, required to be
disregarded for purposes of applying Section 707(b) of the Code) that would have
been allocated to each Member for such hypothetical taxable year, and (c) the
capital interests of the Members as of such date shall equal the percentage of
the total Capital Accounts of each Member as of such date, after adjustment to
reflect the items described in Section 2.1(B), (C) and (D) of this Appendix B
treated as occurring during such hypothetical taxable year.
 
5.8  Section 754 Election. The Joint Venture Company shall make or seek the
revocation of, as applicable, an election under Section 754 of the Code with
respect to the Joint Venture Company upon request of any Member whose Percentage
Interest as of the end of any taxable year of the Joint Venture Company exceeds
its Percentage Interest as of the Effective Date.
 
5.9  Imputed Income. If a Member is deemed for applicable income tax purposes to
have received income from the Joint Venture Company as a result of one or more
transactions that were not treated by the Joint Venture Company as giving rise
to income to such Member, the Joint Venture Company shall make such adjustments
to its allocations as are necessary so that, as closely as possible, such Member
is placed in the same tax position as if such income was not deemed to have been
recognized, provided that such adjustments shall not result in consequences to
the other Member that are significantly more adverse to such other Member than
if the position originally taken by the Joint Venture Company were upheld.
 
5.10  Treatment of MTV Lease and Boise Supply Agreement.
 
(A) The Members agree that the issuance of Joint Venture Company interests to
Micron in exchange for the MTV Lease and the Boise Supply Agreement shall be
treated for U.S. federal income tax purposes as taxable prepaid rent and as a
taxable payment for services, respectively, by the Joint Venture Company to
Micron and not as a contribution of property by Micron to the Joint Venture
Company, in each case for the amount ascribed on Appendix D to such item.
Consequently, the Members agree that Micron shall recognize income, and the
Joint
 
Appendix B-10

--------------------------------------------------------------------------------

Venture Company shall have an initial tax basis, for U.S. federal income tax
purposes equal to such amounts. The Members further agree that the Joint Venture
Company’s initial tax basis in such amounts shall equal the income so
recognized, and that such basis shall be amortized pursuant to Treas. Reg.
§ 1.167(a)-14 over the initial terms of such agreements.
 
(B) The Members further agree that if the treatment described in subsection (A)
above ultimately is determined not to be the proper treatment for either of such
items, the Members shall make such adjustments to the determination and
allocation of the Joint Venture Company’s items of income, gain, loss or
deduction as are necessary (to the extent possible) to place the Members in the
same tax position as if such treatment were respected.
 
5.11  Tax Accounting Methods. To the extent permitted by applicable law, the
Joint Venture Company shall implement such tax elections that to the greatest
extent possible result in the Joint Venture Company's cost of goods sold for
purposes of determining the Joint Venture Company's Book income or loss equaling
the sum of (a) "Cost" as such term is defined in the Supply Agreements, plus (b)
any additional amounts included in the "amount realized" by the Joint Venture
Company upon the sale of products to Intel and Micron, respectively.
 
5.12  No Indemnity for Tax Consequences. Neither of the Members nor the Joint
Venture Company shall be responsible for the income tax consequences to the
other Members resulting from this Appendix or the Agreement; provided, however,
that the Members shall reasonably cooperate as requested in order to effectuate
the intent of this Appendix, although such cooperation shall not require either
Member to incur significant additional costs that are not reimbursed by the
requesting Member.
 
5.13  Precedent Agreements. Amounts paid to Micron pursuant to the Precedent
Agreement to Joint Venture, dated September 27, 2005, and the Second Precedent
Agreement to Joint Venture, dated November 18, 2005, in each case by and between
Micron and Intel, shall be treated as reimbursements to Micron of preformation
expenditures as provided in Treas. Reg. § 1.707-4(d).
 
5.14  Conflicts with Agreement. In the event of any conflict between the terms
of this Appendix B and any provision of the Agreement, the terms of this
Appendix B shall govern.
 
 

Appendix B-11

--------------------------------------------------------------------------------

 

 
APPENDIX C
 
IM FLASH TECHNOLOGIES, LLC
 
INITIAL MANAGERS
 
The initial Managers appointed by Intel will be:
 
Leslie S. Culbertson
Thomas R. Franz
Brian L. Harrison
 
 
The initial Managers appointed by Micron will be:

D. Mark Durcan
Brian J. Shields
W.G. Stover, Jr.
 

 

Appendix C-1

--------------------------------------------------------------------------------

 

 
APPENDIX D
 
IM FLASH TECHNOLOGIES, LLC
 
INITIAL CAPITAL CONTRIBUTIONS
 
Intel Initial Capital Contribution
 
 
 
The Initial Capital Contribution of Intel is $1,196,176,471, payable as follows:
 
 
Intel Initial Contributed Assets:
 
 
 
Cash (to be delivered [***])
 
 
$[***]
 
 
Cash (to be delivered [***]) (the “Intel Additional Cash”)
 
 
$[***]
 
 
Promissory Note substantially in the form attached hereto as Attachment D-1 in
the amount of $[***] (representing funds to be delivered [***] the Joint Venture
Company).
 
 
$[***]
 
 
Cash in the amount of $[***] (to be delivered to the Joint Venture Company upon
certification from Micron (and Micron shall make reasonable efforts to provide
at least ten (10) Business Days’ notice of such pending certification), not
contested by the Joint Venture Company after reasonable review and within 10
Business Days of the Joint Venture Company’s receipt of Micron’s certification,
that construction is complete and the [***] Fab is ready for [***]).
 
 
$[***]
 
 
Total Intel Initial Capital Contribution (deemed to be contributed to the Joint
Venture Company in full as of the Effective Date)
 
 
$1,196,176,471
 
 
If a Liquidating Event occurs prior to the delivery in full of such Initial
Capital Contribution, all undelivered cash and amounts represented by Promissory
Notes shall be delivered promptly after the occurrence of such Liquidating
Event; provided, however, that if the construction and readiness for [***] at
the [***] Fab referred to in the provisions of this Appendix D of the Micron
Initial Capital Contribution is not complete at the time of such Liquidating
Event, only a portion of the $[***] described above shall be delivered, which
portion shall be proportionate to the percentage of completion of such
construction as determined by the Members in good faith.
 
