Document:

Exhibit
10.162

 

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

 

INTEL/MICRON
CONFIDENTIAL

 

SUPPLY AGREEMENT

 

This
SUPPLY AGREEMENT (the “Agreement”),
is made and entered into as of this 6th  day of January, 2006 (the “Effective Date”), by and between Micron Technology, Inc., a
Delaware corporation (“Micron”), and IM Flash Technologies, LLC, a Delaware limited liability
company (the “Joint Venture Company”).

 

RECITALS

 

A.                                   The Joint
Venture Company is engaged in the manufacturing, assembly and test of NAND
Flash Memory Products (as defined hereinafter) for Micron.

 

B.                                     Micron and the
Joint Venture Company (each, a “Party” and
collectively, the “Parties”)
desire the Joint Venture Company to supply Products, including Secondary
Silicon, for Micron in accordance with Micron’s Sharing Interest upon the terms
and subject to the conditions set forth in this Agreement.

 

AGREEMENT

 

NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties intending to be legally bound do
hereby agree as follows.

 

ARTICLE 1

DEFINITIONS; CERTAIN INTERPRETIVE MATTERS

 

1.1                                 Definitions. In addition
to the terms defined elsewhere in this Agreement, capitalized terms used in
this Agreement shall have the respective meanings set forth in Exhibit A.

 

1.2                                 Certain
Interpretive Matters.

 

(a)                                  Unless the
context requires otherwise, (1) all references to Sections, Articles,
Exhibits, Appendices or Schedules are to Sections, Articles, Exhibits,
Appendices or Schedules of or to this Agreement, (2) each of the Schedules
will apply only to the corresponding Section or subsection of this Agreement,
(3) each accounting term not otherwise defined in this Agreement has the
meaning commonly applied to it in accordance with Modified GAAP, (4) words
in the singular include the plural and visa versa, (5) the term “including”
means “including without limitation,” and (6) the terms “herein,”
“hereof,” “hereunder” and words of similar import shall mean
references to this Agreement as a whole and not to any individual Section or
portion hereof. All references to $ or dollar amounts will be to lawful
currency of the United States of America. All references to “day” or “days”
will mean calendar days and all references to “quarter(ly)”, “month(ly)” or “year(ly)”
will mean Fiscal Quarter, Fiscal Month or Fiscal Year, respectively.

 

(b)                                 No provision of
this Agreement will be interpreted in favor of, or against, any of the Parties
by reason of the extent to which any such Party or its counsel participated in
the drafting thereof

 

 

or by reason of the extent to which any such provision is inconsistent
with any prior draft of this Agreement or such provision.

 

ARTICLE 2

OBLIGATIONS OF THE JOINT
VENTURE COMPANY; 

PROCESSES AND CONTROLS

 

2.1                                 General
Obligations. The Joint Venture Company will (1) supply Product
to Micron in accordance with the purchasing process set forth in Article 4
hereof; (2) develop its Facilities and operations to meet Capacity according to
the Ramp Plan and the Initial Business Plan, as may be amended thereafter, and
the Operating Plan and the obligations set forth herein, including Sections
2.2, 2.5 and 2.9; (3) supply Products which meet the Specification(s),
Price, Yield, Cycle-Time, and Quality and Reliability as agreed by the Parties;
and (4) operate its Facilities so that Product output from any one Facility
matches the other Facilities in form, fit and function, in accordance with Section
2.14.

 

2.2                                 Products to
Supply. The Joint Venture Company will manufacture, assemble and test
Products for Micron in accordance with the Operating Plan and applicable
Specifications, developed in response to Micron’s Demand Forecast provided to
Joint Venture Company in accordance with Article 3 below.

 

2.3                                 Process and
Design Information. Micron agrees to provide to the Joint Venture
Company: (i) such process technology or information as is required to be
disclosed under the Joint Development Program Agreement and the Technology
License Agreement; and (ii) design information reasonably required to
manufacture NAND Flash Memory Wafers.

 

2.4                                 Control;
Processes. The Joint Venture Company and Micron will review
Joint Venture Company’s control and process mechanisms, including but not
limited to such mechanisms that are utilized to ensure that all parameters of
the Specification, including the Performance Criteria, are met or exceeded in
the Joint Venture Company’s manufacture of Products by either the Joint Venture
Company or its approved subcontractor for Micron. The Parties agree to work
together in good faith to define mutually agreeable control and process
mechanisms including the following: [***].

 

2.5                                 Equipment, Systems, Materials.
Except as provided in other Joint Venture Documents, the Joint Venture Company
shall be responsible for procuring all manufacturing equipment, tools,
automated material handling systems therein and materials, including Prime
Wafers, which are reasonably required for the Joint Venture Company to achieve
the Ramp Plan and the Operating Plan. The Joint Venture Company shall endeavor
to manage the entire supply chain, including equipment, materials, systems,
maintenance and subcontractors and vendors, to create efficiency and maximize
the Performance Criteria.

 

2.6                                 Production Masks.
Unless otherwise agreed with Micron, the Joint Venture Company or its
subcontractors will be responsible to obtain, maintain, repair and replace
masks used in the production of Products. Such masks will only be used in the
production of Products for Micron. Production masks will be repaired and
replaced solely at mask operations which have been approved by Micron, which
approval shall not be unreasonably withheld. The Joint Venture Company or its subcontractors
will retain possession, but not ownership of any underlying copyrights,
maskworks, or other intellectual property, of any physical production masks
which the Joint Venture Company has made under this Section 2.6.

 

2

 

2.7                                 Designation of WIP.
At Micron’s option, the Joint Venture Company will ensure that WIP at
Facilities or its subcontractor’s facilities is designated for the Micron from
Wafer Start. If Micron does not elect to have WIP so designated, the Joint
Venture Company will designate the WIP for Micron after Probe Testing. Custom
Product of Micron, if any, must be designated as for Micron from Wafer Start at
all the Facilities or its subcontractor’s facilities.

 

2.8                                 Subcontractors.
The Joint Venture Company may utilize subcontractors to perform any portion of
the manufacture, assembly and test process in making Products for Micron,
subject to all subcontractors being approved by the Members, which approval
shall not be unreasonably withheld. The Joint Venture Company will ensure that
all contracts with subcontractors will provide the Joint Venture Company with
the same level of access and controls as set forth in the Agreement, including Sections
2.4, 2.9, 2.10, 2.11, 2.12 and Article 5.

 

2.9                                 Staffing.
The Joint Venture Company shall adequately staff its Facilities and ensure that
its subcontractors adequately staff their facilities to sustain and manage
production of Product for Micron, including the obligations set forth in Section
2.1 and meeting scheduled commitments, including the Ramp Plan, the
Operating Plan and the Performance Criteria.

 

2.10                           Business Continuity Plan. The
Joint Venture Company will develop a process to recover the production process
in the event of a natural disaster or any other event that disrupts the
production process or the ability of the Joint Venture Company to meet its
delivery commitments to Micron or satisfy customer orders. If requested by
Micron, Joint Venture Company will review its Business Continuity Plan with
Micron and make changes as agreed with Micron, subject to any confidentiality
requirements.

 

2.11                           [***]. In
addition to the quarterly review and monthly report requirements set forth in Section
3.2 and 3.3, the Joint Venture Company will promptly notify Micron of [***].

 

2.12                           Traceability and Data Retention. Micron and the Joint Venture Company shall review the
Joint Venture Company’s process traceability system [***]. The Joint Venture
Company agrees to maintain such data for a minimum of [***]. The Joint Venture
Company will endeavor to provide Micron [***].

 

2.13                           Additional Customer Requirements. Micron will inform the Joint Venture Company in writing of
any auditable supplier requirements of Micron’s customer relating to any
Facility at which Product is manufactured, assembled or tested. The Parties
will work together in good faith to resolve such requests.

 

2.14                           Transfer; Equivalency of Operations. The Micron
will cooperate in good faith with the Joint Venture Company to transfer Micron’s
technology to the Joint Venture Company, if such technology transfer is
required under the Joint Venture Documents. The Joint Venture Company will
establish similar baseline Product performance standards, including form, fit
and function, at Facilities and subcontracted facilities. Such efforts will
include the provision of up to date equivalent materials (including correlation
wafers), data and information.

 

3

 

ARTICLE 3

PLANNING MEETINGS
AND FORECASTS; 

PERFORMANCE
REVIEWS AND REPORTS

 

3.1                                 Planning
and Forecasting.

 

(a)                                  Micron
will quarterly provide the Joint Venture Company, in a timeframe to be mutually
agreed by the Parties to meet customer expectations, with a written demand
forecast for [***] ([***]) quarters corresponding to the Joint Venture Company’s
Fiscal Quarters or as may be otherwise agreed between the Parties. This demand
will include desired finished product breakout by design id, technology node,
wafer as finished goods or package type (“Demand Forecast”);

 

(b)                                 The
Joint Venture Company shall furnish Micron with a written response within [***]
([***]) Business Days indicating a response regarding capacity and what portion
of the demand that the Joint Venture Company can commit to meet. This written
response (the “Planning Forecast”) will include:

 

[***].

 

(c)                                  Based
on the Planning Forecast, the Joint Venture Company shall develop a [***]
([***]) Fiscal Quarter proposed Product loading plan for such period (“Proposed Loading Plan”). The Joint Venture Company shall
provide Micron with the Proposed Loading Plan at least [***] ([***]) Business
Days prior to its review by the Manufacturing Committee.

 

(d)                                 The
Joint Venture Company will submit the Proposed Loading Plan, Planning Forecast
and other requested information to the Manufacturing Committee for endorsement.
Once endorsed by the Manufacturing Committee, the Proposed Loading Plan shall
become part of the Operating Plan.

 

3.2                                 Performance Reviews and
Reports. The Joint Venture Company shall meet with Micron each quarter to
discuss the Performance Criteria and the most recent monthly report. The
monthly report will be distributed to Micron monthly, on a date to be agreed by
the Parties, and will include the following information:

 

(a)                                  Describes
[***];

 

(b)                                 Describes
[***];

 

(c)                                  Describes
[***];

 

4

 

(d)                                 Describes
[***].

 

(e)                                  Identifies
[***].

 

 3.3                              Monthly
Review.  In addition, the Parties
shall hold a monthly meeting, on a date to be agreed by the Parties, with the
primary purpose of [***].

 

ARTICLE 4

PURCHASE AND SALE OF PRODUCTS

 

4.1                                 Product Quantity.
Micron shall purchase from the Joint Venture Company a percentage, equal to
Micron’s Sharing Interest (as the same may change from time to time), of all of
the Joint Venture Company’s output of Products that meet the Specifications. The
Joint Venture Company shall produce all Products in accordance with the
Operating Plan, developed in response to Micron’s Demand Forecast under Article
3 above. If Micron fails purchase its full Sharing Interest of the
Joint Venture Company’s output, produced in accordance with the Operating Plan
(“Underloading”), then the increased
Prices associated with such Underloading shall be isolated and charged solely
to Micron, which Micron shall remain solely responsible for paying. Notwithstanding
the foregoing, Micron may elect, but is not obligated, to purchase Product in
excess of its Sharing Interest only by mutual agreement of the other Member.

 

4.2                                 Secondary Silicon.
Any Secondary Silicon produced by the Joint Venture Company or its
subcontractors will be provided [***] by the Joint Venture Company to the
Members in a percentage equal to Micron’s Sharing Interest (as the same may
change from time to time). ALL SECONDARY SILICON PROVIDED HEREUNDER IS PROVIDED
“AS IS,” “WHERE IS” WITH ALL FAULTS AND DEFECTS BASIS WITHOUT WARRANTY OF
ANY KIND.

 

4.3                                 Placement of
Purchase Orders. Prior to the commencement of every Fiscal Quarter
or another time period agreed by the Parties in conjunction with the planning
cycle specified in Article 3, the Joint Venture Company shall place a
non-cancelable blanket purchase order in writing (via e-mail or facsimile
transmission) for the quantity of Product to be supplied by the Joint Venture
Company in the following Fiscal Quarter as indicated in the Operating Plan
(each such order, a “Purchase Order”). 
Micron may issue change orders to such Purchase Orders to reflect changes in
the Operating Plan, provided that such changes can be reasonably accommodated
by the Joint Venture Company without disrupting on-going manufacturing
operations.  Micron may also elect to place out-of-cycle purchase order of
Product, including expedited Probed Wafers, to the Joint Venture Company on an
as-needed basis.  The terms and conditions of this Agreement supersede the
terms and conditions contained in either Party’s sales or purchase
documentation provided in connection herewith unless expressly agreed otherwise
in a writing signed  by each Party.

 

4.4                                 Shortfall.  The
Joint Venture Company shall immediately notify Micron in writing of any
inability to meet a Purchase Order commitment to Micron.

 

5

 

4.5                                 Acceptance of
Purchase Order. Each Purchase Order that corresponds to the Operating Plan in
the manner contemplated by Section 4.3 and, and is otherwise free of errors,
shall be deemed accepted by the Joint Venture Company upon receipt and shall be
binding on the Parties, to the extent not inconsistent with the Operating Plan.

 

4.6                                 Content of Purchase Orders.
Each Purchase Order shall specify the following items:

 

(a)                                  Purchase Order number;

 

(b)                                 Description and part number of each Product;

 

(c)                                  Forecasted quantity of each different Product and the
Sharing Interest portion thereof for the calendar month;

 

(d)                                 Forecasted unit Price and total forecasted Price for each
different Product, and total forecasted Price for all Products ordered;

 

(e)                                  Level of Probe Testing;

 

(f)                                    Marking specification and packaging requirements;

 

(g)                                 Requested delivery date;

 

(h)                                 Place of delivery; and

 

(i)                                     Other terms (if any).

 

4.7                                 Taxes.

 

(a)                                  General. All
sales, use and other transfer taxes imposed directly on or solely as a result
of the supplying of Products and the payments therefor provided herein shall be
stated separately on the Joint Venture Company’s invoice, collected from Micron
and shall be remitted by the Joint Venture Company to the appropriate tax
authority (“Recoverable Taxes”), unless Micron
provides valid proof of tax exemption prior to the effective date of the
transfer of the Products or otherwise as permitted by law prior to the time the
Joint Venture Company is required to pay such taxes to the appropriate tax
authority. When property is delivered and/or services are provided or the
benefit of services occurs within jurisdictions in which collection and
remittance of taxes by Micron is required by law, the Joint Venture Company
shall have sole responsibility for payment of said taxes to the appropriate tax
authorities. In the event such taxes are Recoverable Taxes and the Joint
Venture Company does not collect tax from Micron or pay such taxes to the
appropriate governmental entity on a timely basis, and is subsequently audited
by any tax authority, liability of Micron will be limited to the tax assessment
for such Recoverable Taxes, with no reimbursement for penalty or interest
charges or other amounts incurred in connection therewith. Notwithstanding
anything herein to the contrary, taxes other than Recoverable Taxes shall not
be reimbursed by Micron, and each Party is responsible for its own respective
income taxes (including franchise and other taxes based on net income or a
variation thereof), taxes based upon gross revenues or receipts, and taxes with
respect to general overhead, including but not limited to business and
occupation taxes, and such taxes shall not be Recoverable Taxes.

