Exhibit 10.14

 

LIMITED LIABILITY COMPANY

OPERATING AGREEMENT

OF

MP MASK TECHNOLOGY CENTER, LLC

a Delaware Limited Liability Company

MEMBERSHIP INTERESTS IN MP MASK TECHNOLOGY CENTER, LLC, A DELAWARE LIMITED
LIABILITY COMPANY, HAVE NOT BEEN REGISTERED WITH OR QUALIFIED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE. THE
INTERESTS ARE BEING SOLD IN RELIANCE UPON EXEMPTIONS FROM SUCH REGISTRATION OR
QUALIFICATION REQUIREMENTS. THE INTERESTS CANNOT BE SOLD, TRANSFERRED, ASSIGNED
OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE RESTRICTIONS ON
TRANSFERABILITY CONTAINED IN THIS LIMITED LIABILITY COMPANY OPERATING AGREEMENT
OF MP MASK TECHNOLOGY CENTER, LLC AND APPLICABLE FEDERAL AND STATE SECURITIES
LAWS.

Dated as of May 5, 2006

 

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TABLE OF CONTENTS

      Page ARTICLE 1.       ORGANIZATIONAL MATTERS 1   1.1 Continuation 1 1.2
Name 1 1.3 Principal Place of Business; Other Places of Business 2 1.4 Business
Purpose 2 1.5 Designated Agent for Service of Process 2 1.6 Term 2 1.7
Objectives; Approved Technology 2 1.8 Transaction Documents 3   ARTICLE 2.  
DEFINITIONS 3   ARTICLE 3.   CAPITAL; CAPITAL ACCOUNTS AND MEMBERS 14   3.1
Initial Capital Contributions of Members 14 3.2 Additional Capital Contributions
by Members 14 3.3 Capital Accounts 14 3.4 Member Capital 15 3.5 Liability of
Members 15 3.6 Certain Expenses 15   ARTICLE 4.   FINANCING OF THE COMPANY 15  
4.1 Types of Financing 15   ARTICLE 5.   MANAGEMENT 17                   5.1
Board of Managers 17 5.2 Number of Managers; Appointment of Managers 17 5.3
Effect of Reduction in Photronics' Percentage Interest on Photronics Managers 18
5.4 Effect of Reduction in Micron's Percentage Interest on Micron Managers 18
5.5 Chairman of the Board of Managers 19 5.6 Meetings of Members and of the
Board of Managers; Quorum 19 5.7 Actions Requiring a Special Vote 21 5.8
Compensation of Managers 22 5.9 Other Activities 23 5.10 Accounting; Records and
Reports 23 5.11 Indemnification and Liability of the Managers 25 5.12 General
Manager 27 5.13 Technology Steering Committee 29 5.14 Non-Disclosure Agreement
29 5.15   Maintenance of Insurance 29 5.16   Related Party Agreements 29

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ARTICLE 6.       OPERATIONS 29   6.1 Headquarters 29 6.2 Surplus Equipment 30
6.3 Printability Studies 30 6.4 Operations Plan; Annual Budget 30   ARTICLE 7.  
DISPOSITION AND TRANSFERS OF INTERESTS 30   7.1 Holding of Membership Interest
30 7.2 Transfer Moratorium 30 7.3 Purchase of Remaining Interest 30 7.4 Change
in Control of Photronics 31 7.5 Purchase and Sale Agreement 31   ARTICLE 8.  
DISSOLUTION, LIQUIDATION, AND TERMINATION OF THE COMPANY 32   8.1 Limitations 32
8.2 Exclusive Causes 32 8.3 Effect of Dissolution 33 8.4 No Capital Contribution
Upon Dissolution 33 8.5 Liquidation 34   ARTICLE 9.   DISTRIBUTIONS 35   9.1
Distributions of Cash Available for Distribution 35 9.2 Distributions Upon
Liquidation 35 9.3 Withholding 35 9.4 Distributions in Kind 36 9.5 Limitations
on Distributions 36   ARTICLE 10. ALLOCATIONS OF NET PROFITS AND NET LOSSES 36  
10.1 General Allocation of Net Profits and Losses 36 10.2 Regulatory Allocations
37 10.3 Tax Allocations 39 10.4 Other Provisions 39   ARTICLE 11. MISCELLANEOUS
41                   11.1 Amendments 41

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                        11.2 No Waiver 41 11.3 Entire Agreement 41 11.4 Further
Assurances 41 11.5 Notices 42 11.6 Tax Matters 42 11.7 Governing Law 43 11.8
Construction; Interpretation 43 11.9 Rights and Remedies Cumulative 44 11.10 No
Assignment; Binding Effect 44 11.11 Severability 44 11.12 Counterparts 44 11.13
Dispute Resolution 45 11.14 Third-Party Beneficiaries 45 11.15 Specific
Performance 45 11.16 Consequential Damages 45

EXHIBITS

Exhibit A       Members, Addresses, Initial Capital Contributions, and
Percentage Interests   Exhibit B   Initial Micron Managers   Exhibit C   Initial
Photronics Managers   Exhibit D   Insurance

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Rule 24b-2 of the Exchange Act of 1934. Material filed separately with the
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LIMITED LIABILITY COMPANY OPERATING AGREEMENT
OF
MP MASK TECHNOLOGY CENTER, LLC

          THIS LIMITED LIABILITY COMPANY OPERATING AGREEMENT (together with the
Exhibits, this "Agreement") is made and entered into as of the 5th day of May,
2006 (the "Effective Date"), by and between Micron Technology, Inc., a Delaware
corporation ("Micron"), and Photronics, Inc., a Connecticut corporation
("Photronics"), with respect to MP Mask Technology Center, LLC (the "Company"),
a limited liability company organized under the Delaware Limited Liability
Company Act, as amended from time to time (the "Act").

ARTICLE 1.
ORGANIZATIONAL MATTERS

               1.1 Continuation

          The Company was formed under the Act on April 10, 2006 by filing a
Certificate of Formation of the Company (the "Certificate") in the Office of the
Secretary of State of the State of Delaware as required by the Act. The Members
hereby continue the Company under the Act for the purposes and upon the terms
and conditions hereinafter set forth. Micron hereby continues as a Member of the
Company, and Photronics is admitted to the Company as a Member upon its
execution of this Agreement and receipt by Micron of $48 million of the Purchase
Price (as defined in the Contribution and Purchase Agreement). The rights and
liabilities of the Members shall be as provided in the Act, except as otherwise
expressly provided herein. In the event of any inconsistency between any terms
and conditions contained in this Agreement and any non-mandatory provisions of
the Act, the terms and conditions contained in this Agreement shall govern. If
any provision of this Agreement is prohibited or ineffective under the Act, this
Agreement will be considered amended to the smallest degree possible in order to
make such provision effective under the Act. Subject to the provisions hereof,
the Board of Managers may execute and file, or cause the General Manager to
file, any duly authorized amendments to the Certificate from time to time in a
form prescribed by the Act. The Board of Managers shall also cause to be made,
on behalf of the Company, such additional filings and recordings as the Board of
Managers shall deem necessary or advisable.

               1.2 Name

          The name of the Company shall be MP Mask Technology Center, LLC. The
Company may also conduct business at the same time under one or more fictitious
names if the Board of Managers determines that such is in the best interests of
the Company. The Board of Managers may change the name of the Company from time
to time, in accordance with Applicable Law.

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               1.3 Principal Place of Business; Other Places of Business

          The principal place of business of the Company is located at 3851 East
Columbia Road, Boise, Idaho or at such other place within or outside the State
of Delaware as the Board of Managers may from time to time designate. The
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 deem
advisable.

               1.4 Business Purpose

          The purpose of the Company shall be the (a) development, fabrication
and sale of advanced photomasks; (b) entry into any other lawful business,
purpose or activity in which a limited liability company may be engaged under
Applicable Law (including, without limitation, the Act) as the Members may
determine from time to time, subject to and in accordance with the terms of this
Agreement; and (c) entry into any lawful transaction and engagement in any
lawful activity in furtherance of the foregoing purposes and as may be
necessary, incidental or convenient to carry out the business of the Company as
contemplated by this Agreement.

               1.5 Designated Agent for Service of Process

          The Company shall continuously maintain a registered office and a
designated and duly qualified agent for service of process on the Company in the
State of Delaware. As of the date hereof, the name of the duly qualified agent
for service of process is Corporation Service Company and the address of the
registered office of the Company in the State of Delaware is c/o Corporation
Service Company, 2711 Centerville Road, Suite 400, Wilmington, DE 19808. 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 Term

          The Company shall continue until the Company is terminated, dissolved
or liquidated in accordance with this Agreement and the Act. Notwithstanding the
dissolution of the Company, the existence of the Company shall continue until
termination pursuant to and as provided in Article 8 of this Agreement.

               1.7 Objectives; Approved Technology

          The primary objectives of the Company (the "Primary Objectives") are
to: (i) develop and produce prototypes for industry-leading, advanced,
next-generation, high-end photomasks in accordance with Micron's specifications;
(ii) achieve sustainable, leading edge photomask production capabilities; (iii)
manufacture production photomasks for, and approved by, Micron pursuant to
Micron's specifications and in quantities required under the Transaction
Documents. To the extent the Company has excess capacity and resources after
completely fulfilling the Primary Objectives (inclusive of fulfillment of
Company and Micron engineering needs appropriate to accomplish the foregoing,
but recognizing that Photronics may also support Micron's production photomask
needs through its other facilities as allowed pursuant to the Transaction
Documents), the Company's secondary objective (the "Secondary Objective") is to
support the development of leading edge logic applications and manufacture
prototypes and, when approved by the Technology Steering Committee, production
photomasks, for use by external Photronics customers; [****].

          [****].

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               1.8 Transaction Documents

          Contemporaneous with, or prior to, the execution of this Agreement,
Photronics, Micron and/or the Company have entered into the agreements listed on
Schedule B to the Contribution and Purchase Agreement (collectively, the
"Transaction Documents").

ARTICLE 2.
DEFINITIONS

          Capitalized words and phrases used and not otherwise defined elsewhere
in this Agreement shall have the following meanings:

          "Act" is defined in the preamble.

          "Adjusted Capital Account Deficit" means, with respect to any Member
at any time, the deficit balance, if any, in such Member's Capital Account as of
such time, after giving effect to the following adjustments:

          (1) Add to such Capital Account the amount that such Member is
obligated to restore or is deemed to be obligated to restore pursuant to
Regulations Section 1.704-1(b)(2)(ii)(c) or the penultimate sentence of each of
Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

          (2) Subtract from such Capital Account such Member's share of the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall
be interpreted consistently therewith.

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Rule 24b-2 of the Exchange Act of 1934. Material filed separately with the
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          "Affiliate" of a Person means any other Person which, directly or
indirectly, controls, is controlled by, or is under common control with, such
Person. The term "control" (including, with correlative meaning, the terms
"controlled by" and "under common control with"), as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise. A Person
shall be deemed an Affiliate of another Person only so long as such control
relationship exists. The parties acknowledge and agree that neither Photronics
nor Micron is presently controlled by any other Person. Notwithstanding the
foregoing, a Company Entity shall not be deemed to be an Affiliate of either
Photronics or Micron, except where expressly provided in this Agreement.

          "Agreement" shall mean this Limited Liability Company Operating
Agreement, together with the Exhibits, as amended or otherwise modified from
time to time, which shall constitute the limited liability company agreement of
the Company within the meaning of the Act.

          "Annual Budget" is defined in Section 6.4.

          "Applicable Law" means, with respect to a Person, any domestic or
foreign, national, federal, territorial, state or local constitution, statute,
law (including principles of common law), treaty, ordinance, rule,
administrative interpretation, regulation, order, writ, injunction, legally
binding directive, judgment, decree or other requirement or restriction of any
arbitrator or Governmental Authority applicable to such Person or its
properties, assets, officers, directors, employees, consultants or agents (in
connection with such officer's, director's, employee's, consultant's or agent's
activities on behalf of such Person).

          "Assignment and Assumption Agreement" means the Assignment and
Assumption Agreement dated as of the date hereof, by and between Micron and the
Company.

          "Base Contributions" is defined in Section 4.1.2(a).

          "Board of Managers" means, at any time, the Board of Managers of the
Company designated in accordance with Section 5.2.

          "Business" is defined in Section 5.7(g).

          "Business Day" means any day other than a day on which commercial
banks in the United States are required or authorized to be closed.

          "Capital Account" means the Capital Account maintained for each Member
on the Company's books and records in accordance with the following provisions:

          (1) To each Member's Capital Account there shall be added (a) such
Member's Capital Contributions, (b) such Member's allocable share of Net Profits
and any items in the nature of income or gain that are specially allocated to
such Member pursuant to Article 10 hereof or other provisions of this Agreement
and (c) the amount of any Company liabilities assumed by such Member or which
are secured by any property owned by such Member.

