Document:

ex4604052010.htm

    
 

     

    
      

      

    

     

    
 

    THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT
PURSUANT TO AN EXEMPTION FROM, OR OTHERWISE IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF SUCH ACT.  IN ADDITION, THE SECURITIES
REPRESENTED HEREBY ARE SUBJECT TO THE LIMITATIONS ON TRANSFER SET FORTH IN THE
LOAN AGREEMENT REFERRED TO HEREIN.  A COPY OF THE LOAN AGREEMENT IS
AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF COACHMEN AND WILL BE
FURNISHED WITHOUT CHARGE TO THE HOLDER HEREOF UPON WRITTEN REQUEST TO
COACHMEN.

     

    

     

    COACHMEN
INDUSTRIES, INC.

     

    No.
W-3

    

      COMMON
STOCK PURCHASE WARRANT

                 

     Warrant
to Purchase

     9,557,939
shares

     of
Common Stock

    

     April
5, 2010

    

    This
Common Stock Purchase Warrant (this “Warrant”) certifies
that, for value received, H.I.G. All American, LLC (the “Lender”) is entitled
to purchase from Coachmen Industries, Inc., an Indiana corporation (“Coachmen”), up to
9,557,939 shares of common stock, no par value per share (the “Common Stock”), at
the price (the “Exercise Price”) of
$.00001 per share, at any time or from time to time during the period commencing
on the date hereof and ending at 5:00 P.M. on the tenth anniversary of the date
hereof (the “Expiration
Date”).

     

    This
Warrant has been issued pursuant to a First Amendment to Loan Agreement entered
into on the date hereof by the Lender, Coachmen, and the direct and indirect
subsidiaries of Coachmen party thereto (the “First Amendment”),
for the purpose of waiving certain defaults of Coachmen and its subsidiaries
under, and amending certain terms and provisions of, the Loan Agreement, dated
October 27, 2009, by and among the Lender, Coachmen and such subsidiaries
(the “Loan
Agreement”).  This Warrant is subject to the terms and
conditions, and entitled to the benefits, of the Loan Agreement (as amended by
the First Amendment), including provisions providing certain information and
other rights.  This Warrant is also entitled to the rights and
privileges of that certain Registration Rights Agreement, dated October 27,
2009, by and between Coachmen and the Lender, as amended on the date
hereof.  Copies of the Loan Agreement and Registration Rights
Agreement are available for inspection at the principal office of Coachmen and
will be furnished without charge to the Holder upon written request to Coachmen.
Capitalized terms used herein and not defined shall have the meanings set forth
in the Loan Agreement.

     

    SECTION
1                      DEFINITIONS;
INTERPRETATION.  As used in this Warrant, the following terms
shall have the following meanings:

     

    1.1           Definitions.

     

    “Aggregate Exercise
Price” is defined in Section 3.1(a).

     

    “Applicable Law” shall
mean all provisions of laws, statutes, ordinances, rules, regulations, permits,
certificates or orders of any Governmental Authority applicable to the Person in
question or any of its assets or property, and all judgments, injunctions,
orders and decrees of all courts and arbitrators in proceedings or actions in
which the Person in question is a party or by which any of its assets or
properties are bound.

     

    “Assignment Form”
shall mean the assignment form attached as Annex 2
hereto.

     

    “Business Day” shall
mean any day other than a Saturday, Sunday, or other day on which commercial
banks are authorized or required to close under the laws of the State of New
York, and a day on which the Lender is open for the transaction of
business.

     

    “Coachmen” is defined
in the Preamble.

     

    “Common Stock” shall
mean the (a) common stock, no par value per share of Coachmen, and (b) any
securities issued or issuable with respect to the capital stock referred to in
clause (a) above by way of stock dividends or stock splits or in connection with
a combination of shares, recapitalization, merger, consolidation, or other
reorganization.

     

    “Delivery Date” is
defined in Section 3.2.

     

    “Exchange Form” shall
mean the exchange form attached as Annex 3
hereto.

     

    “Executive Officer”
shall mean, with respect to Coachmen, its President, Chief Financial Officer or
Treasurer.

     

    “Exercise Form” shall
mean the exercise form attached as Annex 1
hereto.

     

    “Exercise Price” shall
mean $.00001 per share of Common Stock, subject to adjustment from time to time
in the manner provided in Section 3.3.

     

    “Existing Warrants”
shall mean the Amended and Restated Common Stock Purchase Warrant
originally issued to the Lender on October 27, 2009 and amended and
restated on the date hereof, and any Existing Warrant issued in connection with
an exchange or transfer of such Existing Warrant or in replacement of such
Existing Warrant.

     

    “Expiration Date” is
defined in the Preamble.

     

    “First Amendment” is
defined in the Preamble.

     

    “Fully-Diluted Basis”
shall mean, as applied to the calculation of the number of shares of Common
Stock outstanding at any time, after giving effect to (a) all shares of Common
Stock outstanding at the time of determination; (b) all shares of Common Stock
issuable upon the exercise of any option, warrant (including the Warrants and
the Existing Warrants) or similar right to purchase Common Stock outstanding at
the time of determination; and (c) all shares of Common Stock issuable upon the
conversion or exchange of any security convertible into or exchangeable for
shares of Common Stock (including the Tranche B Notes).  Such
calculation will not be made in accordance with the “treasury
method.”

     

    “Governmental
Authority” shall mean any nation or government, any state, province, or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government.

     

    “Holder” is defined in
Section 2.1.

     

    “Lender” is defined in
the Preamble.

     

    “Loan Agreement” is
defined in the Preamble.

     

    “Market Price” means,
with respect to a share of Common Stock on any Business Day:

     

    (a)           if
the Common Stock is Publicly Traded at the time of determination, the average of
the closing prices for the Common Stock on all domestic securities exchanges on
which such security may at the time be listed, or, if there have been no sales
on any such exchange on such day, the average of the highest bid and lowest
asked prices on all such exchanges at the end of such day, or, if on any day
such security is not so listed, the average of the representative bid and asked
prices quoted on the NASDAQ as of 4:00 P.M., New York time, on such day, or if
on any day such security is not quoted in the NASDAQ, the average of the highest
bid and lowest asked prices on such day in the domestic over-the-counter market
as reported by the National Quotation Bureau, Incorporated, or any similar
successor organization, in each such case averaged over a period of twenty-one
(21) days consisting of the day as of which “Market Price” is being determined
and the twenty (20) consecutive Business Days prior to such day; or

     

    (b)           if
the Common Stock is not Publicly Traded at the time of determination then,
solely for purposes of Section 3, the Market Price will be the fair value of the
Common Stock as determined by the Valuation Procedures, taking into account
their fiduciary duties (including the holder of this Warrant as if exercised),
but if, in connection with Section 3, the Current Market Price is hereby
referenced in connection with the issuance or sale (or deemed issuance or sale)
of Common Stock to an Affiliate of Coachmen, then the Market Price shall be the
Market Value Per Share; and for all other purposes, including for purposes of
Section 4, the Market Price shall be the Market Value Per Share.

     

    “Market Value” means
the highest price that would be paid for the entire common equity interest in
Coachmen on a going-concern basis in a single arm’s-length transaction between a
willing buyer and a willing seller (neither acting under compulsion), using
valuation techniques then prevailing in the securities industry and always
determined in accordance with the Valuation Procedures, and assuming full
disclosure and understanding of all relevant information and a reasonable period
of time for effectuating such sale.  For the purposes of determining
the Market Value, (a) the exercise price of options or warrants to acquire
Common Stock which are deemed to have been exercised for the purpose of
determining the number of shares of Common Stock outstanding on a Fully Diluted
Basis, shall be deemed to have been received by Coachmen, (b) the liquidation
preference or indebtedness, as the case may be, represented by securities which
are deemed exercised for or converted into Common Stock for the purpose of
determining the number of shares of Common Stock outstanding on a Fully Diluted
Basis shall not be deemed to be outstanding, (c) any contract limitation in
respect of the shares of Common Stock, including their transfer, voting and
other rights shall not be taken into account and (d) any illiquidity arising by
contract law in respect of the shares of Common Stock and any voting rights or
control rights amongst the stockholders of Coachmen, shall be deemed to have
been eliminated or cancelled.

     

    “Market Value Per
Share” shall mean the price per share of Common Stock obtained by
dividing (a) the Market Value by (b) the number of shares of Common Stock
outstanding (on a Fully Diluted Basis) at the time of
determination.

     

    “NASDAQ” means the
NASDAQ National Market or the NASDAQ Smallcap Market.

     

    “Organizational
Documents” shall mean, with respect to any Person, each instrument or
other document that (a) defines the existence of such Person, including its
articles or certificate of incorporation or organization, as filed or recorded
with an applicable Governmental Authority or (b) governs the internal affairs of
such Person, including its by-laws or operating agreement, in each case as
amended, supplemented or restated.

     

    “Other Anti-Dilution
Instruments” shall mean any option, warrant, convertible security or
other rights to acquire Common Stock, excluding this Warrant “W-3”, whether
outstanding as of the date hereof or hereafter issued, together with any
agreements relating thereto, which provide for anti-dilution or other
adjustments in the number of shares of Common Stock and/or exercise or
conversion price.

     

    “Person” or “person” shall mean
any individual, sole proprietorship, partnership, corporation, limited liability
company, limited liability partnership, business trust, unincorporated
association, joint stock corporation, trust, joint venture or other entity or
any government or any agency or instrumentality or political subdivision
thereof.

     

    “Publicly Traded”
shall mean, with respect to any security, that such security is (a) listed on a
domestic securities exchange, (b) quoted on NASDAQ or (c) traded in the domestic
over-the-counter market, which trades are reported by the National Quotation
Bureau, Incorporated.

     

    “Requisite Holders”
shall mean Holders holding Warrants or Warrant Shares representing more than 50%
of all Warrant Shares issued or issuable upon exercise of the Warrants
outstanding on the date of determination.

     

    “Revolving Notes”
shall have the meaning assigned thereto in the Loan Agreement.

     

    “Tax” shall mean all
taxes, charges, fees, duties, levies or other assessments, including, without
limitation, income, gross receipts, net proceeds, ad valorem, turnover, real and
personal property (tangible and intangible), sales, use, franchise, excise,
value added, license, payroll, unemployment, environmental, customs duties,
capital stock, stamp, leasing, lease, user, transfer, fuel, excess profits,
occupational and interest realization, windfall profits, severance and
employees’ income withholding and Social Security taxes imposed by the United
States or any foreign country or by any state, municipality, subdivision or
instrumentality of the United States or of any foreign country or any other tax
authority, including all applicable penalties and interest, and such term shall
include any interest, penalties or additions to tax attributable to such
Taxes.

     

    “Tranche B Notes”
shall have the meaning assigned thereto in the Loan Agreement.

     

    “Valuation Procedures”
shall mean, with respect to the determination of any amount or value required to
be determined in accordance with such procedure, a determination (which shall be
final and binding on Coachmen and the Holders) made (a) by agreement among
Coachmen and the Requisite Holders within thirty (30) days following the event
requiring such determination or (b) in the absence of such an agreement, an
Appraiser (as defined below) selected in accordance with the further provisions
of this section.  If required, an Appraiser shall be selected within
ten (10) days following the expiration of the 30-day period referred to above,
either by agreement among Coachmen and the Requisite Holders or, in the absence
of such agreement, by lot from a pool of four potential Appraisers remaining
after Coachmen nominates three, the Requisite Holders nominate three, and each
side eliminates one potential Appraiser.  The selected Appraiser shall
be instructed by Coachmen and the Requisite Holders to make its determination
within thirty (30) days of its selection.  With respect to a
determination of Market Value, if Coachmen’s Board of Directors is unable to
determine a valuation, then the fees and expenses of an Appraiser selected
hereunder shall be borne entirely by Coachmen.  In all other
instances, the fees and expenses of the Appraiser shall be borne fully by the
party whose amount or value determination is furthest from the valuation
determined by the Appraiser.  All amounts payable by the Holders shall
be payable on a pro rata
basis.  As used herein, “Appraiser” shall mean (a) with respect to a
determination of Market Value, Grant Thornton LLP, or another
nationally-recognized accounting firm if such firm is unable to serve in such
capacity, and (b) with respect to any other valuation required hereunder, Grant
Thornton LLP, or another firm of the type generally considered to be qualified
in making determinations of the type required if such firm is unable to serve in
such capacity.  In no event, however, will more than one Appraiser be
selected to make a determination hereunder.  The determination made by
the Appraiser shall be final, conclusive and binding on the
parties.

     

    “Warrant” or “Warrants” means this
Warrant (and not the Existing Warrants) and any Warrant issued in connection
with an exchange or transfer of this Warrant or in replacement of this
Warrant.

     

    “Warrant Register” is
defined in Section 2.1.

     

    “Warrant Shares” means
the shares of Common Stock issued or issuable upon exercise of a Warrant (but
not an Existing Warrant) in accordance with Section 3.1 and any securities of
Coachmen distributed or issued with respect thereto by way of a stock dividend,
stock split or in connection with a combination of shares, recapitalization,
merger, consolidation, reorganization or otherwise.  As used in this
Warrant, the phrase “Warrant Shares then held” by any Holder or Holders shall
mean Warrant Shares held at the time of determination by such Holder or Holders,
and shall include Warrant Shares issuable upon exercise of Warrants held at the
time of determination by such Holder or Holders.

     

    1.2           Interpretation.  Unless
the context of this Warrant clearly requires otherwise, references to the plural
include the singular, to the singular include the plural, and to the part
include the whole.  The term “including” is not limiting and the term
“or” has the inclusive meaning represented by the term “and/or.”  The
words “hereof,” “herein,” “hereunder,” and similar terms in this Warrant refer
to this Warrant as a whole and not to any particular provision of this Warrant.
References to “Articles”, “Sections,” “Subsections,” “Exhibits,” and “Schedules”
are to Articles, Sections, Subsections, Exhibits and Schedules, respectively, of
this Warrant, unless otherwise specifically provided.  Terms defined
herein may be used in the singular or the plural.  Any capitalized
terms used herein which are not specifically defined herein have the meaning
given to them in the Loan Agreement.

     

    SECTION
2.                      FORM; EXCHANGE FOR WARRANTS;
TRANSFER; TAXES

     

    2.1           Warrant
Register.  Each Warrant issued, exchanged or transferred shall
be registered in a warrant register (the “Warrant
Register”).  The Warrant Register shall set forth the number of
each Warrant, the name and address of the holder thereof (a “Holder”), and the
original number of Warrant Shares purchasable upon the exercise
thereof.  The Warrant Register will be maintained by Coachmen and will
be available for inspection by any Holder at the principal office of Coachmen or
such other location as Coachmen may designate to the Holders in the manner set
forth in Section 5.2 hereof.  Coachmen shall be entitled to treat the
Holder of any Warrant as the owner in fact thereof for all purposes and shall
not be bound to recognize any equitable or other claim to or interest in such
Warrant on the part of any other person.

     

    2.2           Exchange of
Warrants.

     

    (a)           A
Holder may exchange a Warrant for another Warrant or Warrants of like kind and
tenor representing in the aggregate the right to purchase the same number of
Warrant Shares that could be purchased pursuant to the Warrant being so
exchanged.  In order to effect an exchange permitted by this Section
2.2, the Holder shall deliver to Coachmen such Warrant accompanied by an
Exchange Form in the form attached hereto as Annex 3 signed by the
Holder thereof specifying the number and denominations of Warrants to be issued
in such exchange and the names in which such Warrants are to be
issued.  Within ten (10) Business Days of receipt of such a request,
Coachmen shall issue, register and deliver to the Holder thereof each Warrant to
be issued in such exchange.

     

    (b)           Upon
receipt of evidence reasonably satisfactory to Coachmen (an affidavit of the
Holder being satisfactory) of the ownership and the loss, theft, destruction or
mutilation of any Warrant, and in the case of any such loss, theft or
destruction, upon receipt of an indemnity reasonably satisfactory to Coachmen
(an agreement by the Holder being satisfactory) or, in the case of any such
mutilation, upon surrender of such Warrant, Coachmen shall (at its expense)
execute and deliver in lieu of such Warrant a new Warrant of like kind and tenor
representing the same rights represented by and dated the date of such lost,
stolen, destroyed or mutilated Warrant.  Any such new Warrant shall
constitute an original contractual obligation of Coachmen, whether or not the
allegedly lost, stolen, mutilated or destroyed Warrant shall be at any time
enforceable by any Person.