 

Appendix D-1

--------------------------------------------------------------------------------

 
Micron Initial Capital Contribution
 
 
 
The Initial Capital Contribution of Micron is $1,245,000,000, payable as
follows:
 
 
Micron Initial Contributed Assets:
 
 
 
Cash (to be delivered [***]) (the “Micron Additional Cash”)
 
 
$250,000,000
 
 
Lehi Property (pursuant to entry into the Lehi Lease (which is treated as a
transfer of property for federal income tax purposes as described in the Lehi
Lease) and delivery of the Lehi Bill of Conveyance and all rights of Micron
under express or implied warranties or indemnities from third parties with
respect to the Lehi Property
 
 
Value $[***]
 
 
Prepaid Rent on [***], as follows:
 
 
 
On the Effective Date
 
 
Value $[***]
 
 
Upon certification from Micron (and Micron shall make reasonable efforts to
provide at least ten (10) Business Days’ notice of such pending certification),
not contested by the Joint Venture Company after reasonable review and within 10
Business Days of the Joint Venture Company’s receipt of Micron’s certification,
that construction is complete and the [***] Fab is ready for [***] 
 
 
Value $[***]
 
 
Boise Supply Agreement Prepay
 
 
Value $[***]
 
 
Total Micron Initial Capital Contribution (deemed to be contributed to the Joint
Venture Company in full as of the Effective Date)
 
 
Value $1,245,000,000
 
 
If a Liquidating Event occurs prior to the delivery in full of such Initial
Capital Contribution, (a) all undelivered cash and amounts shall be delivered
promptly after the occurrence of such Liquidating Event and (b) if the
construction and readiness for [***] at the [***] Fab referred to in the
provisions of this Appendix D of the Micron Initial Capital Contribution is not
complete at the time of such Liquidating Event, a portion of the $[***]
described above shall be deemed contributed, which portion shall be
proportionate to the percentage of completion of such construction as determined
by the Members in good faith.
 
 

 

Appendix D-2

--------------------------------------------------------------------------------

 
 

ATTACHMENT D-1
 
FORM OF
 
INITIAL CONTRIBUTION NOTE
 
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATES. THIS NOTE HAS BEEN
ISSUED IN RELIANCE UPON THE REPRESENTATION OF THE HOLDER THAT IT HAS BEEN
ACQUIRED FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARDS THE RESALE OR OTHER
DISTRIBUTION THEREOF. THIS NOTE MAY NOT BE TRANSFERRED OR RESOLD.

INTEL CORPORATION

PROMISSORY NOTE

 
No.: [____________]
Principal Amount: $[____________]
Location: [____________]
Date of Issuance: [____________]
 

 
FOR VALUE RECEIVED, Intel Corporation, a Delaware corporation (“Intel”),
promises to pay to IM Flash Technologies, LLC, a Delaware limited liability
company (the “Joint Venture Company”), the principal sum of
[_________________________________________] Dollars ($[_______________]) in
accordance with Section 2 of this Promissory Note (this “Note”).
 
This Note is delivered as a Capital Contribution to the Joint Venture Company
pursuant to Section 2.1(A) of the Amended and Restated Limited Liability Company
Operating Agreement, dated February 27, 2007, of the Joint Venture Company (the
“Operating Agreement”) and is issued under and subject to the terms, provisions
and conditions of the Operating Agreement. Capitalized terms used in this Note
and not defined shall have the meanings set forth in the Operating Agreement.
 
1. TERM.
 
(a) This Note shall remain outstanding until the payment of the entire principal
balance of this Note (such unpaid principal balance at any given time is
referred to a the “Outstanding Balance”).
 
2. PAYMENTS.
 
Payments of the Outstanding Balance shall become due and payable by Intel to the
Joint Venture Company (a) in whole or in part on the tenth Business Day
following written notice by the Lead Controller of the Joint Venture Company
sent to Intel that such amounts are necessary for the operation of the Joint
Venture Company in accordance with the then-effective Approved Business Plan;
and (b) in whole upon the liquidation of the Joint Venture Company in accordance
with Article 13 of the Operating Agreement.
 
Attachment D-1-1

--------------------------------------------------------------------------------

3. MISCELLANEOUS.
 
3.1 This Note shall be construed and enforced in accordance with and governed by
the laws of the State of Delaware without giving effect to the principles of
conflict of laws thereof.
 
3.2 The titles, captions and headings of this Note are provided for convenience
of reference only and shall not be deemed to constitute a part of this Note.
Unless otherwise specifically stated, all references herein to “sections” and
“appendices” will mean “sections” and “appendices” to this Note.
 
3.3 All notices to the Joint Venture Company shall be sent addressed to the
Authorized Officers, or the Chief Executive Officer, as applicable, of the Joint
Venture Company at the Joint Venture Company’s principal place of business. All
notices to Intel shall be addressed to Intel at the address as may be specified
by Intel from time to time in a notice to the Joint Venture Company.
Notwithstanding the foregoing, the initial notice addresses for the Joint
Venture Company and Intel are set forth below. All notices are effective the
next day, if sent by recognized overnight courier or facsimile, or five (5) days
after deposit in the United States mail, postage prepaid, properly addressed and
return receipt requested.

To the Joint Venture Company:
To Intel:
IM Flash Technologies, LLC
1550 East 3400 North
Lehi, Utah 84043
2200 Mission College Blvd.
Mailstop SC4-203
Santa Clara, CA 95054
   
Fax Number: (801) 767-5370
Fax Number: (408) 653-8050
       

3.4 This Note may be executed in several counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
 
3.5 Should any provision of this Note be deemed in contradiction with the laws
of any jurisdiction in which it is to be performed or unenforceable for any
reason, such provision shall be deemed null and void, but this Note shall remain
in full force in all other respects and the parties hereto shall negotiate in
good faith appropriate modifications to this Note that most nearly effects the
parties’ intent in entering into this Note.
 