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          (2) From each Member's Capital Account there shall be subtracted (a)
the amount of (i) cash and (ii) the Gross Asset Value of any Company Assets
(other than cash) distributed to such Member pursuant to any provision of this
Agreement in its capacity as a Member (for the avoidance of doubt, any payment
to a Member pursuant to any license, consulting, services, subcontracting, lease
or other agreement between the Company and such Member or any Affiliates of such
Member shall not be treated as a "distribution"), (b) such Member's allocable
share of Net Losses and any other items in the nature of expenses or losses that
are specially allocated to such Member pursuant to Article 10 or other
provisions of this Agreement, and (c) liabilities of such Member assumed by the
Company or which are secured by any property contributed by such Member.

          (3) In the event any Interest in the Company is Transferred in
accordance with the terms of this Agreement, the transferee shall succeed to the
Capital Account of the transferor to the extent it relates to the Transferred
Interest.

          (4) In determining the amount of any liability for purposes of
subsections (1) and (2) of this definition, there shall be taken into account
Code Section 752(c) and any other applicable provisions of the Code and
Regulations.

          (5) The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted and
applied in a manner consistent with such Regulations. In the event that the
Board of Managers shall determine that it is prudent to modify the manner in
which the Capital Accounts, or any additions or subtractions thereto, are
computed in order to comply with such Regulations, the Board of Managers may
make such modification, provided that it is not likely to have a material effect
on the amounts distributable to any Member pursuant to Article 8 hereof upon the
dissolution of the Company. The Board of Managers shall also make (a) any
adjustments that are necessary or appropriate, in the absence of guidance under
applicable Regulations, to maintain equality between the Capital Accounts of the
Members and the amount of Company capital reflected on the Company's balance
sheet, as computed for book purposes, in accordance with Regulations Section
1.704-1(b)(2)(iv)(q), and (b) any appropriate modifications in the event that
unanticipated events might otherwise cause this Agreement not to comply with
Regulations Sections 1.704-1(b) and 1.704-2.

          "Capital Contributions" means, with respect to any Member, the total
amount of cash and the initial Gross Asset Value of property (other than cash)
contributed to the capital of the Company by such Member.

          "Cash" means cash and cash equivalents determined by the Board of
Managers in good faith consistent with GAAP.

          "Certificate" is defined in Section 1.1.

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          "Chairman of the Board" is defined in Section 5.5.

          "Change in Control" shall be deemed to have occurred, with respect to
Micron or Photronics, when:

          (1) Any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act) of shares representing more
than fifty percent (50%) of the combined voting power of the then outstanding
securities entitled to vote generally in elections of directors of Micron or
Photronics, as the case may be (the "Voting Stock");

          (2) Micron or Photronics (A) consolidates with or merges into any
other Person or any other Person merges into Micron or Photronics, and in the
case of any such transaction, the outstanding common stock of Micron or
Photronics, as the case may be, is changed or exchanged into other assets or
securities as a result, unless the stockholders of Micron or Photronics, as the
case may be, immediately before such transaction own, directly or indirectly
immediately following such transaction, more than fifty percent (50%) of the
combined voting power of the outstanding voting securities of the corporation
resulting from such transaction in substantially the same proportion as their
ownership of the Voting Stock immediately before such transaction, or (B)
conveys, transfers or leases all or substantially all of its assets to any
Person; or

          (3) Any time Continuing Directors do not constitute a majority of the
Board of Directors of Micron or Photronics, as the case may be (or, if
applicable, a successor Person to Micron or Photronics, as the case may be).

          "Change in Control Notice" is defined in Section 7.4.1.

          "Change in Control Closing" is defined in Section 7.4.2.

          "Change in Control Closing Price" is defined in Section 7.4.3.

          "Change in Control Option Price" is defined in Section 7.4.3.

          "Code" means the Internal Revenue Code of 1986, as amended from time
to time (or any corresponding provisions of succeeding law).

          "Company" is defined in the preamble.

          "Company Accountant" shall mean initially PricewaterhouseCoopers LLP
or such other independent accounting firm as appointed from time to time by the
Board of Managers.

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Securities and Exchange Commission.

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          "Company Assets" means all direct and indirect rights and interests in
real and personal property owned by the Company and its subsidiaries from time
to time, and shall include both tangible and intangible property (including
Cash).

          "Company Correlative Item" is defined in Section 10.4.4(b).

          "Company Entity" means the Company, or any of its directly or
indirectly majority owned subsidiaries (whether organized as corporations,
limited liability companies or other legal entities).

          "Company Minimum Gain" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d)(1) for the phrase "partnership minimum
gain."

          "Company Section 482 Allocation" is defined in Section 10.4.4(a).

          "Competing Products" [****].

          "Continuing Director" means, solely with respect to Micron or
Photronics, at any date, a member of Micron's or Photronics' Board of Directors,
as the case may be, (i) who was a member of such board as of the Effective Date
or (ii) who was nominated or elected by at least a majority of the directors who
were Continuing Directors at the time of such nomination or election or whose
election to such board was recommended or endorsed by at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election or such lesser number comprising a majority of a nominating committee
comprised of independent directors if authority for such nominations or
elections has been delegated to a nominating committee whose authority and
composition have been approved by at least a majority of the directors who were
Continuing Directors at the time such committee was formed.

          "Contribution and Purchase Agreement" means the Contribution and Units
Purchase Agreement dated as of the date hereof by and between the Company,
Micron and Photronics.

          "Depreciation" means, for each Fiscal Year of the Company or other
period, an amount equal to the federal income tax depreciation, amortization or
other cost recovery deduction allowable with respect to an asset for such year
or other period, except that if the Gross Asset Value of an asset differs from
its adjusted basis for federal income tax purposes at the beginning of such year
or other period, Depreciation shall be an amount that bears the same ratio to
such beginning Gross Asset Value as the federal income tax depreciation,
amortization or other cost recovery deduction for such year or other period
bears to such beginning adjusted tax basis; provided, however, that if the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period is zero, Depreciation shall be determined with
reference to such beginning Gross Asset Value using any reasonable method
selected by the Board of Managers.

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          "Economic Interest" means a Person's right to share in allocations of
Net Profits, Net Losses and other items of income, gains, losses, deductions and
credits hereunder and to receive distributions from the Company as set forth in
this Agreement, but does not include any other rights of a Member including,
without limitation, the right to vote or to participate in the management of the
Company, or, except as specifically provided in this Agreement or required under
the Act, any right to information concerning the business and affairs of the
Company.

          "Effective Date" is defined in the preamble.

          "Excess Allocation" is defined in Section 9.1.2.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended.

          "Fiscal Month" is defined in Section 5.10.1.

          "Fiscal Quarter" is defined in Section 5.10.1.

          "Fiscal Year" is defined in Section 5.10.1.

          "GAAP" means generally accepted accounting principles in the United
States as in effect from time to time.

          "GAAS" means generally accepted auditing standards in the United
States as in effect from time to time.

          "General Manager" is defined in Section 5.12.1.

          "Governmental Authority" means any foreign, domestic, national,
federal, territorial, state or local governmental authority, quasi-governmental
authority, instrumentality, court, government or self-regulatory organization,
commission, tribunal or organization or any regulatory, administrative or other
agency, or any political or other subdivision, department or branch of any of
the foregoing.

          "Gross Asset Value" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:

          (1) The initial Gross Asset Value of the Micron Contributed Assets
shall be as set forth on Exhibit A. The initial Gross Asset Value of any other
asset contributed by a Member shall be the fair value of such asset as
determined by the Board of Managers and the contributing Member.

          (2) The Gross Asset Value of all Company Assets immediately prior to
the occurrence of any event described in subsections (a) through (d) hereof
shall be adjusted to equal their respective fair values, in accordance with the
applicable valuation provisions of this Agreement, or if there are no such
provisions, as determined by the Board of Managers using such reasonable method
of valuation as the Board of Managers may adopt, upon the occurrence of the
following events and in accordance with the applicable Regulations:

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               (a) the acquisition of an additional Interest in the Company
(other than in connection with the execution of this Agreement) by a new or
existing Member in exchange for more than a de minimis Capital Contribution, if
the Board of Managers reasonably determines that such adjustment is necessary or
appropriate to reflect the relative Economic Interests of the Members in the
Company;

               (b) the distribution by the Company to a Member of more than a de
minimis amount of Company Assets as consideration for an Economic Interest or
Interest in the Company, if the Board of Managers reasonably determines that
such adjustment is necessary or appropriate to reflect the relative Economic
Interests of the Members in the Company;

               (c) the liquidation of the Company within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g); and

               (d) at such other times as the Board of Managers shall reasonably
determine necessary or advisable in order to comply with Regulations Sections
1.704-1(b) and 1.704-2.

          (3) The Gross Asset Value of any Company Asset distributed to a Member
shall be the gross fair market value of such Company Asset on the date of
distribution as determined by the Board of Managers.

          (4) The Gross Asset Values of Company Assets shall be increased (or
decreased) to reflect any adjustments to the adjusted basis of such Company
Assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the
extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); provided,
however, that Gross Asset Values shall not be adjusted pursuant to this
subsection (4) of this definition to the extent that the Board of Managers
reasonably determines that an adjustment pursuant to subsection (2) of this
definition above is necessary or appropriate in connection with a transaction
that would otherwise result in an adjustment pursuant to this subsection (4) of
this definition.

          (5) If the Gross Asset Value of a Company Asset has been determined or
adjusted pursuant to subsections (1), (2) or (4) of this definition, such Gross
Asset Value shall thereafter be adjusted by the Depreciation taken into account
with respect to such Company Asset for purposes of computing Net Profits and Net
Losses.

          "Increasing Member" is defined in Section 5.4.1

          "Indemnified Loss" is defined in Section 5.11.1.

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          "Indemnitee" is defined in Section 5.11.1.

          "Liquidators" is defined in Section 8.5.1.

          "Majority Member" is defined in Section 7.3.1.

          "Managers" means at any time the individuals designated in accordance
with Section 5.2 to serve on the Board of Managers.

          "Maximum Base Contributions Amount" is defined in Section 4.1.2(a).

          "Maximum Excess Contributions Amount" is defined in Section 4.1.2(b).

          "Member" means a Person owning a Membership Interest.

          "Member Correlative Item" is defined in Section 10.4.4(a).

          "Member Minimum Gain" means "partner nonrecourse debt minimum gain" as
defined in Regulations Section 1.704-2(i)(2).

          "Member Nonrecourse Debt" means "partner nonrecourse debt" as set
forth in Regulations Section 1.704-2(b)(4).

          "Member Nonrecourse Deductions" means "partner nonrecourse deductions"
as set forth in Regulations Section 1.704-2(i).

          "Member Section 482 Allocation" is defined in Section 10.4.4(b).

          "Membership Interest" or "Interest" means the entire ownership
interest of a Member in the Company at any particular time, including without
limitation, the Member's Economic Interest, any and all rights to vote and
otherwise participate in the Company's affairs, and the rights to any and all
benefits to which a Member may be entitled as provided in this Agreement,
together with the obligations of such Member to comply with all of the terms and
provisions of this Agreement. A Membership Interest may be expressed as a number
of Units.

          "Micron" is defined in the preamble.

          "Micron Contributed Assets" mean the "Transferred Assets" (as defined
in the Contribution and Purchase Agreement) contributed by Micron to the
Company.

          "Micron Manager" means any of the Managers designated by Micron to
serve on the Board of Managers in accordance with Section 5.2.

          "Minority Closing" is defined in Section 7.3.1.

          "Minority Closing Price" is defined in Section 7.3.2.

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          "Minority Member" is defined in Section 7.3.1.