     

    (c)           Coachmen
shall pay all Taxes (other than any applicable income or similar Taxes payable
by a Holder of a Warrant) attributable to an exchange of a Warrant pursuant to
this Section 2.2; provided, however, that
Coachmen shall not be required to pay any Tax which may be payable in respect of
any transfer involved in the issuance of any Warrant in a name other than that
of the Holder of the Warrant being exchanged.

     

    2.3           Transfer of
Warrant.

     

    (a)           Subject
to Section 2.3(c) hereof, each Warrant and the rights thereunder may be
transferred by the Holder thereof by delivering to Coachmen such Warrant
accompanied by a properly completed Assignment Form in the form of Annex
2.  Within ten (10) Business Days of receipt of such Assignment
Form Coachmen shall issue, register and deliver to the Holder, subject to
Section 2.3(c) hereof, a new Warrant or Warrants of like kind and tenor
representing in the aggregate the right to purchase the same number of Warrant
Shares that could be purchased pursuant to the Warrant being
transferred.  If a Warrant is to be transferred on behalf of a Holder
by an attorney, the original power of attorney, duly approved, or a copy
thereof, duly certified, shall be deposited and remain with
Coachmen.  In the case of any transfer by executors, administrators,
guardians or other legal representatives, duly authenticated evidence of their
authority shall be produced and may be required to be deposited and remain with
Coachmen in its discretion.

     

    (b)           Each
Warrant issued in accordance with this Section 2.3 shall bear the restrictive
legend set forth on the face of this Warrant, unless the Holder or transferee
thereof supplies to Coachmen an opinion of counsel, reasonably satisfactory to
Coachmen, that the restrictions described in such legend are no longer
applicable to such Warrant.

     

    (c)           The
transfer of Warrants and Warrant Shares shall be permitted, so long as such
transfer is pursuant to a transaction that complies with, or is exempt from, the
provisions of the Securities Act, and Coachmen may require an opinion of counsel
(which may be internal counsel to a Holder) in form and substance reasonably
satisfactory to it to such effect prior to effecting any transfer of Warrants or
Warrant Shares.

     

    SECTION
3.                      EXERCISE OF WARRANT;
EXCHANGE FOR WARRANT SHARES.

     

    3.1           Exercise of
Warrants.  On any Business Day prior to the Expiration Date, a
Holder may exercise a Warrant, in whole or in part, by delivering to Coachmen
such Warrant accompanied by a properly completed Exercise Form in the form of
Annex 1 and a
check in an aggregate amount equal to the product obtained by multiplying (a)
the Exercise Price by (b) the number of Warrant Shares being purchased (the
“Aggregate Exercise
Price”); provided, however, in the event
any Holder exercises a Warrant in connection with or immediately prior to a sale
by such Holder of Warrant Shares, in lieu of paying the aggregate Exercise Price
therefor, such Holder may elect to effect a cashless exercise of the Warrant by
receiving that number of Warrant Shares which is equal to the number of shares
for which the Warrant is being exercised less the number of shares having an
aggregate Market Price equal to the Aggregate Exercise Price.  For
purposes of this Section 3.1, the Market Price referred to in the previous
sentence shall be the actual per share price at which such Holder sold such
Warrant Shares; provided that the sale was not to an affiliate and was otherwise
arms-length.  Any partial exercise of a Warrant shall be for a whole
number of Warrant Shares only.

     

    3.2           Issuance of Common
Stock.

     

    (a)           Within
ten (10) Business Days following the delivery date (the “Delivery Date”) of
(i) an Exercise Form in accordance with Section 3.1(a), (ii) a Warrant and (iii)
any required payments of the Aggregate Exercise Price, Coachmen shall issue and
deliver to the Holder a certificate or certificates, registered in the name or
names set forth on such notice, representing the Warrant Shares being purchased
or to be received upon such exercise.

     

    (b)           If
a Holder shall exercise or exchange a Warrant for less than all of the Warrant
Shares that could be purchased or received thereunder, Coachmen shall issue to
the Holder, within ten (10) Business Days of the Delivery Date, a new Warrant of
like kind and tenor to such Warrant evidencing the right to purchase the
remaining Warrant Shares.  Each Warrant surrendered pursuant to
Section 3.1(a) shall be canceled.

     

    (c)           Coachmen
shall not be required to issue fractional shares of Common Stock upon the
exercise or exchange of a Warrant.  If any fraction of a share of
Common Stock would be issuable on the exercise or exchange of any Warrant,
Coachmen may, in lieu of issuing such fractional share, pay to such Holder for
any such fraction of a share an amount in cash equal to the product obtained by
multiplying (i) such fraction by (ii) the Market Price in effect on the Delivery
Date.

     

    (d)           Coachmen
shall pay all Taxes (other than any applicable income Taxes payable by a Holder
of a Warrant) attributable to the initial issuance of Warrant Shares upon the
exercise or exchange of a Warrant; provided, however, that
Coachmen shall not be required to pay any Tax that might be payable in respect
of any transfer involved in the issuance of a Warrant or certificate for Warrant
Shares in a name other than that of the Holder of the Warrant being exercised or
exchanged.

     

    (e)           If
permitted by Applicable Law, the person in whose name any certificate for shares
of Common Stock is issued upon exercise or exchange of a Warrant shall for all
purposes be deemed to have become the holder of record of such shares on the
Delivery Date, irrespective of the date of delivery of such certificate, except
that, if the Delivery Date is a date when the stock transfer books of Coachmen
are closed, such person shall be deemed to have become the holder of record of
such shares at the close of business on the next succeeding date on which the
stock transfer books are open.

     

    (f)           Coachmen
shall at all times reserve and keep available, free from preemptive rights, out
of its authorized but unissued Common Stock, for the purpose of enabling it to
satisfy any obligation to issue Warrant Shares upon exercise of this Warrant,
the maximum number of shares of Common Stock deliverable upon the (i) exercise
of all outstanding Warrants and Existing Warrants and (ii) conversion of all
outstanding Tranche B Notes.  Upon the exercise of any Warrant,
Coachmen shall issue shares of Common Stock that will be duly authorized,
validly issued, fully paid and nonassessable and free from all Taxes, liens,
charges and security interests.

     

    3.3           Adjustment to Exercise Price
and Number of Warrant Shares.  The number of Warrant Shares
purchasable upon exercise of each Warrant shall be subject to adjustment from
time to time in accordance with this Section 3.3.

     

    (a)           Adjustment upon Issuance of
Common Stock.  Except as provided for in Section 3.3(b) hereof,
if Coachmen at any time or from time to time issues any additional Common Stock
(including without limitation an issuance of any options, warrants or similar
rights to purchase Common Stock or securities convertible into or exchangeable
for Common Stock), and such additional Common Stock causes more than 16,403,409
shares of Common Stock to be outstanding on a Fully-Diluted Basis, then, and
thereafter successively upon each such issuance, the number of Warrant Shares
that may be obtained by Holders upon exercise of their Warrants shall forthwith
be increased to allow the Holders to receive the same percentage of the total
Common Stock outstanding on a Fully-Diluted Basis after the issuance of such
additional Common Stock as they would have been able to receive upon exercise of
the Warrants immediately prior to the issuance of such additional Common
Stock.

     

    (b)           Subdivisions or Combinations
of Common Stock.  If, at any time after the date hereof, (i)
the number of shares of Common Stock outstanding is increased by a dividend or
other distribution payable in shares of Common Stock or by a subdivision or
split-up of shares of Common Stock or (ii) the number of shares of Common Stock
outstanding is decreased by a combination or reverse stock split of shares of
Common Stock, then, in each case, effective as of the effective date of such
event retroactive to the record date, if any, of such event, (A) the Exercise
Price shall be adjusted to a price determined by multiplying (1) the Exercise
Price in effect immediately prior to such event by (2) a fraction, the (x)
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such event and the (y) denominator of which shall be the
number of shares of Common Stock outstanding after giving effect to such event,
and (B) the number of Warrant Shares subject to purchase upon the exercise of
any Warrant shall be adjusted effective at such time, to a number determined by
multiplying (1) the number of Warrant Shares subject to purchase upon the
exercise of such Warrant immediately prior to such event by (2) a fraction, the
(x) numerator of which shall be the number of shares of Common Stock outstanding
after giving effect to such event and the (y) denominator of which shall be the
number of shares of Common Stock outstanding immediately prior to such
event.

     

    (c)           Capital Reorganization or
Capital Reclassifications.  If, at any time after the date
hereof, there shall be any capital reorganization or any reclassification of the
capital stock of Coachmen (other than a change in par value or from par value to
no par value or from no par value to par value or as a result of a stock
dividend or subdivision, split-up or combination of shares), then in each case
Coachmen shall cause effective provision to be made so that each Warrant shall,
effective as of the effective date of such event retroactive to the record date,
if any, of such event, be exercisable or exchangeable for the kind and number of
shares of stock, other securities, cash or other property to which a holder of
the number of shares of Common Stock deliverable upon exercise or exchange of
such Warrant would have been entitled upon such reorganization or
reclassification and any such provision shall include adjustments in respect of
such stock, securities or other property that shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Warrant with respect
to such Warrant.

     

    (d)           Consolidations and
Mergers.  If, at any time after the date hereof, Coachmen shall
consolidate with, merge with or into, or sell all or substantially all of its
assets or property to another Person, then Coachmen shall cause effective
provision to be made so that each Warrant shall, effective as of the effective
date of such event retroactive to the record date, if any, of such event, be
exercisable or exchangeable for the kind and number of shares of stock, other
securities, cash or other property to which a holder of the number of shares of
Common Stock deliverable upon exercise or exchange of such Warrant would have
been entitled upon such event.

     

    (e)           Notice; Calculations;
Etc.  Whenever the Exercise Price and the number of Warrant
Shares shall be adjusted as provided in this Section 3.3, Coachmen shall provide
to each Holder a statement, signed by an Executive Officer, describing in detail
the facts requiring such adjustment and setting forth a calculation of the
Exercise Price and the number of Warrant Shares applicable to each Warrant after
giving effect to such adjustment.  All calculations under this Section
3.3 shall be made to the nearest one hundredth of a cent or to the nearest
one-tenth of a share, as the case may be.

     

    (f)           Certain
Adjustments.

     

    (i)           Coachmen
may make such reductions in the Exercise Price or increase in the number of
Warrant Shares to be received by any Holder upon the exercise or exchange of a
Warrant, in addition to those adjustments required by this Section 3.3, as it
deems advisable in order for any of the following not to result in the
imposition of Taxes:  (A) any consolidation or subdivision of the
Common Stock, (B) any issuance wholly for cash of any shares of Common Stock,
(C) any issuance wholly for cash of shares of Common Stock or securities that by
their terms are convertible into or exchangeable for shares of Common Stock, (D)
any stock dividend or (E) any issuance of rights, options or warrants
hereinafter made by Coachmen to the holders of its Common Stock.

     

    (ii)           In
the event that Coachmen in any manner issues or grants options or convertible
securities, or any other transaction, circumstances or events occur that give
rise to anti-dilution adjustments under Other Anti-Dilution Instruments, then
Coachmen shall promptly make proportional, equitable and corresponding
adjustments in the number of shares of Common Stock issuable upon exercise of
the Warrants to protect the Holders against dilution as a result of such
events.

     

    (g)           Excluded
Transactions.  Notwithstanding any other provision of this
Warrant, no adjustment shall be made pursuant to this Section 3.3 in respect of
Warrant Shares issued pursuant to the Warrants.

     

    (h)           Adjustment
Rules.  Any adjustments pursuant to this Section 3.3 shall be
made successively whenever an event referred to herein shall occur, except that,
notwithstanding any other provision of this Section 3.3, no adjustment shall be
made to the number of shares of Common Stock or to the Exercise Price if such
adjustment represents less than 1% of the number of shares previously required
to be so delivered, but any lesser adjustment shall be carried forward and shall
be made at the time and together with the next subsequent adjustment which
together with any adjustments so carried forward shall amount to 1% or more of
the number of shares to be so delivered.

     

    SECTION
4.                      CERTAIN OTHER
RIGHTS

     

    4.1           Payments in Respect of
Dividends and Distributions.  If, at any time prior to the
earlier of the Expiration Date, Coachmen pays any dividend or makes any
distribution (whether in cash, property or securities of Coachmen) on its
capital stock that does not result in an adjustment under Section 3 hereof, then
Coachmen shall simultaneously pay to the Holder of each Warrant, the dividend or
distribution that would have been paid to such Holder on the Warrant Shares
receivable upon the exercise in full of such Warrant had such Warrant been fully
exercised immediately prior to the record date for such dividend or distribution
or, if no record is taken, the date as of which the record holders of Common
Stock entitled to such dividend or distribution are to be
determined.

     

    4.2           Fiduciary Duties of
Coachmen.  Coachmen and its directors shall owe the holders of
the Warrants the same fiduciary duties that Coachmen and its directors would owe
to the Warrant Shares underlying the Warrants.

     

    SECTION
5.                      MISCELLANEOUS.

     

    5.1           Relation to Other
Agreements.  Coachmen hereby acknowledges and agrees that
Warrant Shares will be entitled to those registration rights set forth in the
Registration Rights Agreement, dated October 27, 2009, by and between the Lender
and Coachmen, as amended on the date hereof.

     

    5.2           Notices. All notices,
demands and requests of any kind to be delivered to any party hereto in
connection with this Warrant shall be in writing (a) delivered personally, (b)
sent by nationally-recognized overnight courier, (c) sent by first class,
registered or certified mail, return receipt requested or (d) sent by facsimile,
in each case to such party at its address as follows:

     

    
      	
               
      

            	
              (a)

            	
              if
      to Coachmen, to:

            

    

    

    
      	
               
      

            	
              Coachmen
      Industries, Inc.

            

    

    
      	
               
      

            	
              2831
      Dexter Drive

            

    

    
      	
               
      

            	
              Elkhart,
      Illinois  46514

            

    

    
      	
               
      

            	
              Attention:

            	
              Chief
      Executive Officer, General Counsel

            

    

    

    
      	
               
      

            	
              Telephone:

            	
              (574)
      266-2509

            

    

    
      	
               
      

            	
              Facsimile:

            	
              (574)
      266-3046

            

    

    

    
      	
               
      

            	
              (b)

            	
              if
      to the Lender, to:

            

    

    

    
      	
               
      

            	
              H.I.G.
      All American, LLC

            

    

    
      	
               
      

            	
              1001
      Brickell Bay Drive

            

    

    
      	
               
      

            	
              27th
      Floor

            

    

    
      	
               
      

            	
              Miami,
      Florida  33131

            

    

    
      	
               
      

            	
              Attention:

            	
              Matt
      Sanford

            

    

    

    
      	
               
      

            	
              Telephone:

            	
              (305)
      379-2322

            

    

    
      	
               
      

            	
              Facsimile:

            	
              (305)
      379-3655

            

    

    

    
      	
               
      

            	
              with
      a copy to (which shall not

            

    

    
      	
               
      

            	
              constitute
      notice):

            

    

    

    
      	
               
      

            	
              White
      & Case LLP

            

    

    
      	
               
      

            	
              Wachovia
      Financial Center

            

    

    
      	
               
      

            	
              200
      South Biscayne Boulevard, Suite
4900

            

    

    
      	
               
      

            	
              Miami,
      Florida  33131

            

    

    
      	
               
      

            	
              Attention:

            	
              Jorge
      L. Freeland

            

    

    

    
      	
               
      

            	
              Telephone:

            	
              (305)
      995-5247

            

    

    
      	
               
      

            	
              Facsimile:

            	
              (305)
      358-5744

            

    

    

     

    If to any
other Holder, the address indicated for such Holder in Coachmen’s Warrant
Register.