3.6 Intel hereby waives presentment, demand, protest, notice of dishonor,
diligence and all other notices, any release or discharge arising from any
extension of time, discharge of a prior party, release of any or all of any
security given from time to time for this Note, or other cause of release or
discharge other than actual payment in full hereof.
 
3.7 It is expressly agreed that if this Note is referred to an attorney or if
suit is brought to collect or interpret this Note or any part hereof or to
enforce or protect any rights conferred upon the Joint Venture Company by this
Note or any other document evidencing this Note, then
 
Attachment D-1-2

--------------------------------------------------------------------------------

Intel promises and agrees to pay all costs, including attorneys’ fees, incurred
by the Joint Venture Company.
 
3.8 In the event of any conflict between the provisions of the Operating
Agreement and this Note, the provisions of the Operating Agreement shall
control.
 

Attachment D-1-3

--------------------------------------------------------------------------------

 
IN WITNESS WHEREOF, Intel has executed this Note as of the date first above
written.

 
INTEL CORPORATION
   
By:________________________________    
 
Name:______________________________    
 
Title:_______________________________    

ACKNOWLEDGED AND ACCEPTED:
 
IM FLASH TECHNOLOGIES, LLC
   
By:________________________________    
 
Name:______________________________     
 
Title:_______________________________    

SIGNATURE PAGE TO
PROMISSORY NOTE
ISSUED BY INTEL CORPORATION
TO IM FLASH TECHNOLOGIES, LLC

 

Attachment D-1-1

--------------------------------------------------------------------------------

APPENDIX E
 
Intentionally Omitted.
 

 

 
Appendix E-1

--------------------------------------------------------------------------------

EXHIBIT A
 
FORM OF
 
MANDATORY NOTE
 
NEITHER THIS NOTE NOR ANY INTEREST IN THE JOINT VENTURE COMPANY (AS DEFINED
BELOW) THAT MAY BE ACQUIRED UPON CONVERSION OF THIS NOTE HAS BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE
SECURITIES LAWS OF ANY STATES. THIS NOTE HAS BEEN ISSUED IN RELIANCE UPON THE
REPRESENTATION OF THE HOLDER THAT IT HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TOWARDS THE RESALE OR OTHER DISTRIBUTION THEREOF. THIS NOTE
AND ANY INTEREST IN THE JOINT VENTURE COMPANY ACQUIRED UPON CONVERSION OF THIS
NOTE ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD UNLESS PERMITTED UNDER SECTIONS 12.2 OR 12.5 OF THE
AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING AGREEMENT, DATED
FEBRUARY 27, 2007, OF THE JOINT VENTURE COMPANY AND THEN ONLY PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM AS PERMITTED UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO
BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
 
IM FLASH TECHNOLOGIES, LLC
 
REDEEMABLE NOTE

 
No.: _________
Principal Amount: $[____________]
Location: [____________]
Date of Issuance: [____________]
Maturity Date: [____________] 

 
FOR VALUE RECEIVED, IM Flash Technologies, LLC, a Delaware limited liability
company (the “Joint Venture Company”), promises to pay to [____________], a
Delaware corporation (the “Funding Member”), or such Wholly-Owned Subsidiary of
the Funding Member as the Funding Member may designate, the principal sum of
[____________] Dollars ($[____________]) and to pay interest on the outstanding
principal of this Convertible Promissory Note (this “Note”), in accordance with
Section 2 of this Note.
 
This Note is delivered in exchange for Member Debt Financing received from the
Funding Member pursuant to Section 3.1 of the Amended and Restated Limited
Liability Company Operating Agreement, dated February 27, 2007, of the Joint
Venture Company (the “Operating Agreement”) and is issued under and subject to
the terms, provisions and conditions of the Operating Agreement. Reference is
hereby made to the Operating Agreement for a full statement of the respective
rights, limitations of rights and duties of the Joint Venture Company, the
Funding Member and [____________], a Delaware corporation (the “Non-Funding
Member”) and the terms under which this Note is issued and delivered.
Capitalized terms used in this Note and not defined shall have the meanings set
forth in the Operating Agreement. This
 
Exhibit A-2

--------------------------------------------------------------------------------

Note may be one of a series of Notes issued pursuant to Section 3.1 of the
Operating Agreement. This Note is [a Mandatory Shortfall Note] [a Mandatory
Equalization Note].
 
1. TERM.
 
(a) Subject to paragraph (b) below, from and after the date that is [***] after
the date of this Note (the “Maturity Date”), the Funding Member shall elect to
either:
 
(i) convert this Note in accordance with Section 4 below; or
 
(ii) permit this Note to remain outstanding (in which case this Note shall
become a Continuing Mandatory Note) with the Maturity Date being the Liquidation
Date (the Maturity Date as so extended, the “Extended Maturity Date”).
 
In the event that the Funding Member fails to make an election under clause (i)
or clause (ii) above, the Funding Member shall be deemed to have elected to
permit this Note to remain outstanding in accordance with clause (ii) above, and
this Note and the related Mandatory [Equalization][Shortfall] Note, shall
automatically become a Continuing Mandatory Note.
 
(b) Subject to Section 4 below, upon the date of the first distribution under
Section 13.13(C) of the Operating Agreement, the Outstanding Balance, plus all
accrued and unpaid interest thereon, shall become due.
 
2. INTEREST. [Mandatory Equalization Note: [***]]
 
[Mandatory Shortfall Note: As provided in the Operating Agreement, interest on
the unpaid principal balance of this Note (such unpaid principal balance at any
given time is referred to as the “Outstanding Balance”) will accrue as follows:
 
(a) For the [***] after the issue date of this Note, interest will accrue at the
[***] (as reported in the [***]), as in effect on the issue date of this Note
and adjusted every [***], plus [***] ([***]) basis points, per annum, compounded
[***], calculated on the basis of a 360 day year and actual days elapsed.
 