 

(b)                                 Withholding
Taxes. In the event that Micron is prohibited by law from making payments to
the Joint Venture Company unless Micron deducts or withholds taxes therefrom
and remits such taxes to the local taxing jurisdiction, then Micron shall duly
withhold and remit such taxes and shall

 

6

 

pay to the Joint Venture Company the remaining net amount after the
taxes have been withheld. Such taxes shall not be Recoverable Taxes and Micron
shall not reimburse the Joint Venture Company for the amount of such taxes
withheld.

 

4.8                                 Invoicing; Payment. The Joint Venture Company
shall invoice Micron on a monthly basis for the Price of the Products provided
and all overhead, interest, general and administrative and other costs,
including all start-up costs for Facilities which shall be split between the
Members based on Sharing Interest. All amounts owed under this Agreement are stated,
calculated and shall be paid in United States Dollars. Except as otherwise
specified in this Agreement, the Micron shall pay the Joint Venture Company for
the amounts due, owing, and duly invoiced under this Agreement within [***] ([***])
days following delivery
of an invoice therefore to such place as the Joint Venture Company may
reasonably direct therein.

 

4.9                                 Payment to Subcontractors. The Joint Venture Company
shall be responsible for and shall hold Micron harmless for any and all
payments to its vendors or subcontractors utilized in the performance of this
Agreement.

 

4.10                           Delivery, Title and Risk of Loss. The Joint Venture Company, in order to ensure timely and
complete shipment of Products to Micron, shall arrange for and pay for all
shipping charges, insurance, taxes, customs charges and any fees and duties in
connection with such shipment. The Joint Venture Company shall hold title to
and risk of loss of Products under this Agreement, including WIP held by
subcontractors, until tender to the carrier, at which time title and risk of
loss and damage to Products shall transfer to Micron.

 

4.11                           Packaging.
All shipment packaging of the Products shall be in conformance with the
Specifications, the Micron’s reasonable instructions, and general industry
standards, and shall be resistant to damage that may occur during
transportation. Marking on the packages shall be made by Joint Venture Company
in accordance with Micron’s reasonable instructions.

 

4.12                           Shipment. All Products shall be
prepared for shipment in a manner that: (i) follow good commercial practice;
(ii) is acceptable to common carriers for shipment at the lowest rate; and
(iii) is adequate to ensure safe arrival. The Joint Venture Company shall mark
all containers with necessary lifting, handling, and shipping information,
Purchase Order number, date of shipment, and the names of the Micron and
applicable customer. If no instructions are given, the Joint Venture Company
shall select the most price effective carrier, given the time constraints known
to the Joint Venture Company. At Micron’s request, the Joint Venture will
provide drop-shipment of Products to Micron’s customers. Such shipment service
may be provided by a subcontractor to the Joint Venture Company provided that
title remains with the Joint Venture Company and then passes to Micron upon
tender to the carrier.

 

4.13                           Customs Clearance. Upon Micron’s request, the
Joint Venture Company will promptly provide Micron with a statement of origin
for all Products and with applicable customs documentation for Products wholly
or partially manufactured outside of the country of import.

 

ARTICLE 5

VISITATIONS, AUDITS

 

5.1                                 Visits.
The Joint Venture Company will support Micron’s reasonable requests for visits
to Facilities and meetings for the purpose of reviewing performance of
production of Products including requests for further information and
assistance in troubleshooting performance issues.
Such requests shall

 

7

 

be reasonably granted by the
Joint Venture Company so long as such visits and meetings do not unduly
interfere with the Joint Venture Company’s operations and business affairs.

 

5.2                                 Audit. Micron
representatives and key customer representatives, upon Micron’s request, shall
be allowed to visit the Joint Venture Company’s Facilities during normal
working hours upon reasonable advanced written notice to the Joint Venture
Company for the purposes of monitoring production processes and compliance with
any requirements set forth in this Agreement and the Specifications. Upon
completion of the audit, the Joint Venture Company and Micron will agree to an
audit closure plan, to be documented in the audit report issued by Micron.

 

5.3                                 Financial Audit. Micron
reserves the right to have the Joint Venture Company’s books and records
related to the Pricing hereunder inspected and audited not more than [***]
during any Fiscal Year to ensure compliance with Schedule 4.8 of this Agreement
in regards to Pricing.  Such audit will be performed by an independent
third party auditor acceptable to both Parties at Micron’s expense. Micron
shall provide [***] ([***]) days advance written notice to the Joint Venture
Company of its desire to initiate an audit and the audit shall be scheduled so
that it does not adversely impact or interrupt the Joint Venture Company’s
business operations. If the audit reveals any material discrepancies, the Joint
Venture Company or Micron shall reimburse the other, as applicable, for any
material discrepancies within [***] ([***]) days after completion of the
audit.  The results of such audit shall be kept confidential by the
auditor and only the discrepancies shall be reported to the Parties, and be
limited to discrepancies identified by the audit. Notwithstanding the
foregoing, any auditor reports shall not disclose any the Joint Venture Company
pricing or terms of purchase for any purchases of materials or equipment
hereunder to Micron, absent written agreement from the Members’ respective
legal counsel. If any audit reveals a material discrepancy, Micron may increase
the frequency of such audits to [***] for the subsequent [***] ([***]) month
period.

 

5.4                                 Subcontractor; Vendor Visits.
The Joint Venture Company will use commercially reasonable efforts to ensure
that all contracts with vendors and subcontractors will provide the Joint
Venture Company and Micron with the right to visit and audit rights similar to
those set forth in this Article 5.

 

ARTICLE 6

WARRANTY; HAZARDOUS MATERIALS; DISCLAIMER

 

6.1                                 Product Warranty.
The Joint Venture Company makes the following warranties regarding Products
furnished hereunder, which warranties shall survive any delivery, inspection,
acceptance, payment, or resale of the Products:

 

(a)                                  Products conform to all
agreed Specifications;

 

(b)                                 Products are free from
defects in materials or workmanship; and

 

(c)                                  The Joint Venture Company has
the necessary right, title, and interest to provide Products to the Joint
Venture Company and the Products will be free of liens and encumbrances, not
including any implied warranty of non-infringement.

 

6.2                                 Warranty Claims.
Within a period of time, not to exceed the lesser of the actual
warranty period applicable to the end customer for the NAND Flash Memory
Product at issue or eighteen (18) months from the date of the delivery of the
Products at issue to the Micron (“Warranty
Notice Period”), Micron shall notify the Joint Venture Company if it
believes that any Product does not meet the Product

 

8

 

warranty set forth in Section 6.1. Micron shall return such Products to
the Joint Venture Company as directed by the Joint Venture Company. If a
Product is determined not to be in compliance with such warranty, then Micron
shall be entitled to return such Product and cause the Joint Venture Company to
replace at the Joint Venture Company’s expense or, at Micron’s option, receive
a credit or refund of any monies paid to the Joint Venture Company in respect
of such Product, save that such credit or refund shall in no event exceed on a
per-unit basis the final price paid for the Product under this Agreement. The
basis for such refund or credit shall be the Price on a per-unit basis in the
month in which the returned Product was invoiced to the Micron. THE FOREGOING
REMEDY IS PARENT’S SOLE AND EXCLUSIVE REMEDY FOR THE JOINT VENTURE COMPANY’S
FAILURE TO MEET ANY WARRANTY OF SECTION 6.1.

 

6.3                                 Inspections.
Member may, upon reasonable advance written notice, request samples of Products
(including WIP) during production for purposes of determining compliance with
the requirements and Specification(s) hereunder, provided that the provision of
such samples shall not materially impact the Joint Venture Company’s
performance to the Operating Plan or its ability to meet delivery requirements
under any accepted Purchase Order. Any samples provided hereunder shall be: (i)
limited in quantity to the amount reasonably necessary for the purposes
hereunder; (ii) included in the pricing; and (iii) included in any performance
requirements, if any. The Joint Venture Company shall provide reasonable
assistance for the safety and convenience of Micron in obtaining the samples in
such manner as shall not unreasonably hinder or delay the Joint Venture Company’s
performance.

 

6.4                                 Hazardous Materials.

 

(a)                                  If Products provided hereunder include Hazardous Materials
as determined in accordance with applicable law, the Joint Venture Company
represents and warrants that the Joint Venture Company and the Joint Venture
Company’s employees, agents, and subcontractors actually working with such
materials in providing the Products hereunder to Micron shall be trained in
accordance with applicable law regarding the nature of and hazards associated
with the handling, transportation, and use of such Hazardous Materials, as applicable
to the Joint Venture Company.

 

(b)                                 To the extent required by applicable law, Joint Venture
Company shall provide Micron with Material Safety Data Sheets (MSDS) either
prior to or accompanying any delivery of Products to Micron.

 

6.5                                 Disclaimer.
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS ARTICLE 6, THE JOINT
VENTURE COMPANY HEREBY EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
MERCHANTABILITY, SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE,
NON-INFRINGEMENT OR OTHERWISE, WITH RESPECT TO THE PRODUCTS PROVIDED UNDER THIS
AGREEMENT. THE WARRANTIES WILL NOT APPLY TO: (i) ANY WARRANTY CLAIM OR ISSUE,
OR DEFECT TO THE EXTENT CAUSED BY TECHNICAL MATERIALS PROVIDED OR SPECIFIED BY,
THROUGH OR ON BEHALF OF THE MEMBERS OR COMMITTEES OF MEMBERS, INCLUDING BUT
NOT LIMITED TO PRODUCT DESIGNS, TECHNOLOGY AND TEST PROGRAMS; OR (ii) THE WARRANTIES WILL NOT APPLY TO ANY OF THE
PRODUCTS THAT HAVE BEEN REPAIRED OR ALTERED, EXCEPT AS AUTHORIZED BY THE JOINT
VENTURE COMPANY, OR WHICH ARE SUBJECTED TO MISUSE, NEGLIGENCE, ACCIDENT OR
ABUSE.

 

9

 

ARTICLE 7

CONFIDENTIALITY; OWNERSHIP

 

7.1                                 Protection and Use of Confidential Information. All information provided, disclosed or obtained in the
performance of any of the Parties’ activities under this Agreement shall be
subject to all applicable provisions of the Confidentiality Agreement.
Furthermore, the terms and conditions of this Agreement shall be considered “Confidential Information” under the Confidentiality
Agreement for which each Party is considered a “Receiving
Party” under such agreement. To the extent there is a conflict
between this Agreement and the Confidentiality Agreement, the terms of this
Agreement shall control.

 

7.2                                 Masks. Any
masks produced pursuant to this Agreement will be based on Product designs
owned by Intel and shall be treated as Confidential Information of Intel.

 

7.3                                 Intellectual Property Ownership. Ownership of any intellectual property developed by the
Joint Venture Company will be governed by the Technology License Agreement or
Product Designs Development Agreement.

 

ARTICLE 8

INDEMNIFICATION

 

8.1                                 Mutual General
Indemnity. Subject to ARTICLE 9, each Party (“Indemnifying Party”) shall indemnify, defend and hold
harmless the other Party (“Indemnified Party”)
from and against any and all Indemnified Losses based on or attributable to any
Third Party Claim or threatened Third Party Claim arising under this Agreement
and as a result of the Indemnifying Party’s negligence, gross negligence or
willful misconduct of the Indemnifying Party or any of its respective officers,
directors, employees, agents or subcontractors. Notwithstanding the foregoing,
this Section 8.1 shall not apply to any claims or losses based on
or attributable to intellectual property infringement.

 

8.2                           Indemnification Procedures.

 

(a)                                  Promptly after
the receipt by any Indemnified Party of a notice of any Third Party Claim that
an Indemnified Party seeks to be indemnified
under this Agreement, such Indemnified Party shall give written notice of such
Third Party Claim to the Indemnifying Party, stating in reasonable detail the
nature and basis of each allegation made in the Third Party Claim and the
amount of potential Indemnified Losses with respect to each allegation, to the
extent known, along with copies of the relevant documents received by the
Indemnified Party evidencing the Third Party Claim and the basis for
indemnification sought. Failure of the Indemnified Party to give such notice
shall not relieve the Indemnifying Party from liability on account of this
indemnification, except if and only to the extent that the Indemnifying Party
is actually prejudiced by such failure or delay. Thereafter, the Indemnified
Party shall deliver to the Indemnifying Party, promptly after the Indemnified
Party’s receipt thereof, copies of all notices and documents (including court
papers) received by the Indemnified Party relating to the Third Party Claim. The
Indemnifying Party shall have the right to assume the defense of the
Indemnified Party with respect to such Third Party Claim upon written notice to
the Indemnified Party delivered within thirty (30) days after receipt of the
particular notice from the Indemnified Party. So long as the Indemnifying Party
has assumed the defense of the Third Party Claim in accordance herewith and
notified the Indemnified Party in writing thereof, (i) the Indemnified Party
may retain separate co-counsel at its sole cost and expense and participate in
the defense of the Third Party Claim, it being understood that the

 

10

 

Indemnifying
Party shall pay all reasonable costs and expenses of counsel for the
Indemnified Party after such time as the Indemnified Party has notified the
Indemnifying Party of such Third Party Claim and prior to such time as the
Indemnifying Party has notified the Indemnified Party that it has assumed the
defense of such Third Party Claim, (ii) the Indemnified Party shall not file
any papers or, other than in connection with a settlement of the Third Party
Claim, consent to the entry of any judgment without the prior written consent
of the Indemnifying Party (not to be unreasonably withheld, conditioned or
delayed) and (iii) the Indemnifying Party will not consent to the entry of any
judgment or enter into any settlement with respect to the Third Party Claim
(other than a judgment or settlement that is solely for money damages and is
accompanied by a release of all indemnifiable claims against the Indemnified
Party) without the prior written consent of the Indemnified Party (not to be
unreasonably withheld, conditioned or delayed). Whether or not the Indemnifying
Party shall have assumed the defense of the Indemnified Party for a Third Party
Claim, such Indemnifying Party shall not be obligated to indemnify and hold
harmless the Indemnified Party hereunder for any consent to the entry of
judgment or settlement entered into with respect to such Third Party Claim
without the Indemnifying Party’s prior written consent, which consent shall not
be unreasonably withheld, conditioned or delayed.