     

    Any
notice, demand or request so delivered shall constitute valid notice under this
Warrant and shall be deemed to have been received (a) on the day of actual
delivery in the case of personal delivery, (b) on the next Business Day after
the date when sent in the case of delivery by nationally-recognized overnight
courier, (d) on the fifth Business Day after the date of deposit in the U.S.
mail in the case of mailing or (e) upon receipt in the case of a facsimile
transmission.  Any party hereto may from time to time by notice in
writing served on the other as aforesaid designate a different mailing address
or a different Person to which all such notices, demands or requests thereafter
are to be addressed.

     

    5.3           No Voting Rights:
Limitations of Liability.  No Warrant shall entitle the Holder
thereof to any voting rights or, except as otherwise provided in Section 4.2 and
elsewhere herein, other rights of a stockholder of Coachmen.  No
provision hereof, in the absence of affirmative action by a Holder to purchase
Warrant Shares, and no enumeration herein of the rights or privileges of a
Holder shall give rise to any liability of such Holder for the Exercise Price of
Warrant Shares acquirable by exercise hereof or as a stockholder of
Coachmen.

     

    5.4           Amendments and
Waivers.  Any provision of this Warrant or the Warrants issued
to the other Lenders may be amended or waived, but only pursuant to a written
agreement signed by Coachmen and the Requisite Holders.  Upon an
amendment, this Warrant and any Warrants issued to other Holders shall be
similarly amended to reflect such amendment or modification.

     

    5.5           Severability.  Any
provision of this Warrant that is prohibited or unenforceable in any
jurisdiction shall, as to such provision and such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Warrant affecting the validity or enforceability of
such provision in any other jurisdiction.

     

    5.6           Specific
Performance.  Each Holder shall have the right to specific
performance by Coachmen of the provisions of this Warrant, in addition to any
other remedies it may have at law or in equity.  Coachmen hereby
irrevocably waives, to the extent that it may do so under applicable law, any
defense based on the adequacy of a remedy at law which may be asserted as a bar
to the remedy of specific performance in any action brought against Coachmen for
specific performance of this Warrant by the Holders of the Warrants or Warrant
Shares.

     

    5.7           Binding
Effect.  This Warrant shall be binding upon and inure to the
benefit of Coachmen, each Holder and their respective successors and
assigns.

     

    5.8           Counterparts.  This
Warrant may be executed by the parties hereto in several counterparts, each of
which shall be deemed to be an original and all of which shall constitute
together but one and the same agreement.  This Warrant shall become
effective when counterparts hereof executed on behalf of Coachmen and the
initial Holder shall have been received.

     

    5.9           Entire
Agreement.  This Warrant constitutes the entire understanding
among the parties hereto with respect to the subject matter hereof and
supersedes any prior agreements, written or oral, with respect
thereto.

     

    5.10           Governing law: Submission to
Jurisdiction.  THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED
UNDER THE LAWS OF THE STATE OF FLORIDA, WITHOUT REFERENCE TO ITS CONFLICT OF
LAWS RULES AND PRINCIPLES.  THE PARTIES HEREBY EXPRESSLY AND
IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED
IN MIAMI-DADE COUNTY, FLORIDA FOR THE PURPOSE OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS WARRANT, AND IRREVOCABLY
AGREE TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH
LITIGATION. THE PARTIES HEREBY EXPRESSLY AND IRREVOCABLY WAIVE, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY HAVE OR HEREAFTER MAY HAVE
TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED
TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.  TO THE EXTENT THAT ANY PARTY HAS OR HEREAFTER MAY
ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN
AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE PARTY
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
WARRANT. COACHMEN FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF FLORIDA.

     

    5.11           Headings.  The
various headings of this Warrant are inserted for convenience only and shall not
affect the meaning or interpretation of this Warrant or any provisions hereof or
thereof.

     

    5.12           Expenses.  Coachmen
shall promptly (and in any event within thirty (30) days of receiving any
statement or invoice therefor) pay all reasonable fees, expenses and costs
relating hereto, including, but not limited to, (a) the cost of reproducing this
Warrant, (b) the fees and disbursements of counsel to the Holder in preparing
this Warrant, (c) all transfer, stamp, documentary or other similar Taxes,
assessments or charges levied by any governmental or revenue authority in
respect hereof or any other document referred to herein, (d) fees and expenses
(including, without limitation, reasonable attorneys’ fees) incurred in respect
of the enforcement by Holders of the rights granted to Holders under this
Warrant, and (e) the expenses relating to the consideration, negotiation,
preparation or execution of any amendments, waivers or consents requested by
Coachmen pursuant to the provisions hereof, whether or not any such amendments,
waivers or consents are executed.

     

    5.13           Attorneys’
Fees.  In any action or proceeding brought by a party to
enforce any provision of this Warrant, the prevailing party shall be entitled to
recover the reasonable costs and expenses incurred by it in connection with that
action or proceeding (including, but not limited to, attorneys’
fees).

     

    5.14           Filings.  Coachmen
shall, at its own expense, promptly execute and deliver, or cause to be executed
and delivered, to any holder of Warrants all applications, certificates,
instruments and all other documents and papers that such holder of Warrants may
reasonably request in connection with the obtaining of any consent, approval,
qualification, or authorization of any Federal, provincial, state or local
government (or any agency or commission thereof) necessary or appropriate in
connection with, or for the effective exercise of, any Warrants then held by
such holder.

     

    5.15           Other
Transactions.  Nothing contained herein shall preclude any
Holder from engaging in any transaction, in addition to those contemplated by
this Warrant, with Coachmen or any of its affiliates that is not expressly
prohibited hereunder.

     

    5.16           Waiver of Jury
Trial.  THE
HOLDERS AND COACHMEN HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS WARRANT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF THE HOLDERS OR COACHMEN.  COACHMEN ACKNOWLEDGES AND AGREES
THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND
THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE HOLDERS ENTERING INTO THIS
WARRANT.

     

    
      
        
          

          
            	
                    MIAMI
      866464 (2K)

                  	 
      	 
      

          

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, Coachmen and the Holder have caused this Common Stock Purchase
Warrant to be duly executed as of the day and year first above
written.

     

    
      	
               

              H.I.G.
      ALL AMERICAN, LLC

               

              By:  /s/
      Fabian de Armas

               

              Title:  Vice
      President

               

            	 
      	
               

              COACHMEN
      INDUSTRIES, INC.

               

              By:  /s/
      Richard M. Lavers

               

              Title:  Chief
      Executive Officer

            

    

    

    

    

    
      
        
          

          
            	
                    MIAMI
      866464 (2K)

                  	
                     

                  	 
      

          

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    ANNEX
1

     

    

     

    ELECTION
TO EXERCISE FORM

     

    (To Be
Executed By The Holders of This Warrant

     

    In Order
to Exercise This Warrant)

     

    The
undersigned hereby irrevocably elects to exercise the right to purchase
__________ shares of Common Stock of Coachmen covered by this Warrant according
to the conditions hereof and herewith makes payment of the Exercise Price of
such shares in full.

     

    

    

    Signature

    

    

    

    

    Address

    

    

    Dated:           

    

    
      
        
          

          
            	
                    MIAMI
      866464 (2K)

                  	 
      	 
      

          

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    ANNEX
2

     

    

     

    ASSIGNMENT
FORM

     

    (To Be
Executed By The Holder of This Warrant

     

    In Order
to Assign This Warrant Certificate)

     

    

     

    FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
_____________________________ this Warrant and all rights evidenced thereby and
does irrevocably constitute and appoint ___________________, attorney, to
transfer the said Warrant on the books of Coachmen.

     

    

    

    Signature

    

    

    

    

    Address

    

    

    Dated:           

    

    
      
        
          

          
            	
                    MIAMI
      866464 (2K)

                  	 
      	 
      

          

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    ANNEX
3

     

    

     

    EXCHANGE
FORM

     

    (To Be
Executed By The Holder of This Warrant

     

    In Order
to Assign This Warrant Certificate)

     

    

     

    The
undersigned hereby irrevocably elects to exchange this Warrant to purchase
___________ shares of Common Stock of Coachmen Industries, Inc. covered by this
Warrant for ___________ Warrants to purchase the denominations of shares of
Common Stock set forth below to the persons named and hereby sells, assigns and
transfers unto such persons that portion of this Warrant represented by such new
Warrants and all rights evidenced thereby and does irrevocably constitute and
appoint ____________________, attorney, to exchange and transfer this Warrant as
aforesaid on the books of Coachmen.

     

    Number of Warrant
Shares                                                                                                Assignee

     

    

     

    

     

    

    Signature

    

    

    

    

    Address

    

     

    FOR USE
BY COACHMEN ONLY:

     

    This
Warrant No. __ cancelled (or transferred or exchanged) this ________ day of
_____________, _____________ shares of ___ Common Stock issued therefor in the
name of ____ ___________ Warrant No. ___ for _________ shares of Common Stock in
the name of _________________________.

     

    

    Dated:           

    

     

    
      
        
          

          
            	
                    MIAMI
      866464 (2K)exhibit_10-87.htm

 

 

EXHIBIT 10.87

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

NTC/MICRON CONFIDENTIAL

AMENDED AND RESTATED JOINT VENTURE AGREEMENT

 

This AMENDED AND RESTATED JOINT VENTURE AGREEMENT, dated this 11th day of January, 2010, is made and entered into by and between MICRON SEMICONDUCTOR B.V. (hereinafter “MNL”), a private limited liability company organized under the laws of the Netherlands and NANYA TECHNOLOGY CORPORATION (Nanya Technology Corporation [Translation from Chinese]) (hereinafter “NTC”), a company incorporated under the laws of the Republic of China (“ROC” or “Taiwan”) (MNL and NTC are each referred to individually as a “JV Party,” and collectively as the “JV Parties”).

 

RECITALS

 

A.           NTC and Infineon Technologies AG, a company incorporated under the laws of Germany (hereinafter “Infineon”), have previously formed Inotera Memories, Inc. (Inotera Memories, Inc. [Translation from Chinese]), a company incorporated under the laws of the ROC (the “Joint Venture Company”).

 

B.           Infineon subsequently assigned to Qimonda AG, a company incorporated under the laws of Germany (hereinafter “Qimonda”), all of Infineon’s Shares in the Joint Venture Company.

 

C.           In accordance with that certain Share Purchase Agreement, dated October 11, 2008 (the “Qimonda/MNL Share Purchase Agreement”), by and between Micron Technology, Inc., a Delaware corporation (“Micron”), MNL, Qimonda and Qimonda Holding B.V., a private limited company organized under the laws of the Netherlands (“Qimonda B.V.”), MNL acquired from Qimonda and Qimonda B.V. Shares in the Joint Venture Company.

 

D.           The JV Parties previously entered into that certain Joint Venture Agreement, dated November 26, 2008 (the “Original Joint Venture Agreement”), to set forth certain agreements regarding the ownership, governance and operation of the Joint Venture Company.

 

E.           The JV Parties now desire to amend and restate the Original Joint Venture Agreement in order to, among other things, reflect certain changes the JV Parties deem appropriate in light of the recently completed public sale of Shares (as defined hereinafter) by the Joint Venture Company.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree to amend and restate the Original Joint Venture Agreement in its entirety to read as follows:

 

  

  

NTC/MICRON CONFIDENTIAL

 

ARTICLE 1

 

DEFINITIONS; INTERPRETATION

 

Section 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 below:

 

“2nd Closing” shall have the meaning set forth in the Qimonda/MNL Share Purchase Agreement.

 

“Accountants” shall have the meaning set forth in Section 10.2(c)(ii) of this Agreement.

 

“Affiliate” means, with respect to any specified Person, any other Person that, directly or indirectly, including through one or more intermediaries, controls, is controlled by, or is under common control with such specified Person; and the term “affiliated” has a meaning correlative to the foregoing.

 

“Agreement” means this Amended and Restated Joint Venture Agreement.

 

“Annual Budget” shall have the meaning set forth in Section 7.5(a)(ii) of this Agreement.

 

“Annual Business Plan” shall have the meaning set forth in Section 7.5(a)(i) of this Agreement.

 

“Answer Notice” shall have the meaning set forth in Section 7.3(b) of 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.

 

“Articles of Incorporation” means the Articles of Incorporation of the Joint Venture Company in the form and substance as Exhibit A attached to this Agreement, and as amended from time to time.

 

“Baseline Flow” shall have the meaning set forth in Section 7.2(b)(v) of this Agreement.

 

“Board of Directors” means the board of directors of the Joint Venture Company.

 

“Boundary Conditions” means, with respect to any fab, the Trench DRAM Boundary Conditions and Stack DRAM Boundary Conditions.

 

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

 

“Business Plan” means any Annual Business Plan.

 

“Buyout Notice” shall have the meaning set forth in Section 13.1(a) of this Agreement.

 

  

- 2 -

NTC/MICRON CONFIDENTIAL

 

 

“Buyout Price” shall have the meaning set forth in Section 12.3(a) of this Agreement.

 

“Buyout Shares” shall have the meaning set forth in Section 13.1(a) of this Agreement.

 

“Buyout Subsidiary” shall have the meaning set forth in Section 13.2 of this Agreement.

 

“Chairman” means the Chairman of the Board of Directors.

 

“Change Notice” shall have the meaning set forth in Section 7.3(b) of this Agreement.

 

“Closing” means the consummation of the 2nd Closing.

 

“Closing Date” means November 26, 2008, the date on which the Closing occurred.  For purposes of this Agreement and the other agreements and instruments referenced herein, the Closing shall be deemed to have occurred at 12:01 a.m. in Taipei, Taiwan on such date.

 

“Competitively Sensitive Information” means any information, in whatever form, that has not been made publicly available relating to products and services that Micron or a Subsidiary of Micron, on the one hand, and NTC or a Subsidiary of NTC, on the other hand, sells in competition with the other at the execution of this Agreement or thereafter, including DRAM Products, to the extent such information of the Person selling such products and services includes price or any element of price, customer terms or conditions of sale, seller-specific costs, volume of sales, output (but not including the Joint Venture Company’s output), bid terms of the foregoing type and such similar information as is specifically identified electronically or in writing to the Joint Venture Company by Micron or a Subsidiary of Micron, on the one hand, and NTC or a Subsidiary of NTC, on the other hand, as competitively sensitive information.

 

“Compliant JV Party” shall have the meaning set forth in Section 13.1(a) of this Agreement.

 

“Confidentiality Agreement” shall have the meaning set forth in Section 15.13(a) of this Agreement.

 

“Control” (whether or not capitalized) means the power or authority, whether exercised or not, to direct the business, management and policies of a Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, which power or authority shall conclusively be presumed to exist upon possession of beneficial ownership or power to direct the vote of [***] of the votes entitled to be cast at a meeting of the members, shareholders or other equity holders of such Person or power to control the composition of a majority of the board of directors or like governing body of such Person; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“COSL” shall have the meaning set forth in Section 11.6 of this Agreement.

 

“Cure Period” shall have the meaning set forth in Section 12.5 of this Agreement.

 

“Deadlock” shall have the meaning set forth in Section 12.1 of this Agreement.

  

- 3 -

NTC/MICRON CONFIDENTIAL

 

“Defaulting JV Party” shall have the meaning set forth in Section 12.4 of this Agreement.

 

 “Design ID” means a part number that is assigned to a unique DRAM Design of a particular DRAM Product, which may include a number or letter designating a specific device revision.

 

“Design SOW” means any [***].

 

“Dilutive Transaction” means a transaction in which the Joint Venture Company issues Shares and a JV Party does not purchase 100% of the Shares that such JV Party would be entitled to purchase with respect to such transaction as a result of fully exercising its pre-emptive right with respect to the issuance of the Shares; provided, however, that such transaction shall not be a Dilutive Transaction if neither JV Party exercises any of its pre-emptive rights with respect to such issuance of Shares.

 

“Divestiture Action” shall have the meaning set forth in Section 2.4(c)(v) of this Agreement.

 

“DRAM Design” means an Trench DRAM Designs or Stack DRAM Design.

 

“DRAM Product” means a Trench DRAM Product or Stack DRAM Product.

 

“Employee Restriction Period” means the period commencing on the Closing Date and ending on the date that is two (2) years after the later of (i) the sale, exchange, transfer, or disposal of all of the ordinary shares of the Joint Venture Company owned by one JV Party and its Subsidiaries to the other JV Party, its Affiliates or to a Third Party that was not in contravention of this Agreement and (ii) the termination of the JDP Agreement.