(b) For the period starting on the day after the [***] anniversary of the issue
date of this Note through the Maturity Date, interest will accrue at the [***]
(as reported in the [***]), as in effect on the [***] anniversary of the issue
date of this Note and adjusted every [***], per annum, compounded [***],
calculated on the basis of a 360 day year and actual days elapsed.
 
(c) [***] will accrue on the Outstanding Balance from the Maturity Date until
this Note is converted or redeemed in full.]  
 
All payments received shall be applied first against costs of collection and
enforcement (if any), then against accrued and unpaid interest, and then against
principal.
 
3. PREPAYMENT. The Joint Venture Company shall prepay, without premium or
penalty, this Note if, as and to the extent required by the Operating Agreement,
but only upon written notice executed by the chief executive officer of the
holder of this Note.
 
Exhibit A-3

--------------------------------------------------------------------------------

4. CONVERSION.
 
(a) At any time, and from time to time, from the Maturity Date through the
Extended Maturity Date, the Funding Member may, at its election, transfer to the
Joint Venture Company as a Capital Contribution all or a portion of the
Outstanding Balance plus all accrued and unpaid interest thereon and such amount
shall be added to the Capital Contribution Balance of the Funding Member (a
“Conversion”).
 
(b) If the Outstanding Balance plus all accrued and unpaid interest thereon
shall become due as set forth in Section 1(b) above, (i) the Funding Member may
elect to make a Conversion in full, but not in part, of the Outstanding Balance
plus all accrued and unpaid interest thereon or (ii) if the Funding Member does
not so elect, a Conversion of the Outstanding Balance plus all accrued and
unpaid interest thereon (in full, but not in part) may be effected in accordance
with Section 13.13(B) of the Operating Agreement.
 
(c) Upon the occurrence of an Event of Default under Section 5 below, the
Funding Member may, in addition to the remedies set forth in Section 6 below,
elect to make a Conversion.
 
5. DEFAULT. The occurrence of any one or more of the following events, acts or
occurrences shall constitute an event of default (each an “Event of Default”):
 
(a) failure by the Joint Venture Company to pay any principal of or interest on
this Note as and when required by the Operating Agreement or the terms hereof,
unless the Funding Member makes an election under Section 1(a) hereof; and
 
(b) (i) the entry of a decree or order for relief of the Joint Venture Company
by a court of competent jurisdiction in any involuntary case involving the Joint
Venture Company under any bankruptcy, insolvency or other similar law now or
hereafter in effect; (ii) the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or other similar agent for the Joint Venture
Company or for any substantial part of the Joint Venture Company’s assets or
property; (iii) the ordering of the winding up or liquidation of the Joint
Venture Company’s affairs; (iv) the filing with respect to the Joint Venture
Company of a petition in any such involuntary bankruptcy case, which petition
remains undismissed for a period of sixty (60) days or which is dismissed or
suspended pursuant to Section 305 of the Federal Bankruptcy Code (or any
corresponding provision of any future United States bankruptcy law); (v) the
commencement by the Joint Venture Company of a voluntary case under any
bankruptcy, insolvency or other similar law now or hereafter in effect; (vi) the
consent by the Joint Venture Company to the entry of an order for relief in an
involuntary case under any such law or to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar agent for the Joint Venture Company or for any substantial part
of the Joint Venture Company’s assets or property; or (vii) the making by the
Joint Venture Company of any general assignment for the benefit of creditors.
 
6. REMEDIES. If an Event of Default occurs, the Funding Member may, at its
election, (a) elect to make a Conversion in accordance with Section 4 above, (b)
accelerate repayment of the Outstanding Balance, in which case the Outstanding
Balance plus all accrued and unpaid interest
 
Exhibit A-4

--------------------------------------------------------------------------------

thereon shall be due and payable immediately, and (c) pursue a claim for payment
of the amounts required to be paid under the Operating Agreement or this Note.
 
7. MISCELLANEOUS.
 
7.1 This Note shall be construed and enforced in accordance with and governed by
the laws of the State of Delaware without giving effect to the principles of
conflict of laws thereof.
 
7.2 The titles, captions and headings of this Note are provided for convenience
of reference only and shall not be deemed to constitute a part of this Note.
Unless otherwise specifically stated, all references herein to “sections” and
“appendices” will mean “sections” and “appendices” to this Note.
 
7.3 All notices to the Joint Venture Company shall be sent addressed to the
Authorized Officers, or the Chief Executive Officer, as applicable, of the Joint
Venture Company at the Joint Venture Company’s principal place of business. All
notices to the Funding Member or the Non-Funding Member shall be sent addressed
to such Member at the address as may be specified by Members from time to time
in a notice to the Joint Venture Company. Notwithstanding the foregoing, the
initial notice addresses for the Joint Venture Company and the Members are set
forth below. All notices are effective the next day, if sent by recognized
overnight courier or facsimile, or five (5) days after deposit in the United
States mail, postage prepaid, properly addressed and return receipt requested.

To the Joint Venture Company:
To the Funding Member:
[____________]
[____________]
[____________]
[____________]
[____________]
[____________]
[____________]
[____________]
   
Fax Number: [____________]
Fax Number: [____________]
   

 
7.4 No delay or omission to exercise any right, power or remedy accruing to the
Funding Member, upon any breach or default of the Joint Venture Company under
this Note, shall impair any such right, power or remedy of the Funding Member
nor shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of any similar breach of default thereafter occurring
or any waiver of any other breach or default theretofore or thereafter
occurring. The acceptance at any time by the Funding Member of any past-due
amount shall not be deemed to be a waiver of the right to require prompt payment
when due of any other amounts then or thereafter due and payable. Any waiver,
permit, consent or approval of any kind or character on the part of the Funding
Member of any breach of default under this Note or any waiver on the part of the
Funding Member of any provisions or conditions of this Note, must be in writing
and shall be effective only to the extent specifically set forth in such
writing. All other remedies provided for in this Note shall be exclusive and
shall be in lieu of any other remedies that the Funding Member may have in
respect of this Note, at law or in equity.
 