 

(b)                                 Equitable
Remedies. In the case of any Third Party Claim where the
Indemnifying Party reasonably believes that it would be appropriate to settle
such Third Party Claim using equitable remedies (i.e., remedies involving the
future activity and conduct of the Joint Venture Company), the Indemnifying
Party and the Indemnified Party shall work together in good faith to agree to a
settlement; provided, however, that no Party shall be under any obligation to
agree to any such settlement.

 

(c)                                  Treatment of
Indemnification Payments; Insurance Recoveries. Any indemnity payment
under this Agreement shall be decreased by any amounts actually recovered by
the Indemnified Party under third party insurance policies with respect to such
Indemnified Losses (net of any premiums paid by such Indemnified Party under
the relevant insurance policy), each Party agreeing (i) to use all reasonable
efforts to recover all available insurance proceeds and (ii) to the extent that
any indemnity payment under this Agreement has been paid by the Indemnifying
Party to the Indemnified Party prior to the recovery by the Indemnified Party
of such insurance proceeds, the amount of such insurance proceeds actually
recovered by the Indemnified Party shall be promptly paid to the Indemnifying
Party.

 

(d)                                 Certain Additional
Procedures. The Indemnified Party shall cooperate and assist the Indemnifying
Party in determining the validity of any Third Party Claim for indemnity by the
Indemnified Party and in otherwise resolving such matters. The Indemnified
Party shall cooperate in the defense by the Indemnifying Party of each Third
Party Claim (and the Indemnified Party and the Indemnifying Party agree with
respect to all such Third Party Claim that a common interest privilege
agreement exists between them), including, (i) permitting the Indemnifying
Party to discuss the Third Party Claim with such officers, employees,
consultants and representatives of the Indemnified Party as the Indemnifying
Party reasonably requests, (ii) 
providing to the Indemnifying Party copies of documents and samples of
products as the Indemnifying Party reasonably requests in connection with
defending such Third Party Claim, (iii) 
preserving all properties, books, records, papers, documents, plans,
drawings, electronic mail and databases of the Joint Venture Company and
relating to matters pertinent to the conduct of the Joint Venture Company under
the Indemnified Party’s custody or control in accordance with such Party’s
corporate documents retention policies, or longer to the extent reasonably
requested by the Indemnifying Party, (iv) notifying the Indemnifying Party
promptly of receipt by the Indemnified Party of any subpoena or other third
party request for documents or interviews and testimony, (v) providing to the
Indemnifying Party copies of any documents produced by the Indemnified Party in
response to or compliance with any subpoena or other third party request for
documents; and (vi) except to the extent inconsistent with the Indemnified
Party’s obligations under applicable law and except to the

 

11

 

extent that to do so would
subject the Indemnified Party or its employees, agents or representatives to
criminal or civil sanctions, unless ordered by a court to do otherwise,  not producing documents to a third party
until the Indemnifying Party has been provided a reasonable opportunity to
review, copy and assert privileges covering such documents.

 

ARTICLE 9

LIMITATION OF LIABILITY

 

9.1                                 Damages Limitation.
SUBJECT TO SECTION 9.4, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER
PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR OTHER INDIRECT DAMAGES OR
ANY PUNITIVE OR EXEMPLARY DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT, WHETHER SUCH DAMAGES ARE BASED ON BREACH OF CONTRACT, TORT
(INCLUDING NEGLIGENCE) OR OTHER THEORY OF LIABILITY, AND EVEN IF A PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

9.2                                 THE
PARTIES AGREE THAT TO THE EXTENT A CLAIM ARISES UNDER THIS AGREEMENT, THE CLAIM
SHALL BE BROUGHT UNDER THIS AGREEMENT.

 

9.3                                 Damages Cap. SUBJECT TO SECTION 9.4,
IF EITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY MATTER ARISING FROM
THIS AGREEMENT, WHETHER BASED UPON AN ACTION OR CLAIM IN CONTRACT, WARRANTY,
EQUITY, NEGLIGENCE, INTENDED CONDUCT OR OTHERWISE (INCLUDING ANY ACTION OR
CLAIM ARISING FROM AN ACT OR OMISSION, NEGLIGENT OR OTHERWISE, OF THE LIABLE
PARTY), THE AMOUNT OF DAMAGES RECOVERABLE AGAINST THE LIABLE PARTY WITH RESPECT
TO ANY BREACH, PERFORMANCE, NONPERFORMANCE, ACT OR OMISSION HEREUNDER WILL NOT EXCEED
THE LESSER OF THE ACTUAL DAMAGES ALLOWED HEREUNDER; OR (i) IN THE CASE OF THE
JOINT VENTURE COMPANY BRINGING A CLAIM TEN MILLION DOLLARS ($10,000,000)  PER CLAIM OR SERIES OF RELATED CLAIMS ARISING
FROM THE SAME CAUSE; OR (ii) IN THE CASE OF PARENT BRINGING A CLAIM: (a)
NON-CUSTOM PRODUCTS SOLD BY THE JOINT VENTURE COMPANY TO BOTH MEMBERS, TEN
MILLION DOLLARS ($10,000,000) PER CLAIM OR SERIES OF RELATED CLAIMS ARISING
FROM THE SAME CAUSE; OR (b) IN THE CASE OF CUSTOM PRODUCTS THE AMOUNT OF
DAMAGES, IF ANY, ACTUALLY RECOVERED BY THE JOINT VENTURE COMPANY FROM ANY THIRD
PARTY RELATING TO THE PARENT’S CLAIM OR SERIES OF RELATED CLAIMS ARISING FROM
THE SAME CAUSE.

 

9.4                                 Exclusions and Mitigation.
Section 9.1 and 9.3 will not apply to either Party’s breach of ARTICLE 7. Section 9.3 will
not apply to Micron’s failure to meet either an Underloading charge under
Section 4.1 or a payment obligation which is due and payable under this
Agreement. Each Party shall have a duty to use commercially reasonable efforts
to mitigate damages for which the other Party is responsible.

 

9.5                                 Losses. Except as
provided under Section 8.1, the Joint Venture Company and Micron
each shall be responsible for Losses to their respective tangible personal or
real property (whether owned or leased), and each Party agrees to look only to
their own insurance arrangements with respect to such damages. The Joint
Venture Company and Micron waive all rights to recover against each other,
including each Party’s insurers’ subrogation rights, if any, for any loss or
damage to their respective tangible personal property or real property (whether
owned or leased) from any cause covered by insurance maintained by each of
them, including their respective deductibles or self-insured retentions.

 

12

 

Notwithstanding the foregoing, in the event of a loss hereunder involving
a property, transit or crime event or occurrence that: (i) is insured under
Micron’s insurance policies; (ii) a single insurance deductible applies; and
(iii) the loss event or occurrence affects the insured ownership or insured
legal interests of both Parties, then the Parties shall share the cost of the
deductible in proportion to each Party’s insured ownership or legal interests
in relative proportion to the total insured ownership or legal interests of the
Parties.

 

ARTICLE 10

TERM AND TERMINATION;

SUPPLY OBLIGATIONS FOLLOWING LIQUIDATING EVENT

 

10.1                           Term.
The term of this Agreement commences on the Effective Date and continues in
effect until the first to occur of (a) the Liquidation Date or (b) a Minority Closing, unless terminated sooner solely
by mutual agreement (such period of time, the “Term”).

 

10.2                           Termination.
This Agreement may not be terminated for any reason, including breach by a
Party, before termination pursuant to Section 10.1.

 

10.3                           Masks. On
the Liquidation Date, the Joint Venture Company shall immediately transfer
possession of production masks possessed by it at each Facility to the Micron
that then owns that Facility as of the Liquidation Date.

 

10.4                           Survival.
Termination of this Agreement shall not affect any of the Parties’ respective
rights accrued or obligations owed before termination, including any rights or
obligations of the Parties in respect of any accepted Purchase Orders existing
at the time of termination. In addition, the following shall survive
termination of this Agreement for any reason: Sections 2.12, 6.2, 6.5,
and Articles 4, 7, 8, 9, 10 and  11.

 

10.5                           Supply Obligations Following Liquidating Event. Upon the occurrence of a Liquidating Event any supply
obligations of the Parties will be as set forth in Article 13 of the LLC
Operating Agreement.

 

ARTICLE 11

MISCELLANEOUS

 

11.1                           Force Majeure Events.
The Parties shall be excused from any failure to perform any obligation
hereunder to the extent such failure is caused by a Force Majeure Event. A
Force Majeure Event shall operate to excuse a failure to perform an obligation
hereunder only for the period of time during which the Force Majeure Event
renders performance impossible or infeasible and only if the Party asserting
Force Majeure as an excuse for its failure to perform has provided written
notice to the other Party specifying the obligation to be excused and
describing the events or conditions constituting the Force Majeure Event. As
used herein, “Force Majeure Event” means the
occurrence of an event or circumstance beyond the reasonable control of the
party failing to perform, including, without limitation, (a) explosions, fires,
flood, earthquakes, catastrophic weather conditions, or other elements of
nature or acts of God; (b) acts of war (declared or undeclared), acts of
terrorism, insurrection, riots, civil disorders, rebellion or sabotage; (c)
acts of federal, state, local or foreign governmental authorities or courts;
(d) labor disputes, lockouts, strikes or other industrial action, whether
direct or indirect and whether lawful or

 

13

 

unlawful; (e) failures or fluctuations in electrical power or
telecommunications service or equipment; and (f) delays caused by the other
Party’s nonperformance hereunder.

 

11.2                           Specific Performance.
The Parties agree that irreparable damage will result if this Agreement is not
performed in accordance with its terms, and the Parties agree that any damages
available at law for a breach of this Agreement would not be an adequate remedy.
Therefore, the provisions hereof and the obligations of the Parties hereunder
shall be enforceable in a court of equity, or other tribunal with jurisdiction,
by a decree of specific performance, and appropriate preliminary or permanent
injunctive relief may be applied for and granted in connection therewith. 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.

 

11.3                           Assignment.
This Agreement shall be binding upon and inure to the benefit of the
permitted successors and assigns of each Party hereto. Neither this Agreement
nor any right or obligation hereunder may be assigned or delegated by either Party
in whole or in part to any other Person, other than a Wholly-Owned Subsidiary
of such Party, without the prior written consent of the non-assigning
Party.  Any purported assignment in violation of the provisions of this
Section shall be null and void and have no effect.

 

11.4                           Compliance with Laws and Regulations. Each of the Parties shall comply with, and shall use
reasonable efforts to require that its respective subcontractors comply with,
Applicable Laws relating to this Agreement and the performance of a Party’s
rights hereunder.

 

11.5                           Notice.
All notices and other communications hereunder shall be in writing and shall be
deemed given upon (a) transmitter’s confirmation of a receipt of a
facsimile transmission, (b) confirmed delivery by a standard overnight
carrier or when delivered by hand, (c) the expiration of five (5) Business
Days after the day when mailed in the United States by certified or registered
mail, postage prepaid, or (d) delivery in Person, addressed at the
following addresses (or at such other address for a party as shall be specified
by like notice):

 

In the case of the IM Flash
Technologies, LLC:

	
  1550 East 3400 North

  Lehi, Utah 84043

  
	
  Attention:  David A. Baglee; Rodney Morgan

  
	
  Facsimile Number:  (801) 767-5370

  

 

	
  With a mandatory copy to:

  
	
  Intel Corporation

  
	
  2200
  Mission College Blvd.

  Mail-Stop
  SC4-203

  Santa Clara,
  California 95054

  
	
  Attention:  General Counsel

  
	
  Facsimile Number:  (408) 653-8050

  

 

	
  In the case of Micron:

  
	
  Micron Technology, Inc. 

  8000 S. Federal Way

  Boise, Idaho 83707-0006

  Attention:  General Counsel

  Facsimile Number:  (208)368-4540

  

 

14

 

Either Party may change its address
for notices upon giving ten (10) days written notice of such change to the
other Party in the manner provided above.

 

11.6                           Waiver.
The failure at any time of a Party to require performance by the other Party of
any responsibility or obligation required by this Agreement shall in no way
affect a Party’s right to require such performance at any time thereafter, nor
shall the waiver by a Party of a breach of any provision of this Agreement by
the other Party constitute a waiver of any other breach of the same or any
other provision nor constitute a waiver of the responsibility or obligation
itself.

 

11.7                           Severability.
Should any provision of this Agreement be deemed in contradiction with the laws
of any jurisdiction in which it is to be performed or unenforceable for any
reason, such provision shall be deemed null and void, but this Agreement shall
remain in full force in all other respects. Should any provision of this
Agreement be or become ineffective because of changes in Applicable Laws or
interpretations thereof, or should this Agreement fail to include a provision
that is required as a matter of law, the validity of the other provisions of
this Agreement shall not be affected thereby. If such circumstances arise, the
Parties hereto shall negotiate in good faith appropriate modifications to this
Agreement to reflect those changes that are required by Applicable Law.

 

11.8                           Third Party Rights.
Nothing in this Agreement, whether express or implied, is intended or shall be
construed to confer, directly or indirectly, upon or give to any Person, other
than the Parties hereto, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any covenant, condition or other provision
contained herein.

 

11.9                           Amendment.
This Agreement may not be modified or amended except by a written instrument
executed by or on behalf of each of the Parties to this Agreement.

 

11.10                     Entire Agreement.
This Agreement and the applicable provisions of the Confidentiality Agreement,
which are incorporated herein and made a part hereof, together with the
Exhibits and Schedules hereto and the agreements and instruments expressly
provided for herein, constitute the entire agreement of the Parties hereto with
respect to the subject matter hereof and supersede all prior agreements and
understandings, oral and written, between the Parties hereto with respect to
the subject matter hereof.

 

11.11                     Choice of Law.
This Agreement shall be construed and enforced in accordance with and governed
by the laws of the State of Delaware, without giving effect to the principles
of conflict of laws thereof.

 

11.12                     Jurisdiction; Venue.
Any suit, action or proceeding seeking to enforce any provision of, or based on
any matter arising out of or in connection with, this Agreement shall be
brought in a state or federal court located in Delaware and each of the Parties
to this Agreement hereby consents and submits to the exclusive jurisdiction of
such courts (and of the appropriate appellate courts therefrom) in any such
suit, action or proceeding and irrevocably waives, to the fullest extent
permitted by Applicable Law, any objection which it may now or hereafter have
to the laying of the venue of any such suit, action or proceeding in any such
court or that any such suit, action or proceeding which is brought in any such
court has been brought in an inconvenient forum. Process in any such suit, action
or proceeding may be served on any party anywhere in the world, whether within
or without the jurisdiction of any such court.