 

“Equity Interest” means a JV Party’s percentage ownership of the Shares as determined by dividing the number of Shares owned by such JV Party at the time of determination by the total issued and outstanding Shares at the time of determination.

 

“Event of Default” shall have the meaning set forth in Section 12.4 of this Agreement.

 

“Executive Vice President” shall have the meaning set forth in Section 5.4(b) of this Agreement.

 

“Exercise Notice” shall have the meaning set forth in Section 12.6(a) of this Agreement.

 

“Fair Value” means (i) if the Joint Venture Company is listed on the Taiwan Stock Exchange, [***] of the Shares immediately prior to the date of the Exercise Notice or the Buyout Notice, as applicable; or (ii) if the Joint Venture Company is not then listed on the Taiwan Stock Exchange, the fair value immediately prior to the date of the Exercise Notice or Buyout Notice, as applicable, as determined by independent appraisers selected as follows: each JV Party shall appoint one independent appraiser, which shall be an internationally recognized accounting, valuation or investment banking firm, and these two independent appraisers shall mutually select a third independent appraiser.  Each such appraiser shall in good faith conduct its own 

- 4 -

NTC/MICRON CONFIDENTIAL

 

independent appraisal to determine the fair value of the Shares (ignoring any applicable minority discounts or effects of illiquidity that may be associated with the Shares of the Joint Venture Company), and [***] that are the closest in value shall be the Fair Value of the Shares.

 

[***]

 

“Filing” shall have the meaning set forth in Section 2.4 of this Agreement.

 

“Filing Event” shall have the meaning set forth in Section 2.4 of this Agreement.

 

“Fiscal Quarter” means any of the four financial accounting quarters within the Fiscal Year.

 

“Fiscal Year” shall have the meaning set forth in Section 10.1 of this Agreement.

 

“GAAP” means generally accepted accounting principles, consistently applied for all periods at issue.

 

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

 

“ICDR” means the International Centre for Dispute Resolution of the American Arbitration Association.

 

“Imaging Product” means any (i) semiconductor device having a plurality of photo elements (e.g., photodiodes, photogates, etc.) for converting impinging light into an electrical representation of the information in the light, (ii) image processor or other semiconductor device for balancing, correcting, manipulating or otherwise processing such electrical representation of the information in the impinging light, or (iii) combination of the devices described in clauses (i) and (ii).

 

 “Infineon” shall have the meaning set forth in the Recitals of this Agreement.

 

“Initiating JV Party” shall have the meaning set forth in Section 7.3(b) of this Agreement.

 

“JDP Agreement” means that certain Joint Development Program Agreement between NTC and Micron, dated as of April 21, 2008, as amended.

 

“JDP Committee” means the committee formed and operated by Micron and NTC to govern the performance of Micron and NTC under the JDP Agreement in accordance with the JDP Committee Charter.

 

“JDP Committee Charter” means the charter attached as Schedule 2 to the JDP Agreement.

  

- 5 -

NTC/MICRON CONFIDENTIAL

 

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

 

“Joint Venture Documents” means the documents identified on Schedule A to this Agreement.

 

“Joint Venture Reportable Events” shall have the meaning set forth in Section 10.3 of this Agreement.

 

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

 

“Manufacturing Capacity” means Trench DRAM Manufacturing Capacity and Stack DRAM Manufacturing Capacity.

 

“Manufacturing Committee” shall have the meaning set forth in Section 7.2(b)(i) of this Agreement.

 

“Manufacturing Plan” shall have the meaning set forth in Section 7.2(c) of this Agreement.

 

“Maximum Output Percentage Adjustment” means the [***].

 

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

 

“Micron Assigned Employee Agreement” means that certain Micron Assigned Employee Agreement between Micron and the Joint Venture Company, dated as of the Closing Date.

 

[***].

 

“Minimally Restored Position” has the meaning set forth in Section 11.5(c) of this Agreement.

 

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

 

“MTT” shall mean Micron Technology Asia Pacific, Inc., an Idaho corporation.

 

“NAND Flash Memory Product” means a non-volatile semiconductor memory device containing memory cells that are electrically programmable and electrically erasable whereby the memory cells consist of one or more transistors that have a floating gate, charge trapping regions or any other functionally equivalent structure utilizing one or more different charge levels (including binary or multi-level cell structures), with or without any on-chip control, I/O and other support circuitry, in wafer, die or packaged form.

 

“Non-compliant JV Party” shall have the meaning set forth in Section 13.1(a) of this Agreement.

 

“Non-Defaulting JV Party” shall have the meaning set forth in Section 12.5 of this Agreement.

  

- 6 -

NTC/MICRON CONFIDENTIAL

 

“Non-SOW Product” means a class of Stack DRAM Product that does not result from a SOW.

 

“Notice of Default” shall have the meaning set forth in Section 12.5 of this Agreement.

 

“NT$” means the lawful currency of the ROC.

 

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

 

“NTC Assigned Employee Agreement” means that certain NTC Assigned Employee Agreement between NTC and the Joint Venture Company, dated as of the Closing Date.

 

[***].

 

“Offered Shares” means the Shares as defined in Section 9.3(a) of this Agreement.

 

“Option Period” shall have the meaning set forth in Section 9.3(b) of this Agreement.

 

“Original Joint Venture Agreement” shall have the meaning set forth in the Recitals to this Agreement.

 

“Other JV Party” shall have the meaning set forth in Section 7.3(b) of this Agreement.

 

“Output Percentage” means [***].

 

“Output Percentage Adjustment” means, [***].

 

“Permitted Transfer” shall have the meaning set forth in Section 9.2 of this Agreement.

 

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

 

“Plastics” shall have the meaning set forth in Section 11.5(b) of this Agreement.

 

 “President” shall have the meaning set forth in Section 5.4(a) of this Agreement.

 

“Process Node” means [***].

 

“Prohibited Employees” shall have the meaning set forth in Section 8.4(a) of this Agreement.

 

“Proposing JV Party” shall have the meaning set forth in Section 12.3(a) of this Agreement.

 

“Purchaser” shall mean any Person for and to whom the Joint Venture Company manufactures and delivers DRAM Products under the Supply Agreement, currently NTC or Micron.

  

- 7 -

NTC/MICRON CONFIDENTIAL

 

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

 

“Qimonda B.V.” shall have the meaning set forth in the Recitals to this Agreement.

 

“Qimonda/MNL Share Purchase Agreement” shall have the meaning set forth in the Recitals to this Agreement.

 

“Restricted Employees” shall have the meaning set forth in Section 8.4(a) of this Agreement.

 

“Receiving Party” shall have the meaning set forth in Section 9.3(a) of this Agreement.

 

“Receiving JV Party” shall have the meaning set forth in Section 12.3(a) of this Agreement.

 

“Regulatory Law” shall have the meaning set forth in Section 2.4 of this Agreement.

 

“Restored Position” shall have the meaning set forth in Section 11.5(b) of this Agreement.

 

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

 

“ROC Company Law” means the Company Law of the ROC, promulgated on December 26, 1929, and as last amended on February 3, 2006.

 

“ROC Securities Exchange Law” means the Securities and Exchange Law of the ROC, promulgated on April 30, 1968, and as last amended on May 30, 2006.

 

“Sale Offer” shall have the meaning set forth in Section 9.3(a) of this Agreement.

 

“Share Decrease Percentage”  means [***].

 

“Share Disposition” shall have the meaning set forth in Section 7.3(b) of this Agreement.

 

“Shareholders’ Meeting” or “Shareholders’ Meetings” shall have the meaning set forth in Section 6.2 of this Agreement.

 

“Shares” means the ordinary shares of the Joint Venture Company, each having a par value of [***].

 

“SOW” means a statement of the work that describes research and development work to be performed under the JDP Agreement and that has been adopted by the JDP Committee pursuant to Section 3.2 of the JDP Agreement.

 

“Stack DRAM” means dynamic random access memory cell that functions by using a  capacitor arrayed predominantly above the semiconductor substrate.

 

“Stack DRAM Boundary Conditions” means, with respect to any fab, a requirement that, at any point in time:

  

- 8 -

NTC/MICRON CONFIDENTIAL

 

[***].

 

“Stack DRAM Design” means, with respect to a Stack DRAM Product, all of the design elements, components, specifications and information required to manufacture the subject Stack DRAM Product, including some or all of the elements, components, specifications and information listed on Schedule 3 to the JDP Agreement or others.

 

“Stack DRAM Manufacturing Capacity” means, with respect to each of the Joint Venture Company’s fabs, the total work minutes available for each Process Node to manufacture Stack DRAM Products at such fab.

 

“Stack DRAM Module” means one or more Stack DRAM Products in a JEDEC-compliant package or module (whether as part of a SIMM, DIMM, multi chip package, memory card or other memory module or package).

 

“Stack DRAM Product” means any memory comprising Stack DRAM, whether in die or wafer form.

 

“Subsidiary” means with respect to any specified Person, any other Person that, directly or indirectly, including through one or more intermediaries, is controlled by such specified Person.

 

“Supply Agreement” means that certain Supply Agreement among NTC, Micron and the Joint Venture Company, dated as of November 26, 2008, as subsequently amended and restated effective as of April 1, 2009, as the same may be amended from time-to-time.

 

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

 

“Taiwan GAAP” means GAAP used in the ROC, as in effect from time to time, consistently applied for all periods at issue.

 

“Technology Transfer Agreement” means that certain Technology Transfer Agreement among NTC, Micron and the Joint Venture Company, dated as of the Closing Date.

 

“Third Party” means any Person other than NTC, Micron, the Joint Venture Company or any of their respective Subsidiaries.

 

“Transfer” shall have the meaning set forth in Section 9.1(a) of this Agreement.

 

“Transfer Notice” shall have the meaning set forth in Section 9.3(a) of this Agreement.

 

“Transfer Period” shall have the meaning set forth in Section 9.3(d) of this Agreement.

 

“Transferor” shall have the meaning set forth in Section 9.3(a) of this Agreement.

 

“Transition Period” shall have the meaning set forth in Section 2.1(b) of this Agreement.

 

“Trench Contract Process” means the 90nm and 70nm trench based DRAM process technology previously transferred to the Joint Venture Company under that certain Know How 

- 9 -

NTC/MICRON CONFIDENTIAL

 

Transfer Agreement among the Joint Venture Company, NTC and Qimonda, dated November 13, 2002, as amended.

 

“Trench DRAM” means a dynamic random access memory cell that functions employing a capacitor arrayed predominantly below the surface of the semiconductor substrate.

 

“Trench DRAM Boundary Conditions” means, with respect to any fab, a requirement that, at any point in time:

 

[***].

 

“Trench DRAM Designs” means, with respect to a Trench DRAM Product, the corresponding design components, materials and information.

 

“Trench DRAM Exception Products” means [***].

 

“Trench DRAM Manufacturing Capacity” means, with respect to each of the Joint Venture Company’s fabs, the total work minutes available for each Process Node to manufacture Trench DRAM Products at such fab.

 

“Trench DRAM Products” means trench based dynamic random access memory products manufactured by the Joint Venture Company in accordance with the Trench Contract Process.

 

“TTA 68-50” means that certain Technology Transfer Agreement for 68-50 nm Process Nodes between Micron and the Joint Venture Company dated as of October 11, 2008.

 

“TTLA” shall have the meaning set forth in Section 11.5(a) of this Agreement.

 

“[***]” shall have the meaning set forth in Section 11.5(a) of this Agreement.

 

“U.S. GAAP” means GAAP used in the United States, as in effect from time to time.

 

“Vice-Chairman” means the Vice Chairman of the Board of Directors.

 

“Wafer Start” means the initiation of manufacturing services with respect to a wafer.

 

“Wholly-Owned Subsidiary” of a Person means a Subsidiary, all of the shares of stock or other ownership interests of which are owned, directly or indirectly through one or more intermediaries, by such Person, other than a nominal number of shares or a nominal amount of other ownership interests issued in order to comply with requirements that such shares or interests be held by one or more other Persons, including requirements for directors’ qualifying shares or interests, requirements to have or maintain two or more stockholders or equity owners or other similar requirements.

 

Section 1.2 Certain Interpretive Matters.

 

(a) Unless the context requires otherwise, (i) all references to Sections, Articles, Exhibits, Appendices or Schedules are to Sections, Articles, Exhibits, Appendices or 

- 10 -

 

NTC/MICRON CONFIDENTIAL

 

Schedules of or to this Agreement, (ii) each accounting term not otherwise defined in this Agreement has the meaning commonly applied to it in accordance with Taiwan GAAP, (iii) words in the singular include the plural and vice versa, (iv) the term “including” means “including without limitation,” and (v) 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.  Unless otherwise denoted, all references to “$” or dollar amounts will be to lawful currency of the United States of America.  All references to “day” or “days” mean calendar days.

 

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

 

(c) For purposes of the definition of Boundary Conditions, the following fabs collectively shall constitute a single fab:  (i) the existing fabs commonly referred to as “Fab 1” and “Fab 2” at Hwa Ya Technology Park, Taoyuan, Taiwan, and (ii) the fab leased as of the Closing Date by MeiYa Technology Corporation (MeiYa Technology Corporation [Translation from Chinese]), a company incorporated under the laws of the ROC, and located at Hwa Ya Technology Park, Taoyuan, Taiwan, so long as such fab is operated by the Joint Venture Company.

 

ARTICLE 2

 

THE JOINT VENTURE COMPANY

 

Section 2.1 General Matters.

 

(a) Name.  The JV Parties shall use best efforts to cause the Joint Venture Company to be named Inotera Memories, Inc. [Translation from Chinese] in Chinese and “Inotera Memories, Inc.” in English.  The JV Parties acknowledge and agree to use best efforts to cause the Joint Venture Company to be continued as a company-limited-by-shares under the laws of the ROC.

 

(b) Purpose.  During the period commencing on the date hereof and ending on the date that the Joint Venture Company’s fabs are fully converted (as determined based on the delivery of the final Trench DRAM Product manufactured by the Joint Venture Company) from the manufacture of Trench DRAM Products to the manufacture of Stack DRAM Products (the “Transition Period”), the JV Parties shall use best efforts to cause the purpose of the Joint Venture Company to be the manufacture and sale of certain Trench DRAM Products and Stack DRAM Products exclusively for and to Micron and NTC.  After the Transition Period, the JV Parties shall use best efforts to cause the purpose of the Joint Venture Company to be the manufacture and sale of certain Stack DRAM Products exclusively for and to Micron and NTC; and the entry of, or engagement in, any such lawful transactions or activities in furtherance of the foregoing purpose.

  

- 11 -

NTC/MICRON CONFIDENTIAL

 

(c) Business Scope.  Subject to amendment by the JV Parties from time to time and any necessary approval from the relevant Governmental Entities, the JV Parties shall use best efforts to cause the registered business scope of the Joint Venture Company to be as set forth in its business license, other incorporation documents and the Articles of Incorporation, all as mutually agreed upon by the JV Parties.

 

(d) Principal Place of Business.  The JV Parties shall use best efforts to cause the registered address and the principal place of business of the Joint Venture Company to be at Hwa-Ya Technology Park, Taoyuan, Taiwan, ROC, unless the Board of Directors changes the registered address or the principal place of business of the Joint Venture Company to such other place as the Board of Directors may from time to time determine.  The Joint Venture Company may maintain offices and places of business at such other place or places within or outside of Taiwan as the Board of Directors may deem to be advisable.

 

Section 2.2 Articles of Incorporation.  In case of any conflict or inconsistency between the provisions of the Articles of Incorporation and the terms of this Agreement, the terms of this Agreement shall prevail as between the JV Parties to the extent permitted under the Applicable Laws.  The JV Parties shall exercise all rights available to them to give effect to the terms of this Agreement to the extent permissible under the Applicable Laws and to take such reasonable steps to amend the Articles of Incorporation as soon as practicable to the extent necessary to remove any such conflict or inconsistency.

 

Section 2.3 Maintenance of Joint Venture Company.  The JV Parties shall use best efforts to cause the Board of Directors, or officers of the Joint Venture Company, to make or cause to be made, from time to time, filings and applications to the relevant Governmental Entities in the ROC to amend any registration, license or permit of the Joint Venture Company as the Board of Directors reasonably considers necessary or appropriate under the Applicable Laws so as to ensure (a) the continuation of the Joint Venture Company as a company-limited-by-shares under the laws of the ROC and (b) compliance with the terms of this Agreement.