Exhibit A-5

--------------------------------------------------------------------------------

7.5 This Note may be executed in several counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
 
7.6 Should any provision of this Note be deemed in contradiction with the laws
of any jurisdiction in which it is to be performed or unenforceable for any
reason, such provision shall be deemed null and void, but this Note shall remain
in full force in all other respects and the parties hereto shall negotiate in
good faith appropriate modifications to this Note that most nearly effects the
parties’ intent in entering into this Note.
 
7.7 The Joint Venture Company hereby waives presentment, demand, protest, notice
of dishonor, diligence and all other notices, any release or discharge arising
from any extension of time, discharge of a prior party, release of any or all of
any security given from time to time for this Note, or other cause of release or
discharge other than actual payment in full hereof.
 
7.8 The Funding Member shall not be deemed, by any act or omission, to have
waived any of its rights or remedies hereunder unless such waiver is in writing
and signed by the Funding Member and then only to the extent specifically set
forth in such writing. A waiver with reference to one event shall not be
construed as continuing or as a bar to or waiver of any right or remedy as to a
subsequent event.
 
7.9 Time is of the essence hereof.
 
7.10 It is expressly agreed that if this Note is referred to an attorney or if
suit is brought to collect or interpret this Note or any part hereof or to
enforce or protect any rights conferred upon the Funding Member by this Note or
any other document evidencing this Note, then the Joint Venture Company promises
and agrees to pay all costs, including attorneys’ fees, incurred by the Funding
Member.
 
7.11 If any provisions of this Note would require the Joint Venture Company to
pay interest hereon at a rate exceeding the highest rate allowed by applicable
law, the Joint Venture Company shall instead pay interest under this Note at the
highest rate permitted by applicable law.
 
7.12 In the event of any conflict between the provisions of the Operating
Agreement and this Note, the provisions of the Operating Agreement shall
control.
 

Exhibit A-6

--------------------------------------------------------------------------------

 
IN WITNESS WHEREOF, the Joint Venture Company has executed this Note as of the
date first above written.

 
IM FLASH TECHNOLOGIES, LLC
   
By:__________________________    
 
Name:________________________   
 
Title:_________________________    

ACKNOWLEDGED AND ACCEPTED:
 
[____________], the Funding Member
   
By:___________________________   
 
Name:_________________________    
 
Title:__________________________    

SIGNATURE PAGE TO
PROMISSORY NOTE
ISSUED BY IM FLASH TECHNOLOGIES
TO [____________]
 

Exhibit A-7

--------------------------------------------------------------------------------

EXHIBIT B
 
FORM OF
 
OPTIONAL [***] NOTE
 
NEITHER THIS NOTE NOR ANY INTEREST IN THE JOINT VENTURE COMPANY (AS DEFINED
BELOW) THAT MAY BE ACQUIRED UPON CONVERSION OF THIS NOTE HAS BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE
SECURITIES LAWS OF ANY STATES. THIS NOTE HAS BEEN ISSUED IN RELIANCE UPON THE
REPRESENTATION OF THE HOLDER THAT IT HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TOWARDS THE RESALE OR OTHER DISTRIBUTION THEREOF. THIS NOTE
AND ANY INTEREST IN THE JOINT VENTURE COMPANY ACQUIRED UPON CONVERSION OF THIS
NOTE ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD UNLESS PERMITTED UNDER SECTIONS 12.2 OR 12.5 OF THE
AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING AGREEMENT, DATED
FEBRUARY 27, 2007, OF THE JOINT VENTURE COMPANY AND THEN ONLY PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM AS PERMITTED UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO
BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
 
IM FLASH TECHNOLOGIES, LLC
 
REDEEMABLE NOTE

 
No.: _________
Principal Amount: $[____________]
Location: [____________]
Date of Issuance: [____________]
Maturity Date: [____________] 

 
FOR VALUE RECEIVED, IM Flash Technologies, LLC, a Delaware limited liability
company (the “Joint Venture Company”), promises to pay to [____________], a
Delaware corporation (the “Funding Member”), or such Wholly-Owned Subsidiary of
the Funding Member as the Funding Member may designate, the principal sum of
[____________] Dollars ($[____________]) and to pay interest on the outstanding
principal of this Convertible Promissory Note (this “Note”), in accordance with
Section 2 of this Note.
 
This Note is delivered in exchange for Member Debt Financing received from the
Funding Member pursuant to Section 3.2 of the Amended and Restated Limited
Liability Company Operating Agreement, dated February 27, 2007, of the Joint
Venture Company (the “Operating Agreement”) and is issued under and subject to
the terms, provisions and conditions of the Operating Agreement. Reference is
hereby made to the Operating Agreement for a full statement of the respective
rights, limitations of rights and duties of the Joint Venture Company, the
Funding Member and [____________], a Delaware corporation (the “Non-Funding
Member”) and the terms under which this Note is issued and delivered.
Capitalized terms used in this Note and not defined shall have the meanings set
forth in the Operating Agreement. This
 
Exhibit B-1

--------------------------------------------------------------------------------

Note may be one of a series of Notes issued pursuant to Section 3.2 of the
Operating Agreement. This Note is [an Optional [***] Shortfall Note] [an
Optional [***] Equalization Note].
 
1. TERM. (a) This note will mature on the [***].
 
(b) Subject to Section 4 below, upon the date of the first distribution under
Section 13.13(C) of the Operating Agreement, the Outstanding Balance, plus all
accrued and unpaid interest thereon, shall become due.
 
2. INTEREST. [Optional [***] Equalization Note: [***]]
 
[Optional [***] Shortfall Note: As provided in the Operating Agreement, interest
on the unpaid principal balance of this Note (such unpaid principal balance at
any given time is referred to as the “Outstanding Balance”) will accrue at the
[***] (as reported in the [***]), as in effect on the issue date of this Note
and adjusted every [***], per annum, compounded [***], calculated on the basis
of a 360 day year and actual days elapsed.
 