 

11.13                     Headings. The headings of the Articles and Sections in this Agreement are
provided for convenience of reference only and shall not be deemed to
constitute a part hereof.

 

15

 

11.14                     Counterparts. This Agreement may be executed in several counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

 

11.15                     Insurance. Without limiting or qualifying the Joint Venture Company’s
liabilities, obligations, or indemnities otherwise assumed by the Joint Venture
Company pursuant to this Agreement, the Joint Venture Company shall maintain,
at no charge to Micron, with companies acceptable to Micron:

 

(a)                                  Commercial General Liability with limits
of liability not less than $[***] per occurrence and including liability
coverage for bodily injury or property damage (1) assumed in a contract or
agreement pertaining to The Joint Venture Company’s business and (2) arising
out of The Joint Venture Company’s products, Services, or work. The Joint
Venture Company’s insurance shall be primary with respect to liabilities
assumed by The Joint Venture Company in this Agreement to the extent such
liabilities are the subject of  The Joint
Venture Company’s insurance, and any applicable insurance maintained by Micron
shall be excess and non-contributing. The above coverage shall name Micron as
additional insured as respects The Joint Venture Company’s work or services
provided to or on behalf of Micron.

 

(b)                                 Automobile Liability Insurance with
limits of liability not less than $[***] per accident for bodily injury or
property damage.

 

(c)                                  Statutory Workers’ Compensation
coverage, including a Broad Form All States Endorsement in the amount required
by law, and Employers’ Liability Insurance in the amount of $[***] per
occurrence. Such insurance shall include mutual insurer’s waiver of subrogation.

 

[Signature page follows]

 

16

 

IN WITNESS WHEREOF, this Agreement has been
duly executed by and on behalf of the Parties hereto as of the Effective Date.

 

	
  MICRON TECHNOLOGY, INC.

  	
  IM FLASH TECHNOLOGIES, LLC

  
	
   

  	
   

  
	
  By:

  	
  /s/ STEVEN R. APPLETON

  	
   

  	
  By:

  	
  /s/ DAVID A. BAGLEE

  	
   

  
	
  Name: 
  Steven R. Appleton

  	
  Name: 
  David A. Baglee

  
	
  Title: 
  Chief Executive Officer and President

  	
  Title: 
  Authorized Officer

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ RODNEY MORGAN

  	
   

  
	
   

  	
  Name: 
  Rodney Morgan

  
	
   

  	
  Title: 
  Authorized Officer

  
							

 

THIS IS THE SIGNATURE PAGE FOR THE SUPPLY AGREEMENT ENTERED INTO BY AND
BETWEEN MICRON TECHNOLOGY, INC. AND IM FLASH TECHNOLOGIES, LLC

 

17

EXHIBIT A

DEFINITIONS

 

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

 

“Agreement”
shall have the meaning set forth in the preamble to this Agreement.

 

“Applicable Law”
means any applicable laws, statutes, rules, regulations, ordinances, orders,
codes, arbitration awards, judgments, decrees or other legal requirements of
any Governmental Entity.

 

“Approved Business Plan” shall have the meaning set forth in the LLC Operating Agreement.

 

“Assembly
Outs” shall mean a Product for which the Assembly Services have been
completed and meets all of the Assembly Specification applicable at such time
and is not Secondary Silicon or Rejects.

 

“Boise Supply Agreement” means that certain Boise Supply Agreement by and between Micron and
the Joint Venture Company dated as of the Effective Date.

 

“Business Continuity Plan” shall have the meaning set forth in Section 2.8 hereof.

 

“Business Day”
means a day that is not a Saturday, Sunday or other day on which commercial
banking institutions in the State of New York are authorized or required by
Applicable Law to be closed.

 

“Capacity” means
the rate of output (defined in terms of units per time period), at a particular
point in time, at which a particular Facility or set of Facilities of the Joint
Venture Company (or of a third party on the Joint Venture Company’s behalf) is
capable of producing such units.

 

“Confidential
Information”
shall have the meaning set forth in Section 7.1 hereof.

 

“Confidentiality
Agreement”
means that Mutual Confidentiality Agreement by and among the Joint Venture
Company, Intel and Micron dated as of the Effective Date.

 

“Custom Products”
shall have the meaning set forth in the Product Designs Committee Agreement.

 

“Cycle Time”
means the time required to process a unit through a portion of the
manufacturing process (e.g., fab, assembly, or final test) or through the
manufacturing process as a whole.

 

“Demand Forecast”
shall have the meaning set forth in Section 3.1(a) hereof.

 

“Effective Date”
shall have the meaning set forth in the preamble to this Agreement.

 

“Excursion”
means an occurrence, either during production or after customer delivery that
is outside normal historical behavior as established by both Parties in writing
in the applicable Specificationswhich may impact performance, Quality and
Reliability, or customer delivery commitments for Probed Wafers, NAND Flash
Memory Product or Known Good Die.

 

18

 

“Facilities”
shall mean all of the Joint Venture Company’s facilities at which it may
perform manufacturing, assembly or test services, including subcontractors.

 

“Fiscal Quarter”
means any of the four financial accounting quarters within the Joint Venture
Company’s Fiscal Year.

 

“Fiscal
Month” means any of the twelve financial accounting months within the Joint
Venture Company’s Fiscal Year.

 

“Fiscal Year” means the fiscal year of the Joint Venture
Company for financial accounting purposes.

 

“Flash Memory Integrated Circuit” shall have the meaning set forth in the LLC Operating Agreement.

 

“Force Majeure Event” shall have the meaning set forth in Section 11.1.

 

“GAAP”
means United States generally accepted accounting principles as in effect from
time to time.

 

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

 

“Hazardous Materials” means dangerous goods, chemicals, contaminants, substances, pollutants
or any other materials that are defined as hazardous by relevant local, state,
national, or international law, regulations and standards.

 

“Indemnified
Party” shall
mean any of the following to the extent entitled to seek indemnification under
this Agreement: Micron, the Joint Venture Company, and their respective
Affiliates, officers, directors, employees, agents, assigns and successors.

 

“Indemnified Losses” shall
mean all direct, out-of-pocket liabilities, damages, losses, costs and expenses
of any nature incurred by an Indemnified Party, including reasonable attorneys’
fees and consultants’ fees, and all damages, fines, penalties and judgments
awarded or entered against an Indemnified Party, but specifically excluding any
special, consequential or other types of indirect damages.

 

“Indemnifying Party”
shall mean the Party owing a duty of indemnification to another Party with
respect to a particular Third Party Claim.

 

“Intel”
means Intel Corporation, a Delaware Corporation.

 

“Initial Business Plan” shall have the meaning set forth in the LLC Operating Agreement.

 

“Joint Development Program Agreement” means that certain Joint Development by and between Intel and  Micron dated as of the Effective Date.

 

“Joint Venture Company” shall have the meaning set forth in the preamble to this Agreement.

 

“Joint Venture Documents”
shall have the meaning set forth in the Master Agreement.

 

“Known Good Die”
means a raw wafer that has been processed to the point of containing functional
and/or operational NAND Flash Memory Integrated Circuits that has undergone
Probe Testing (a.k.a. “Sort” procedure), meeting predefined performance and
quality criteria and singulated to individual semiconductor die. Die will have
been fully tested but will not been assembled into final packaging or undergone
final product testing.

 

“LLC Operating Agreement” means that Limited Liability Company Operating Agreement of the Joint
Venture Company, LLC between, Intel and Micron.

 

19

 

“Liquidation Date”
shall have the meaning set forth in the LLC Operating Agreement.

 

“Liquidation Event” shall have the meaning set forth in the LLC Operating Agreement.

 

“Losses”
shall mean, collectively, any and all insurable liabilities, damages, losses,
costs and expenses (including reasonable attorneys’ and consultants’ fees and
expenses).

 

“Manufacturing Committee” shall have the meaning set forth in the LLC Operating Agreement.

 

“Master Agreement”
means that certain Master Agreement by and between Intel and Micron as defined
in the LLC Operating Agreement.

 

“Members”
means Micron and Intel.

 

“Micron”
shall have the meaning set forth in the preamble to this Agreement.

 

“Minority Closing” shall
have the meaning set forth in the LLC Operating Agreement.

 

“Modified GAAP”
shall have the meaning set forth in the LLC Operating Agreement.

 

“MTV Lease Agreement” means that certain MTV Lease Agreement by and between the Joint
Venture Company and Micron dated as of the Effective Date.

 

“NAND
Flash Memory Integrated Circuit” means a Flash Memory
Integrated Circuit, in the memory cells included in the Flash Memory Integrated
Circuit are arranged in groups of serially connected memory cells (each such group
of serially connected memory cells called a “string”) in which the drain of
each memory cell of a string (other than the first memory cell in the string)
is connected in series to the source of another memory cell in such string, the
gate of each memory cell in such string is directly accessible, and the drain
of the uppermost bit of such string is coupled to the bitline of the memory
array.

 

“NAND Flash Memory Product”
shall have the meaning set forth in the LLC Operating Agreement.

 

“NAND Flash Memory Wafer” means a raw wafer that has been processed to the point of containing
NAND Flash Memory Integrated Circuits organized in multiple semiconductor die
and that has undergone Probe Testing, but before singulation of said die into
individual semiconductor die.

 

“Operating Plan”
means the Manufacturing Plan, Assembly Plan and Testing Plan developed pursuant
to the Definitions in the LLC Operating Agreement.

 

“Optional Purchase Agreement” means that certain Optional Purchase Agreement dated as of the Effective
Date.

 

“Party”
and “Parties” shall have the meaning set
forth in the Recitals to this Agreement.

 

“Performance
Criteria” means [***].

 

“Person”
shall have the meaning set forth in the LLC Operating Agreement.

 

20

 

“Planning
Forecast”
shall have the meaning set forth in Section 3.1(b) hereof.

 

“Price” or “Pricing” means
the calculation set forth on Schedule 4.8 hereof.

 

“Prime Wafer”
means the raw silicon wafers required, on a product-by-product basis, for the
manufacturer.

 

“Probe Testing” means
testing, using a wafer test program as set forth in the applicable
Specifications, of a wafer that has completed all processing steps deemed
necessary to complete the creation of the desired NAND Flash Memory Integrated
Circuits in the die on such wafer, the purpose of which test is to determine
how many and which of the die meet the applicable criteria for such die set
forth in the Specifications.

 

“Probed Wafer”
means a Prime Wafer that has been processed to the point of containing NAND
Flash Memory Integrated Circuits organized in multiple semiconductor die and
that has undergone Probe Testing, but before singulation of said die into
individual semiconductor dice.

 

“Product Designs Committee Agreement” means that certain Product Designs Committee Agreement by and between
Micron and the Joint Venture Company dated as of the Effective Date.

 

“Product Designs Development Agreement” means that certain Product Designs Development Agreement by and
between Micron and the Joint Venture Company dated as of the Effective Date.

 

“Products”
means a Probed Wafer, Known Good Die, or NAND Flash Memory Product, or such
other products that are manufactured by the Joint Venture Company under Section
2.2 hereof.

 

“Proposed Loading Plan”
shall have the meaning set forth in Section 3.1 hereof.

 

“Purchase Order”
shall have the meaning set forth in Section 4.3 hereof.

 

“Quality and Reliability” or “Q&R” means building and
sustaining relationships which assess, anticipate, and fulfill the quality and
reliability standards as set forth in the Specification or Operating Plan for
Products.

 

“Ramp Plan”
means the document which defines the process and key milestone schedule to
build and ramp a silicon fabrication facility.

 

“Receiving Party”
shall have the meaning set forth in Section 7.1 hereof.

 

“Recoverable Taxes”
shall have the meaning set forth in Section 4.7 hereof.

 

“Secondary Silicon”
shall mean: (i) a Prime Wafer that has been processed to the point of
containing NAND Flash Memory Integrated Circuits organized in multiple
semiconductor die and that has undergone Probe Testing would otherwise
constitute a Probed Wafer but for failure to achieve

 

21

 

qualification; or (ii) singulated and/or packaged
die that would otherwise constitute Assembly Outs or Test Outs but for failure
to achieve qualification; and otherwise conform to the applicable Secondary
Silicon Specification.

 

“Semiconductor Manufacturing Technology”
shall have the meaning set forth in the Process Joint Development Program
Agreement.

 

“Sharing Interest”
shall have the meaning set forth in the LLC Operating Agreement.

 

“Specifications”
means those specifications used to describe, characterize, and define the
quality and performance of NAND Flash Memory Products and Known Good Die,
including any interim performance specifications at Probe Testing or other
testing, as such specifications may be determined from time to time by the
Joint Venture Company.

 

“Subsidiary” shall
have the meaning set forth in the LLC Operating Agreement.

 

“Technology License Agreement” means that certain Technology License Agreement by and between Intel,
Micron and the Joint Venture Company dated as of the Effective Date.

 

“Term”
shall have the meaning set forth in Section 11.1 hereof.

 

“Test Outs” shall mean a
Product Candidate for which Testing Services have been completed and meets all
of the Testing Specification applicable at such time and is not Secondary
Silicon or Rejects.

 

“Third Party Claim” shall mean any claim, demand, action, suit or proceeding, and any
actual or threatened lawsuit, complaint, cross-complaint or counter-complaint,
arbitration or other legal or arbitral proceeding of any nature, brought in any
court, tribunal or judicial forum anywhere in the world, regardless of the
manner in which such proceeding is captioned or styled, by any Person other
than Micron, the Joint Venture Company and Affiliates of the foregoing, against
an Indemnified Party, in each case alleging entitlement to any Indemnified
Losses pursuant to any indemnification obligation under this Agreement.

 

“Under-loading”
shall have the meaning set forth in Section 4.1.

 

“Wafer
Start” shall mean the initiation of Manufacturing Services with respect to a
Prime Wafer.

 

“Warranty Claim Period” shall have the meaning set forth in Section 6.2 hereof.

 

“Wholly-Owned Subsidiary” shall have the meaning set forth in the LLC Operating Agreement.

 

“WIP”
means work in process. This includes all wafers and Product in wafer
fabrication, sort, assembly, and/or final test, including prime and secondary
wafers, and all completed Product units not yet delivered to Micron.