          [****]

          "Net Profits" or "Net Losses" means, for each Fiscal Year or other
period, an amount equal to the Company's taxable income or loss for such year or
period determined in accordance with Code Section 703(a) (for this purpose, all
items of income, gain, loss or deduction required to be stated separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss),
with the following adjustments:

          (1) Any income of the Company that is exempt from federal income tax
and not otherwise taken into account in computing Net Profits or Net Losses
pursuant to this definition shall be added to such taxable income or loss;

          (2) Any expenditure of the Company described in Code Section
705(a)(2)(B) or treated as a Code Section 705(a)(2)(B) expenditure pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Profits or Net Losses pursuant to this subsection (2) of this
definition, shall be subtracted from such taxable income or loss;

          (3) Gain or loss resulting from any disposition of Company Assets
where such gain or loss is recognized for federal income tax purposes shall be
computed by reference to the Gross Asset Value of the Company Assets disposed
of, notwithstanding that the adjusted tax basis of such Company Assets differs
from its Gross Asset Value;

          (4) In lieu of the depreciation, amortization and other cost recovery
deductions taken into account in computing such taxable income or loss, there
shall be taken into account Depreciation for such Fiscal Year;

          (5) To the extent an adjustment to the adjusted tax basis of any asset
included in Company Assets pursuant to Code Section 734(b) or Code Section
743(b) is required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be
taken into account in determining Capital Accounts as a result of a distribution
other than in liquidation of a Member's Interest, the amount of such adjustment
shall be treated as an item of gain (if the adjustment increases the basis of
the asset) or loss (if the adjustment decreases the basis of the asset) from the
disposition of the asset and shall be taken into account for the purposes of
computing Net Profits and Net Losses;

          (6) If the Gross Asset Value of any Company Asset is adjusted in
accordance with subsection (2) or subsection (3) of the definition of "Gross
Asset Value," the amount of such adjustment shall be taken into account in the
taxable year of such adjustment as gain or loss from the disposition of such
asset for purposes of computing Net Profits or Net Losses; and

          (7) Notwithstanding any other provision of this definition, any items
of income, gain, loss or deduction that are specially allocated pursuant to
Sections 10.2 and 10.4.4 shall not be taken into account in computing Net
Profits or Net Losses. The amount of items of income, gain, loss and deduction
available to be specially allocated shall be determined using principles
analogous to those set forth in this definition.

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          The Members acknowledge and agree that for financial accounting
purposes the results of the Company's operations will be reported in accordance
with GAAP.

          "Non-Disclosure Agreement" means the Non-Disclosure Agreement, dated
as of the date hereof, by and among the Company, Micron and Photronics.

          "Nonrecourse Deductions" has the meaning set forth in Regulations
Sections 1.704-2(b)(1) and 1.704-2(c).

          "Officer" is defined in Section 5.12.3.

          "Option Price" is defined in Section 7.3.2.

          "Percentage Interest" means, with respect to a Member holding one or
more Units, its Interest in the Company as determined by dividing the number of
Units owned by such Member by the total number of Units of the Company then
outstanding as specified in Exhibit A attached hereto, as such exhibit may be
modified or supplemented from time to time in accordance with the terms of this
Agreement. A change in a Member's Capital Account shall not affect the
Percentage Interests of the Members unless expressly provided in this Agreement.

          [****]

          "Person" means any person or entity, whether an individual, trustee,
corporation, partnership, limited partnership, limited liability company, trust,
unincorporated organization, business association, firm, joint venture, other
legal entity or Governmental Authority.

          "Photronics" is defined in the preamble.

          "Photronics Manager" means any of the Managers designated by
Photronics to serve on the Board of Managers in accordance with Section 5.2.

          "Primary Objectives" is defined in Section 1.7.

          "Proceeding" means any action, suit, hearing, arbitration, proceeding
(public or private), investigation, examination, audit or claim brought by or
against any Governmental Authority.

          "R&D" is defined in Section 3.6.

          "Reducing Member" is defined in Section 5.4.1.

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          "Regulations" means temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).

          "Regulatory Allocations" is defined in Section 10.2.8.

          "Representative" is defined in Section 5.11.7(e).

          "Responsible Party" is defined in Section 5.11.6.

          "Secondary Objective" is defined in Section 1.7.

          "SG&A" is defined in Section 3.6.

          "Special Vote" means the affirmative vote or consent of each of Micron
(provided that Micron shall be entitled to such vote or consent only so long as
Micron's Percentage Interest is at least twenty-five percent (25%)) and
Photronics (provided that Photronics shall be entitled to such vote or consent
only so long as Photronics' Percentage Interest is at least twenty-five percent
(25%)).

          "Tax" or "Taxes" means all taxes, levies, imposts and fees imposed by
any Governmental Authority (domestic or foreign) of any nature including but not
limited to federal, state, local or foreign net income tax, alternative or
add-on minimum tax, profits or excess profits tax, franchise tax, gross income,
adjusted gross income or gross receipts tax, employment related tax (including
employee withholding or employer payroll tax, FICA or FUTA), real or personal
property tax or ad valorem tax, sales or use tax, excise tax, stamp tax or duty,
any withholding or back up withholding tax, value added tax, severance tax,
prohibited transaction tax, premiums tax, occupation tax, together with any
interest or any penalty, addition to tax or additional amount imposed by any
Governmental Authority (domestic or foreign) responsible for the imposition of
any such tax.

          "Tax Matters Partner" shall mean Micron.

          "Technology License Agreement" means the Technology License Agreement
dated as of the date hereof by and among the Company, Micron and Photronics.

          "Technology Steering Committee" is defined in Section 5.13.

          "Transaction Documents" is defined in Section 1.8.

          "Transfer" (including, with correlative meaning, the term
"Transferred") means, with respect to any Unit, Membership Interest or Economic
Interest or portion thereof, a sale, conveyance, exchange, assignment, pledge,
encumbrance, gift, bequest, hypothecation or other transfer or disposition by
any other means, whether for value or no value and whether voluntary or
involuntary (including, without limitation, by operation of law), or an
agreement to do any of the foregoing.

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          "Unit" means, with respect to a Membership Interest, a fractional,
undivided share of such Membership Interest issued pursuant to Article 3 of this
Agreement. A Membership Interest may include a fractional Unit. As of the date
hereof, the Units are held by the Members in accordance with Exhibit A, which
Exhibit will be updated from time to time in accordance with the terms of this
Agreement.

          "Voting Stock" is defined in the definition of "Change in Control."

ARTICLE 3.
CAPITAL; CAPITAL ACCOUNTS AND MEMBERS

               3.1 Initial Capital Contributions of Members

          3.1.1 Capital Contributions. The Members acknowledge and agree that as
of the date hereof: (i) pursuant to the Contribution and Purchase Agreement
Micron has contributed to the Company the Micron Contributed Assets; and (ii)
pursuant to the Assignment and Assumption Agreement Micron has assigned to the
Company certain contractual rights and other liabilities, and the Company has
assumed certain liabilities of Micron in connection therewith. Upon Photronics
purchase of 49,990 Units, from Micron pursuant to the Contribution and Purchase
Agreement, Photronics' and Micron's Capital Account balances shall have a
relative ratio equal to 49.99 divided by 50.01.

          3.1.2 Capital Account Balances. The names, addresses, initial Capital
Account balances of each Member (after giving effect to the transactions
described in Section 3.1.1 and the sale by Micron of an Interest in the Company
to Photronics pursuant to the LLC Units Sale and Purchase Agreement), Percentage
Interests of, and number of Units owned by, the Members are as set forth on
Exhibit A, provided that the gross asset value and capital account balances on
Exhibit A will not be finalized until the completion of the balance sheet
referenced in Section 5.10.3(a).

               3.2 Additional Capital Contributions by Members

          Except as provided in Section 3.1 and Section 4.1.2, no Member shall
be required to make any Capital Contributions to the Company.

               3.3 Capital Accounts

          A Capital Account shall be established and maintained by the Company
for each Member in accordance with the terms of this Agreement.

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               3.4 Member Capital

          Except as otherwise provided in this Agreement or approved by a
Special Vote: (a) no Member shall demand or be entitled to receive a return of
or interest on any portion of its Capital Contributions or balance in its
Capital Account; (b) no Member shall withdraw any portion of its Capital
Contributions or receive any distributions from the Company as a return of
capital on account of such Capital Contributions; and (c) the Company shall not
redeem or repurchase the Membership Interest of any Member, provided that any
such return, distribution or redemption that is permitted hereunder shall be pro
rata based upon the Members' respective Percentage Interests.

               3.5 Liability of Members

          Except as otherwise required by any non-waivable provision of the Act
or other Applicable Law and except as provided in this Agreement or other
agreements between the Company and one or more Members or their Affiliates, no
Member shall be liable in any manner whatsoever for any debt, liability or other
obligation of the Company, whether such debt, liability or other obligation
arises in contract, tort, or otherwise solely by reason of being a Member.

               3.6 Certain Expenses.

          [****]

ARTICLE 4.
FINANCING OF THE COMPANY

               4.1 Types of Financing

          4.1.1 General. The Board of Managers shall be responsible for
determining the type of financing required to fund the operations of the
Company, which may include Capital Contributions from Members or incurring debt
from Members or from public, private or bank markets.

          4.1.2 Member Contributions.

               (a) If the Board of Managers determines that the Company requires
additional funding by way of Capital Contributions, then the Members shall make
additional Capital Contributions of up to [****]. Any such written notice shall
include the amount of required Capital Contribution and the required funding
date and shall be sent to the Members at least twenty (20) Business Days prior
to the required funding date. Such required funding date shall correspond to the
end of a Fiscal Month. Subject to the dollar limitation set forth in this
Section 4.1.2(a), [****].

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               (b) If the Members (or one of the Members as allowed pursuant to
Section 4.1.2(c)) have made all of the Base Contributions provided for by
Section 4.1.2(a) during any year and the Board of Managers determines that
additional funding is required and advisable, then the Company shall pursue its
own additional needed financing. If, after using its reasonable efforts to
obtain such financing, the Company cannot obtain such financing on terms that
are acceptable to the Company, then the Company may request that the Members
make additional Capital Contributions in excess of the Base Contributions of up
to an additional aggregate amount equal to such amount as agreed between the
Members or, absent any such agreement, [****] (the "Maximum Excess Contributions
Amount") (each Member having the right to contribute its pro rata share,
determined by multiplying such amount by such Member's Percentage Interest (the
"Excess Contributions")) to the Company upon the written request of the Board of
Managers. Any such written request shall include the amount of requested Capital
Contribution and the required funding date and shall be sent to the Members at
least twenty (20) Business Days prior to the required funding date. Such
required funding date shall correspond to the end of a Fiscal Month. Subject to
the dollar limitation set forth in this Section 4.1.2(b), there shall be no
limit on the number of such requests for Excess Contributions that the Board of
Managers may make in any year. Subject to Section 4.1.2(c), each Member shall
have the right to make any Excess Contribution pro rata based on its Percentage
Interest.

               (c) If a Member fails to make a required Base Contribution or a
requested Excess Contribution by the required funding date set forth pursuant to
Section 4.1.2(a) or (b) above, then the other Member may elect to fund its
portion and all or part of the non-funding Member's portion of such Base
Contribution or Excess Contribution; provided, however, that in no event may a
Member make during any year aggregate Base Contributions, including those made
for itself and for the non-funding Member, in excess of the Maximum Base
Contributions Amount or aggregate Excess Contributions, including those made for
itself and for the non-funding Member, in excess of the Maximum Excess
Contributions Amount, without the prior written consent of the other Member.

               (d) Upon the payment by either or both Members of any required
Base Contribution or requested Excess Contribution, the Company shall issue a
number of additional Units (rounded down to the nearest whole Unit) to the
funding Member(s) equal to the amount of the Base Contribution or Excess
Contribution, as the case may be, funded by the funding Member(s) divided by a
fraction, the numerator of which is the [****]of the Company's Assets, less the
[****] of the Company's liabilities, as of the required funding date immediately
prior to the funding of the Base Contributions or Excess Contributions, as the
case may be, and the denominator of which is the number of Units outstanding
immediately prior to the funding of the Base Contributions or Excess
Contributions, as the case may be.

               (e) The provisions of Sections 4.1.2(a)-(d) (including any
obligation to make any Base Contribution or Excess Contribution requested on or
prior to [****]) shall not apply following [****]unless neither Member has
provided notice pursuant to Section 8.2(f) prior to [****], in which case such
provisions shall again be applicable following [****].

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ARTICLE 5.
MANAGEMENT

               5.1 Board of Managers

          5.1.1 Powers. Except as otherwise expressly provided in this
Agreement, all management powers over the business, property and affairs of the
Company are exclusively vested in a board of Managers (the "Board of Managers"),
and no Member shall have any right to participate in or exercise control or
management power over the business and affairs of the Company or otherwise to
bind, act or purport to act on behalf of the 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,
which shall include, without limitation, the power to incur indebtedness, the
power to enter into agreements and commitments of all kinds, the power to
manage, acquire and dispose of Company Assets, and all ancillary powers
necessary or convenient to the foregoing. Unless authorized by a Special Vote,
no individual Manager may, in his or her capacity as a Manager, act for the
Board of Managers or have authority to bind the Company. The Board of Managers
may also designate one or more persons to open bank accounts and conduct other
banking business on behalf of the Company. The Managers shall devote such time
to the business and affairs of the Company as is reasonably necessary for the
performance of their duties, but shall not be required to devote full time to
the performance of such duties.

          5.1.2 Evaluation of General Manager. The Board of Managers will be
responsible for supervision and evaluation of the Company's General Manager on
an ongoing basis, including at least an annual review of his or her performance
to ensure he or she is acting in accordance with prudent business practices.