All payments received shall be applied first against costs of collection and
enforcement (if any), then against accrued and unpaid interest, and then against
principal.
 
3. PREPAYMENT. The Joint Venture Company shall prepay, without premium or
penalty, this Note if, as and to the extent required by the Operating Agreement,
but only upon written notice executed by the chief executive officer of the
holder of this Note.
 
4. CONVERSION.
 
(a) At any time, and from time to time, the Funding Member may, at its election,
transfer to the Joint Venture Company as a Capital Contribution all or a portion
of the Outstanding Balance plus all accrued and unpaid interest thereon and such
amount shall be added to the Capital Contribution Balance of the Funding Member
(a “Conversion”).
 
(b) If the Outstanding Balance plus all accrued and unpaid interest thereon
shall become due as set forth in Section 1(b) above, (i) the Funding Member may
elect to make a Conversion in full, but not in part, of the Outstanding Balance
plus all accrued and unpaid interest thereon or (ii) if the Funding Member does
not so elect, a Conversion of the Outstanding Balance plus all accrued and
unpaid interest thereon (in full, but not in part) may be effected in accordance
with Section 13.13(B) of the Operating Agreement.
 
(c) Upon the occurrence of an Event of Default under Section 5 below, the
Funding Member may, in addition to the remedies set forth in Section 6 below,
elect to make a Conversion.
 
5. DEFAULT. The occurrence of any one or more of the following events, acts or
occurrences shall constitute an event of default (each an “Event of Default”):
 
(a) failure by the Joint Venture Company to pay any principal of or interest on
this Note as and when required by the Operating Agreement or the terms hereof;
and
 
Exhibit B-2

--------------------------------------------------------------------------------

(b) (i) the entry of a decree or order for relief of the Joint Venture Company
by a court of competent jurisdiction in any involuntary case involving the Joint
Venture Company under any bankruptcy, insolvency or other similar law now or
hereafter in effect; (ii) the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or other similar agent for the Joint Venture
Company or for any substantial part of the Joint Venture Company’s assets or
property; (iii) the ordering of the winding up or liquidation of the Joint
Venture Company’s affairs; (iv) the filing with respect to the Joint Venture
Company of a petition in any such involuntary bankruptcy case, which petition
remains undismissed for a period of sixty (60) days or which is dismissed or
suspended pursuant to Section 305 of the Federal Bankruptcy Code (or any
corresponding provision of any future United States bankruptcy law); (v) the
commencement by the Joint Venture Company of a voluntary case under any
bankruptcy, insolvency or other similar law now or hereafter in effect; (vi) the
consent by the Joint Venture Company to the entry of an order for relief in an
involuntary case under any such law or to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar agent for the Joint Venture Company or for any substantial part
of the Joint Venture Company’s assets or property; or (vii) the making by the
Joint Venture Company of any general assignment for the benefit of creditors.
 
6. REMEDIES. If an Event of Default occurs, the Funding Member may, at its
election, (a) elect to make a Conversion in accordance with Section 4 above, (b)
accelerate repayment of the Outstanding Balance, in which case the Outstanding
Balance plus all accrued and unpaid interest thereon shall be due and payable
immediately, and (c) pursue a claim for payment of the amounts required to be
paid under the Operating Agreement or this Note.
 
7. MISCELLANEOUS.
 
7.1 This Note shall be construed and enforced in accordance with and governed by
the laws of the State of Delaware without giving effect to the principles of
conflict of laws thereof.
 
7.2 The titles, captions and headings of this Note are provided for convenience
of reference only and shall not be deemed to constitute a part of this Note.
Unless otherwise specifically stated, all references herein to “sections” and
“appendices” will mean “sections” and “appendices” to this Note.
 
7.3 All notices to the Joint Venture Company shall be sent addressed to the
Authorized Officers, or the Chief Executive Officer, as applicable, of the Joint
Venture Company at the Joint Venture Company’s principal place of business. All
notices to the Funding Member or the Non-Funding Member shall be sent addressed
to such Member at the address as may be specified by Members from time to time
in a notice to the Joint Venture Company. Notwithstanding the foregoing, the
initial notice addresses for the Joint Venture Company and the Members are set
forth below. All notices are effective the next day, if sent by recognized
overnight courier or facsimile, or five (5) days after deposit in the United
States mail, postage prepaid, properly addressed and return receipt requested.
 
Exhibit B-3

--------------------------------------------------------------------------------

To the Joint Venture Company:
To the Funding Member:
[____________]
[____________]
[____________]
[____________]
[____________]
[____________]
[____________]
[____________]
   
Fax Number: [____________]
Fax Number: [____________]
   

 
7.4 No delay or omission to exercise any right, power or remedy accruing to the
Funding Member, upon any breach or default of the Joint Venture Company under
this Note, shall impair any such right, power or remedy of the Funding Member
nor shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of any similar breach of default thereafter occurring
or any waiver of any other breach or default theretofore or thereafter
occurring. The acceptance at any time by the Funding Member of any past-due
amount shall not be deemed to be a waiver of the right to require prompt payment
when due of any other amounts then or thereafter due and payable. Any waiver,
permit, consent or approval of any kind or character on the part of the Funding
Member of any breach of default under this Note or any waiver on the part of the
Funding Member of any provisions or conditions of this Note, must be in writing
and shall be effective only to the extent specifically set forth in such
writing. All other remedies provided for in this Note shall be exclusive and
shall be in lieu of any other remedies that the Funding Member may have in
respect of this Note, at law or in equity.
 
7.5 This Note may be executed in several counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
 
7.6 Should any provision of this Note be deemed in contradiction with the laws
of any jurisdiction in which it is to be performed or unenforceable for any
reason, such provision shall be deemed null and void, but this Note shall remain
in full force in all other respects and the parties hereto shall negotiate in
good faith appropriate modifications to this Note that most nearly effects the
parties’ intent in entering into this Note.
 