 

Section 2.4 Governmental Approvals.  In the event that either JV Party takes or desires to take any action contemplated by this Agreement that could reasonably be expected to result in an event or transaction, including the purchase by either JV Party of Shares pursuant to Section 9.3, 12.3, 12.6 or 13.1, which event or transaction, as to each of the foregoing, would require either JV Party to make a filing, notification or any other required or requested submission under antitrust, competition, foreign investment, company or fair trade law (any such event or transaction, a “Filing Event” and any such filing, notification, or any such other required or requested submission, a “Filing” and any such law, a “Regulatory Law”), then:

 

(a) the JV Party taking such action, in addition to complying with any other applicable notice provisions under this Agreement, shall promptly notify the other JV Party of such Filing Event, which notification shall include an indication that Filings under the Regulatory Law will be required;

 

(b) notwithstanding any provision to the contrary in this Agreement, a Filing Event may not occur or close until after any applicable waiting period (including any extension thereof) under the Regulatory Law, as applicable to such Filing Event, shall have 

- 12 -

NTC/MICRON CONFIDENTIAL

 

expired or been terminated, and all approvals under regulatory Filings in any jurisdiction that shall be necessary for such Filing Event to occur or close shall have been obtained, and any applicable deadline for the occurrence or closing of such Filing Event contained in this Agreement shall be delayed, so long as both JV Parties are proceeding diligently in accordance with this Section 2.4 to seek any such expiration, termination or approval, and so long as there are no other outstanding conditions preventing the occurrence or closing of the Filing Event;

 

(c) the JV Parties shall, and shall cause any of their relevant Affiliates to:

 

(i) as promptly as practicable, make their respective Filings under the applicable Regulatory Law;

 

(ii) promptly respond to any requests for additional information from the applicable Governmental Entity;

 

(iii) subject to applicable Regulatory Laws, use commercially reasonable efforts to cooperate with each other in the preparation of, and coordinate, such Filings (including the exchange of drafts between each party’s outside counsel) so as to reduce the length of any review periods;

 

(iv) subject to applicable Regulatory Laws, cooperate and use their respective commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary under Regulatory Law in connection with such Filing Event, including using commercially reasonable efforts to provide information, obtain necessary exemptions, rulings, consents, clearances, authorizations, approvals and waivers, and effect necessary registrations and filings;

 

(v) subject to applicable Regulatory Laws, use their commercially reasonable efforts to (a) take actions that are necessary to prevent the applicable Governmental Entity from filing an action with a court or Governmental Entity that, if the Governmental Entity prevailed, would restrict, enjoin, prohibit or otherwise prevent or materially delay the consummation of the Filing Event, including an action by any such Governmental Entity seeking a requirement to (i) sell, license or otherwise dispose of, or hold separate and agree to sell or otherwise dispose of, assets, categories of assets or businesses of either JV Party, the Joint Venture Company, or any of their respective Subsidiaries; (ii) terminate existing relationships and contractual rights and obligations of either JV Party, the Joint Venture Company or any of their respective Subsidiaries; (iii) terminate any relevant joint venture or other arrangement; or (iv) effectuate any other change or restructuring of either JV Party or the Joint Venture Company (as to each of the foregoing, a “Divestiture Action”), and (b) contest and resist any action, including any legislative, administrative or judicial action, and to have vacated, lifted, reversed or overturned any order that restricts, enjoins, prohibits or otherwise prevents or materially delays the occurrence or closing of such Filing Event; and

 

(vi) subject to applicable Regulatory Laws, prior to the making or submission of any analysis, appearance, presentation, memorandum, brief, argument, opinion or proposal by or on behalf of either JV Party in connection with proceedings under or relating to 

- 13 -

NTC/MICRON CONFIDENTIAL

 

the applicable Regulatory Law, consult and cooperate with one another, and consider in good faith the views of one another, in connection with any such analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals, and provide one another with copies of all material communications from and filings with, any Governmental Entities in connection with any Filing Event;

 

(d) notwithstanding anything to the contrary in this Section 2.4, nothing in this Section 2.4 shall require either JV Party or its respective Affiliates, or the Joint Venture Company, to take any Divestiture Action; and

 

(e) if the Filing Event is prevented from occurring or closing as a result of any applicable Regulatory Laws, after exhausting all efforts required under this Section 2.4 to obtain the necessary approval of any applicable Governmental Entity, then the JV Parties shall negotiate in good faith to agree upon an alternative event or transaction that would be permissible under applicable Regulatory Laws, and would approximate, as closely as possible, the intent and contemplated effect of the original Filing Event.

 

ARTICLE 3

 

CAPITALIZATION; CONTRIBUTION OF CAPITAL

 

Section 3.1 Authorized Capital.  In accordance with Section 6.5, the JV Parties shall use best efforts to cause the authorized capital of the Joint Venture Company to be amended from time to time, as may be necessary or desirable to consummate the transactions contemplated herein and in accordance with the Applicable Laws of the ROC.

 

Section 3.2 Capital Contributions.

 

(a) No Obligation.  Unless otherwise agreed by the JV Parties in writing, neither JV Party shall be obligated to make any contribution of capital to the Joint Venture Company.

 

(b) Future Cash Requirements.  Until the second anniversary of the Closing, the JV Parties shall use commercially reasonable efforts consistent with their fiduciary duties to the Joint Venture Company, to cause the Joint Venture Company to fund future cash requirements through cash flow generated by operations of the Joint Venture Company or external debt financing rather than the issuance of Shares or other equity or equity-linked securities of the Joint Venture Company.

 

Section 3.3 Unilateral Purchase of Shares.  Except as otherwise provided herein, MNL shall not, and shall not permit Micron or its Subsidiaries to, and NTC shall not, and shall not permit its Subsidiaries to, directly or indirectly acquire Shares or any other equity-linked securities of the Joint Venture Company from any Person other than the Joint Venture Company, without the prior written consent of the other JV Party.  MNL and NTC shall use their respective best efforts to prevent the Joint Venture Company from issuing Shares or any other equity-linked security of the Joint Venture Company, directly or indirectly, to an Affiliate of MNL or NTC without the prior written consent of both JV Parties.  If an Affiliate of MNL or of NTC acquires Shares or any other equity-linked security of the Joint Venture Company, whether from the Joint 

- 14 -

NTC/MICRON CONFIDENTIAL

 

Venture Company or otherwise (except as a result of a Permitted Transfer as contemplated by Section 9.2), the JV Parties shall, notwithstanding anything to the contrary in Sections 5.1(b) or (c), use their respective commercially reasonable efforts to cause the directors on the Board of Directors to be allocated between them, consistent with the principles set forth in Sections 5.1(b) and (c), as if the Shares or equity-linked securities owned by such Affiliates were owned one half by MNL and one half by NTC (and treating, for purposes of this sentence, any director whose election was controlled by an Affiliate of a JV Party as being a director designated by such JV Party).  Notwithstanding the foregoing, if the JV Parties fail to achieve the foregoing result after using such commercially reasonable efforts, no JV Party shall be in breach of this section or have any liability for such failure.

 

ARTICLE 4

 

BANK LOANS

 

If the Board of Directors shall at any time determine that there is a need for the Joint Venture Company to obtain external financing, the JV Parties will assist the Joint Venture Company to seek and obtain commercial loans or other financing arrangements from banks and other financial institutions on competitive market terms and otherwise as the Joint Venture Company may reasonably require.  None of the JV Parties (or any of their representatives) shall be obligated under this Agreement or otherwise to provide any guarantee or security for any such loans in favor of the Joint Venture Company, unless specifically agreed in writing by such JV Party (or its duly authorized representative).

 

ARTICLE 5

 

MANAGEMENT OF THE JOINT VENTURE COMPANY

 

Section 5.1 Board of Directors.

 

(a) Power and Authority.  The JV Parties shall use best efforts to cause the Board of Directors to be responsible for the overall management of the business, affairs and operations of the Joint Venture Company.  The JV Parties shall use best efforts to cause the Board of Directors to have all the rights and powers given to it under the Articles of Incorporation and the Applicable Laws of the ROC, including without limitation, the ROC Company Law.

 

(b) Number of Directors.  The JV Parties shall use best efforts to cause the Articles of Incorporation to provide for the Joint Venture Company to have a Board of Directors consisting of twelve (12) directors (provided that the JV Parties shall use best efforts to reduce such number for each director withdrawn in accordance with Section 5.1(b)(iv)).  The JV Parties shall use best efforts to cause the directors to be designated and elected as follows (subject, and giving effect, to any prior withdraw of one or more directors in accordance with Section 5.1(b)(iv)):

 

[***].

  

- 15 -

NTC/MICRON CONFIDENTIAL

(c) Agreement to Vote.

 

 

(i) The JV Parties agree to vote, in any meeting of the shareholders where directors are elected, in a coordinated manner, to elect all of the Persons designated by the JV Parties in accordance with Section 5.1(b) above.

 

(ii) If for any reason the JV Parties shall be unable to elect twelve (12) Persons (or such lesser number of Persons as is applicable after taking into account the application of Section 5.1(b)(iv)) to be their representatives to serve as directors pursuant to Section 5.1(b), the JV Parties shall vote, in a coordinated manner, to elect as many of such Persons as possible, consistent with the principles set forth in Section 5.1.

 

(d) Removal and Replacement.  Any of the representatives serving as directors on the Board of Directors may be removed or replaced for any reason by the JV Party that designated him or her.  If any such representative serving on the Board of Directors is so removed or replaced or otherwise ceases to serve as a director on the Board of Directors, the JV Party that designated such representative shall be entitled to designate another Person to fill such vacancy, and the JV Parties shall use best efforts to have such replacement elected as a director.

 

(e) Compensation.  The directors, except for the independent directors, if any, shall not receive any compensation for serving as such, although the Board of Directors may authorize the reimbursement of expenses reasonably incurred in connection with the performance of their duties.

 

(f) Meetings of the Board of Directors; Notice.  The JV Parties shall use best efforts to cause or affect the following:

 

(i) The Board of Directors shall meet from time to time but at least once per Fiscal Quarter in Taiwan (or such other place as the Board of Directors may decide) by not less than fourteen (14) days notice in writing.  Emergency meetings of the Board of Directors may be convened from time to time by the Chairman, or the Vice-Chairman pursuant to Section 5.2(c), by not less than two (2) Business Days notice in writing.

 

(ii) A notice of a meeting of the Board of Directors shall contain the time, date, location and agenda for such meeting.  The presence of any director at a meeting (including attendance by means of video conference) shall constitute a waiver of notice of the meeting with respect to such director.

 

(iii) The Board of Directors shall cause written minutes to be prepared of all actions, determinations and resolutions taken by the Board of Directors and a copy thereof sent to each director and supervisor of the Joint Venture Company within twenty (20) days of each meeting.

 

(g) Proxy and Video Conference.  The JV Parties shall use best efforts to cause the Joint Venture Company to allow that:  (i) in any case where a director cannot attend a meeting of the Board of Directors, such director may appoint another director as his or her proxy in accordance with the ROC Company Law; (ii) all or any of the directors may 

- 16 -

 

NTC/MICRON CONFIDENTIAL

 

participate in a meeting of the Board of Directors by means of a video conference which allows all persons participating in the meeting to see and hear each other; and (iii) a director so participating shall be deemed to be present in person at the meeting and shall be entitled to vote or be counted in a quorum accordingly.

 

(h) Quorum.  The JV Parties shall use best efforts to cause the presence of at least [***] of the directors in office, in person, by proxy or by video conference, to be necessary and sufficient to constitute a quorum for the purpose of taking action by the directors at any meeting of the Board of Directors.  No action taken by the Board of Directors at any meeting shall be valid unless the requisite quorum is present.

 

(i) Voting.  Unless a higher majority of votes is specifically required under the ROC Company Law or the Articles of Incorporation, the JV Parties shall use best efforts to cause all actions, determinations or resolutions of the Board of Directors to require the affirmative vote of a [***] majority of the directors present at any meeting of the Board of Directors at which a quorum is present.

 

(j) Matters Requiring the Approval of the Board of Directors.  The JV Parties shall use best efforts to cause each of the following actions to require the approval of the Board of Directors by resolution adopted in accordance with Section 5.1(i) above (which approval may be obtained through the adoption of a Business Plan by the Board of Directors in accordance with Section 7.5, provided, that the relevant Business Plan sets forth such action in reasonable detail):

 

(i) appointing or removing the Chairman and, once the position has been created, the Vice Chairman of the Board of Directors and appointing or removing the President and Executive Vice President of the Joint Venture Company nominated by the Chairman, and appointing  or removing any Vice Presidents of the Joint Venture Company;

 

(ii) approving or amending any Business Plan, including the Annual Budget, any quarterly budgets, the production plan, the profit and loss plan, the capital investment plan and the financial plan;

 

(iii) issuing new Shares within the authorized capital of the Joint Venture Company or issuing equity-linked securities;

 

(iv) determining long-term policies of the Joint Venture Company, including substantial change in the organizational structure and business operation of the Joint Venture Company;

 

(v) determining employment terms, including compensation packages of the President, the Executive Vice President, Vice Presidents and assistant Vice Presidents of the Joint Venture Company;

 

(vi) establishing Subsidiaries, opening and closing branch offices, acquiring or selling all or part of the assets of another entity or business, establishing new business sites and closing of existing ones;

  

- 17 -

 

NTC/MICRON CONFIDENTIAL

 

(vii) setting the limits of authorities of various employment positions and approving the internal chart of authorities;

 

(viii) making capital expenditures (or a group of related capital expenditures) in an amount equal to or greater than [***] individually or [***] in the aggregate in any one Fiscal Quarter;

 

(ix) borrowing or lending to, or guaranteeing the obligations of, any Third Party;

 

(x) pledging or hypothecating, or creating any encumbrance or other security interest in, the Joint Venture Company’s assets;

 

(xi) issuing any debt securities of the Joint Venture Company;

 

(xii) entering into an agreement for the purchase, transfer, sale or any other disposal of assets valued at an amount greater than [***] other than transfers, sales or dispositions of assets in the ordinary course of business of the Joint Venture Company;

 

(xiii) entering into, amending or terminating any material agreement relating to intellectual property rights or know how;

 

(xiv) entering into, amending or terminating any agreement or other arrangement with, or for the benefit of, any director of the Joint Venture Company;

 

(xv) establishing, modifying or eliminating any significant accounting or tax policy, procedure or principle;

 

(xvi) creating new product lines or discontinuing existing product lines;

 

(xvii) commencing any litigation as plaintiff or settling any litigation matters;

 

(xviii) preparing and submitting proposals for surplus earning distributions and loss offset to the shareholders of the Joint Venture Company for approval;

 

(xix) submitting any matters to the shareholders of the Joint Venture Company for consideration or approval as may be required by the law;

 

(xx) entering into, modifying, extending or terminating any one-time service or purchase of goods agreement in the amount of more than [***] or any long-term service or purchase agreement for goods between the Joint Venture Company and a shareholder holding more than 10% of the issued share capital of the Joint Venture Company, or an Affiliate of such shareholder;

 

(xxi) redeeming or repurchasing Shares;

  

- 18 -

 

NTC/MICRON CONFIDENTIAL

 

(xxii) deciding other important matters related to the Joint Venture Company that arise other than in the ordinary course of business.

 

Section 5.2 Chairman and Vice-Chairman.

 

(a) Chairman.  The JV Parties shall use best efforts to cause the Chairman of the Board of Directors to be a director designated by NTC, subject to the consent of MNL, which consent shall not be unreasonably withheld.  The JV Parties shall use best efforts to cause the Chairman to have such duties and responsibilities as may be assigned to him or her by the Board of Directors.  The JV Parties shall use best efforts to cause the Chairman to not have a second or casting vote.

 

(b) Vice-Chairman.  The JV Parties shall use best efforts to cause the Articles of Incorporation to be amended to provide that there shall be a Vice-Chairman of the Board of Directors who shall be a director designated by MNL, subject to the consent of NTC, which consent shall not be unreasonably withheld.  The JV Parties shall use best efforts to cause the Vice-Chairman to not have a second or casting vote.