               5.2 Number of Managers; Appointment of Managers

          The Board of Managers shall initially consist of six (6) individuals
(each such individual, a "Manager"). Subject to Sections 5.3 and 5.4 below,
three (3) of the Managers shall be appointed by Micron and three (3) of the
Managers shall be appointed by Photronics. Unless a Manager resigns (including
by death or retirement) or is removed either by the Member who appointed such
Manager or in accordance with Section 5.3 or 5.4, each Manager shall hold office
until a successor shall have been duly appointed by the appointing Member. Each
Member having the right to nominate a Manager or Managers pursuant to this
Section 5.2 shall 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, the
Company and the Manager(s) to be removed. In the case of a vacancy in the office
of a Manager for any reason (including by reason of death, resignation,
retirement, expiration of such Manager's term or removal pursuant to the
preceding sentence), the vacancy shall be filled by the Member that nominated
the Manager in question; provided, however, that in the case of a vacancy
created due to a change in a Member's Percentage Interest as described in
Section 5.3 or 5.4, such vacancy shall be filled in accordance with Section 5.3
or 5.4. Micron hereby selects the individuals specified on Exhibit B hereto to
serve on the initial Board of Managers. Photronics hereby selects the
individuals specified on Exhibit C hereto to serve on the initial Board of
Managers.

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               5.3 Effect of Reduction in Photronics' Percentage Interest on
Photronics Managers

          Subject to Section 5.4.1 below, the number of Managers that Photronics
can appoint to or maintain on the Board of Managers shall depend on Photronics'
Percentage Interest as follows:

Photronics' Percentage Interest        Number of Photronics Managers [****] 3
[****] 1 [****] 0

               5.4 Effect of Reduction in Micron's Percentage Interest on Micron
Managers

          Subject to Section 5.4.1 below, the number of Managers that Micron can
appoint to or maintain on the Board of Managers shall depend on Micron's
Percentage Interest as follows:

Micron's Percentage Interest        Number of Micron Managers [****] 3 [****] 1
[****] 0

          5.4.1 Procedure. If either Member's Percentage Interest should be
below any of the threshold levels set forth in Sections 5.3 or 5.4 above and if
such Member (the "Reducing Member") then has more designees serving on the Board
of Managers than the number to which it is entitled, such Reducing 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 Reducing Member fails to make such designation
within five (5) Business Days after written demand by the other Member (the
"Increasing Member"), the Increasing Member may designate by written notice to
the Reducing Member one or more (as appropriate) of the Reducing 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. Upon the written notice described in either of the
immediately preceding two sentences, the Increasing Member may immediately fill
the vacancies created by such removals by written notice to the other Member
designating its selected Manager(s). Similarly, if a Member whose Percentage
Interest fell below any threshold level set forth in Section 5.3 or 5.4
subsequently increases its Percentage Interest above any such level, the process
shall be reversed.

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               5.5 Chairman of the Board of Managers

          A Chairman of the Board of Managers (the "Chairman of the Board")
shall preside at all meetings of the Board of Managers. The Chairman of the
Board shall be selected from among the Managers appointed by Micron; provided,
however, that if the Percentage Interest of Micron falls below [****], then the
Chairman of the Board will be selected by Photronics if Photronics' Percentage
Interest is above [****] or otherwise by the Board of Managers.

               5.6 Meetings of Members and of the Board of Managers; Quorum

          5.6.1 Member Meetings. At any time, and from time to time, the Board
of Managers may, but shall not be required to, call meetings of the Members.
Special meetings of the Members for any proper purpose or purposes may be called
at any time by either Member. Written notice of any such meeting (which may be
given via confirmed facsimile, confirmed e-mail or other manner provided for in
Section 11.5) shall be given to all Members not less than five (5) Business Days
nor more than thirty-five (35) Business Days prior to the date of such meeting.
Each meeting of the Members shall be conducted by the Chairman of the Board of
Managers or any designee thereof. Each Member may authorize any Person by
written proxy 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 from time to time be established in
the sole discretion of the Board of Managers.

          5.6.2 Action by Member Consent. Any action which may be taken at any
meeting of the Members may be taken without a meeting, without prior notice and
without a vote if a consent in writing, setting forth the action so taken, is
executed by all Members.

          5.6.3 Board Meetings. The Board of Managers shall hold meetings at
least once every Fiscal Quarter. The presence of four (4) Managers (with at
least fifty percent (50%) of the Managers present being Micron Managers), in
each case, in person or by telephone conference or by other means of
communication 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. Each Member may authorize
any Person by written proxy to act for or on behalf of any Manager that such
Member has the right to nominate on all matters in which such Manager is
entitled to participate. Each proxy must be signed by a duly authorized officer
of the Member. Each Member shall be responsible for the expenses of the
Manager(s) appointed by such Member in connection with all meetings of the Board
of Managers. Either Member may place items on the agenda for any meeting of the
Board of Managers, and the Chairman of the Board of Managers will call for a
vote on any matter at the reasonable request of any Member.

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          5.6.4 Notice; Waiver. The regular quarterly meetings of the Board of
Managers described in Section 5.6.3 shall be held upon not less than five (5)
Business Days written notice. Additional meetings of the Board of Managers may
be held at the request of any Manager, upon not less than five (5) Business
Days' written notice (which may be given via confirmed facsimile, confirmed
e-mail or other manner provided for in Section 11.5) or telephonic notice to
each Manager (which notice shall be provided to the other Managers by the
requesting Manager). The presence of any Manager at a meeting (including by
means of telephone conference or other means of communication acceptable to the
Board of Managers) shall constitute a waiver of notice of the meeting with
respect to such Manager. No action taken by the Managers at any meeting shall be
valid unless the requisite quorum is present.

          5.6.5 Voting of Managers. Except as otherwise expressly provided in
this Agreement, 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; provided,
however, that in the event of an evenly split vote, the Chairman of the Board
will automatically receive an additional vote to break any such evenly split
vote. Except as provided in the prior sentence, each Manager shall be entitled
to one (1) vote, and Managers shall be entitled to cast their vote through
proxies. The Board of Managers may act without a meeting if the action is
consented to in advance or subsequently ratified, in each case in writing, by
all of the Managers.

          5.6.6 Meetings by Telecommunications. Managers and their proxies 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. Members and their representatives and proxies shall have the right to
participate in all meetings of the Members 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.

          5.6.7 Reliance by Third Parties. Any Person dealing with the Company,
the Micron Member, the Photronics Member, any Manager or any Officer may rely
upon a certificate signed by any one Micron Manager and one Photronics Manager
as to: (a) the identity of any Manager or Officer; (b) the existence or
non-existence of any fact or facts which constitute a condition precedent to
acts by the Managers or Officers or in any other manner germane to the affairs
of the Company; (c) the Persons who are authorized to execute and deliver any
instrument or document for or on behalf of the Company; or (d) any act or
failure to act by the Company or as to any other matter whatsoever involving the
Company, the Micron Member, the Photronics Member, any Manager or any Officer.

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               5.7 Actions Requiring a Special Vote

          Notwithstanding the provisions of Section 5.6.5 or any other
provisions of this Agreement, the Company may not, and no Member or Manager may
cause the Company to, take any of the following actions (or any other action
specified in this Agreement as requiring a Special Vote) without a Special Vote:

               (a) effect a merger or consolidation (in a transaction or series
of transactions) in which the Company is not the surviving entity or in which
the Company is the surviving entity but in either case in which the Membership
Interests or Units possessing more than fifty percent (50%) of the total
combined Membership Interests or Units are transferred to a Person or Persons
different than those who held such interests immediately prior to the merger or
consolidation or the initial transaction culminating in such merger or
consolidation;

               (b) sell or otherwise transfer all or substantially all of the
assets of the Company to any other Person, including to another Company Entity;

               (c) settle any lawsuit, administrative proceeding, tax claim or
other legal proceeding where any Company Entity pays the settlement of a dollar
amount that is greater than [****] of the fair market value (subject to the last
paragraph of this Section 5.7, as determined by the Board of Managers) of the
assets of the Company Entities taken as a whole;

               (d) effect any investment in, or acquisition of, assets or equity
interests (including by a merger, consolidation or otherwise) by a Company
Entity or Company Entities that comprise greater than [****] of the fair market
value of the assets of the Company Entities taken as a whole, as determined by
the Board of Managers (other than in connection with the Company's routine cash
management functions);

               (e) approve the fairness of pricing terms and the fairness of
other terms having an economic impact of any contract, agreement, arrangement or
understanding (or any series of related contracts, agreements, arrangements or
understandings relating to the same or substantially similar subject matter)
entered into after the date hereof between any Company Entity on the one hand,
and either Member (or any of their respective Affiliates) on the other hand,
that involves actual or potential payments to or from any Company Entity
exceeding [****] in any Fiscal Year or [****] in the aggregate over the life of
the contract, agreement, arrangement or understanding;

               (f) approve the fairness of pricing terms and the fairness of
other terms having an economic impact of any amendment to any contract,
agreement, arrangement or understanding (or any series of related contracts,
agreements, arrangements or understandings relating to the same or substantially
similar subject matter) between any Company Entity on the one hand, and either
Member (or any of their respective Affiliates) on the other hand, which
amendment involves (i) a change in actual or potential payments to or from any
Company Entity exceeding [****] in any Fiscal Year or [****] in the aggregate
over the life of the contract, agreement, arrangement or understanding or (ii) a
material reduction in the services, rights or privileges received by any Company
Entity under the contract, agreement, arrangement or understanding without
proportionate reduction in fees, royalties or other payments to such Member (or
its respective Affiliates, provided that no Company Entity shall be deemed a
Member Affiliate for the purposes of this provision) thereunder;

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               (g) authorize any Company Entity to engage in or undertake any
material activity that is materially unrelated to the Company's pursuit of the
Business (for purposes of this subsection (g), "Business" shall mean all
activities related to or reasonably required in connection with the design,
development fabrication and sale of advanced photomasks);

               (h) effect any distribution from the Company to its Members other
than in cash or any distribution in cash other than in accordance with Article 9
of this Agreement;

               (i) effect any resolution to wind-up the Company or any Company
Entity (unless the relevant governing documents or this Agreement expressly
provide for "automatic" dissolution upon the occurrence of specified events);

               (j) effect the filing of any application or petition for
bankruptcy, reorganization or other similar proceedings under Applicable Law
with respect to the Company or any Company Entity;

               (k) file any lawsuit by the Company or any Company Entity against
any Person that is a customer of Photronics;

               (l) suspend the Company's operations for a period of greater than
[****];

               (m) issue any additional Units or Membership Interests, or
securities convertible into Units or Membership Interests, or admit any new
Member other than pursuant to the terms of this Agreement;

               (n) change the Company's Fiscal Year; or

               (o) [****].

               5.8 Compensation of Managers

          The Managers shall not be entitled to any compensation in their
capacities as Managers unless otherwise agreed upon in writing by all of the
Members.

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               5.9 Other Activities

          Subject to Applicable Law and the provisions of the Transaction
Documents, the Members, their respective Affiliates and the Managers may engage
or invest in, and devote their time to, any other business venture or activity
of any nature and description (independently or with others), whether or not
such other activity may be deemed or construed to be in competition with the
Company. Neither the Company nor any Member, Affiliate of a Member, or Manager
shall have any right by virtue of this Agreement or the relationship created
hereby in or to such other venture or activity of any Member or its Affiliates
(or to the income or proceeds derived therefrom), and the pursuit thereof, even
if competitive with the business of the Company, shall not be deemed wrongful or
improper.

               5.10 Accounting; Records and Reports

          5.10.1 Accounting and Fiscal Year. The books, records and accounts of
the Company, including for all applicable tax purposes, will be maintained in
accordance with such methods of accounting as shall be determined by the Board
of Managers. The fiscal year of the Company ("Fiscal Year"), including each of
the fiscal quarters (the "Fiscal Quarters") and each of the fiscal months
("Fiscal Months") thereof, shall correspond to that of Micron for as long as
Micron and/or an Affiliate of Micron holds a fifty percent (50%) or greater
Percentage Interest in the Company in the aggregate. The Company shall have a
taxable year which complies with Section 706(b) of the Code.

          5.10.2 Books and Records. The Board of Managers shall cause to be
kept, at such location as the Board of Managers shall reasonably deem
appropriate, full and proper ledgers, other books of account, and records of all
receipts and disbursements and other financial activities of the Company in
accordance with Micron's record retention policies. The Board of Managers shall
also cause to be kept at such location copies of each of the following:

               (a) a current list of the full name and last known address of
each Member, and the capital account, number of Units and Percentage Interest
held by each Member;

               (b) a current list of the full name and last known address of
each Manager;

               (c) the Certificate of the Company, any amendments to the
Certificate, and executed copies of any powers of attorney granted for the
purpose of executing the Certificate;

               (d) the Company's federal, state and local income tax returns and
reports, if any, for the seven (7) most recent Fiscal Years;

               (e) this Agreement and any amendments to this Agreement;

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               (f) financial statements of the Company for the five (5) most
recent Fiscal Years; and

               (g) minutes of all meetings of the Board of Managers and the
Members and any written consents of the Board of Managers or the Members for
actions taken without a meeting.