 

“Yield”
means anticipated output of Product from WIP at a particular point in time,
including line yield, die yield, assembly yield and final testing yield.

 

22

 

	
  SCHEDULES

  

 

	
  Schedule 4.8

  	
   

  	
  Price

  

 

23Exhibit 10.163

 

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

 

INTEL/MICRON CONFIDENTIAL

 

SUPPLY AGREEMENT

 

This SUPPLY AGREEMENT (the “Agreement”),
is made and entered into as of this 6th day of January, 2006 (the “Effective Date”), by and between Intel Corporation, a
Delaware corporation (“Intel”), and
IM Flash Technologies, LLC, a Delaware limited liability company (the “Joint Venture Company”).

 

RECITALS

 

A.                                   The
Joint Venture Company is engaged in the manufacturing, assembly and test of
NAND Flash Memory Products (as defined hereinafter) for Intel.

 

B.                                     Intel
and the Joint Venture Company (each, a “Party” and
collectively, the “Parties”) desire
the Joint Venture Company to supply Products, including Secondary Silicon, for
Intel in accordance with Intel’s Sharing Interest upon the terms and subject to
the conditions set forth in this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties
intending to be legally bound do hereby agree as follows.

 

ARTICLE 1

DEFINITIONS; CERTAIN INTERPRETIVE MATTERS

 

1.1                                 Definitions.
In addition to the terms defined elsewhere in this Agreement, capitalized terms
used in this Agreement shall have the respective meanings set forth in Exhibit A.

 

1.2                                 Certain
Interpretive Matters.

 

(a)                                  Unless
the context requires otherwise, (1) all references to Sections, Articles,
Exhibits, Appendices or Schedules are to Sections, Articles, Exhibits,
Appendices or Schedules of or to this Agreement, (2) each of the Schedules will
apply only to the corresponding Section or subsection of this Agreement, (3)
each accounting term not otherwise defined in this Agreement has the meaning
commonly applied to it in accordance with Modified GAAP, (4) words in the
singular include the plural and visa versa, (5) the term “including” means “including
without limitation,” and (6) the terms “herein,” “hereof,” “hereunder”
and words of similar import shall mean references to this Agreement as a whole
and not to any individual Section or portion hereof. All references to $ or
dollar amounts will be to lawful currency of the United States of America. All
references to “day” or “days” will mean calendar days and all
references to “quarter(ly)”, “month(ly)” or “year(ly)” will mean Fiscal
Quarter, Fiscal Month or Fiscal Year, respectively.

 

(b)                                 No
provision of this Agreement will be interpreted in favor of, or against, any of
the Parties by reason of the extent to which any such Party or its counsel
participated in the drafting thereof or by reason of the extent to which any
such provision is inconsistent with any prior draft of this Agreement or such
provision.

 

 

ARTICLE 2

OBLIGATIONS OF THE JOINT VENTURE COMPANY;

PROCESSES AND CONTROLS

 

2.1                                 General
Obligations. The Joint Venture Company will (1) supply Product to Intel in
accordance with the purchasing process set forth in Article 4 hereof;
(2) develop its Facilities and operations to meet Capacity according to the
Ramp Plan and the Initial Business Plan, as may be amended thereafter, and the
Operating Plan and the obligations set forth herein, including Sections 2.2,
2.5 and 2.9; (3) supply Products which meet the Specification(s), Price,
Yield, Cycle-Time, and Quality and Reliability as agreed by the Parties; and
(4) operate its Facilities so that Product output from any one Facility matches
the other Facilities in form, fit and function, in accordance with Section 2.14.

 

2.2                                 Products
to Supply. The Joint Venture Company will manufacture, assemble and test
Products for Intel in accordance with the Operating Plan and applicable
Specifications, developed in response to Intel’s Demand Forecast provided to
Joint Venture Company in accordance with Article 3 below.

 

2.3                                 Process
and Design Information. Intel agrees to provide to the Joint Venture
Company:  (i) such process technology or
information as is required to be disclosed under the Joint Development Program
Agreement and the Technology License Agreement; and (ii) design information
reasonably required to manufacture NAND Flash Memory Wafers.

 

2.4                                 Control;
Processes. The Joint Venture Company and Intel will review Joint Venture
Company’s control and process mechanisms, including but not limited to such
mechanisms that are utilized to ensure that all parameters of the
Specification, including the Performance Criteria, are met or exceeded in the
Joint Venture Company’s manufacture of Products by either the Joint Venture Company
or its approved subcontractor for Intel. The Parties agree to work together in
good faith to define mutually agreeable control and process mechanisms
including the following:  [***].

 

2.5                                 Equipment,
Systems, Materials. Except as provided in other Joint Venture Documents,
the Joint Venture Company shall be responsible for procuring all manufacturing
equipment, tools, automated material handling systems therein and materials,
including Prime Wafers, which are reasonably required for the Joint Venture Company
to achieve the Ramp Plan and the Operating Plan. The Joint Venture Company
shall endeavor to manage the entire supply chain, including equipment,
materials, systems, maintenance and subcontractors and vendors, to create
efficiency and maximize the Performance Criteria.

 

2.6                                 Production
Masks. Unless otherwise agreed with Intel, the Joint Venture Company or its
subcontractors will be responsible to obtain, maintain, repair and replace
masks used in the production of Products. Such masks will only be used in the
production of Products for Intel. Production masks will be repaired and
replaced solely at mask operations which have been approved by Intel, which
approval shall not be unreasonably withheld. The Joint Venture Company or its
subcontractors will retain possession, but not ownership of any underlying
copyrights, maskworks, or other intellectual property, of any physical
production masks which the Joint Venture Company has made under this Section
2.6.

 

2.7                                 Designation
of WIP. At Intel’s option, the Joint Venture Company will ensure that WIP
at Facilities or its subcontractor’s facilities is designated for the Intel
from Wafer Start. If Intel does not elect to have WIP so designated, the Joint
Venture Company will designate the WIP for Intel after Probe Testing. Custom
Product of Intel, if any, must be designated as for Intel from Wafer Start at
all the Facilities or its subcontractor’s facilities.

 

2

 

2.8                                 Subcontractors.
The Joint Venture Company may utilize subcontractors to perform any portion of
the manufacture, assembly and test process in making Products for Intel,
subject to all subcontractors being approved by the Members, which approval
shall not be unreasonably withheld. The Joint Venture Company will ensure that
all contracts with subcontractors will provide the Joint Venture Company with
the same level of access and controls as set forth in the Agreement, including Sections
2.4, 2.9, 2.10, 2.11, 2.12 and Article 5.

 

2.9                                 Staffing.
The Joint Venture Company shall adequately staff its Facilities and ensure that
its subcontractors adequately staff their facilities to sustain and manage
production of Product for Intel, including the obligations set forth in Section
2.1 and meeting scheduled commitments, including the Ramp Plan, the
Operating Plan and the Performance Criteria.

 

2.10                           Business
Continuity Plan. The Joint Venture Company will develop a process to
recover the production process in the event of a natural disaster or any other
event that disrupts the production process or the ability of the Joint Venture
Company to meet its delivery commitments to Intel or satisfy customer orders. If
requested by Intel, Joint Venture Company will review its Business Continuity
Plan with Intel and make changes as agreed with Intel, subject to any
confidentiality requirements.

 

2.11                           [***].
In addition to the quarterly review and monthly report requirements set forth
in Section 3.2 and 3.3, the Joint Venture Company will promptly notify
Intel of [***].

 

2.12                           Traceability
and Data Retention. Intel and the Joint Venture Company shall review the
Joint Venture Company’s process traceability system [***]. The Joint Venture
Company agrees to maintain such data for a minimum of [***] years. The Joint
Venture Company will endeavor to provide Intel [***].

 

2.13                           Additional
Customer Requirements. Intel will inform the Joint Venture Company in
writing of any auditable supplier requirements of Intel’s customer relating to
any Facility at which Product is manufactured, assembled or tested. The Parties
will work together in good faith to resolve such requests.

 

2.14                           Transfer;
Equivalency of Operations. The Intel will cooperate in good faith with the
Joint Venture Company to transfer Intel’s technology to the Joint Venture
Company, if such technology transfer is required under the Joint Venture
Documents. The Joint Venture Company will establish similar baseline Product
performance standards, including form, fit and function, at Facilities and
subcontracted facilities. Such efforts will include the provision of up to date
equivalent materials (including correlation wafers), data and information.

 

ARTICLE 3

PLANNING MEETINGS AND FORECASTS;

PERFORMANCE REVIEWS AND REPORTS

 

3.1                                 Planning
and Forecasting.

 

(a)                                  Intel
will quarterly provide the Joint Venture Company, in a timeframe to be mutually
agreed by the Parties to meet customer expectations, with a written demand
forecast for [***] ([***]) quarters corresponding to the Joint Venture Company’s
Fiscal Quarters or as may be otherwise agreed between the Parties. This demand
will include desired finished product breakout by design id, technology node,
wafer as finished goods or package type (“Demand Forecast”);

 

3

 

(b)                                 The
Joint Venture Company shall furnish Intel with a written response within [***]
([***]) Business Days indicating a response regarding capacity and what portion
of the demand that the Joint Venture Company can commit to meet. This written
response (the “Planning Forecast”) will include:

 

[***].

 

(c)                                  Based
on the Planning Forecast, the Joint Venture Company shall develop a [***]
([***]) Fiscal Quarter proposed Product loading plan for such period (“Proposed Loading Plan”). The Joint Venture Company shall
provide Intel with the Proposed Loading Plan at least [***] ([***]) Business
Days prior to its review by the Manufacturing Committee.

 

(d)                                 The
Joint Venture Company will submit the Proposed Loading Plan, Planning Forecast
and other requested information to the Manufacturing Committee for endorsement.
Once endorsed by the Manufacturing Committee, the Proposed Loading Plan shall
become part of the Operating Plan.

 

3.2                                 Performance
Reviews and Reports. The Joint Venture Company shall meet with Intel each
quarter to discuss the Performance Criteria and the most recent monthly report.
The monthly report will be distributed to Intel monthly, on a date to be agreed
by the Parties, and will include the following information:

 

(a)                                  Describes
[***];

 

(b)                                 Describes
[***];

 

(c)                                  Describes
[***];

 

(d)                                 Describes
[***].

 

(e)                                  Identifies
[***].

 

3.3                                 Monthly
Review. In addition, the Parties shall hold a monthly meeting, on a date to
be agreed by the Parties, with the primary purpose of [***].

 

ARTICLE 4

PURCHASE AND SALE OF PRODUCTS

 

4.1                                 Product
Quantity. Intel shall purchase from the Joint Venture Company a percentage,
equal to Intel’s Sharing Interest (as the same may change from time to time),
of all of the Joint Venture Company’s output of Products that meet the
Specifications. The Joint Venture Company shall produce all Products in
accordance with the Operating Plan, developed in response to Intel’s Demand
Forecast under Article 3 above. If Intel fails purchase its full Sharing
Interest of the Joint Venture Company’s output, produced in accordance with the
Operating Plan (“Underloading”), then the
increased Prices associated with such Underloading shall be isolated and
charged solely to Intel, which Intel shall remain solely responsible for paying.
Notwithstanding the foregoing, Intel may elect, but is not obligated, to
purchase Product in excess of its Sharing Interest only by mutual agreement of
the other Member.

 

4.2                                 Secondary
Silicon. Any Secondary Silicon produced by the Joint Venture Company or its
subcontractors will be provided [***] by the Joint Venture Company to the
Members in a percentage equal to Intel’s Sharing Interest (as the same may
change from time to time). ALL SECONDARY

 

4

 

SILICON PROVIDED
HEREUNDER IS PROVIDED “AS IS,” “WHERE IS” WITH ALL FAULTS AND DEFECTS BASIS
WITHOUT WARRANTY OF ANY KIND.

 

4.3                                 Placement
of Purchase Orders. Prior to the commencement of every Fiscal Quarter or
another time period agreed by the Parties in conjunction with the planning
cycle specified in Article 3, the Joint Venture Company shall place a
non-cancelable blanket purchase order in writing (via e-mail or facsimile
transmission) for the quantity of Product to be supplied by the Joint Venture
Company in the following Fiscal Quarter as indicated in the Operating Plan
(each such order, a “Purchase Order”).
Intel may issue change orders to such Purchase Orders to reflect changes in the
Operating Plan, provided that such changes can be reasonably accommodated by
the Joint Venture Company without disrupting on-going manufacturing operations.
Intel may also elect to place out-of-cycle purchase order of Product, including
expedited Probed Wafers, to the Joint Venture Company on an as-needed basis. The
terms and conditions of this Agreement supersede the terms and conditions
contained in either Party’s sales or purchase documentation provided in
connection herewith unless expressly agreed otherwise in a writing signed  by each Party.

 

4.4                                 Shortfall.
The Joint Venture Company shall immediately notify Intel in writing of any
inability to meet a Purchase Order commitment to Intel.

 

4.5                                 Acceptance
of Purchase Order. Each Purchase Order that corresponds to the Operating
Plan in the manner contemplated by Section 4.3 and, and is otherwise
free of errors, shall be deemed accepted by the Joint Venture Company upon
receipt and shall be binding on the Parties, to the extent not inconsistent
with the Operating Plan.

 

4.6                                 Content
of Purchase Orders. Each Purchase Order shall specify the following items:

 

(a)                                  Purchase
Order number;

 

(b)                                 Description
and part number of each Product;

 

(c)                                  Forecasted
quantity of each different Product and the Sharing Interest portion thereof for
the calendar month;

 

(d)                                 Forecasted
unit Price and total forecasted Price for each different Product, and total forecasted
Price for all Products ordered;

 

(e)                                  Level
of Probe Testing;

 

(f)                                    Marking
specification and packaging requirements;

 

(g)                                 Requested
delivery date;

 

(h)                                 Place
of delivery; and

 

(i)                                     Other
terms (if any).