 

(c) Convening of the Board of Directors Meeting.  The JV Parties shall use best efforts to cause meetings of the Board of Directors to be convened by the Chairman.  The JV Parties shall use best efforts to cause each director of the Joint Venture Company to have the right to request the Chairman to convene a meeting of the Board of Directors indicating the proposed agenda.  If the Chairman does not, within one week (or within three (3) days for convening an emergency meeting of the Board of Directors), comply with such director’s request, the JV Parties shall use best efforts to cause the Vice-Chairman to have the right to convene the meeting of the Board of Directors as requested by such director.

 

Section 5.3 Supervisors.

 

(a) Number of Supervisors.  The JV Parties shall use best efforts to cause the Articles of Incorporation to provide for the Joint Venture Company to have four (4) supervisors.  The JV Parties agree to vote, in any meeting of the shareholders where supervisors are elected, in a coordinated manner, to elect as supervisors two (2) Persons designated by MTT and two (2) Persons designated by Pei Jen Co., Ltd.  From and after the Closing, MNL shall cause MTT, and NTC shall cause Pei Jen Co., Ltd., to hold, respectively, a number of Shares that is equal to or greater than one-half (1/2) of the minimum number of Shares required to be held by all supervisors of the Joint Venture Company in accordance with Applicable Laws.

 

(b) Agreement to Vote.  The JV Parties agree to vote, in any meeting of the shareholders where supervisors are elected, in a coordinated manner, to elect all of the Persons designated by the JV Parties in accordance with Section 5.3(a) above.

 

(c) Removal and Replacement.  The JV Parties shall use best efforts to provide that any of the supervisors may be removed or replaced for any reason by the JV Party that designated him or her.  If any supervisor is so removed or replaced or otherwise ceases to serve as a supervisor, the JV Parties shall use best efforts to cause the JV Party that designated such supervisor to be entitled to designate another Person to fill such vacancy.

  

- 19 -

 

NTC/MICRON CONFIDENTIAL

 

(d) Compensation.  The JV Parties shall use best efforts to cause the supervisors, except for the independent supervisors, if any, to not receive any compensation for serving as such, although the Board of Directors may authorize the reimbursement of expenses reasonably incurred in connection with the performance of their duties.

 

(e) Restriction on Employment.  The JV Parties shall use best efforts to cause the supervisors to not be concurrently employed by the Joint Venture Company in any other capacity.

 

Section 5.4 President and Executive Vice President.

 

(a) President.  The JV Parties shall use best efforts to cause the Articles of Incorporation to provide for the Joint Venture Company to have a president (the “President”), who shall report to the Board of Directors and serve at its pleasure.  The President shall have such daily operation and management responsibilities of the Joint Venture Company as may be assigned or delegated by the Board of Directors from time to time.  [***].

 

(b) Executive Vice President.  The JV Parties shall use best efforts to cause the Articles of Incorporation to provide for the Joint Venture Company to have an executive vice president (the “Executive Vice President”), who shall also report to the Board of Directors and serve at its pleasure.  The Executive Vice President shall work with and assist the President in executing the daily operation and management responsibilities of the Joint Venture Company and shall have such other responsibilities as may be assigned or delegated by the Board of Directors from time to time.  [***].

 

(c) Termination and Vacancy.  The JV Parties shall use best efforts to cause the Board of Directors to have the exclusive right to terminate the services of the President and the Executive Vice President with or without cause.  In the event of any such termination or in the event of any vacancy as a result of death, resignation, retirement or any other reason, the JV Parties shall use best efforts to cause the JV Party that nominated the President or the Executive Vice President, as the case may be, to be entitled to nominate another Person, subject to the same consent requirement set forth in Sections 5.4(a) or (b) above, as the case may be, to fill such vacancy for appointment by the Board of Directors.

 

(d) Authority.  With respect to the execution of the daily operation and management of the Joint Venture Company, the JV Parties shall use best efforts to cause the President and the Executive Vice President to have the authority to, among other things:

 

(i) propose the annual budget and business plan of the Joint Venture Company;

 

(ii) approve capital expenditures of the Joint Venture Company of [***] or less in a single event, or an aggregate of [***] or less in any Fiscal Quarter;

 

(iii) approve borrowing and lending of the Joint Venture Company and dispositions of assets of the Joint Venture Company, in each case less than [***]; and

  

- 20 -

 

NTC/MICRON CONFIDENTIAL

 

(iv) execute annual budgets of the Joint Venture Company approved by the Board of Directors.

 

(e) Work as a Team.  The President and the Executive Vice President shall work as a team in executing their duties and responsibilities.

 

Section 5.5 Other Officers.  The JV Parties shall use best efforts to allow the President and the Executive Vice President to appoint, subject to the approval of the Board of Directors, and be assisted by such other officers of the Joint Venture Company as the President and the Executive Vice President may consider necessary or desirable from time to time.  Such other officers shall perform such duties and have such powers specifically delegated to them by the Board of Directors from time to time.  The JV Parties shall use best efforts to cause the Board of Directors to determine, from time to time, the compensation, including any incentive compensation, for which such officers may be offered.  The JV Parties shall use best efforts to allow the Board of Directors to, from time to time, also appoint, and assign titles to, other officers of the Joint Venture Company, and delegate to such officers such authorities and duties as the Board of Directors may deem advisable.

 

ARTICLE 6

 

SHAREHOLDERS’ MEETINGS

 

Section 6.1 Annual Meeting.  The JV Parties shall use best efforts to cause the annual meetings of the shareholders of the Joint Venture Company to be convened at least once annually by not less than thirty (30) days prior notice in writing accompanied by an agenda specifying the business to be transacted.

 

Section 6.2 Special Meeting.  The JV Parties shall use best efforts to cause special meetings of the shareholders of the Joint Venture Company to be held from time to time and to be convened by the Board of Directors by not less than fifteen (15) days prior notice in writing accompanied by an agenda specifying the business to be transacted.  (Any annual meetings of the shareholders and any special meetings of the shareholders shall individually be referred to as a “Shareholders’ Meeting” and collectively be referred to as “Shareholders’ Meetings.”)

 

Section 6.3 Quorum.  Unless a higher quorum is required under the Applicable Laws, the JV Parties shall use best efforts to cause the presence of the shareholders of the Joint Venture Company representing [***] or more of the issued and outstanding Shares of the Joint Venture Company to be necessary and sufficient to constitute a quorum for the purpose of taking action at any Shareholders’ Meeting of the Joint Venture Company.  The JV Parties shall use best efforts to provide that no action taken at a Shareholders’ Meeting shall be valid unless the requisite quorum is present.

 

Section 6.4 Voting.  The JV Parties shall use best efforts to cause each Share to entitle its holder to one vote.  Unless a higher vote is required under the Applicable Laws, the JV Parties shall use best efforts to cause all actions, determinations or resolutions of the shareholders at any Shareholders’ Meeting of the Joint Venture Company to require the affirmative vote of [***] or 

- 21 -

 

NTC/MICRON CONFIDENTIAL

 

more of the votes represented in person or by proxy at the Shareholders’ Meeting at which a quorum is present.

 

Section 6.5 Matters Requiring the Approval of the Shareholders.  The JV Parties shall use best efforts to cause each of the following actions to require the approval of the shareholders of the Joint Venture Company by resolution adopted in accordance with Section 6.4 above:

 

(a) amending, restating or revoking the Articles of Incorporation;

 

(b) electing or removing the directors or the supervisors;

 

(c) determining the compensation of any director or supervisor;

 

(d) approving the balance sheet and other financial statements received from the Board of Directors;

 

(e) appointing and removing the auditors of the Joint Venture Company;

 

(f) approval of surplus earning distribution or loss offset proposals;

 

(g) any merger, consolidation or other business combination to which the Joint Venture Company is a party, or any other transaction to which the Joint Venture Company is a party (other than where the Joint Venture Company is merged or combined with or consolidated into a Wholly-Owned Subsidiary of the Joint Venture Company), resulting in (i) a change of control of the Joint Venture Company, other than a change of control that may occur pursuant to Section 9.3, 12.3, 12.6 or 13.1 or (ii) the sale of all or substantially all assets of the Joint Venture Company;

 

(h) voluntary submission by the Joint Venture Company to receivership, bankruptcy or any similar status;

 

(i) liquidation or dissolution of the Joint Venture Company; and

 

(j) other actions reserved to the determination of the shareholders of the Joint Venture Company by the ROC Company Law.

 

ARTICLE 7

 

OPERATIONS

 

Section 7.1 Manufacturing Facility; Fab Equipment.

 

(a) Fab Equipment.  Subject to the mutual agreement of the JV Parties, the Joint Venture Company may purchase, at fair market value, NTC’s idle equipment that is suitable for use in connection with the manufacturing of Stack DRAM Products.

 

(b) Upgrade and Enhancements.  [***].

 

Section 7.2 Manufacturing Operations.

  

- 22 -

NTC/MICRON CONFIDENTIAL

 

(a) Front-End Manufacturing Operations.  The JV Parties shall use best efforts to cause the Joint Venture Company to operate, at all times, within the Boundary Conditions.

 

(b) Manufacturing Committee.

 

(i) The JV Parties have jointly established a manufacturing committee (the “Manufacturing Committee”), [***].  The members of the Manufacturing Committee shall serve at the pleasure of the JV Party appointing them and may be removed from the Manufacturing Committee and replaced by such JV Party at any time with or without cause.

 

(ii) NTC’s members of the Manufacturing Committee shall be employees of NTC, and MNL’s members of the Manufacturing Committee shall be employees of Micron, in each case who are responsible for product loading and planning decisions and who can coordinate the loading of product at the Joint Venture Company level.

 

(iii) The JV Parties shall use best efforts to cause the Manufacturing Committee to be responsible for [***].  In reaching such decisions, the Manufacturing Committee may take advice and input from such sources as it deems appropriate.

 

(iv) In the event that the members of the Manufacturing Committee cannot agree on product loading decisions, then the Manufacturing Committee will permit, with respect to each Process Node, [***].

 

(v) The allocation of Trench DRAM Manufacturing Capacity shall be based on [***] (“Baseline Flow”).  On a quarterly basis, or as otherwise determined by the Manufacturing Committee, the Manufacturing Committee shall determine the Baseline Flow.  If, during any quarter, the Manufacturing Committee cannot agree on a Baseline Flow, [***].

 

(vi) Requests of Micron and NTC for products or product mixes different from the pre-planned Baseline Flow with respect to a fab shall be honored, except to the extent honoring such request would lead to wafer starts for the non-Baseline Flow products at such fab resulting in Micron or NTC receiving more than the Trench DRAM Manufacturing Capacity and or Stack DRAM Manufacturing Capacity allocated to such Person under the current Baseline Flow for such fab.  To the extent that both Micron and NTC request changes in products or product mixes at a given fab that result in [***], the Manufacturing Committee shall re-determine the allocation of Trench DRAM Manufacturing Capacity and Stack DRAM Manufacturing Capacity based on [***], which shall then be the basis for its loading plans with respect to such fab.

 

(vii) The JV Parties shall use best efforts to cause the Joint Venture Company to ensure that Trench DRAM Manufacturing Capacity and Stack DRAM Manufacturing Capacity at each fab is allocated as provided for in this Section 7.2.

 

(viii) The Manufacturing Committee shall meet at such times as may be helpful or necessary for the efficient operation of the Company but in no event less than monthly.  The Manufacturing Committee shall provide an annual report to the Joint Venture Company for use in a Business Plan and the Manufacturing Plan.

  

- 23 -

NTC/MICRON CONFIDENTIAL

 

(c) Manufacturing Plan.  The JV Parties shall use best efforts to cause the Joint Venture Company to prepare an annual manufacturing plan (the “Manufacturing Plan”) under the direction of the President, with input from the Executive Vice President, the JV Parties and the Manufacturing Committee (or such other persons or committees charged with such responsibility from time to time by the JV Parties).  The Manufacturing Plan shall be updated quarterly by the Joint Venture Company and the Manufacturing Committee in accordance with the procedures set forth in the Supply Agreement.  The Manufacturing Plan shall address various manufacturing issues, including without limitation, the DRAM Products to be manufactured, priority of wafer starts and weekly output.

 

Section 7.3 Output Rights and Obligations.

 

(a) Supply Agreement.  No amendment or modification of the terms or conditions of the Supply Agreement shall be made without prior written notice to and the prior written consent of NTC and Micron.

 

(b) Output Percentage.  [***].

 

Section 7.4 Marketing and Sales.  With respect to DRAM Products purchased from the Joint Venture Company, each of Micron and NTC shall be free to compete against each other, anywhere in the world and with any customers, using its own marketing and sales channels and personnel.  The JV Parties agree that appropriate safeguards shall be put in place by each JV Party, and the JV Parties shall use best efforts to cause the Joint Venture Company to put in place such safeguards, to ensure compliance with all applicable competition or anti-trust laws.

 

Section 7.5 Business Plans and Budgets.

 

(a) Annual Business Plan; Annual Budget.

 

(i) For each Fiscal Year, the JV Parties shall use best efforts to cause the President, in consultation with the Executive Vice President and with input from the Manufacturing Committee or such other relevant Persons or committees charged by the JV Parties with responsibility for such matters from time to time, to prepare and submit to the Board of Directors for approval, an annual business plan (the “Annual Business Plan”) [***].

 

(ii) The Annual Business Plan shall include an annual budget (“Annual Budget”) which shall cover [***].

 

(iii) The JV Parties shall use best efforts to cause the Annual Business Plan, including the Annual Budget, to not be amended, updated, modified or superseded without the approval of the Board of Directors.

 

(b) Transition Supply Obligation. With respect to a Share Disposition of all (but not less than all) of the Shares then owned by a JV Party as contemplated under Sections 9.3, 12.3, 12.6 and 13.1, the JV Party that remains a shareholder of the Joint Venture Company after such Share Disposition shall, [***].

  

- 24 -

 

NTC/MICRON CONFIDENTIAL

 

ARTICLE 8

 

EMPLOYEE MATTERS

 

Section 8.1 Employees.

 

(a) Employees of the Joint Venture Company.  The JV Parties shall use best efforts to cause the Joint Venture Company to employ its own personnel, including administrative staff, operators, technicians and engineers, and, except with respect to employees assigned to the Joint Venture Company pursuant to the Micron Assigned Employee Agreement or NTC Assigned Employee Agreement, to be their exclusive employer.

 

(b) Hiring.  The JV Parties shall use best efforts to cause the number, position and compensation of the employees of the Joint Venture Company to be as determined by the President in consultation with the Executive Vice President, consistent with the Annual Business Plan and other employee policies, program and benefits approved by the Board of Directors or as otherwise expressly authorized by the Board of Directors.

 

(c) Employee Policies.  The JV Parties shall use best efforts to cause, subject to the approval of the Board of Directors, the Joint Venture Company to put in place and implement such employee policies, programs and benefits as determined by the President in consultation with the Executive Vice President or as may otherwise be required by Applicable Laws.

 

Section 8.2 Assigned Employees.

 

(a) Micron Assigned Employee Agreement.  Certain employees of Micron may be assigned or transferred to work at or with the Joint Venture Company.  In connection therewith, Micron and the Joint Venture Company have entered into the Micron Assigned Employee Agreement.

 

(b) NTC Assigned Employee Agreement.  Certain employees of NTC may be assigned or transferred to work at or with the Joint Venture Company.  In connection therewith, NTC and the Joint Venture Company have entered into the NTC Assigned Employee Agreement.

 

Section 8.3 Employment and Service-Related Forms.  The JV Parties shall use best efforts to cause the Joint Venture Company to have policies applicable to, and ensure that all of its officers, employees and third-party independent contractors, third-party consultants, and other third-party service providers enter into appropriate agreements with respect to, (a) protection of confidential information of the Joint Venture Company, (b) compliance with Applicable Laws, (c) other matters related to the delivery of services to, or employment of such Person by, the Joint Venture Company, (d) intellectual property creation and assignment documents, including invention disclosures, pursuant to which ownership to any intellectual property created in the course of employment with (or service to) the Joint Venture Company shall be transferred and assigned to the Joint Venture Company or its designee, as appropriate.