          5.10.3 Reports. The Board of Managers shall also cause to be sent to
each Member of the Company, the following:

               (a) within forty-five (45) days after the Effective Date, the
Company shall provide each Member with an unaudited balance sheet of the Company
as of the Effective Date;

               (b) within 180 days following the end of each Fiscal Year,
Schedule K-1 to IRS Form 1065 and such other information as may be reasonably
required by the Members for preparation of their respective federal, state and
local income or franchise tax returns;

               (c) a copy of the Company's federal, state and local income tax
or information returns for each Fiscal Year, concurrent with the filing of such
returns;

               (d) within seventy-five (75) days after the end of each Fiscal
Year or as soon thereafter as reasonably practicable, the Company shall provide
each Member with an audited balance sheet, income statement and statement of
cash flows for and as of the last day of the Fiscal Year then ended, audited in
accordance with GAAS by an auditor agreed to by Micron; provided, that
Photronics shall reimburse the Company for the cost of such audit;

               (e) within forty-five (45) days after the end of each Fiscal
Quarter or as soon thereafter as reasonably practicable, the Company shall
provide each Member with an unaudited balance sheet, income statement and
statement of cash flows for and as of the last day of the year or quarter (as
appropriate) then ended, prepared in accordance with GAAP, as well as such other
financial information as any Member may reasonably request to enable such Member
and its Affiliates to prepare their consolidated quarterly and annual financial
statements; and

               (f) within a reasonable period of time, notice of any material
litigation filed against the Company or any written claim by a Governmental
Authority of any material violation of any state, federal or foreign law,
statute, rule or regulation.

          5.10.4 Access to Company Books and Records.

               (a) To the extent not in violation of Applicable Law, Members
(personally or through an authorized representative) may, for purposes
reasonably related to their interests in the Company, during reasonable business
hours (i) examine and copy (at their own cost and expense) the books and records
of the Company, including the records listed in Section 5.10.2, and (ii) have
access to the Company's management, internal and external accountants and
attorneys, plans, properties and other assets to conduct due diligence and other
investigations regarding the Business and assets of the Company at such Member's
sole expense, and the Company shall reasonably cooperate with such Member in
such due diligence and investigations. Upon reasonable notice, Photronics may
also request reasonable short-term and temporary access to the properties of the
Company by Photronics customers for technology review and validation. Any
information obtained as a result of this Section 5.10.4 shall be used by a
Member solely for purposes reasonably related to such Member's participation in
the Company and shall be subject to the Non-Disclosure Agreement.

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               (b) Any Member's request for documents or request to inspect or
copy documents or have access to the Company's management, plans, properties and
other assets under this Section 5.10.4 (i) may be made by that Member or that
Member's authorized representative and (ii) shall be made in writing to the
General Manager and shall state the purpose of such demand. If a Member is not
satisfied with the response of the General Manager, the Member may make such
request of the Technology Steering Committee and/or the Board of Managers.

               5.11 Indemnification and Liability of the Managers

          5.11.1 Indemnification. The Company shall indemnify and hold harmless
each Manager, the General Manager and all other Officers (individually, an
"Indemnitee") to the fullest extent permitted by Applicable Law from and against
any and all losses, claims, demands, costs, damages, liabilities, whether joint
or several, expenses of any nature (including reasonable attorneys' fees and
disbursements), judgments, fines, settlements and other amounts (each an
"Indemnified Loss") arising from any and all claims, demands, actions, suits or
proceedings, civil, criminal, administrative or investigative, in which the
Indemnitee may be involved as a defendant, or threatened to be involved as a
defendant (other than all claims, demands, actions, suits or proceedings brought
by the Member who nominated such Manager, if applicable), relating to the
performance or nonperformance of any act concerning the activities of the
Company or by reason of the Indemnitee's status as a Manager, General Manager or
Officer, as applicable, regardless of whether the Indemnitee retains such status
at the time any such Indemnified Loss is paid or incurred, if (a) the Indemnitee
acted in good faith and in a manner he or she reasonably believed to be in, or
not opposed to, the best interests of the Company and, in the case of a criminal
proceeding, had no reasonable cause to believe that his or her conduct was
unlawful, and (b) the Indemnitee's conduct did not constitute an act or omission
which involved intentional misconduct or a knowing violation of the law. The
termination of an action, suit or proceeding by judgment, order, settlement, or
upon a plea of nolo contendere or its equivalent, shall not, in and of itself,
create a presumption or otherwise constitute evidence that the Indemnitee acted
in a manner contrary to that specified in clauses (a) or (b) above.

          5.11.2 Expenses. Expenses incurred by an Indemnitee in defending any
claim, demand, action, suit or proceeding subject to this Section 5.11 shall be
advanced by the Company prior to the final disposition of such claim, demand,
action, suit, or proceeding.

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          5.11.3 Company Expenses. Any indemnification provided hereunder shall
be satisfied solely out of the Company Assets, as an expense of the Company. No
Member shall be subject to liability by reason of these indemnification
provisions.

          5.11.4 No Other Rights. The provisions of this Section 5.11 are for
the benefit of the Indemnitees and shall not be deemed to create any rights for
the benefit of any other Person; provided, however, that the indemnification
rights provided in this Section 5.11 will inure to the benefit of the heirs,
legal representatives, successors, assigns and administrators of the Indemnitee.

          5.11.5 No Liability. No Indemnitee shall be liable to the Company or
to any Member for any losses sustained or liabilities incurred as a result of
any act or omission of any Indemnitee if (a) the Indemnitee acted in good faith
and in a manner he or she reasonably believed to be in, or not opposed to, the
best interests of the Company and, in the case of a criminal proceeding, had no
reasonable cause to believe that his or her conduct was unlawful, and (b) the
Indemnitee's conduct did not constitute an act or omission which involved
intentional misconduct or a knowing violation of the law.

          5.11.6 Reliance Upon Agreement. To the extent that any Manager,
General Manager or Officer (each, a "Responsible Party") has, under Applicable
Law or in equity, duties (including, without limitation, fiduciary duties) to
the Company, any Member or other Person bound by the terms of this Agreement,
such Responsible Parties acting in accordance with this Agreement shall not be
liable to the Company, any Member, or any such other Person for its good faith
reliance on the provisions of this Agreement.

          5.11.7 No Fiduciary Duties.

               (a) In connection with the determination of any and all matters
presented for action to the Members, the Board of Managers or the Technology
Steering Committee, 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 or the Technology Steering Committee 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 Company or any of its subsidiaries, and,
subject to Section 5.11.7(E), 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 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
decisions of the Representatives appointed by such Member without duty to or
regard for the interests of the other Member or the Company or any of its
subsidiaries.

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               (c) The Company, on its own behalf and on behalf of each of its
subsidiaries, and each Member waive, to the fullest extent permitted by
Applicable Law, (1) any claim or cause of action against any Member or Manager
or member of the Technology Steering Committee appointed by a Member based on
the determination of any and all matters presented for action to the Members,
the Board of Managers or the Technology Steering Committee, 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 Company or any of
its subsidiaries or the other Member.

               (d) The Company and each Member, by entering into this Agreement,
expressly acknowledge that neither Member nor any of its designated Managers
shall owe any fiduciary duties to the Company or to the other Member by virtue
of such Member's ownership of a majority of the Units of the Company or such
Member's Managers' positions on, and majority control of, the Board of Managers
or the Technology Steering Committee.

               (e) The term "Representative" shall mean, with respect to a
Member, the Managers and members of the Technology Steering Committee appointed
by such Member, but not including, only for purposes of Section 5.11.7(c)(2),
the General Manager or any other officer of the 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).

               5.12 General Manager

          5.12.1 General Manager. The Company will have a General Manager (the
"General Manager") to be selected by Micron with input from the Board of
Managers and Photronics; provided, however, that if the Percentage Interest of
Micron falls below [****]then the General Manager will (after input from the
Board of Managers and Micron) be selected by Photronics if Photronics'
Percentage Interest is above [****] or otherwise by the Board of Managers.

          5.12.2 Duties and Powers of the General Manager. The General Manager
shall, subject to the control of the Board of Managers, have general
supervision, direction and control of the day-to-day affairs of the Company and
shall report directly to the Board of Managers. Unless limited by the Board of
Managers or this Agreement, he or she shall have the general powers and duties
of management usually vested in the office of chief executive officer of
corporations and shall have such other powers and duties as may be prescribed by
the Board of Managers. Only the General Manager, the Board of Managers or
individuals authorized by the General Manager or the Board of Managers shall
have the ability to enter into binding agreements or approve payments on behalf
of the Company.

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          5.12.3 Other Officers; Employment; Removal. The Company may also have
a chief financial officer, a secretary and such other officers as determined by
the Board of Managers, each of whom will be accountable to the General Manager
(the General Manager and any other officers elected in accordance with this
Section 5.12.3, each, an "Officer" and collectively, the "Officers"). The
General Manager and any other Officer may be removed at any time upon an
affirmative vote of the majority of the Board of Managers.

          5.12.4 Duties and Powers of Chief Financial Officer. Any chief
financial officer of the Company shall keep and maintain, or cause to be kept
and maintained, books and records of accounts of the properties and business
transactions of the Company, including accounts of its assets, liabilities,
receipts, disbursements, gains, losses and capital. He or she shall disburse the
funds of the Company as may be ordered by the Board of Managers and shall render
to the Board of Managers at their request an account of all his or her
transactions as chief financial officer and of the financial condition of the
Company. Authorizations with respect to the Company's depositories, disbursement
of funds and related banking matters shall be as set forth in resolutions of the
Board of Managers.

          5.12.5 Duties and Powers of Secretary.

               (a) Any secretary of the Company shall attend (in person or by
telephone conference) all meetings of the Board of Managers and all meetings of
the Members (whether any of such meetings are in person, by telephone conference
or both) and record all votes and the minutes of all proceedings in a book to be
kept for that purpose, and shall perform like duties for any standing committees
when requested by such committee.

               (b) Any secretary of the Company shall keep, or cause to be kept,
at the principal executive office or at the office of the Company's transfer
agent or registrar, as determined by resolution of the Board of Managers, a
register, or a duplicate register, showing the names of all Members and their
addresses, Economic Interests and Percentage Interests, the number and date of
certificates issued for the same (if any), and the number and date of
cancellation of every certificate surrendered for cancellation (if any).

          5.12.6 General Provisions Regarding Officers.

               (a) The Board of Managers may, from time to time, designate
Officers of the Company and delegate to such Officers such authority and duties
as the Board of Managers may deem advisable and may assign titles (including,
without limitation, president, vice-president and/or treasurer) to any such
Officer. Unless the Board of Managers otherwise determines, if the title
assigned to an Officer of the Company is one commonly used for Officers of a
business corporation, 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. Any
number of titles may be held by the same Officer.

               (b) Any Officer to whom a delegation is made pursuant to the
foregoing 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.

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               5.13 Technology Steering Committee

          The Company will establish a Technology Steering Committee (the
"Technology Steering Committee") in accordance with the provisions of the
Technology License Agreement.

               5.14 Non-Disclosure Agreement

          The parties acknowledge and agree that the contents and terms and
conditions of all of the Transaction Documents and all proprietary or nonpublic
information disclosed by one party to another party in connection with the
Transaction Documents is subject to the Non-Disclosure Agreement.

               5.15 Maintenance of Insurance

          The Company shall at all times be covered by insurance of the types
and in the amounts set forth on Exhibit D. Such insurance coverage may be
provided through the coverage under one or more insurance policies maintained by
the Company or by either Member. A certificate of insurance will be provided to
the Members annually evidencing coverage.

               5.16 Related Party Agreements

          Micron, Photronics and the Company agree that any contract, agreement,
amendment, arrangement or understanding entered into after the date hereof
between any Company Entity on the one hand, and either Member (or any of their
respective Affiliates) on the other hand, shall be on an arms-length basis.

ARTICLE 6.
OPERATIONS

               6.1 Headquarters

          The Company's world headquarters shall be in Boise, Idaho.

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               6.2 Surplus Equipment

               [****]

               6.3 Printability Studies

               [****]

               6.4 Operations Plan; Annual Budget

          The Company will operate in accordance with an operations plan, which
plan shall be initially developed and agreed upon by Micron and Photronics, and
amended from time to time by the Board of Managers and in no event less than
annually. The Board of Managers will also be responsible for approving an annual
budget (the "Annual Budget") on at least an annual basis.