 

4.7                                 Taxes.

 

(a)                                  General.
All sales, use and other transfer taxes imposed directly on or solely as a
result of the supplying of Products and the payments therefor provided herein
shall be stated separately on the Joint Venture Company’s invoice, collected
from Intel and shall be remitted by the Joint Venture

 

5

 

Company to the
appropriate tax authority (“Recoverable Taxes”),
unless Intel provides valid proof of tax exemption prior to the effective date
of the transfer of the Products or otherwise as permitted by law prior to the
time the Joint Venture Company is required to pay such taxes to the appropriate
tax authority. When property is delivered and/or services are provided or the
benefit of services occurs within jurisdictions in which collection and
remittance of taxes by Intel is required by law, the Joint Venture Company
shall have sole responsibility for payment of said taxes to the appropriate tax
authorities. In the event such taxes are Recoverable Taxes and the Joint
Venture Company does not collect tax from Intel or pay such taxes to the
appropriate governmental entity on a timely basis, and is subsequently audited
by any tax authority, liability of Intel will be limited to the tax assessment
for such Recoverable Taxes, with no reimbursement for penalty or interest
charges or other amounts incurred in connection therewith. Notwithstanding
anything herein to the contrary, taxes other than Recoverable Taxes shall not
be reimbursed by Intel, and each Party is responsible for its own respective
income taxes (including franchise and other taxes based on net income or a
variation thereof), taxes based upon gross revenues or receipts, and taxes with
respect to general overhead, including but not limited to business and
occupation taxes, and such taxes shall not be Recoverable Taxes.

 

(b)                                 Withholding
Taxes. In the event that Intel is prohibited by law from making payments to
the Joint Venture Company unless Intel deducts or withholds taxes therefrom and
remits such taxes to the local taxing jurisdiction, then Intel shall duly
withhold and remit such taxes and shall pay to the Joint Venture Company the
remaining net amount after the taxes have been withheld. Such taxes shall not
be Recoverable Taxes and Intel shall not reimburse the Joint Venture Company for
the amount of such taxes withheld.

 

4.8                                 Invoicing;
Payment. The Joint Venture Company shall invoice Intel on a monthly basis
for the Price of the Products provided and all overhead, interest, general and
administrative and other costs, including all start-up costs for Facilities
which shall be split between the Members based on Sharing Interest. All amounts
owed under this Agreement are stated, calculated and shall be paid in United
States Dollars. Except as otherwise specified in this Agreement, the Intel
shall pay the Joint Venture Company for the amounts due, owing, and duly
invoiced under this Agreement within [***] ([***]) days following delivery of
an invoice therefore to such place as the Joint Venture Company may reasonably
direct therein.

 

4.9                                 Payment
to Subcontractors. The Joint Venture Company shall be responsible for and
shall hold Intel harmless for any and all payments to its vendors or
subcontractors utilized in the performance of this Agreement.

 

4.10                           Delivery,
Title and Risk of Loss. The Joint Venture Company, in order to ensure
timely and complete shipment of Products to Intel, shall arrange for and pay
for all shipping charges, insurance, taxes, customs charges and any fees and
duties in connection with such shipment. The Joint Venture Company shall hold
title to and risk of loss of Products under this Agreement, including WIP held
by subcontractors, until tender to the carrier, at which time title and risk of
loss and damage to Products shall transfer to Intel.

 

4.11                           Packaging.
All shipment packaging of the Products shall be in conformance with the
Specifications, the Intel’s reasonable instructions, and general industry
standards, and shall be resistant to damage that may occur during
transportation. Marking on the packages shall be made by Joint Venture Company
in accordance with Intel’s reasonable instructions.

 

4.12                           Shipment.
All Products shall be prepared for shipment in a manner that:  (i) follow good commercial practice; (ii) is
acceptable to common carriers for shipment at the lowest rate; and (iii) is
adequate to ensure safe arrival. The Joint Venture Company shall mark all
containers with necessary

 

6

 

lifting, handling, and
shipping information, Purchase Order number, date of shipment, and the names of
the Intel and applicable customer. If no instructions are given, the Joint
Venture Company shall select the most price effective carrier, given the time
constraints known to the Joint Venture Company. At Intel’s request, the Joint
Venture will provide drop-shipment of Products to Intel’s customers. Such
shipment service may be provided by a subcontractor to the Joint Venture
Company provided that title remains with the Joint Venture Company and then
passes to Intel upon tender to the carrier.

 

4.13                           Customs
Clearance. Upon Intel’s request, the Joint Venture Company will promptly
provide Intel with a statement of origin for all Products and with applicable
customs documentation for Products wholly or partially manufactured outside of
the country of import.

 

ARTICLE 5

VISITATIONS, AUDITS

 

5.1                                 Visits.
The Joint Venture Company will support Intel’s reasonable requests for visits
to Facilities and meetings for the purpose of reviewing performance of
production of Products including requests for further information and
assistance in troubleshooting performance issues. Such requests shall be
reasonably granted by the Joint Venture Company so long as such visits and
meetings do not unduly interfere with the Joint Venture Company’s operations
and business affairs.

 

5.2                                 Audit.
Intel representatives and key customer representatives, upon Intel’s request,
shall be allowed to visit the Joint Venture Company’s Facilities during normal
working hours upon reasonable advanced written notice to the Joint Venture
Company for the purposes of monitoring production processes and compliance with
any requirements set forth in this Agreement and the Specifications. Upon
completion of the audit, the Joint Venture Company and Intel will agree to an
audit closure plan, to be documented in the audit report issued by Intel.

 

5.3                                 Financial
Audit. Intel reserves the right to have the Joint Venture Company’s books
and records related to the Pricing hereunder inspected and audited not more
than [***] during any Fiscal Year to ensure compliance with Schedule 4.8 of
this Agreement in regards to Pricing. Such audit will be performed by an
independent third party auditor acceptable to both Parties at Intel’s expense. Intel
shall provide [***] ([***]) days advance written notice to the Joint Venture
Company of its desire to initiate an audit and the audit shall be scheduled so
that it does not adversely impact or interrupt the Joint Venture Company’s
business operations. If the audit reveals any material discrepancies, the Joint
Venture Company or Intel shall reimburse the other, as applicable, for any
material discrepancies within [***] ([***]) days after completion of the audit.
The results of such audit shall be kept confidential by the auditor and only
the discrepancies shall be reported to the Parties, and be limited to
discrepancies identified by the audit. Notwithstanding the foregoing, any
auditor reports shall not disclose any the Joint Venture Company pricing or
terms of purchase for any purchases of materials or equipment hereunder to
Intel, absent written agreement from the Members’ respective legal counsel. If
any audit reveals a material discrepancy, Intel may increase the frequency of
such audits to [***] for the subsequent [***] ([***]) month period.

 

5.4                                 Subcontractor;
Vendor Visits. The Joint Venture Company will use commercially reasonable
efforts to ensure that all contracts with vendors and subcontractors will
provide the Joint Venture Company and Intel with the right to visit and audit
rights similar to those set forth in this Article 5.

 

7

 

ARTICLE 6

WARRANTY; HAZARDOUS MATERIALS; DISCLAIMER

 

6.1                                 Product
Warranty. The Joint Venture Company makes the following warranties
regarding Products furnished hereunder, which warranties shall survive any
delivery, inspection, acceptance, payment, or resale of the Products:

 

(a)                                  Products
conform to all agreed Specifications;

 

(b)                                 Products
are free from defects in materials or workmanship; and

 

(c)                                  The
Joint Venture Company has the necessary right, title, and interest to provide
Products to the Joint Venture Company and the Products will be free of liens
and encumbrances, not including any implied warranty of non-infringement.

 

6.2                                 Warranty
Claims. Within a period of time, not to exceed the lesser of the actual
warranty period applicable to the end customer for the NAND Flash Memory
Product at issue or eighteen (18) months from the date of the delivery of the
Products at issue to the Intel (“Warranty
Notice Period”), Intel shall notify the Joint Venture Company if it
believes that any Product does not meet the Product warranty set forth in
Section 6.1. Intel shall return such Products to the Joint Venture Company as
directed by the Joint Venture Company. If a Product is determined not to be in
compliance with such warranty, then Intel shall be entitled to return such
Product and cause the Joint Venture Company to replace at the Joint Venture
Company’s expense or, at Intel’s option, receive a credit or refund of any
monies paid to the Joint Venture Company in respect of such Product, save that
such credit or refund shall in no event exceed on a per-unit basis the final
price paid for the Product under this Agreement. The basis for such refund or
credit shall be the Price on a per-unit basis in the month in which the
returned Product was invoiced to the Intel. THE FOREGOING REMEDY IS PARENT’S
SOLE AND EXCLUSIVE REMEDY FOR THE JOINT VENTURE COMPANY’S FAILURE TO MEET ANY
WARRANTY OF SECTION 6.1.

 

6.3                                 Inspections.
Member may, upon reasonable advance written notice, request samples of Products
(including WIP) during production for purposes of determining compliance with
the requirements and Specification(s) hereunder, provided that the provision of
such samples shall not materially impact the Joint Venture Company’s
performance to the Operating Plan or its ability to meet delivery requirements
under any accepted Purchase Order. Any samples provided hereunder shall be:  (i) limited in quantity to the amount
reasonably necessary for the purposes hereunder; (ii) included in the pricing;
and (iii) included in any performance requirements, if any. The Joint Venture
Company shall provide reasonable assistance for the safety and convenience of
Intel in obtaining the samples in such manner as shall not unreasonably hinder
or delay the Joint Venture Company’s performance.

 

6.4                                 Hazardous
Materials.

 

(a)                                  If
Products provided hereunder include Hazardous Materials as determined in
accordance with applicable law, the Joint Venture Company represents and
warrants that the Joint Venture Company and the Joint Venture Company’s
employees, agents, and subcontractors actually working with such materials in
providing the Products hereunder to Intel shall be trained in accordance with
applicable law regarding the nature of and hazards associated with the
handling, transportation, and use of such Hazardous Materials, as applicable to
the Joint Venture Company.

 

8

 

(b)                                 To
the extent required by applicable law, Joint Venture Company shall provide
Intel with Material Safety Data Sheets (MSDS) either prior to or accompanying
any delivery of Products to Intel.

 

6.5                                 Disclaimer.
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS ARTICLE 6, THE JOINT
VENTURE COMPANY HEREBY EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
MERCHANTABILITY, SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE,
NON-INFRINGEMENT OR OTHERWISE, WITH RESPECT TO THE PRODUCTS PROVIDED UNDER THIS
AGREEMENT. THE WARRANTIES WILL NOT APPLY TO:  (i) ANY WARRANTY CLAIM OR ISSUE,
OR DEFECT TO THE EXTENT CAUSED BY TECHNICAL MATERIALS PROVIDED OR SPECIFIED BY,
THROUGH OR ON BEHALF OF THE MEMBERS OR COMMITTEES OF MEMBERS, INCLUDING
BUT NOT LIMITED TO PRODUCT DESIGNS, TECHNOLOGY AND TEST PROGRAMS; OR (ii) THE WARRANTIES WILL NOT
APPLY TO ANY OF THE PRODUCTS THAT HAVE BEEN REPAIRED OR
ALTERED, EXCEPT AS AUTHORIZED BY THE JOINT VENTURE COMPANY, OR WHICH ARE
SUBJECTED TO MISUSE, NEGLIGENCE, ACCIDENT OR ABUSE.

 

ARTICLE 7

CONFIDENTIALITY; OWNERSHIP

 

7.1                                 Protection
and Use of Confidential Information. All information provided, disclosed or
obtained in the performance of any of the Parties’ activities under this
Agreement shall be subject to all applicable provisions of the Confidentiality
Agreement. Furthermore, the terms and conditions of this Agreement shall be
considered “Confidential Information” under
the Confidentiality Agreement for which each Party is considered a “Receiving Party” under such agreement. To the extent there
is a conflict between this Agreement and the Confidentiality Agreement, the
terms of this Agreement shall control.

 

7.2                                 Masks.
Any masks produced pursuant to this Agreement will be based on Product designs
owned by Intel and shall be treated as Confidential Information of Intel.

 

7.3                                 Intellectual
Property Ownership. Ownership of any intellectual property developed by the
Joint Venture Company will be governed by the Technology License Agreement or
Product Designs Development Agreement.

 

ARTICLE 8

INDEMNIFICATION

 

8.1                                 Mutual
General Indemnity. Subject to ARTICLE 9, each Party (“Indemnifying Party”) shall indemnify, defend and hold
harmless the other Party (“Indemnified Party”)
from and against any and all Indemnified Losses based on or attributable to any
Third Party Claim or threatened Third Party Claim arising under this Agreement
and as a result of the Indemnifying Party’s negligence, gross negligence or
willful misconduct of the Indemnifying Party or any of its respective officers,
directors, employees, agents or subcontractors. Notwithstanding the foregoing,
this Section 8.1 shall not apply to any claims or losses based on or
attributable to intellectual property infringement.

 

8.2                                 Indemnification
Procedures.

 

(a)                                  Promptly
after the receipt by any Indemnified Party of a notice of any Third Party Claim
that an Indemnified Party seeks to be indemnified under this Agreement, such
Indemnified

 

9

 

Party shall give written
notice of such Third Party Claim to the Indemnifying Party, stating in
reasonable detail the nature and basis of each allegation made in the Third
Party Claim and the amount of potential Indemnified Losses with respect to each
allegation, to the extent known, along with copies of the relevant documents
received by the Indemnified Party evidencing the Third Party Claim and the
basis for indemnification sought. Failure of the Indemnified Party to give such
notice shall not relieve the Indemnifying Party from liability on account of
this indemnification, except if and only to the extent that the Indemnifying
Party is actually prejudiced by such failure or delay. Thereafter, the
Indemnified Party shall deliver to the Indemnifying Party, promptly after the
Indemnified Party’s receipt thereof, copies of all notices and documents
(including court papers) received by the Indemnified Party relating to the
Third Party Claim. The Indemnifying Party shall have the right to assume the
defense of the Indemnified Party with respect to such Third Party Claim upon
written notice to the Indemnified Party delivered within thirty (30) days after
receipt of the particular notice from the Indemnified Party. So long as the
Indemnifying Party has assumed the defense of the Third Party Claim in
accordance herewith and notified the Indemnified Party in writing thereof, (i)
the Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Third Party Claim, it being
understood that the Indemnifying Party shall pay all reasonable costs and
expenses of counsel for the Indemnified Party after such time as the
Indemnified Party has notified the Indemnifying Party of such Third Party Claim
and prior to such time as the Indemnifying Party has notified the Indemnified
Party that it has assumed the defense of such Third Party Claim, (ii) the
Indemnified Party shall not file any papers or, other than in connection with a
settlement of the Third Party Claim, consent to the entry of any judgment
without the prior written consent of the Indemnifying Party (not to be
unreasonably withheld, conditioned or delayed) and (iii) the Indemnifying Party
will not consent to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim (other than a judgment or settlement that is
solely for money damages and is accompanied by a release of all indemnifiable
claims against the Indemnified Party) without the prior written consent of the
Indemnified Party (not to be unreasonably withheld, conditioned or delayed). Whether
or not the Indemnifying Party shall have assumed the defense of the Indemnified
Party for a Third Party Claim, such Indemnifying Party shall not be obligated
to indemnify and hold harmless the Indemnified Party hereunder for any consent
to the entry of judgment or settlement entered into with respect to such Third
Party Claim without the Indemnifying Party’s prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed.