7.7 The Joint Venture Company hereby waives presentment, demand, protest, notice
of dishonor, diligence and all other notices, any release or discharge arising
from any extension of time, discharge of a prior party, release of any or all of
any security given from time to time for this Note, or other cause of release or
discharge other than actual payment in full hereof.
 
7.8 The Funding Member shall not be deemed, by any act or omission, to have
waived any of its rights or remedies hereunder unless such waiver is in writing
and signed by the Funding Member and then only to the extent specifically set
forth in such writing. A waiver with reference to one event shall not be
construed as continuing or as a bar to or waiver of any right or remedy as to a
subsequent event.
 
7.9 Time is of the essence hereof.
 
7.10 It is expressly agreed that if this Note is referred to an attorney or if
suit is brought to collect or interpret this Note or any part hereof or to
enforce or protect any rights conferred
 
Exhibit B-4

--------------------------------------------------------------------------------

upon the Funding Member by this Note or any other document evidencing this Note,
then the Joint Venture Company promises and agrees to pay all costs, including
attorneys’ fees, incurred by the Funding Member.
 
7.11 If any provisions of this Note would require the Joint Venture Company to
pay interest hereon at a rate exceeding the highest rate allowed by applicable
law, the Joint Venture Company shall instead pay interest under this Note at the
highest rate permitted by applicable law.
 
7.12 In the event of any conflict between the provisions of the Operating
Agreement and this Note, the provisions of the Operating Agreement shall
control.
 

Exhibit B-5

--------------------------------------------------------------------------------

 
IN WITNESS WHEREOF, the Joint Venture Company has executed this Note as of the
date first above written.

 
IM FLASH TECHNOLOGIES, LLC
   
By:_________________________    
 
Name:_______________________   
 
Title:________________________    

ACKNOWLEDGED AND ACCEPTED:
 
[____________], the Funding Member
   
By:_________________________    
 
Name:_______________________   
 
Title:________________________    

SIGNATURE PAGE TO
PROMISSORY NOTE
ISSUED BY IM FLASH TECHNOLOGIES
TO [____________]
 

Exhibit B-6

--------------------------------------------------------------------------------

EXHIBIT C
 
FORM OF
 
OPTIONAL OTHER NOTE
 
NEITHER THIS NOTE NOR ANY INTEREST IN THE JOINT VENTURE COMPANY (AS DEFINED
BELOW) THAT MAY BE ACQUIRED UPON CONVERSION OF THIS NOTE HAS BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE
SECURITIES LAWS OF ANY STATES. THIS NOTE HAS BEEN ISSUED IN RELIANCE UPON THE
REPRESENTATION OF THE HOLDER THAT IT HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TOWARDS THE RESALE OR OTHER DISTRIBUTION THEREOF. THIS NOTE
AND ANY INTEREST IN THE JOINT VENTURE COMPANY ACQUIRED UPON CONVERSION OF THIS
NOTE ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD UNLESS PERMITTED UNDER SECTIONS 12.2 OR 12.5 OF THE
AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING AGREEMENT, DATED
FEBRUARY 27, 2007, OF THE JOINT VENTURE COMPANY AND THEN ONLY PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM AS PERMITTED UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO
BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
 
IM FLASH TECHNOLOGIES, LLC
 
REDEEMABLE NOTE

 
No.: _________
Principal Amount: $[____________]
Location: [____________]
Date of Issuance: [____________]
Maturity Date: [____________] 

 
FOR VALUE RECEIVED, IM Flash Technologies, LLC, a Delaware limited liability
company (the “Joint Venture Company”), promises to pay to [____________], a
Delaware corporation (the “Funding Member”), or such Wholly-Owned Subsidiary of
the Funding Member as the Funding Member may designate, the principal sum of
[____________] Dollars ($[____________])of this Convertible Promissory Note
(this “Note”), in accordance with Section 2 of this Note.
 
This Note is delivered in exchange for Member Debt Financing received from the
Funding Member pursuant to Section 3.3 of the Amended and Restated Limited
Liability Company Operating Agreement, dated February 27, 2007, of the Joint
Venture Company (the “Operating Agreement”) and is issued under and subject to
the terms, provisions and conditions of the Operating Agreement. Reference is
hereby made to the Operating Agreement for a full statement of the respective
rights, limitations of rights and duties of the Joint Venture Company, the
Funding Member and [____________], a Delaware corporation (the “Non-Funding
Member”) and the terms under which this Note is issued and delivered.
Capitalized terms used in this Note and not defined shall have the meanings set
forth in the Operating Agreement. This
Schedule C-1

--------------------------------------------------------------------------------

Note may be one of a series of Notes issued pursuant to Section 3.3 of the
Operating Agreement. This Note is an Optional Other Shortfall Note.
 
1. TERM. This Note will mature on the [***].
 
2. INTEREST. [***]
 
3. PREPAYMENT. The Joint Venture Company shall prepay, without premium or
penalty, this Note if, as and to the extent required by the Operating Agreement,
but only upon written notice executed by the chief executive officer of the
holder of this Note.
 
4. CONVERSION.
 
(a) At any time, and from time to time, the Funding Member may, at its election,
transfer to the Joint Venture Company as a Capital Contribution all or a portion
of the Outstanding Balance thereon and such amount shall be added to the Capital
Contribution Balance of the Funding Member (a “Conversion”).
 
(b) Upon the occurrence of an Event of Default under Section 5 below, the
Funding Member may, in addition to the remedies set forth in Section 6 below,
elect to make a Conversion.
 