ARTICLE 7.
DISPOSITION AND TRANSFERS OF INTERESTS

               7.1 Holding of Membership Interest

          For so long as Micron or Photronics, directly or indirectly, maintains
a Membership Interest in the Company, Micron or Photronics, as applicable, must
own and hold such Membership Interest either (a) itself or (b) through one or
more wholly owned (including indirect wholly owned) subsidiaries.

               7.2 Transfer Moratorium

          No Member may Transfer all or any portion of its Membership Interest
to any other Person without the prior written consent of the other Member and
any such attempted Transfer shall be deemed void and of no force or effect, nor
shall Micron or Photronics without the prior written consent of the other sell
or transfer, or allow to be sold or transferred, or in any way dispose of, its
ownership interest, either direct or indirect, in any wholly owned subsidiary
(including any indirect wholly owned subsidiary) that owns, directly or
indirectly, the Membership Interest held by Micron or Photronics, respectively,
in each case other than [****].

               7.3 Purchase of Remaining Interest

          7.3.1 If the Percentage Interest of a Member (the "Minority Member")
drops to [****] or less and remains at or below [****] for more than six (6)
consecutive months, the other Member or a wholly owned subsidiary thereof (such
other Member or Affiliate thereof, the "Majority Member") shall have the option
to purchase all of the remaining Interest of the Minority Member at a cash
purchase price equal to the Option Price, subject to the terms and conditions
set forth below. 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
(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 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 Company 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 or instruments of conveyance as the Majority Member
reasonably requests.

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          7.3.2 Upon the Minority Closing, the Majority Member shall pay to the
Minority Member a sum (the "Minority Closing Price") equal to the product of (i)
the difference of [****]. Within five (5) Business Days after the month-end
balance sheet becomes available (prepared in accordance with GAAP consistently
applied and as of the last day of the Fiscal Month in which the Minority Closing
occurred), [****]. 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.

               7.4 Change in Control of Photronics

          7.4.1 [****].

          7.4.2 [****].

          7.4.3 [****].

          7.4.4 [****].

               7.5 Purchase and Sale Agreement

          In the event of any purchase and sale of Membership Interests under
Section 7.3, 7.4 or 8.5.3, the parties thereto shall enter into a commercially
reasonable agreement to implement such purchase and sale. Such agreement will
include that (a) the selling Member is released from any obligation to make
future capital contributions to the Company and (b) income and loss for the year
in which such closing occurs will be allocated to the selling Member on a basis
that reflects the actual operations of the Company's business for the period
prior to the Closing and will not be allocated based on the product of the
Company's income and loss for the entire year times that percentage of the year
in which the selling Member held a Membership Interest.

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ARTICLE 8.
DISSOLUTION, LIQUIDATION, AND TERMINATION OF THE COMPANY

               8.1 Limitations

          The Company may be dissolved, liquidated, and terminated only pursuant
to the provisions of this Article 8, and the parties hereto do hereby
irrevocably waive, to the extent permitted by Applicable Law, any and all other
rights they may have to cause a dissolution, liquidation or termination of the
Company or a sale or partition of any or all of the Company Assets in connection
with such dissolution or liquidation.

               8.2 Exclusive Causes

          Notwithstanding the Act, the following and only the following events
shall cause the Company to be dissolved, liquidated, and terminated:

               (a) the election of all of the Members;

               (b) the entry of a decree of judicial dissolution pursuant to
Section 18-802 of the Act;

               (c) any Member's election, if the Company ceases operation for
more than six (6) months unless due to Force Majeure (as defined in the Supply
Agreement dated as of the date hereof between Photronics and Micron);

               (d) Photronics' election following a material breach of this
Agreement or any other material provision of any of the Transaction Documents by
Micron and, if the material breach is capable of cure, such material breach
continues uncured for a period (i) specified in such Transaction Document or
(ii) of ninety (90) days of a written notice from Micron to Photronics of such
material breach if no cure period is specified in such Transaction Document;
provided that if the breach in the case of (ii) is capable of being cured and
the breaching party has worked diligently and in good faith since the receipt of
the notice to cure such breach, but has not cured the breach during the allotted
time, the cure period will be extended for an additional thirty (30) days;

               (e) Micron's election following a material breach of this
Agreement or any other material provision of any of the Transaction Documents by
Photronics; and, if the material breach is capable of cure, such material breach
continues uncured for a period (i) specified in such Transaction Document or
(ii) of ninety (90) days of a written notice from Micron to Photronics of such
material breach if no cure period is specified in such Transaction Document;
provided that if the breach in the case of (ii) is capable of being cured and
the breaching party has worked diligently and in good faith since the receipt of
the notice to cure such breach, but has not cured the breach during the allotted
time, the cure period will be extended for an additional thirty (30) days;

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               (f) either Member's election upon at least [****] notice prior to
(i) the ten-year anniversary of this Agreement or (ii) the last date of each
successive five-year period following the ten-year anniversary of this
Agreement, such termination to be effective upon such ten-year anniversary or
the last date of such five-year period, as applicable;

               (g) the election by a Member with a Percentage Interest of at
least 90% to dissolve and wind up the affairs of the Company (which election
shall not require the consent of the other Member), upon delivery of written
notice of such election to the Company and the other Member;

               (h) the occurrence of any other event that, under the Act, makes
it unlawful, impossible or impractical to carry on the business of the Company;

               (i) the election by either Member to dissolve and wind up the
affairs of the Company upon (a) the occurrence of a bankruptcy of the Company,
provided that the Member making such election is not in default of any payment
obligation to the Joint Venture Company or (b) the bankruptcy, 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; or

               (j) [****].

To the fullest extent permitted by law, any dissolution of the Company other
than as provided in this Section 8.2 shall be a dissolution in contravention of
this Agreement. The parties agree that the failure of a Member to make Base
Contributions (but not the failure of a Member to make Excess Contributions) or
the Transfer of Membership Interests by a Member in contravention of this
Agreement shall, among other matters, constitute a material breach of this
Agreement.

               8.3 Effect of Dissolution

          The dissolution of the Company shall be effective on the day on which
the event occurs giving rise to the dissolution, but the Company shall not
terminate until it has been wound up and its assets have been distributed as
provided in Section 8.5.1 or 8.5.3 of this Agreement. Notwithstanding the
dissolution of the Company, prior to the termination of the Company, the
business of the Company and the affairs of the Members, as such, shall continue
to be governed by this Agreement.

               8.4 No Capital Contribution Upon Dissolution

          Each Member shall look solely to the Company Assets for all
distributions with respect to the Company, its Capital Contribution thereto, its
Capital Account and its share of Net Profits or Net Losses, and shall have no
recourse therefor (upon dissolution or otherwise) against any other Member.
Accordingly, if any Member has a deficit Capital Account balance (after giving
effect to all contributions, distributions and allocations for all taxable
years, including the year during which the liquidation occurs), then such Member
shall have no obligation to make any Capital Contribution with respect to such
deficit, and such deficit shall not be considered a debt owed to the Company or
to any other Person for any purpose whatsoever.

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               8.5 Liquidation

          8.5.1 Upon dissolution of the Company, the Board of Managers (or other
Person(s) designated by a decree of court) shall act as the "Liquidators" of the
Company. The Liquidators shall liquidate the Company Assets, and after
allocating (pursuant to Article 10 of this Agreement) all income, gain, loss and
deductions resulting therefrom, shall apply and distribute the proceeds thereof
as follows:

               (a) first, to (i) the payment of the obligations of the Company
to third parties, including, but not limited to and on a pari passu basis,
taxes, debts, lease and other payments to Persons other than Members or their
Affiliates; (ii) the expenses of liquidation; and (iii) the setting up of any
reserves for contingencies, debts or liabilities to Persons other than the
Members or their Affiliates, whether the whereabouts of the creditor is known or
unknown, which the Board of Managers may consider necessary;

               (b) thereafter, amounts due to either Member or their respective
Affiliates (other than a Company Entity) pursuant to intellectual property
license agreements, consulting agreements, services agreements, subcontracting
agreements, lease agreements and other similar agreements; and

               (c) thereafter, to the Members in proportion to the positive
balances in the Members' respective Capital Accounts, determined after taking
into account all Capital Account adjustments for the Company's taxable year
during which such liquidation occurs, by the end of the taxable year in which
such liquidation occurs or, if later, within ninety (90) days after the date of
the liquidation.

          8.5.2 Notwithstanding Section 8.5.1 of this Agreement, in the event
that the Board of Managers determines that an immediate sale of all or any
portion of the Company Assets would cause undue loss to the Members, the Board
of Managers, in order to avoid such loss to the extent not then prohibited by
the Act, may either defer liquidation of and withhold from distribution for a
reasonable time any Company Assets except those necessary to satisfy the
Company's debts and obligations, or, subject to Section 9.4, distribute the
Company Assets to the Members in kind (in accordance with the second sentence of
Section 8.5.1).

          8.5.3 Notwithstanding Section 8.5.1 or 8.5.2 of this Agreement, in the
event of termination pursuant to Section 8.2 (other than pursuant to Section
8.2(d)) Micron shall have the right, exercisable within thirty (30) days of such
termination, to acquire, free and clear of all liens and other encumbrances (i)
from Photronics, Photronics' Membership Interest at a purchase price equal
[****]. The foregoing purchase price shall be determined (and adjusted as
necessary) in the manner provided in Section 7.4.3.

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ARTICLE 9.
DISTRIBUTIONS

               9.1 Distributions of Cash Available for Distribution

          9.1.1 Use of Cash. Subject to applicable legal and contractual
restrictions and to Section 9.2 and Article 8, Company cash will be treated as
follows (in the following order of priority):

               (a) First, cash will be retained in the Company in an amount
sufficient to fund the Company's operations. Such amount will take into
consideration scheduled debt service, lease and other payments to third parties
and payments of amounts due to either Member or their respective Affiliates
pursuant to intellectual property license agreements, consulting agreements,
services agreements, subcontracting agreements, lease agreements and other
similar agreements; and

               (b) Second, subject to Section 9.1.2, any excess cash remaining
will be distributed at the discretion of the Board of Managers to Micron and
Photronics pro rata based on their Percentage Interests at the time of such
distribution.

          9.1.2 Excess Allocations. Subject to Section 9.2 and Article 8, to the
extent a Member's Percentage Interest is adjusted for any reason as provided in
this Agreement and the aggregate allocations of Net Profit (and similar items)
net of any allocations of Net Losses (and similar items) made to such Member
pursuant to Article 10 on a cumulative basis through the effective time of such
adjustment exceeded: (a) the aggregate distributions made to such Member
pursuant to Sections 9.1.1(b) and 9.4 plus (b) all amounts previously
distributed to such Member pursuant to this Section 9.1.2 through such effective
time (collectively, an "Excess Allocation"), then prior to the making of any
further distributions pursuant to Section 9.1.1(b), distributions shall first be
made pro rata among the Members according to their respective Excess Allocation
amounts existing at such time, to the extent thereof.

               9.2 Distributions Upon Liquidation

          Distributions made in conjunction with the final liquidation of the
Company shall be applied or distributed as provided in Article 8 hereof.

               9.3 Withholding

          The Company may withhold amounts in respect of allocations or
distributions if it is required to do so by any Applicable Law, and each Member
hereby authorizes the Company to withhold from or pay on behalf of or with
respect to such Member such amount of federal, state, local or foreign taxes
that the Tax Matters Partner determines the Company is required to withhold or
pay with respect to any amount distributable or allocable to such Member
pursuant to this Agreement, provided that the Tax Matters Partner shall provide
Photronics with twenty (20) Business Days advance written notice of the amount
of any withholding to be made in respect of allocations or distributions to
Photronics (or any Affiliate of Photronics) which notice shall demonstrate the
calculation thereof. Any amount paid on behalf of or with respect to a Member
pursuant to this Section 9.3 shall constitute a loan by the Company to such
Member, which loan shall be repaid by such Member within twenty (20) Business
Days after notice from the Company that such payment must be made unless: (i)
the Company withholds such payment from a distribution that would otherwise be
made to the Company or (ii) the Tax Matters Partner determines, in its sole
discretion, that such payment may be satisfied out of Company Assets available
therefor which would, but for such payment, be distributed to the Member. Any
amounts withheld pursuant to this Section 9.3 shall be treated as having been
distributed to such Member. Each Member hereby represents that it has provided
to the Company IRS Form W-9 and that it has provided and will from time to time
provide such other forms or documents as may reasonably be required in order to
establish the status of such Member for purposes of the tax laws of any
applicable jurisdiction. Each Member agrees to indemnify and hold harmless the
Company from any liability imposed on the Company for (i) any action taken by
the Company in reliance upon such representation of tax withholding status or
(ii) any failure to withhold from any amount distributable or allocable, or
deemed distributable or allocable, to such Member pursuant to this Agreement. A
Member's obligations hereunder shall survive the dissolution, liquidation or
winding up of the Company. If a Governmental Authority asserts in writing to any
Person that the Company failed to withhold Tax at the time and/or in the amounts
required by Chapter 3 of the Code or comparable provisions of other Tax laws in
respect of Photronics and/or its Affiliates, then Photronics and/or its
Affiliates, as applicable, shall promptly upon receipt of a copy of such writing
accompanied by a written notice from the Company specifying that a payment is
required pursuant to this Section 9.3 pay to such Governmental Authority an
amount in full satisfaction of the amount of Taxes so asserted by such
Governmental Authority. If Photronics and its Affiliates do not promptly pay
such amount to such Governmental Authority, then, unless Photronics provides
satisfactory written evidence of settlement in full of the matter asserted by
the Governmental Authority, the Company shall withhold such amount from the next
distribution(s) to Photronics, shall promptly pay such withheld amounts over to
such Governmental Authority in payment of such asserted liability for Taxes and
shall treat the amounts so withheld and paid over as actually distributed to
Photronics.