 

(b)                                 Equitable
Remedies. In the case of any Third Party Claim where the Indemnifying Party
reasonably believes that it would be appropriate to settle such Third Party
Claim using equitable remedies (i.e., remedies involving the future activity
and conduct of the Joint Venture Company), the Indemnifying Party and the
Indemnified Party shall work together in good faith to agree to a settlement;
provided, however, that no Party shall be under any obligation to agree to any
such settlement.

 

(c)                                  Treatment
of Indemnification Payments; Insurance Recoveries. Any indemnity payment
under this Agreement shall be decreased by any amounts actually recovered by
the Indemnified Party under third party insurance policies with respect to such
Indemnified Losses (net of any premiums paid by such Indemnified Party under
the relevant insurance policy), each Party agreeing (i) to use all reasonable
efforts to recover all available insurance proceeds and (ii) to the extent that
any indemnity payment under this Agreement has been paid by the Indemnifying
Party to the Indemnified Party prior to the recovery by the Indemnified Party
of such insurance proceeds, the amount of such insurance proceeds actually
recovered by the Indemnified Party shall be promptly paid to the Indemnifying
Party.

 

(d)                                 Certain
Additional Procedures. The Indemnified Party shall cooperate and assist the
Indemnifying Party in determining the validity of any Third Party Claim for
indemnity by the Indemnified Party and in otherwise resolving such matters. The
Indemnified Party shall cooperate in the defense by the Indemnifying Party of
each Third Party Claim (and the Indemnified Party and the

 

10

 

Indemnifying Party agree
with respect to all such Third Party Claim that a common interest privilege
agreement exists between them), including, (i) permitting the Indemnifying
Party to discuss the Third Party Claim with such officers, employees,
consultants and representatives of the Indemnified Party as the Indemnifying
Party reasonably requests, (ii)  providing
to the Indemnifying Party copies of documents and samples of products as the
Indemnifying Party reasonably requests in connection with defending such Third
Party Claim, (iii)  preserving all
properties, books, records, papers, documents, plans, drawings, electronic mail
and databases of the Joint Venture Company and relating to matters pertinent to
the conduct of the Joint Venture Company under the Indemnified Party’s custody
or control in accordance with such Party’s corporate documents retention policies,
or longer to the extent reasonably requested by the Indemnifying Party, (iv)
notifying the Indemnifying Party promptly of receipt by the Indemnified Party
of any subpoena or other third party request for documents or interviews and
testimony, (v) providing to the Indemnifying Party copies of any documents
produced by the Indemnified Party in response to or compliance with any
subpoena or other third party request for documents; and (vi) except to the
extent inconsistent with the Indemnified Party’s obligations under applicable
law and except to the extent that to do so would subject the Indemnified Party
or its employees, agents or representatives to criminal or civil sanctions,
unless ordered by a court to do otherwise, 
not producing documents to a third party until the Indemnifying Party
has been provided a reasonable opportunity to review, copy and assert
privileges covering such documents.

 

ARTICLE 9

LIMITATION OF LIABILITY

 

9.1                                 Damages
Limitation. SUBJECT TO SECTION 9.4, IN NO EVENT SHALL EITHER PARTY BE
LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR OTHER
INDIRECT DAMAGES OR ANY PUNITIVE OR EXEMPLARY DAMAGES ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT, WHETHER SUCH DAMAGES ARE BASED ON BREACH OF
CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHER THEORY OF LIABILITY, AND EVEN IF
A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

9.2                                 THE
PARTIES AGREE THAT TO THE EXTENT A CLAIM ARISES UNDER THIS AGREEMENT, THE CLAIM
SHALL BE BROUGHT UNDER THIS AGREEMENT.

 

9.3                                 Damages
Cap. SUBJECT TO SECTION 9.4, IF EITHER PARTY SHALL BE LIABLE TO THE
OTHER PARTY FOR ANY MATTER ARISING FROM THIS AGREEMENT, WHETHER BASED UPON AN
ACTION OR CLAIM IN CONTRACT, WARRANTY, EQUITY, NEGLIGENCE, INTENDED CONDUCT OR
OTHERWISE (INCLUDING ANY ACTION OR CLAIM ARISING FROM AN ACT OR OMISSION,
NEGLIGENT OR OTHERWISE, OF THE LIABLE PARTY), THE AMOUNT OF DAMAGES RECOVERABLE
AGAINST THE LIABLE PARTY WITH RESPECT TO ANY BREACH, PERFORMANCE,
NONPERFORMANCE, ACT OR OMISSION HEREUNDER WILL NOT EXCEED THE LESSER OF THE
ACTUAL DAMAGES ALLOWED HEREUNDER; OR (i) IN THE CASE OF THE JOINT VENTURE
COMPANY BRINGING A CLAIM TEN MILLION DOLLARS ($10,000,000)  PER CLAIM OR SERIES OF RELATED CLAIMS ARISING
FROM THE SAME CAUSE; OR (ii) IN THE CASE OF PARENT BRINGING A CLAIM: (a)
NON-CUSTOM PRODUCTS SOLD BY THE JOINT VENTURE COMPANY TO BOTH MEMBERS, TEN
MILLION DOLLARS ($10,000,000) PER CLAIM OR SERIES OF RELATED CLAIMS ARISING
FROM THE SAME CAUSE; OR (b) IN THE CASE OF CUSTOM PRODUCTS THE AMOUNT OF
DAMAGES, IF ANY, ACTUALLY RECOVERED BY THE JOINT VENTURE COMPANY FROM ANY THIRD
PARTY RELATING TO THE PARENT’S CLAIM OR SERIES OF RELATED CLAIMS ARISING FROM
THE SAME CAUSE.

 

11

 

9.4                                 Exclusions
and Mitigation. Section 9.1 and 9.3 will not apply to either Party’s
breach of ARTICLE 7. Section 9.3 will not apply to Intel’s
failure to meet either an Underloading charge under Section 4.1 or a
payment obligation which is due and payable under this Agreement. Each Party
shall have a duty to use commercially reasonable efforts to mitigate damages
for which the other Party is responsible.

 

9.5                                 Losses.
Except as provided under Section 8.1, the Joint Venture Company and
Intel each shall be responsible for Losses to their respective tangible personal
or real property (whether owned or leased), and each Party agrees to look only
to their own insurance arrangements with respect to such damages. The Joint
Venture Company and Intel waive all rights to recover against each other,
including each Party’s insurers’ subrogation rights, if any, for any loss or
damage to their respective tangible personal property or real property (whether
owned or leased) from any cause covered by insurance maintained by each of
them, including their respective deductibles or self-insured retentions. Notwithstanding
the foregoing, in the event of a loss hereunder involving a property, transit
or crime event or occurrence that:  (i)
is insured under Intel’s insurance policies; (ii) a single insurance deductible
applies; and (iii) the loss event or occurrence affects the insured ownership
or insured legal interests of both Parties, then the Parties shall share the
cost of the deductible in proportion to each Party’s insured ownership or legal
interests in relative proportion to the total insured ownership or legal
interests of the Parties.

 

ARTICLE 10

TERM AND TERMINATION;

SUPPLY OBLIGATIONS FOLLOWING LIQUIDATING EVENT

 

10.1                           Term.
The term of this Agreement commences on the Effective Date and continues in
effect until the first to occur of (a) the Liquidation Date or (b) a Minority
Closing, unless terminated sooner solely by mutual agreement (such period of
time, the “Term”).

 

10.2                           Termination.
This Agreement may not be terminated for any reason, including breach by a
Party, before termination pursuant to Section 10.1.

 

10.3                           Masks.
On the Liquidation Date, the Joint Venture Company shall immediately transfer
possession of production masks possessed by it at each Facility to the Intel
that then owns that Facility as of the Liquidation Date.

 

10.4                           Survival.
Termination of this Agreement shall not affect any of the Parties’ respective
rights accrued or obligations owed before termination, including any rights or
obligations of the Parties in respect of any accepted Purchase Orders existing
at the time of termination. In addition, the following shall survive
termination of this Agreement for any reason:  Sections 2.12, 6.2, 6.5, and Articles
4, 7, 8, 9, 10 and 11.

 

10.5                           Supply
Obligations Following Liquidating Event. Upon the occurrence of a
Liquidating Event any supply obligations of the Parties will be as set forth in
Article 13 of the LLC Operating Agreement.

 

ARTICLE 11

MISCELLANEOUS

 

11.1                           Force
Majeure Events. The Parties shall be excused from any failure to perform
any obligation hereunder to the extent such failure is caused by a Force
Majeure Event. A Force Majeure Event shall operate to excuse a failure to
perform an obligation hereunder only for the period of time

 

12

 

during which the Force
Majeure Event renders performance impossible or infeasible and only if the
Party asserting Force Majeure as an excuse for its failure to perform has
provided written notice to the other Party specifying the obligation to be
excused and describing the events or conditions constituting the Force Majeure
Event. As used herein, “Force Majeure Event”
means the occurrence of an event or circumstance beyond the reasonable control
of the party failing to perform, including, without limitation, (a) explosions,
fires, flood, earthquakes, catastrophic weather conditions, or other elements
of nature or acts of God; (b) acts of war (declared or undeclared), acts of
terrorism, insurrection, riots, civil disorders, rebellion or sabotage; (c)
acts of federal, state, local or foreign governmental authorities or courts;
(d) labor disputes, lockouts, strikes or other industrial action, whether
direct or indirect and whether lawful or unlawful; (e) failures or fluctuations
in electrical power or telecommunications service or equipment; and (f) delays
caused by the other Party’s nonperformance hereunder.

 

11.2                           Specific
Performance. The Parties agree that irreparable damage will result if this
Agreement is not performed in accordance with its terms, and the Parties agree
that any damages available at law for a breach of this Agreement would not be
an adequate remedy. Therefore, the provisions hereof and the obligations of the
Parties hereunder shall be enforceable in a court of equity, or other tribunal
with jurisdiction, by a decree of specific performance, and appropriate
preliminary or permanent injunctive relief may be applied for and granted in
connection therewith. 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.

 

11.3                           Assignment.
This Agreement shall be binding upon and inure to the benefit of the permitted
successors and assigns of each Party hereto. Neither this Agreement nor any
right or obligation hereunder may be assigned or delegated by either Party in
whole or in part to any other Person, other than a Wholly-Owned Subsidiary of
such Party, without the prior written consent of the non-assigning Party. Any
purported assignment in violation of the provisions of this Section shall be
null and void and have no effect.

 

11.4                           Compliance
with Laws and Regulations. Each of the Parties shall comply with, and shall
use reasonable efforts to require that its respective subcontractors comply
with, Applicable Laws relating to this Agreement and the performance of a Party’s
rights hereunder.

 

11.5                           Notice.
All notices and other communications hereunder shall be in writing and shall be
deemed given upon (a) transmitter’s confirmation of a receipt of a facsimile
transmission, (b) confirmed delivery by a standard overnight carrier or when
delivered by hand, (c) the expiration of five (5) Business Days after the day
when mailed in the United States by certified or registered mail, postage
prepaid, or (d) delivery in Person, addressed at the following addresses (or at
such other address for a party as shall be specified by like notice):

 

In the
case of the IM Flash Technologies, LLC:

1550 East 3400 North

Lehi, Utah  84043

Attention:  David A. Baglee; Rodney
Morgan

Facsimile Number:  (801) 767-5370

 

With a
mandatory copy to:

Micron Technology, Inc.

8000 S. Federal Way

Boise, Idaho  83707-0006

Attention:  General Counsel

Facsimile Number:  (208)368-4540

 

13

 

In the
case of Intel Corporation:

Intel Corporation

2200 Mission College Blvd.

Mail-Stop SC4-203

Santa Clara, California  95054

Attention:  General Counsel

Facsimile Number:  (408) 653-8050

 

Either Party may change its address for notices upon
giving ten (10) days written notice of such change to the other Party in the
manner provided above.

 

11.6                           Waiver.
The failure at any time of a Party to require performance by the other Party of
any responsibility or obligation required by this Agreement shall in no way
affect a Party’s right to require such performance at any time thereafter, nor
shall the waiver by a Party of a breach of any provision of this Agreement by
the other Party constitute a waiver of any other breach of the same or any
other provision nor constitute a waiver of the responsibility or obligation
itself.

 

11.7                           Severability.
Should any provision of this Agreement be deemed in contradiction with the laws
of any jurisdiction in which it is to be performed or unenforceable for any
reason, such provision shall be deemed null and void, but this Agreement shall
remain in full force in all other respects. Should any provision of this
Agreement be or become ineffective because of changes in Applicable Laws or
interpretations thereof, or should this Agreement fail to include a provision
that is required as a matter of law, the validity of the other provisions of
this Agreement shall not be affected thereby. If such circumstances arise, the
Parties hereto shall negotiate in good faith appropriate modifications to this
Agreement to reflect those changes that are required by Applicable Law.

 

11.8                           Third
Party Rights. Nothing in this Agreement, whether express or implied, is
intended or shall be construed to confer, directly or indirectly, upon or give
to any Person, other than the Parties hereto, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any covenant,
condition or other provision contained herein.

 

11.9                           Amendment.
This Agreement may not be modified or amended except by a written instrument
executed by or on behalf of each of the Parties to this Agreement.

 

11.10                     Entire
Agreement. This Agreement and the applicable provisions of the
Confidentiality Agreement, which are incorporated herein and made a part
hereof, together with the Exhibits and Schedules hereto and the agreements and
instruments expressly provided for herein, constitute the entire agreement of
the Parties hereto with respect to the subject matter hereof and supersede all
prior agreements and understandings, oral and written, between the Parties
hereto with respect to the subject matter hereof.

 

11.11                     Choice
of Law. This Agreement shall be construed and enforced in accordance with
and governed by the laws of the State of Delaware, without giving effect to the
principles of conflict of laws thereof.

 

11.12                     Jurisdiction;
Venue. Any suit, action or proceeding seeking to enforce any provision of,
or based on any matter arising out of or in connection with, this Agreement
shall be brought in a state or federal court located in Delaware and each of
the Parties to this Agreement hereby consents and submits to the exclusive
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by Applicable Law, any objection which it may now or hereafter
have to the laying of the venue of any such suit, action or proceeding in any
such court or that any such suit, action or

 

14

 

proceeding which is
brought in any such court has been brought in an inconvenient forum. Process in
any such suit, action or proceeding may be served on any party anywhere in the
world, whether within or without the jurisdiction of any such court.