5. DEFAULT. The occurrence of any one or more of the following events, acts or
occurrences shall constitute an event of default (each an “Event of Default”):
 
(a) failure by the Joint Venture Company to pay any principal of on this Note as
and when required by the Operating Agreement or the terms hereof; and
 
(b) (i) the entry of a decree or order for relief of the Joint Venture Company
by a court of competent jurisdiction in any involuntary case involving the Joint
Venture Company under any bankruptcy, insolvency or other similar law now or
hereafter in effect; (ii) the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or other similar agent for the Joint Venture
Company or for any substantial part of the Joint Venture Company’s assets or
property; (iii) the ordering of the winding up or liquidation of the Joint
Venture Company’s affairs; (iv) the filing with respect to the Joint Venture
Company of a petition in any such involuntary bankruptcy case, which petition
remains undismissed for a period of sixty (60) days or which is dismissed or
suspended pursuant to Section 305 of the Federal Bankruptcy Code (or any
corresponding provision of any future United States bankruptcy law); (v) the
commencement by the Joint Venture Company of a voluntary case under any
bankruptcy, insolvency or other similar law now or hereafter in effect; (vi) the
consent by the Joint Venture Company to the entry of an order for relief in an
involuntary case under any such law or to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar agent for the Joint Venture Company or for any substantial part
of the Joint Venture Company’s assets or property; or (vii) the making by the
Joint Venture Company of any general assignment for the benefit of creditors.
 
6. REMEDIES. If an Event of Default occurs, the Funding Member may, at its
election, (a) elect to make a Conversion in accordance with Section 4 above, (b)
accelerate repayment of the
 
Schedule C-2

--------------------------------------------------------------------------------

Outstanding Balance, in which case the Outstanding Balance shall be due and
payable immediately, and (c) pursue a claim for payment of the amounts required
to be paid under the Operating Agreement or this Note.
 
7. MISCELLANEOUS.
 
7.1 This Note shall be construed and enforced in accordance with and governed by
the laws of the State of Delaware without giving effect to the principles of
conflict of laws thereof.
 
7.2 The titles, captions and headings of this Note are provided for convenience
of reference only and shall not be deemed to constitute a part of this Note.
Unless otherwise specifically stated, all references herein to “sections” and
“appendices” will mean “sections” and “appendices” to this Note.
 
7.3 All notices to the Joint Venture Company shall be sent addressed to the
Authorized Officers, or the Chief Executive Officer, as applicable, of the Joint
Venture Company at the Joint Venture Company’s principal place of business. All
notices to the Funding Member or the Non-Funding Member shall be sent addressed
to such Member at the address as may be specified by Members from time to time
in a notice to the Joint Venture Company. Notwithstanding the foregoing, the
initial notice addresses for the Joint Venture Company and the Members are set
forth below. All notices are effective the next day, if sent by recognized
overnight courier or facsimile, or five (5) days after deposit in the United
States mail, postage prepaid, properly addressed and return receipt requested.

To the Joint Venture Company:
To the Funding Member:
[____________]
[____________]
[____________]
[____________]
[____________]
[____________]
[____________]
[____________]
   
Fax Number: [____________]
Fax Number: [____________]
   

 
7.4 No delay or omission to exercise any right, power or remedy accruing to the
Funding Member, upon any breach or default of the Joint Venture Company under
this Note, shall impair any such right, power or remedy of the Funding Member
nor shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of any similar breach of default thereafter occurring
or any waiver of any other breach or default theretofore or thereafter
occurring. The acceptance at any time by the Funding Member of any past-due
amount shall not be deemed to be a waiver of the right to require prompt payment
when due of any other amounts then or thereafter due and payable. Any waiver,
permit, consent or approval of any kind or character on the part of the Funding
Member of any breach of default under this Note or any waiver on the part of the
Funding Member of any provisions or conditions of this Note, must be in writing
and shall be effective only to the extent specifically set forth in such
writing. All other remedies provided for in this Note shall be exclusive and
shall be in lieu of any other remedies that the Funding Member may have in
respect of this Note, at law or in equity.
 
Schedule C-3

--------------------------------------------------------------------------------

7.5 This Note may be executed in several counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
 
7.6 Should any provision of this Note be deemed in contradiction with the laws
of any jurisdiction in which it is to be performed or unenforceable for any
reason, such provision shall be deemed null and void, but this Note shall remain
in full force in all other respects and the parties hereto shall negotiate in
good faith appropriate modifications to this Note that most nearly effects the
parties’ intent in entering into this Note.
 
7.7 The Joint Venture Company hereby waives presentment, demand, protest, notice
of dishonor, diligence and all other notices, any release or discharge arising
from any extension of time, discharge of a prior party, release of any or all of
any security given from time to time for this Note, or other cause of release or
discharge other than actual payment in full hereof.
 
7.8 The Funding Member shall not be deemed, by any act or omission, to have
waived any of its rights or remedies hereunder unless such waiver is in writing
and signed by the Funding Member and then only to the extent specifically set
forth in such writing. A waiver with reference to one event shall not be
construed as continuing or as a bar to or waiver of any right or remedy as to a
subsequent event.
 
7.9 Time is of the essence hereof.
 
7.10 It is expressly agreed that if this Note is referred to an attorney or if
suit is brought to collect or interpret this Note or any part hereof or to
enforce or protect any rights conferred upon the Funding Member by this Note or
any other document evidencing this Note, then the Joint Venture Company promises
and agrees to pay all costs, including attorneys’ fees, incurred by the Funding
Member.
 
7.11 If any provisions of this Note would require the Joint Venture Company to
pay interest hereon at a rate exceeding the highest rate allowed by applicable
law, the Joint Venture Company shall instead pay interest under this Note at the
highest rate permitted by applicable law.
 
7.12 In the event of any conflict between the provisions of the Operating
Agreement and this Note, the provisions of the Operating Agreement shall
control.
 
Schedule C-4

--------------------------------------------------------------------------------

 
IN WITNESS WHEREOF, the Joint Venture Company has executed this Note as of the
date first above written.

 
IM FLASH TECHNOLOGIES, LLC
   
By:__________________________   
 
Name:________________________   
 
Title:_________________________   

ACKNOWLEDGED AND ACCEPTED:
 
[____________], the Funding Member
   
By:__________________________    
 
Name:________________________    
 
Title:_________________________    

 

SIGNATURE PAGE TO
PROMISSORY NOTE
ISSUED BY IM FLASH TECHNOLOGIES
TO [____________]
 

 
Schedule C-5

--------------------------------------------------------------------------------