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               9.4 Distributions in Kind

          Subject to Section 8.5.3, no right is given to any Member to demand or
receive any distribution of property other than cash as provided in this
Agreement. Upon a vote of the Board of Managers and a Special Vote, the Board of
Managers may determine (subject to the approval of the Special Vote) to make a
distribution in kind of Company Assets to the Members, and such Company Assets
shall be distributed in such fashion as to ensure that the fair market value
thereof (as determined by the Board of Managers and approved by the Special
Vote) is distributed, and any items of gain or loss resulting from such
distribution are allocated, in accordance with this Article 9 and Articles 6 and
10 hereof.

               9.5 Limitations on Distributions

          Notwithstanding any provision to the contrary contained in this
Agreement, neither the Company nor the Board of Managers, on behalf of the
Company, shall be required to or shall knowingly make a distribution to any
Member or the holder of any Economic Interest on account of its Membership
Interest or Economic Interest in the Company (as applicable) in violation of the
Act or other Applicable Law.

ARTICLE 10.
ALLOCATIONS OF NET PROFITS AND NET LOSSES

               10.1 General Allocation of Net Profits and Losses

          10.1.1 Net Profits and Net Losses shall be determined and allocated
with respect to each Fiscal Year or other period of the Company as of the end of
such Fiscal Year or other period and at such other times, if any, as the Board
of Managers shall determine is appropriate for purposes of administering this
Agreement. Subject to the other provisions of this Agreement, an allocation to a
Member of a share of Net Profits or Net Losses shall be treated as an allocation
of the same share of each item of income, gain, loss or deduction that is taken
into account in computing Net Profits or Net Losses.

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          10.1.2 Subject to the other provisions of this Article 10, Net
Profits, Net Losses and any other items of income, gain, loss and deduction for
any Fiscal Year shall be allocated in proportion to the Members' respective
Percentage Interests.

               10.2 Regulatory Allocations

          Notwithstanding the foregoing provisions of this Article 10, the
following special allocations shall be made in the following order of priority:

          10.2.1 If there is a net decrease in Company Minimum Gain during a
Company taxable year, then, to the extent required by Regulations Section
1.704-2(f), each Member shall be allocated items of Company income and gain for
such taxable year (and, if necessary, for subsequent years) in an amount equal
to such Member's share of the net decrease in Company Minimum Gain, determined
in accordance with Regulations Section 1.704-2(g)(2). This Section 10.2.1 is
intended to comply with the minimum gain chargeback requirement of Regulations
Section 1.704-2(f) and shall be interpreted consistently therewith.

          10.2.2 If there is a net decrease in Member Minimum Gain attributable
to a Member Nonrecourse Debt during any Company taxable year, each Member who
has a share of the Member Minimum Gain attributable to such Member Nonrecourse
Debt, determined in accordance with Regulations Section 1.704-2(i)(5), shall, to
the extent required by Regulations Section 1.704-2(i)(4), be specially allocated
items of Company income and gain for such taxable year (and, if necessary,
subsequent years) in an amount equal to such Member's share of the net decrease
in Member Minimum Gain attributable to such Member Nonrecourse Debt, determined
in a manner consistent with the provisions of Regulations Section 1.704-2(g)(2).
This Section 10.2.2 is intended to comply with the partner nonrecourse debt
minimum gain chargeback requirement of Regulations Section 1.704-2(i)(4) and
shall be interpreted consistently therewith.

          10.2.3 If any Member unexpectedly receives an adjustment, allocation,
or distribution of the type contemplated by Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6), and after receiving such adjustment,
allocation, or distribution, such Member has an Adjusted Capital Account
Deficit, items of income and gain shall be allocated to all such Members (in
proportion to the amounts of their respective Adjusted Capital Account Deficits)
in an amount and manner sufficient to eliminate the Adjusted Capital Account
Deficit of such Member as quickly as possible. This Section 10.2.3 is intended
to constitute a "qualified income offset" within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

          10.2.4 If the allocation of Net Loss to a Member as provided in
Section 10.1 would create or increase an Adjusted Capital Account Deficit for
such Member, there shall be allocated to such Member only that amount of Net
Loss as will not create or increase an Adjusted Capital Account Deficit. The Net
Loss that would, absent the application of the preceding sentence, otherwise be
allocated to such Member shall be allocated to the other Members in accordance
with their relative Percentage Interests, subject to the limitations of this
Section 10.2.4. If, after the allocation of Net Loss pursuant to the preceding
two sentences, no additional amount of Net Loss can be allocated to any Member
without creating or increasing an Adjusted Capital Account Deficit for such
Member, then Net Loss shall be allocated to the Members in accordance with their
relative Percentage Interests. This Section 10.2.4 is intended to implement the
alternate test for economic effect set forth in Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

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          10.2.5 To the extent that an adjustment to the adjusted tax basis of
any Company Asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as the result of a distribution to a Member in complete liquidation of
its Interest in the Company, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Members in accordance with
their interests in the Company in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Members to whom such distribution was
made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

          10.2.6 The Nonrecourse Deductions for each taxable year of the Company
shall be allocated to the Members in proportion to their Percentage Interests.

          10.2.7 The Member Nonrecourse Deductions shall be allocated each year
to the Member that bears the economic risk of loss (within the meaning of
Regulations Section 1.752-2) for the Member Nonrecourse Debt to which such
Member Nonrecourse Deductions are attributable.

          10.2.8 The allocations set forth in Sections 10.2.1, 10.2.2, 10.2.3,
10.2.4, 10.2.5, 10.2.6 and 10.2.7 (the "Regulatory Allocations") are intended to
comply with certain requirements of Regulations Sections 1.704-1(b) and 1.704-2.
Notwithstanding the provisions of Section 10.1.2, the Regulatory Allocations
shall be taken into account by the Board of Managers in specially allocating
other items of income, gain, loss and deduction among the Members so that, to
the extent possible, the net amount of such allocations of other items and the
Regulatory Allocations to each Member shall be equal to the net amount that
would have been allocated to each such Member if the Regulatory Allocations had
not occurred. In exercising its discretion under this Section 10.2.8, the Board
of Managers shall take into account future Regulatory Allocations that, although
not yet made, are likely to offset other Regulatory Allocations previously made.

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               10.3 Tax Allocations

          10.3.1 Except as provided in Section 10.3.2, for income tax purposes
under the Code and the Regulations and for purposes of applicable state and
local law, each Company item of income, gain, loss and deduction shall be
allocated between the Members in the same manner as its correlative item of
"book" income, gain, loss or deduction is allocated pursuant to this Article 10.

          10.3.2 Tax items with respect to Company Assets that are contributed
to the Company with a Gross Asset Value that varies from its basis in the hands
of the contributing Member immediately preceding the date of contribution shall
be allocated between the Members for income tax purposes pursuant to Regulations
promulgated under Code Section 704(c) or, if applicable, corresponding
provisions of applicable state or local law so as to take into account such
variation. The Company shall account for such variation under any permissible
method under Section 704(c) as determined by the Tax Matters Partner. If the
Gross Asset Value of any Company Asset is adjusted pursuant to subsection (2) of
the definition of "Gross Asset Value," subsequent allocations of income, gain,
loss and deduction with respect to such Company Asset shall take account of any
variation between the adjusted basis of such Company Asset for federal income
tax purposes and its Gross Asset Value under any permissible method under
Section 704(c) as determined by the Tax Matters Partner. Any tax credits will be
allocated to the Members in accordance with the requirements of applicable tax
law. Allocations pursuant to this Section 10.3.2 are solely for purposes of
federal, state and local taxes and shall not affect, or in any way be taken into
account in computing, any Member's Capital Account or share of Net Profits, Net
Losses and any other items or distributions pursuant to any provision of this
Agreement.

               10.4 Other Provisions

          10.4.1 For any Fiscal Year during which any Membership Interest or
Economic Interest or portion thereof is Transferred between the Members or to
another Person or is otherwise disposed of or acquired, or there is for any
other reason a change in the Members' respective Percentage Interests, the
portion of the Net Profits, Net Losses and other items of income, gain, loss,
deduction and credit with respect to such Membership Interest or Economic
Interest or portion thereof shall be allocated and, to the extent necessary
apportioned, under any method allowed pursuant to Section 706 of the Code and
the applicable Regulations, as reasonably determined by the Board of Managers;
provided, that the Board of Managers shall utilize consistent methods with
respect to the same or substantially similar transactions and items in making
such allocations or apportionments with respect to all such changes in the
Members' respective Percentage Interests, whether occurring within a single
Fiscal Year or in different Fiscal Years.

          10.4.2 In the event that the Code or any Regulations require
allocations of items of income, gain, loss, deduction or credit different from
those set forth in this Article 10, the Board of Managers is hereby authorized
to make new allocations in reliance on the Code and such Regulations, and no
such new allocation shall give rise to any claim or cause of action by any
Member, provided that such allocations are consistent with the advice of the
Company Accountant or tax counsel and are not likely to alter materially the
amounts which each Member is entitled to receive under the terms of this
Agreement.

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          10.4.3 For purposes of determining a Member's proportional share of
the Company's "excess nonrecourse liabilities" within the meaning of Regulations
Section 1.752-3(a)(3), each Member's interest in Net Profits shall be such
Member's Percentage Interest.

          10.4.4 Section 482 Adjustments.

               (a) Company Section 482 Adjustment. If the Internal Revenue
Service or any applicable state or local taxing authority reallocates an item of
income, deduction or loss to the Company pursuant to Code Section 482 or any
similar rule or principle of law (a "Company Section 482 Allocation"), and a
Member or an Affiliate of such Member has a corresponding "correlative item," as
determined under Regulations Section 1.482-1(g) (the "Member Correlative Item"),
the item of income, deduction or loss constituting such Company Section 482
Allocation shall be specially allocated to and reflected in the Capital Account
of the Member who received (or whose Affiliate received) such Member Correlative
Item, and such Member shall be treated as making any corresponding deemed
capital contribution or receiving any corresponding deemed distribution, with
such deemed capital contribution or distribution, as the case may be, reflected
in the Capital Account of such Member.

               (b) Member Section 482 Adjustment. If the Internal Revenue
Service or any applicable state or local taxing authority reallocates an item of
income, deduction or loss to a Member or an Affiliate of such Member pursuant to
Code Section 482 or any similar rule or principle of law (a "Member Section 482
Allocation"), and the Company has a corresponding "correlative item," as
determined under Regulations Section 1.482-1(g) (the "Company Correlative
Item"), such Company Correlative Item shall be specially allocated to and
reflected in the Capital Account of the Member that received (or whose Affiliate
received) such Member Section 482 Allocation, and such Member shall be treated
as making any corresponding deemed capital contribution or receiving any
corresponding deemed distribution, with such deemed capital contribution or
distribution, as the case may be, reflected in the Capital Account of such
Member.

               (c) Corresponding Treatment if Foreign Adjustment. If any taxing
authority outside the United States makes an adjustment to the income, deduction
or loss of the Company or a Member (or an Affiliate of a Member) that is
analogous to an adjustment under Code Section 482, the Board of Managers shall
use commercially reasonable efforts to handle any affected items of the Company
in a manner analogous to the treatment of an adjustment under Code Section 482
as set forth in Sections 10.4.4(a) and 10.4.4(b) above.

          10.4.5 The Members acknowledge and are aware of the income tax
consequences of the allocations made by this Article 10 and hereby agree to be
bound by the provisions of this Article 10 in reporting their shares of the
Company's income and loss for federal, state and local income tax purposes.
Without limiting the foregoing sentence, each Member acknowledges that, while it
presently has no plan or intention to take a position in preparing a tax return
that requires it to file a notice of inconsistent treatment under Code Section
6222(b), if it intends to do so in the future, it shall use its best efforts to
provide at least ten (10) days advance notice of such intent to the Company and
shall, if so requested by the Company, consult with the Tax Matters Partner
concerning such position.