  

- 25 -

NTC/MICRON CONFIDENTIAL

 

Section 8.4 [***].

 

(a) [***].  During the [***], MNL shall not, and shall cause Micron and its Affiliates not to, without the prior written consent of NTC, [***], provided that such Affiliate of Micron does not do so with information or assistance provided by Micron, [***].

 

(b) [***].  During the [***], NTC shall not, and shall cause its Affiliates not to, without the prior written consent of MNL and Micron, [***], provided that such Affiliate of NTC does not do so with information or assistance provided by NTC, [***].

 

ARTICLE 9

 

TRANSFER RESTRICTIONS

 

Section 9.1 Restrictions on Transfer.

 

(a) Transfer Prohibitions.

 

(i) A JV Party shall in no event sell, exchange, transfer, dispose of, encumber, pledge, mortgage or hypothecate (each a “Transfer”), whether directly or indirectly, any part of the Shares of the Joint Venture Company owned by it to any Person if immediately after such Transfer such JV Party’s Equity Interest would be below [***]%.

 

(ii) The JV Parties agree that:

 

(A) MNL shall in no event Transfer any part of the Shares of the Joint Venture Company owned by it to a [***] without the prior written consent of NTC; and

 

(B) NTC shall in no event Transfer any part of the Shares of the Joint Venture Company owned by it to a [***] without the prior written consent of MNL; provided, however, the provisions of this Section 9.1(a)(ii) shall not apply to any Transfer of Shares conducted on, and through the normal, public trading procedures of, the Taiwan Stock Exchange or any other stock exchange upon which the Shares are listed, in each case other than Transfers conducted through after-hours trading on such exchanges.

 

(b) Change of Control Event.  [***].

 

(c) Transferee to be Bound.  Notwithstanding consent being given by one JV Party to the other JV Party for the Transfer of any part of the Shares of the Joint Venture Company owned by the transferring JV Party to any Person, the transferring JV Party shall cause and procure the transferee to agree in writing to perform and be bound by all duties and obligations of the transferring JV Party, including the any transfer restrictions under Section 9.1 of this Agreement, except where the Transfer is conducted on, and through the normal, public trading procedures of, the Taiwan Stock Exchange or any other stock exchange upon which the Shares are listed, in each case other than Transfers conducted through after-hours trading on such exchanges.

  

- 26 -

NTC/MICRON CONFIDENTIAL

 

Section 9.2 Permitted Transfers.  Notwithstanding Section 9.1, a JV Party may Transfer all (but not less than all) of its shares in the Joint Venture Company to [***] (a “Permitted Transfer”); provided, that:

 

(a) such transferee shall agree in writing to perform and be bound by all duties and obligations of the transferring JV Party, including the obligations set forth in this Agreement and any Joint Venture Documents to which the transferring JV Party is a party;

 

(b) the transferring JV Party shall not be released from its duties and obligations under this Agreement or any other Joint Venture Documents and shall remain fully liable for the performance thereof by such transferee;

 

(c) [***]; and

 

(d) at least [***] days prior written notice of any such Transfer by a JV Party of shares in the Joint Venture Company shall be provided to the other JV Party.

 

(e) prior to the effectiveness of a Transfer permitted under this Section 9.2, the transferring JV Party shall deliver to the Board of Directors and the other JV Party a certificate stating that:

 

(i) the transferring JV Party is not in breach of any provisions of this Agreement or any other Joint Venture Documents to which the transferring JV Party is a party;

 

(ii) immediately after giving effect to such Transfer, there will exist no event of default or an event or condition that, with the giving of notice or lapse of time or both, would constitute an event of default of the Transferor or such transferee under this Agreement or any of the Joint Venture Documents; and

 

(iii) the Transfer will not, and could not reasonably be expected to, cause an adverse effect on the Joint Venture Company or the other JV Party, including any material adverse tax consequences or an adverse effect due to the loss of intellectual property rights.

 

Section 9.3 Right of First Refusal.

 

(a) Transfer Notice.  At any time during the term of this Agreement, and further subject to Section 9.1, if a JV Party proposes to Transfer all or any part of the Shares in the Joint Venture Company in one or more related transactions (such JV Party a “Transferor”) to any party other than a Wholly-Owned Subsidiary of Micron or the Transferor, then the Transferor shall give the other JV Party (the “Receiving Party”) a written notice of the Transferor’s intention to make the Transfer (the “Transfer Notice”), which shall include [***].  The Transfer Notice shall also certify that the Transferor has received a firm offer from the prospective transferee and in good faith believes a binding agreement for such Transfer is obtainable on the terms set forth in the Transfer Notice.

 

(b) Option to Purchase.  The Receiving Party shall have the first right and option, at its sole discretion, but not the obligation, to purchase all (but not less than all) of the 

- 27 -

NTC/MICRON CONFIDENTIAL

 

Offered Shares pursuant to the Sale Offer by delivering a written notice to the Transferor within [***] days from the date of the Sale Offer (such period, the “Option Period”) stating the Receiving Party’s intention to exercise its right and option to purchase the Offered Shares.

 

(c) Closing of Transfer to Receiving Party.  The Transfer of Offered Shares resulting from acceptance of the Sale Offer by the Receiving Party in accordance with paragraph (b) above shall take place at a closing on a date designated by the Receiving Party within [***] days following such acceptance (or, if any governmental or regulatory approvals, consents, filings or authorizations are required in connection with such Transfer, within [***] days following the receipt of all such approvals, consents, filings or authorizations), or at such other time as the Transferor and the Receiving Party may otherwise agree.  At such closing, the Transferor shall be obligated to sell and Transfer the Offered Shares and the Receiving Party shall pay the purchase price for such shares in accordance with the terms and conditions set forth in the Sale Offer.

 

(d) Sale to Third Party.  If the Receiving Party elects not to, or fails to give any notice of its intention to, purchase all of the Offered Shares within the Option Period, then, subject to Section 9.1, the Transferor shall have the right for [***] days thereafter (hereinafter the “Transfer Period”) to Transfer the Offered Shares to the prospective transferee identified in the Transfer Notice; provided, however, [***].  If such Transfer is not completed within the Transfer Period, the Transferor shall no longer be permitted to sell such Offered Shares except to again comply with the provisions of this Section 9.3.

 

(e) Excluded Transfers.  Notwithstanding the forgoing, the provisions of this Section 9.3 shall not apply to any Transfer of Shares or depository receipts representing the Shares by a JV Party conducted on, and through the normal, public trading procedures of, the Taiwan Stock Exchange or any other stock exchange upon which the Shares or depository receipts are listed, in each case other than Transfers conducted through after-hours trading on such exchanges.

 

ARTICLE 10

 

ACCOUNTING; FINANCIAL MATTERS

 

Section 10.1 Accounting.  The JV Parties shall use reasonable efforts to cause the Joint Venture Company’s books of account and records to be kept and maintained in accordance with Taiwan GAAP applied on a consistent basis.  The JV Parties shall use reasonable efforts to cause the fiscal year of the Joint Venture Company to be from January 1 to December 31 (“Fiscal Year”) and the Fiscal Quarter of the Joint Venture Company to be based on calendar months (ending on the last day of each three-month period).

 

Section 10.2 Access to Information.

 

(a) Inspection.  To the extent not in violation of Applicable Laws, the JV Parties shall use best efforts to cause each JV Party and its agents (which may include employees of the JV Party (or, in the case of MNL, of Micron) or the JV Party’s independent certified public accountants (or, in the case of MNL, Micron’s independent certified public 

- 28 -

 

NTC/MICRON CONFIDENTIAL

 

accountants)) to have the right, at any reasonable time, to inspect, review, copy and audit (or cause to be audited) at the expense of the inspecting JV Party any and all properties, assets, books of account, corporate records, contracts, documentation and any other material of the Joint Venture Company or any of its Subsidiaries, at the request of the inspecting JV Party, whether in the possession of the foregoing or its (or their) independent certified public accountants.  Upon such request, the JV Parties shall use reasonable efforts to cause the Joint Venture Company and each of its relevant Subsidiaries to use reasonable efforts to make available (or cause to make available) to such inspecting JV Party the Joint Venture Company’s accountants and key employees for interviews to verify information furnished or to enable such JV Party to otherwise review the Joint Venture Company or any of its Subsidiaries and their operations.

 

(b) Competitively Sensitive Information.  The JV Parties recognize that the Joint Venture Company may, from time to time, be in possession of Competitively Sensitive Information belonging to a JV Party, and in no event shall a JV Party be entitled to access any Competitively Sensitive Information of the other JV Party in the possession of the Joint Venture Company.  The JV Parties shall use reasonable efforts to cause the Joint Venture Company to maintain procedures reasonably acceptable to both JV Parties (including requiring that the JV Parties use reasonable efforts to label or otherwise identify Competitively Sensitive Information as such) to ensure that the Joint Venture Company will not disclose or provide Competitively Sensitive Information of one JV Party to the other JV Party (other than to a Joint Venture Company employee or to an assigned employee of the other JV Party to the extent required for such employee or assigned employee to perform his or her duties for the Joint Venture Company) or any third party unless such disclosure is specifically requested by the JV Party providing such Competitively Sensitive Information.

 

(c) Information Right.  The JV Parties shall use reasonable efforts to cause the Joint Venture Company to, and to cause the Board of Directors to cause the Joint Venture Company to, provide to each JV Party, without cost to the JV Parties (except as otherwise provided below), the following:

 

(i) Monthly Reports.  At the end of each fiscal month, the Joint Venture Company, and, if requested, each of its Subsidiaries, if any, shall provide each JV Party with the following monthly reports prepared in accordance with Taiwan GAAP consistently applied, in each case within the time period specified below:

 

(A) monthly cash flow report as soon as practicable, but not later than [***] days after the end of each fiscal month;

 

(B) month-end balance sheet as soon as practicable, but not later than [***] days after the end of each fiscal month;

 

(C) monthly income statement as soon as practicable, but not later than [***] days after the end of each fiscal month;

 

(D) monthly operational spending summary as soon as practicable, but not later than [***] days after the end of each fiscal month; and

  

- 29 -

NTC/MICRON CONFIDENTIAL

 

(E) such other reports as may be reasonably requested by each JV Party.

 

(ii) Quarterly Reports.  As soon as practicable, but not later than [***] days after the end of each Fiscal Quarter, a consolidated balance sheet of the Joint Venture Company as of the end of such period and consolidated statements of income, cash flows and changes in shareholders’ equity, as applicable, for such Fiscal Quarter and for the period commencing at the end of the previous Fiscal Year and ending with the end of such period, setting forth in each case in comparative form the corresponding figures for the corresponding period of the preceding fiscal year, each prepared in accordance with Taiwan GAAP.  The quarterly financial statements shall be reviewed by a firm of independent certified public accountants selected from time to time by the Board of Directors (the “Accountants”).  As soon as practicable, but not later than [***] days after the end of each Fiscal Quarter, the Joint Venture Company shall also prepare a reconciliation of its quarterly financial statements to U.S. GAAP as of the end of each Fiscal Quarter.  The Joint Venture Company and MNL shall cooperate with respect to the preparation of the quarterly financial statements and related reconciliation for the Joint Venture Company’s current Fiscal Quarter, and the presentation thereof shall be as mutually agreed by the Joint Venture Company and MNL.

 

(iii) Annual Financial Statements.

 

(A) As soon as practicable, but not later than [***] days after the end of each Fiscal Year of the Joint Venture Company, audited consolidated financial statements of the Joint Venture Company and its Subsidiaries, which shall include statements of income, cash flows and of changes in shareholders’ equity, as applicable, for such Fiscal Year and a balance sheet as of the last day thereof, each prepared in accordance with Taiwan GAAP, consistently applied, and accompanied by the report of the Accountants.

 

(B) As soon as practicable, but not later than [***] days after the end of each Fiscal Year of the Joint Venture Company, audited consolidated financial statements of the Joint Venture Company and its Subsidiaries, which shall include statements of income, cash flows and of changes in shareholders’ equity, as applicable, for such Fiscal Year and a balance sheet as of the last day thereof, each prepared in accordance with U.S. GAAP, consistently applied, and accompanied by the report of the Accountants. Notwithstanding the first sentence of this Section 10.2(c), unless MNL requests that an audit of such U.S. GAAP financial statement not be undertaken, MNL will bear the cost of such audit.

 

Section 10.3 Other Information Rights. The Joint Venture Company shall provide to MNL and its Affiliates such financial, accounting and other information as MNL may reasonably request in connection with the accounting and financial reporting obligations of MNL or any of its Affiliates relating to the ownership of Shares.  If MNL requests that the Accountants or MNL’s own auditors perform audit, review or other agreed upon procedures in connection therewith, the fees and expenses of the Accountants or MNL’s auditors relating thereto shall be borne by MNL.

 

Section 10.4 Reportable Events.  The JV Parties shall use reasonable efforts to cause the Joint Venture Company to provide notice to the JV Parties of any Joint Venture Company 

- 30 -

NTC/MICRON CONFIDENTIAL

 

Reportable Event as soon as practicable and in any event not later than [***] days after the Joint Venture Company becomes aware of such Joint Venture Reportable Event.  The following events shall be “Joint Venture Reportable Events”:

 

(a) Receipt by the Joint Venture Company or any of its Subsidiaries of an offer by any Person to buy an equity interest in the Joint Venture Company or any of its Subsidiaries or a significant amount of its assets or to merge or consolidate with the Joint Venture Company or any of its Subsidiaries, or any indication of interest from any Person with respect to any such transaction;

 

(b) The commencement, or threat delivered in writing, of any lawsuit involving the Joint Venture Company or any of its Subsidiaries;

 

(c) The receipt by the Joint Venture Company or any of its Subsidiaries of a notice that the Joint Venture Company or any of its Subsidiaries is in default under any loan agreement to which the Joint Venture Company or any of its Subsidiaries is a party;

 

(d) Any breach by the Joint Venture Company or any of its Subsidiaries or a JV Party or an Affiliate of a JV Party of any contract between the Joint Venture Company or any of its Subsidiaries and a JV Party or an Affiliate of a JV Party;

 

(e) The removal or resignation of the auditor for the Joint Venture Company, or any adoption, or material modification, of any significant accounting policy or tax policy other than those required by Taiwan GAAP; or

 

(f) Any other event that has had or could reasonably be expected to have a material adverse effect on the business, results of operations, financial condition or assets of the Joint Venture Company or any of its Subsidiaries.

 

Section 10.5 Distributions and Dividend Policy.

 

[***].

 

Section 10.6 Bank Accounts and Funds.  The JV Parties shall use reasonable efforts to cause the funds of the Joint Venture Company, including any cash capital contributions, to be deposited in an interest-bearing account or accounts in the name of the Joint Venture Company and to not be commingled with the funds of any JV Party or any other Person.  The JV Parties shall use reasonable efforts to cause the checks, orders or withdrawals to be signed by any one or more Persons as authorized by the Board of Directors.

 

Section 10.7 Internal Controls.  The JV Parties shall use reasonable efforts to cause the Joint Venture Company to have in place a system of internal accounting controls, in accordance with the policies agreed by the JV Parties, which shall be approved by the Board of Directors and monitored by the President and the Executive Vice President.  The JV Parties shall use best efforts to provide that changes to the Joint Venture Company’s system of internal accounting controls shall be made at the request of either JV Party, subject to the approval of the Board of Directors; provided, however, that in the event one JV Party is required to consolidate the financial results of the Joint Venture Company under applicable GAAP, the internal controls and 

- 31 -

 

NTC/MICRON CONFIDENTIAL

 

accounting systems of the Joint Venture Company shall be modified as necessary to satisfy that JV Party’s requirements relating to internal controls and financial reporting and such JV Party shall be entitled to receive the information and perform the testing that it deems necessary or advisable to satisfy its responsibilities related thereto.  At the request of a JV Party, the JV Parties shall use their best efforts to cause the Joint Venture Company to (i) permit an independent auditor retained by such requesting JV Party and reasonably acceptable to the Joint Venture Company to perform a reasonable evaluation of the internal controls and accounting systems of the Joint Venture Company, provided that such evaluation is undertaken at the cost of the requesting JV Party and (ii) cooperate with such evaluation.