 

11.13                     Headings.
The headings of the Articles and Sections in this Agreement are provided for
convenience of reference only and shall not be deemed to constitute a part
hereof.

 

11.14                     Counterparts.
This Agreement may be executed in several counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

 

11.15                     Insurance.
Without limiting or qualifying the Joint Venture Company’s liabilities,
obligations, or indemnities otherwise assumed by the Joint Venture Company
pursuant to this Agreement, the Joint Venture Company shall maintain, at no
charge to Intel, with companies acceptable to Intel:

 

(a)                                  Commercial
General Liability with limits of liability not less than $[***] per occurrence
and including liability coverage for bodily injury or property damage (1)
assumed in a contract or agreement pertaining to The Joint Venture Company’s
business and (2) arising out of The Joint Venture Company’s products, Services,
or work. The Joint Venture Company’s insurance shall be primary with respect to
liabilities assumed by The Joint Venture Company in this Agreement to the
extent such liabilities are the subject of 
The Joint Venture Company’s insurance, and any applicable insurance
maintained by Intel shall be excess and non-contributing. The above coverage
shall name Intel as additional insured as respects The Joint Venture Company’s
work or services provided to or on behalf of Intel.

 

(b)                                 Automobile
Liability Insurance with limits of liability not less than $[***] per accident
for bodily injury or property damage.

 

(c)                                  Statutory
Workers’ Compensation coverage, including a Broad Form All States Endorsement
in the amount required by law, and Employers’ Liability Insurance in the amount
of $[***] per occurrence. Such insurance shall include mutual insurer’s waiver
of subrogation.

 

[Signature page follows]

 

15

 

IN WITNESS WHEREOF, this Agreement has been duly
executed by and on behalf of the Parties hereto as of the Effective Date.

 

	
  INTEL
  CORPORATION

  	
  IM
  FLASH TECHNOLOGIES, LLC

  
	
   

  	
   

  
	
  By:

  	
  /s/ BRIAN L. HARRISON

  	
   

  	
  By:

  	
  /s/ DAVID A. BAGLEE

  	
   

  
	
  Name:  Brian L. Harrison

  	
  Name:  David A. Baglee

  
	
  Title:

  	
  Vice President and
  General Manager,

  	
  Title:  Authorized Officer

  
	
   

  	
  Flash Memory Group

  	
   

  
	
   

  	
  By:

  	
  /s/ RODNEY MORGAN

  	
   

  
	
   

  	
  Name:  Rodney Morgan

  
	
   

  	
  Title:  Authorized Officer

  
							

 

THIS IS THE SIGNATURE PAGE FOR THE
SUPPLY AGREEMENT ENTERED INTO BY AND BETWEEN INTEL CORPORATION AND IM FLASH
TECHNOLOGIES, LLC

 

16

 

EXHIBIT A

DEFINITIONS

 

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

 

“Agreement” shall have the
meaning set forth in the preamble to this Agreement.

 

“Applicable Law” means any
applicable laws, statutes, rules, regulations, ordinances, orders, codes,
arbitration awards, judgments, decrees or other legal requirements of any
Governmental Entity.

 

“Approved Business Plan” shall
have the meaning set forth in the LLC Operating Agreement.

 

“Assembly Outs” shall mean a
Product for which the Assembly Services have been completed and meets all of
the Assembly Specification applicable at such time and is not Secondary Silicon
or Rejects.

 

“Boise Supply Agreement” means
that certain Boise Supply Agreement by and between Micron and the Joint Venture
Company dated as of the Effective Date.

 

“Business Continuity Plan” shall
have the meaning set forth in Section 2.8 hereof.

 

“Business Day” means a day that
is not a Saturday, Sunday or other day on which commercial banking institutions
in the State of New York are authorized or required by Applicable Law to be closed.

 

“Capacity” means the rate of
output (defined in terms of units per time period), at a particular point in
time, at which a particular Facility or set of Facilities of the Joint Venture
Company (or of a third party on the Joint Venture Company’s behalf) is capable
of producing such units.

 

“Confidential Information” shall
have the meaning set forth in Section 7.1 hereof.

 

“Confidentiality Agreement”
means that Mutual Confidentiality Agreement by and among the Joint Venture
Company, Intel and Micron dated as of the Effective Date.

 

“Custom Products” shall have the
meaning set forth in the Product Designs Committee Agreement.

 

“Cycle Time” means the time
required to process a unit through a portion of the manufacturing process
(e.g., fab, assembly, or final test) or through the manufacturing process as a
whole.

 

“Demand Forecast” shall have the
meaning set forth in Section 3.1(a) hereof.

 

“Effective Date” shall have the
meaning set forth in the preamble to this Agreement.

 

“Excursion” means an occurrence,
either during production or after customer delivery that is outside normal
historical behavior as established by both Parties in writing in the applicable
Specifications which may impact performance, Quality and Reliability, or
customer delivery commitments for Probed Wafers, NAND Flash Memory Product or
Known Good Die.

 

“Facilities” shall mean all of
the Joint Venture Company’s facilities at which it may perform manufacturing,
assembly or test services, including subcontractors.

 

17

 

“Fiscal Quarter” means any of
the four financial accounting quarters within the Joint Venture Company’s
Fiscal Year.

 

“Fiscal Month” means any of the
twelve financial accounting months within the Joint Venture Company’s Fiscal Year.

 

“Fiscal Year” means the fiscal
year of the Joint Venture Company for financial accounting purposes.

 

“Flash Memory Integrated Circuit”
shall have the meaning set forth in the LLC Operating Agreement.

 

“Force Majeure Event” shall have
the meaning set forth in Section 11.1.

 

“GAAP” means United States
generally accepted accounting principles as in effect from time to time.

 

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

 

“Hazardous Materials” means
dangerous goods, chemicals, contaminants, substances, pollutants or any other
materials that are defined as hazardous by relevant local, state, national, or
international law, regulations and standards.

 

“Indemnified Party” shall mean
any of the following to the extent entitled to seek indemnification under this
Agreement:  Intel, the Joint Venture
Company, and their respective Affiliates, officers, directors, employees,
agents, assigns and successors.

 

“Indemnified Losses” shall mean
all direct, out-of-pocket liabilities, damages, losses, costs and expenses of
any nature incurred by an Indemnified Party, including reasonable attorneys’
fees and consultants’ fees, and all damages, fines, penalties and judgments
awarded or entered against an Indemnified Party, but specifically excluding any
special, consequential or other types of indirect damages.

 

“Indemnifying Party” shall mean
the Party owing a duty of indemnification to another Party with respect to a
particular Third Party Claim.

 

“Intel” means Intel Corporation,
a Delaware Corporation.

 

“Initial Business Plan” shall
have the meaning set forth in the LLC Operating Agreement.

 

“Joint Development Program Agreement”
means that certain Joint Development by and between Intel and  Micron dated as of the Effective Date.

 

“Joint Venture Company” shall
have the meaning set forth in the preamble to this Agreement.

 

“Joint Venture Documents” shall
have the meaning set forth in the Master Agreement.

 

“Known Good Die” means a raw
wafer that has been processed to the point of containing functional and/or
operational NAND Flash Memory Integrated Circuits that has undergone Probe Testing
(a.k.a. “Sort” procedure),
meeting predefined performance and quality criteria and singulated to

 

18

 

individual semiconductor
die. Die will have been fully tested but will not been assembled into final
packaging or undergone final product testing.

 

“LLC Operating Agreement” means
that Limited Liability Company Operating Agreement of the Joint Venture
Company, LLC between, Intel and Micron.

 

“Liquidation Date” shall have
the meaning set forth in the LLC Operating Agreement.

 

“Liquidation Event” shall have
the meaning set forth in the LLC Operating Agreement.

 

“Losses” shall mean,
collectively, any and all insurable liabilities, damages, losses, costs and
expenses (including reasonable attorneys’ and consultants’ fees and expenses).

 

“Manufacturing Committee” shall
have the meaning set forth in the LLC Operating Agreement.

 

“Master Agreement” means that
certain Master Agreement by and between Intel and Micron as defined in the LLC
Operating Agreement.

 

“Members” means Micron and
Intel.

 

“Micron” shall have the meaning
set forth in the preamble to this Agreement.

 

“Minority Closing” shall have
the meaning set forth in the LLC Operating Agreement.

 

“Modified GAAP” shall have the
meaning set forth in the LLC Operating Agreement.

 

“MTV Lease Agreement” means that
certain MTV Lease Agreement by and between the Joint Venture Company and Micron
dated as of the Effective Date.

 

“NAND Flash Memory Integrated Circuit”
means a Flash Memory Integrated Circuit, in the memory cells included in the
Flash Memory Integrated Circuit are arranged in groups of serially connected
memory cells (each such group of serially connected memory cells called a “string”) in which the drain of each memory cell of a string
(other than the first memory cell in the string) is connected in series to the
source of another memory cell in such string, the gate of each memory cell in
such string is directly accessible, and the drain of the uppermost bit of such
string is coupled to the bitline of the memory array.

 

“NAND Flash Memory Product”
shall have the meaning set forth in the LLC Operating Agreement.

 

“NAND Flash Memory Wafer” means
a raw wafer that has been processed to the point of containing NAND Flash
Memory Integrated Circuits organized in multiple semiconductor die and that has
undergone Probe Testing, but before singulation of said die into individual
semiconductor die.

 

“Operating Plan” means the
Manufacturing Plan, Assembly Plan and Testing Plan developed pursuant to the
Definitions in the LLC Operating Agreement.

 

“Optional Purchase Agreement”
means that certain Optional Purchase Agreement dated as of the Effective Date.

 

“Party” and “Parties”
shall have the meaning set forth in the Recitals to this Agreement.

 

19

 

“Performance Criteria” means
[***].

 

“Person” shall have the meaning
set forth in the LLC Operating Agreement.

 

“Planning Forecast” shall have
the meaning set forth in Section 3.1(b) hereof.

 

“Price” or “Pricing”
means the calculation set forth on Schedule 4.8 hereof.

 

“Prime Wafer” means the raw
silicon wafers required, on a product-by-product basis, for the manufacturer.

 

“Probe Testing” means testing,
using a wafer test program as set forth in the applicable Specifications, of a
wafer that has completed all processing steps deemed necessary to complete the
creation of the desired NAND Flash Memory Integrated Circuits in the die on
such wafer, the purpose of which test is to determine how many and which of the
die meet the applicable criteria for such die set forth in the Specifications.

 

“Probed Wafer” means a Prime
Wafer that has been processed to the point of containing NAND Flash Memory
Integrated Circuits organized in multiple semiconductor die and that has
undergone Probe Testing, but before singulation of said die into individual
semiconductor dice.

 

“Product Designs Committee Agreement”
means that certain Product Designs Committee Agreement by and between Micron
and the Joint Venture Company dated as of the Effective Date.

 

“Product Designs Development Agreement”
means that certain Product Designs Development Agreement by and between Micron
and the Joint Venture Company dated as of the Effective Date.

 

“Products” means a Probed Wafer,
Known Good Die, or NAND Flash Memory Product, or such other products that are
manufactured by the Joint Venture Company under Section 2.2 hereof.

 

“Proposed Loading Plan” shall
have the meaning set forth in Section 3.1 hereof.

 

“Purchase Order” shall have the
meaning set forth in Section 4.3 hereof.

 

“Quality and Reliability” or “Q&R” means building and sustaining relationships which
assess, anticipate, and fulfill the quality and reliability standards as set
forth in the Specification or Operating Plan for Products.

 

“Ramp Plan” means the document
which defines the process and key milestone schedule to build and ramp a
silicon fabrication facility.

 

“Receiving Party” shall have the
meaning set forth in Section 7.1 hereof.

 

 “Recoverable Taxes” shall have the meaning set forth in
Section 4.7 hereof.

 

“Secondary Silicon” shall mean:  (i) a Prime Wafer that has been processed to
the point of containing NAND Flash Memory Integrated Circuits organized in
multiple semiconductor die and that has undergone Probe Testing would otherwise
constitute a Probed Wafer but for failure to achieve qualification; or (ii)
singulated and/or packaged die that would otherwise constitute Assembly Outs or
Test Outs but for failure to achieve qualification; and otherwise conform to
the applicable Secondary Silicon Specification.

 

20

 

“Semiconductor Manufacturing Technology”
shall have the meaning set forth in the Process Joint Development Program
Agreement.

 

 “Sharing Interest” shall have the meaning set forth in the
LLC Operating Agreement.

 

“Specifications” means those
specifications used to describe, characterize, and define the quality and
performance of NAND Flash Memory Products and Known Good Die, including any
interim performance specifications at Probe Testing or other testing, as such
specifications may be determined from time to time by the Joint Venture
Company.

 

“Subsidiary” shall have the
meaning set forth in the LLC Operating Agreement.

 

“Technology License Agreement”
means that certain Technology License Agreement by and between Intel, Micron and
the Joint Venture Company dated as of the Effective Date.

 

“Term” shall have the meaning
set forth in Section 11.1 hereof.

 

“Test Outs” shall mean a Product
Candidate for which Testing Services have been completed and meets all of the
Testing Specification applicable at such time and is not Secondary Silicon or
Rejects.

 

“Third Party Claim” shall mean
any claim, demand, action, suit or proceeding, and any actual or threatened
lawsuit, complaint, cross-complaint or counter complaint, arbitration or other
legal or arbitral proceeding of any nature, brought in any court, tribunal or
judicial forum anywhere in the world, regardless of the manner in which such
proceeding is captioned or styled, by any Person other than Intel, the Joint
Venture Company and Affiliates of the foregoing, against an Indemnified Party,
in each case alleging entitlement to any Indemnified Losses pursuant to any
indemnification obligation under this Agreement.

 

“Under-loading” shall have the
meaning set forth in Section 4.1.

 

“Wafer Start” shall mean the
initiation of Manufacturing Services with respect to a Prime Wafer.

 

“Warranty Claim Period” shall
have the meaning set forth in Section 6.2 hereof.

 

“Wholly-Owned Subsidiary” shall
have the meaning set forth in the LLC Operating Agreement.

 

“WIP” means work in process. This
includes all wafers and Product in wafer fabrication, sort, assembly, and/or
final test, including prime and secondary wafers, and all completed Product
units not yet delivered to Intel.

 

“Yield” means anticipated output
of Product from WIP at a particular point in time, including line yield, die
yield, assembly yield and final testing yield.

 

21

 

SCHEDULES

 

	
  Schedule 4.8

  	
   

  	
  Price

  

 

22

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