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All matters concerning the allocations and other determinations provided for in
this Article 10 and any accounting procedures not expressly provided for in this
Agreement shall be determined by the Board of Managers in a manner consistent
with the terms and intent of this Agreement.

ARTICLE 11.
MISCELLANEOUS

               11.1 Amendments

          Any provision of this Agreement may be amended if, and only if, such
amendment is in writing and is duly executed by all Members; provided, however,
that amendments may be made to this Agreement from time to time by the Board of
Managers, without the consent of either Member, to take such actions as may be
reasonably necessary (if any) to insure that the Company will be treated as a
partnership for federal income tax purposes. Upon the making of any amendment to
this Agreement in accordance with the previous sentence, the Board of Managers
shall prepare and file such documents and certificates as may be required under
the Act and under any other Applicable Law.

               11.2 No Waiver

          Any provision of this Agreement may be waived if, and only if, such
waiver is in writing and is duly executed by the party against whom the waiver
is to be enforced. No failure or delay by any party in exercising any right,
power or privilege under this Agreement shall operate as a waiver thereof nor
shall any single or partial waiver or exercise thereof preclude the enforcement
of any other right, power or privilege.

               11.3 Entire Agreement

          This Agreement, together with the other documents, exhibits and
schedules referred to herein and therein, constitute the entire agreement
between the parties hereto pertaining to the subject matter hereof, and
supersede any and all prior oral and written, and all contemporaneous oral,
agreements or understandings pertaining thereto. There are no agreements,
understandings, restrictions, warranties or representations relating to such
subject matter among the parties other than those set forth herein and in the
other documents, exhibits and schedules referred to herein and therein.

               11.4 Further Assurances

          Each of the parties hereto does hereby covenant and agree on behalf of
itself, its successors and its assigns, without further consideration, to
prepare, execute, acknowledge, file, record, publish, and deliver such other
instruments, documents and statements, and to take such other action as may be
required by law or reasonably necessary or advisable to effectively carry out
the purposes of this Agreement.

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               11.5 Notices

          Unless otherwise provided herein, all notices, requests, instructions
or consents required or permitted under this Agreement shall be in writing and
will be deemed given: (a) when delivered personally; (b) when sent by confirmed
facsimile; (c) ten (10) Business Days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or (d) three (3)
Business Days after deposit with an internationally recognized commercial
overnight carrier specifying next-day delivery, with written verification of
receipt. All communications will be sent to the addresses listed on Exhibit A
(or to such other address or facsimile number as may be designated by a party
giving written notice to the other parties pursuant to this Section 11.5).

               11.6 Tax Matters

          11.6.1 Tax Matters Partner.

               (a) The Company shall file an election pursuant to Code Section
6231(a)(1)(B)(ii) to have Code Section 6231(a)(1)(B)(i) not apply. For so long
as Micron and/or any of its Affiliates has an aggregate Percentage Interest
greater than fifty percent (50%), Micron shall serve as the Company's "Tax
Matters Partner" (as defined in Code Section 6231(a)(7)) and shall perform any
similar or corresponding role under applicable state law. The Tax Matters
Partner shall perform the duties imposed on a Tax Matters Partner under the Code
and shall be entitled to expend Company funds for (or to be reimbursed for)
reasonable third-party costs relating thereto. All legal and accounting fees
relating to any audits of the Company shall be borne by the Company; provided,
that the Members shall bear the costs of any audits of their separate tax
returns. In the event the United States Internal Revenue Service or any other
applicable Governmental Authority notifies the Tax Matters Partner of any
proposed Proceeding relating to the Company's information or tax returns or to
the amount of the liability of the Company for any Tax, the Tax Matters Partner
shall promptly notify the other Members of such matter, shall provide relevant
factual information (to the extent known) describing any asserted liability for
Tax in reasonable detail and shall provide copies of any notice or other
documents received from the Internal Revenue Service or other applicable
Governmental Authority with respect to such matter. The Tax Matters Partner
shall at all times keep the other Members informed as to the status of all such
Proceedings.

               (b) The Member designated as Tax Matters Partner is hereby
authorized to make all elections available to the Company for federal, state,
local, and foreign tax purposes, except that in no event shall the Company file
an election to be treated as a corporation or as an association taxable as a
corporation for United States federal income tax purposes or for purposes of
income or corporate franchise tax purposes under the law of any State of the
United States.

                    (c) The Tax Matters Partner shall prepare or cause to be
prepared all appropriate income and information tax returns for the Company. All
such returns shall be subject to review by the other Member(s) before filing and
shall be delivered to the other Member(s) for review not fewer than ten (10)
Business Days in advance of the due date thereof (taking into account any
extensions actually obtained). All third-party costs and expenses reasonably
incurred by the Tax Matters Partner in performing its duties described in this
Section 11.6 or otherwise in accordance with the terms of this Agreement
(including legal and accounting fees) shall be borne by the Company. Each Member
shall provide to the Tax Matters Partner such information as the Tax Matters
Partner deems necessary or appropriate in connection with its activities as Tax
Matters Partner. The Tax Matters Partner shall cooperate with the Members by
providing to each Member such information as the Member may reasonably request
concerning the Company and its transactions in connection with the determination
of such Member's liability for any Tax or any Proceeding relating thereto.

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               (d) The provisions of this Section 11.6 shall survive the
termination or dissolution of the Company and shall remain binding on the
Members for such period of time as is necessary to resolve any and all matters
regarding the Tax treatment of the Company and Tax items attributable to the
Company.

          11.6.2 Standards. The Tax Matters Partner and its Affiliates shall not
be liable, responsible, or accountable, in damages or otherwise, to the Company
or to any other Member(s) for doing any act or failing to do any act, with
respect to the Tax Matters Partner's duties set forth in this Section 11.6 or
otherwise performed, the effect of which may cause or result in loss or damage
to the Company or any Member(s), unless the Tax Matters Partner or one of its
Affiliates engages in gross negligence or willful misconduct.

               11.7 Governing Law

          This Agreement will be governed by and construed in accordance with
the laws of the State of Delaware, United States of America, as applied to
agreements among Delaware residents entered into and wholly to be performed
within the State of Delaware (without reference to any choice or conflicts of
laws rules or principles that would require the application of the laws of any
other jurisdiction).

               11.8 Construction; Interpretation

          11.8.1 Certain Terms. The words "hereof," "herein," "hereto,"
"hereunder" and similar words refer to this Agreement as a whole and not to any
particular provision of this Agreement. The term "including" is not limited and
means "including without limitation."

          11.8.2 Section References; Titles and Subtitles. Unless otherwise
noted, all references to Sections and Exhibits herein are to Sections and
Exhibits of this Agreement. The titles, captions and headings of this Agreement
are inserted for convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.

          11.8.3 Reference to Persons, Agreements, Statutes. Unless otherwise
expressly provided herein, (i) references to a Person include its successors and
permitted assigns, (ii) references to agreements (including this Agreement) and
other contractual instruments shall be deemed to include all subsequent
amendments, restatements and other modifications thereto or supplements thereof
and (iii) references to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting such statute or regulation.

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          11.8.4 Presumptions. No party, nor its counsel, shall be deemed the
drafter of this Agreement for purposes of construing the provisions of this
Agreement, and all provisions of this Agreement shall be construed in accordance
with their fair meaning, and not strictly for or against any party.

               11.9 Rights and Remedies Cumulative

          The rights and remedies provided by this Agreement are cumulative and
the use of any one right or remedy by any party shall not preclude or waive its
right to use any or all other remedies. Said rights and remedies are given in
addition to any other rights the parties may have by law, statute, ordinance or
otherwise.

               11.10 No Assignment; Binding Effect

          Except as otherwise expressly provided herein, no party may assign,
delegate or otherwise transfer any of its rights or obligations hereunder to any
third party, whether by assignment, transfer, Change in Control or other means,
without the prior written consent of each other party. Any attempted assignment
in violation of the foregoing shall be null and void. Subject to the foregoing,
this Agreement shall be binding on and inure to the benefit of the Members,
their heirs, executors, administrators, successors and all other Persons
hereafter holding, having or receiving an interest in the Company.

               11.11 Severability

          If any provision in this Agreement will be found or be held to be
invalid or unenforceable, then the meaning of said provision will be construed,
to the extent feasible, so as to render the provision enforceable, and if no
feasible interpretation would save such provision, it will be severed from the
remainder of this Agreement which will remain in full force and effect unless
the severed provision is essential and material to the rights or benefits
received by any party. In such event, the parties will use their respective best
efforts to negotiate, in good faith, a substitute, valid and enforceable
provision or agreement which most nearly effects the parties' intent in entering
into this Agreement.

               11.12 Counterparts

          This Agreement may be executed in counterparts, each of which so
executed will be deemed to be an original and such counterparts together will
constitute one and the same agreement. Execution and delivery of this Agreement
by exchange of facsimile copies bearing the facsimile signature of a party shall
constitute a valid and binding execution and delivery of this Agreement by such
party.

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               11.13 Dispute Resolution

          The parties hereby agree that claims, disputes or controversies of
whatever nature, arising out of, in connection with, or in relation to the
interpretation, performance or breach of this Agreement (or any other agreement
contemplated by or related to this Agreement), shall be first raised to the
chief executive officer or another officer of each of the Members (appointed by
such Member's chief executive officer) for discussion and attempt at resolution
in good faith among such chief executive officers or any individuals appointed
by such chief executive officers for such discussions and attempt at resolution,
and if after thirty (30) days of such raising to the chief executive officers
the parties are unable to come to a resolution, each of the parties shall be
free to pursue any such claim, dispute or controversy in court.

               11.14 Third-Party Beneficiaries

          None of the provisions of this Agreement shall be for the benefit of
or be enforceable by any creditor of the Company or by any third-party creditor
of any Member. This Agreement is not intended to confer any rights or remedies
hereunder upon, and shall not be enforceable by, any Person other than the
parties hereto, their respective successors and permitted assigns and, solely
with respect to the provision of Section 5.11, each Indemnitee and each other
indemnified Person addressed therein.

               11.15 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
injunctive relief may be applied for an granted in connection therewith. 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, at law or in equity.

               11.16 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 (it being understood that consequential damages
arising from the breach of the confidentiality restrictions set forth in the
Non-Disclosure Agreement shall not be considered to fall within any such
category of damages).

(Signature Page Follows)

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               IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.

MEMBERS   MICRON TECHNOLOGY, INC.    

By:        

Name:        

Title:        

    PHOTRONICS, INC.  

By:        

Name:        

Title:        

S-1

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EXHIBIT A   Name and Address of Gross Asset Value of Capital Account Percentage
Number of Units Members       Contributed Property       Balance       Interest
      Micron Technology, Inc. 50.01% 50,010 8000 S. Federal Way Boise, Idaho
83716-9632       Attn: Chief Operating       Officer   Fax: (208) 368-2548  
With a required copy to: General Counsel Fax: (208) 368-4540 Photronics, Inc.
49.99% 49,990 15 Secor Road
Brookfield, CT 06804
Attention: Edwin L.
Lewis, Senior Vice
President and General
Counsel
Fax: (203) 775-5601    And   15 Secor Road
Brookfield, CT 06804
Attention: Sean Smith,
Senior Vice President and
Chief Financial Officer
Fax: (203) 775-5601  

A-1

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EXHIBIT B

[****]

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Securities and Exchange Commission.

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EXHIBIT C

Michael J. Luttati, Sean T. Smith and Christopher J. Progler.

C-1

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EXHIBIT D

INSURANCE POLICIES AT CLOSING

1.       Property Insurance: Coverage for "all risk" property insurance,
insuring against physical damage on a replacement basis for assets, and insuring
against resultant business interruption from physical damage on an actual-loss
sustained basis. The property insurance limit must equal full replacement value
of all physical property and one year business interruption insurance.   2.
Transit Insurance: Coverage for repair or replacement of capital equipment in
transit up to the invoiced amount for the equipment.   3. Liability Insurance:

 * Commercial general liability insurance, including but not limited to
   contractual liability, personal injury, completed operations, product
   liability and host liquor liability, coverage for bodily injury and property
   damage liability, with a limit of not less than $50 million for each loss
   occurrence and not less than $50 million in annual aggregate coverage.
   
   
 * Automobile liability coverage for bodily injury and property damage liability
   with a limit of not less than $10 million for each loss occurrence and not
   less than $10 million in annual aggregate coverage, for owned, hired, and
   non-owned automobiles.

4.       Workers Compensation & Employers Liability: Statutory workers
compensation coverage for employees, if any, of the Company and its
subsidiaries, including employers' liability coverage with a limit of not less
than $10 million for each loss occurrence and $10 million in annual aggregate
coverage.

D-1

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