 

Section 10.8 FCPA.  The JV Parties shall use their best efforts to cause the Joint Venture Company to comply with, and establish appropriate procedures to ensure compliance with, the United States Foreign Corrupt Practices Act of 1977, as amended.

 

ARTICLE 11

 

OTHER AGREEMENTS AND COVENANTS

 

Section 11.1 Tax Cooperation.  The JV Parties shall cooperate in a good faith, commercially reasonable manner to maximize tax benefits and minimize tax costs of the Joint Venture Company and of the JV Parties or their Affiliates with respect to the activities of the Joint Venture Company, consistent with the overall goals of the Joint Venture Documents.  Such cooperation shall include (a) NTC’s use of reasonable efforts to assist Micron, MNL and the Joint Venture Company in applying for applicable tax incentives and for a tax withholding exemption in Taiwan, the Netherlands and such other jurisdictions as may be relevant, with respect to payments made by either, NTC or the Joint Venture Company to Micron or MNL, or by MNL or an Affiliate of MNL to the Joint Venture Company and (b) MNL’s use of reasonable efforts to assist NTC in applying for applicable tax incentives and for a tax withholding exemption in Taiwan, the Netherlands and such other jurisdictions as may be relevant, with respect to payments made by either, the Joint Venture Company to NTC, or by NTC or an Affiliate of NTC to the Joint Venture Company.  [***].

 

Section 11.2 Use of JV Party Names.  Except as may be expressly provided in the Joint Venture Documents, nothing in this Agreement shall be construed as conferring on the Joint Venture Company, any Subsidiary of the Joint Venture Company or either JV Party the right to use in advertising, publicity, marketing or other promotional activities any name, trade name, trademark, service mark or other designation, or any derivation thereof, of the JV Parties (in the case of a JV Party, the other JV Party).

 

Section 11.3 JV Parties’ Covenants.  Each JV Party agrees and covenants that it will not, without the prior written consent of the other JV Party:

 

(a) confess any judgment against the Joint Venture Company;

 

(b) enter into any agreement on behalf of, or otherwise purport to bind, the other JV Party or the Joint Venture Company;

  

- 32 -

 

NTC/MICRON CONFIDENTIAL

 

(c) cause the Joint Venture Company to take any action in contravention of the Articles of Incorporation;

 

(d) cause the Joint Venture Company to dispose of the goodwill or the business opportunities of the Joint Venture Company; or

 

(e) cause the Joint Venture Company to assign or place its property in trust for creditors or on the assignee’s promise to pay any indebtedness of the Joint Venture Company.

 

Section 11.4 Contractual Relationship Between the Joint Venture Company and Any JV Party.  With respect to any contract (including under the Fab Lease or the Supply Agreement) between the Joint Venture Company and a JV Party (or an Affiliate of a JV Party), the other JV Party shall have the right to demand that the Joint Venture Company, and shall have the right to cause the Joint Venture Company to, take any action, pursue any right, enforce any obligation or seek recourse pursuant to or under such contract, including with respect to the assertion of any claim or cause of action for breach of contract against the JV Party (or an Affiliate of the JV Party) involved in such contractual relationship with the Joint Venture Company.  In respect thereof, each JV Party agrees that it will not, and it shall cause its representatives elected as directors of the Joint Venture Company to not, interfere with or otherwise obstruct in any respect such action, pursuit, enforcement or recourse.

 

Section 11.5 [***]

 

[***]

 

Section 11.6 [***]

 

ARTICLE 12

 

DEADLOCK; EVENTS OF DEFAULT

 

Section 12.1 Deadlock.  A “Deadlock” shall [***], is required for approval, and such matter is not approved because, in the case of a [***] is not obtained.

 

Section 12.2 Resolution of a Deadlock.  If a Deadlock occurs, the JV Parties shall:

 

(a) first, submit the matter that was the subject of the Deadlock to the president of each of Micron and NTC by providing notice of the Deadlock to such Persons, and the JV Parties shall use reasonable efforts to cause such Persons to make a good faith effort to hold at least [***] in-person meetings between them to resolve the Deadlock within sixty (60) days of their receipt of the notice of Deadlock;

 

(b) next, if the president of each of Micron and NTC are unable to resolve the Deadlock in the given [***] days, then submit the matter to the chairman of each of Micron and NTC for resolution, and the JV Parties shall use reasonable efforts to cause such Persons to make a good faith effort to hold at least [***] in-person meeting between them to resolve the Deadlock within [***] days following the submission of the Deadlock to them;

  

- 33 -

NTC/MICRON CONFIDENTIAL

 

(c) next, if the chairman of each of Micron and NTC are unable to resolve the Deadlock in the given [***] days, either JV Party may commence mediation by providing to ICDR and the other JV Party a written request for mediation, setting forth the subject of the Deadlock and the relief requested.  The JV Parties will cooperate with ICDR and with one another in selecting a mediator from an ICDR panel of neutrals, and in scheduling the mediation proceedings to be held in [***] during the [***] days following the commencement of mediation.  The JV Parties covenant that they will participate in the mediation in good faith, and that they will share equally in its costs.  All offers, promises, conduct and statements, whether oral or written, made in the course of the mediation by any of the JV Parties, by any of their respective agents, employees, experts and attorneys and by the mediator and any ICDR employees are confidential, privileged and inadmissible for any purpose, including impeachment, in any litigation or other proceeding involving the JV Parties, provided, that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the mediation.  Either JV Party may seek equitable relief prior to the mediation to preserve the status quo pending the completion of that process.  The provisions of this Section 12.2(c) may be enforced by any court of competent jurisdiction, and the JV Party seeking enforcement shall be entitled to an award of all costs, fees and expenses, including attorneys’ fees, to be paid by the JV Party against whom enforcement is ordered.

 

Section 12.3 Buyout from Deadlock.

 

[***].

 

Section 12.4 Event of Default.  An “Event of Default” shall occur if (a) a JV Party (the “Defaulting JV Party”) breaches or fails to perform in any material respect any material obligation under this Agreement and (b) at the end of the Cure Period therefor such breach or failure remains uncured.

 

Section 12.5 Cure Period.  Upon a JV Party’s breach or failure to perform an obligation under this Agreement, the other JV Party (the “Non-Defaulting JV Party”) shall have the right to deliver to the Defaulting JV Party a notice of default (a “Notice of Default”).  The Notice of Default shall set forth the nature of the Defaulting JV Party’s breach or failure of performance.  If the Defaulting JV Party fails to cure the breach or failure within the Cure Period, the Non-Defaulting JV Party shall be entitled to take such action as set forth in Section 12.6.  For purposes hereof, “Cure Period” means a period commencing on the date that the Notice of Default is provided by the Non-Defaulting JV Party and ending (a) [***] days after Notice of Default is so provided, or (b) in the case of any obligation (other than an obligation to pay money) which cannot reasonably be cured within such [***] day period, such longer period not to exceed [***] days after the Notice of Default is so provided as is necessary to effect a cure of the Event of Default, so long as the Defaulting JV Party diligently attempts to effect a cure throughout such period.

 

Section 12.6 Default Remedy.

 

(a) Upon the occurrence of an Event of Default, the Non-Defaulting JV Party shall have the right, but not the obligation, by notice delivered in writing to the 

- 34 -

 

NTC/MICRON CONFIDENTIAL

 

Defaulting JV Party not later than [***] after the expiration of the applicable Cure Period (the “Exercise Notice”), to require the Defaulting JV Party to:

 

[***].

 

(b) The JV Parties shall in good faith complete the sale and purchase transaction contemplated under Section 12.6(a) as soon as practicable, but in no event later than 180 days after the determination of Fair Value.  [***].

 

(c) Notwithstanding anything to the contrary and in addition to the remedies provided under this Section 12.6, the Joint Venture Company and the Non-Defaulting JV Party may also pursue all other legal and equitable rights and remedies against the Defaulting JV Party available to it.  The Defaulting JV Party shall pay all costs, including reasonable attorneys’ fees, incurred by the Joint Venture Company and the Non-Defaulting JV Party in pursuing any and all such legal remedies.

 

ARTICLE 13

 

BUYOUT

 

Section 13.1 Buyout Right.

 

(a) Exercise of Buyout Right.  If at any time, the Equity Interest of a JV Party (for purposes of this Section 13.1, the “Non-compliant JV Party”) falls below the lesser of (i) [***]% and (ii) [***] (for purposes of this Section 13.1, the “Compliant JV Party”), the Compliant JV Party  shall have the right, but not the obligation, by notice to the Non-compliant JV Party in writing (such notice, the “Buyout Notice”), to purchase all (but not less than all) of the Shares of the Joint Venture Company then owned by the Non-compliant JV Party and its Subsidiaries (such Shares, the “Buyout Shares”) at the Fair Value, [***] and such Buyout Notice is delivered to the Non-compliant JV Party no later than [***] after such JV Party first becomes a Non-compliant JV Party.

 

(b) Completion of Buyout.

 

(i) The JV Parties shall in good faith complete the sale and purchase transaction contemplated under Section 13.1(a) as soon as practicable, but in no event later than [***] after deliver of the Buyout Notice.

 

(ii) [***].

 

Section 13.2 Buyout Subsidiary.  In the event of a buyout of Shares as contemplated under Sections 9.3, 12.3, 12.6 and/or 13.1, the JV Party subject to the buyout of its Shares shall use its best efforts to transfer, prior to consummation of the proposed buyout, all of the Shares subject to the buyout under Section 9.3, 12.3, 12.6 or 13.1, as applicable to a wholly-owned Subsidiary of such JV Party (the “Buyout Subsidiary”) that has no liabilities and holds no assets other than the Shares subject to the buyout under Section 9.3, 12.3, 12.6 or 13.1, as applicable.  If the Shares subject to the buyout under Section 9.3, 12.3, 12.6 or 13.1, as applicable, are transferred to the Buyout Subsidiary, the JV Party acquiring such Shares shall have the right to 

- 35 -

 

NTC/MICRON CONFIDENTIAL

 

acquire all of the outstanding equity interests of the Buyout Subsidiary for the same price and on the same terms as the JV Party would otherwise have acquired the Shares subject to the buyout under Section 9.3, 12.3, 12.6 or 13.1, as applicable.

 

ARTICLE 14

 

TERMINATION

 

Section 14.1 Effective Date.  Subject to obtaining relevant regulatory approvals as may be required, this Agreement shall become effective on the Closing Date, and continue in force unless terminated in accordance with this Agreement.

 

Section 14.2 Termination.  This Agreement shall terminate upon the Transfer of all of the Shares owned by one JV Party and its Affiliates to the other JV Party and/or its Affiliates in accordance with Section 12.3, 12.6 and 13.1; provided, that the following provisions shall survive termination of this Agreement:  Sections 7.2 (to the extent Micron and NTC both continue to purchase Stack DRAM Products from the Joint Venture Company under the Supply Agreement), 7.3 (to the extent Micron and NTC both continue to purchase Stack DRAM Products from the Joint Venture Company under the Supply Agreement), 11.2 and 14.2 and Article 15.

 

ARTICLE 15

 

GENERAL PROVISIONS

 

Section 15.1 Notices.  All notices and other communications hereunder shall be in writing and shall be deemed duly given upon (a) transmitter’s confirmation of a receipt of a facsimile transmission, (b) confirmation of delivery by a standard overnight or recognized international carrier, or (c) delivery in person, addressed at the following addresses (or at such other address for a JV Party as shall be specified by like notice):

 

if to NTC:

 

Nanya Technology Corporation

Hwa-Ya Technology Park 669

Fuhsing 3 RD. Kueishan

Taoyuan, Taiwan, ROC

Attn:  Legal  department

Facsimile: 886-3-396-2226

 

if to MNL:

 

Micron Semiconductor B.V.

Naritaweg 165 Telestone 8

1043BW Amsterdam

The Netherlands

 

  

- 36 -

NTC/MICRON CONFIDENTIAL

 

Attn:  Managing Director

Facsimile:  020-5722650

 

with a mandatory copy to Micron:

 

Micron Technology, Inc.

8000 S. Federal Way

Mail Stop 1-507

Boise, ID 83716

Attn: General Counsel

Facsimile: (208) 368-4537

 

Section 15.2 Waiver.  The failure at any time of a JV Party to require performance by the other JV Party of any responsibility or obligation required by this Agreement shall in no way affect a JV Party’s right to require such performance at any time thereafter, nor shall the waiver by a JV Party of a breach of any provision of this Agreement by the other JV 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.

 

Section 15.3 Assignment.  [***].

 

Section 15.4 Amendment.  This Agreement may not be amended or modified without the written consent of the JV Parties.

 

Section 15.5 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 JV Parties, any legal or equitable right, remedy or claim under or in respect of this Agreement or any covenant, condition or other provision contained herein.

 

Section 15.6 Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the ROC, without giving effect to its conflict of laws principles.

 

Section 15.7 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 the Taipei District Court, located in Taipei, Taiwan, and each of the Parties hereby consents and submits to the exclusive jurisdiction of such court (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.

 

Section 15.8 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.

  

- 37 -

 

NTC/MICRON CONFIDENTIAL

 

Section 15.9 Entire Agreement.  This Agreement, together with the Appendices, Exhibits and Schedules hereto and the agreements (including the Joint Venture Documents) and instruments referred to herein, constitute the entire agreement of the JV Parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral and written, between the JV Parties with respect to the subject matter hereof.

 

Section 15.10 Taxes and Expenses.  Except as otherwise set forth in this Agreement, all taxes, fees and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the JV Party incurring such expenses.

 

Section 15.11 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 and effect in all other respects.  Should any provision of this Agreement be or become ineffective because of changes in Applicable Law or interpretations thereof, or should this Agreement fail to include a provision that is required as a matter of law, the validity of the other provisions of this Agreement shall not be affected thereby.  If such circumstances arise, the JV Parties shall negotiate in good faith appropriate modifications to this Agreement to reflect those changes that are required by Applicable Law.

 

Section 15.12 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.

 

Section 15.13 Confidential Information.

 

(a) The JV Parties shall abide by the terms of that certain Second Amended and Restated Mutual Confidentiality Agreement among Micron, MNL, NTC, MeiYa Technology Corporation and the Joint Venture Company, dated as of the date of the 2nd Closing, as may be amended or replaced from time to time (the “Confidentiality Agreement”), which agreement is incorporated herein by reference.  The JV Parties agree that the Confidentiality Agreement shall govern the confidentiality, non-disclosure and non-use obligations between the JV Parties respecting the information provided or disclosed in connection with this Agreement.

 

(b) If the Confidentiality Agreement is terminated or expires and is not replaced, such Confidentiality Agreement shall continue with respect to confidential information provided in connection with this Agreement, notwithstanding such expiration or termination, for the duration of the term of this Agreement or until a new Confidentiality Agreement is entered into between the JV Parties.  To the extent there is a conflict between this Agreement and the Confidentiality Agreement, the terms of this Agreement shall control.

 

(c) The terms and conditions of this Agreement shall be considered “Confidential Information” under the Confidentiality Agreement for which each of Micron and NTC is considered a “Receiving Party” under such Confidentiality Agreement.

 

[SIGNATURE PAGES FOLLOW]

 

  

- 38 -

  

IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the date first written above.

 

 

	 	
NANYA TECHNOLOGY CORPORATION

	 	  
	 	  
	 	  
	 	  
	 	
By: /s/ Jih Lien                                                  

	 	
Jih Lien

President

 

 

THIS IS A SIGNATURE PAGE FOR THE AMENDED AND RESTATED JOINT VENTURE AGREEMENT

ENTERED INTO BY AND BETWEEN NTC AND MNL

 

DLI-6215523v12

  

  

  

	 	
MICRON SEMICONDUCTOR B.V.

	 	  
	 	  
	 	  
	 	
By: /s/ Thomas L. Laws                                    

	 	
Thomas L. Laws

	 	
Managing Director A

	 	  
	 	  
	 	  
	 	
By:  /s/ Patrick van Maurik                                

	 	
Name:  Patrick van Maurik

	 	
Managing Director B

 

 

THIS IS A SIGNATURE PAGE FOR THE AMENDED AND RESTATED JOINT VENTURE AGREEMENT

ENTERED INTO BY AND BETWEEN NTC AND MNL

 

DLI-6215523v12

  

  

  

Schedule A

 

Joint Venture Documents

 

 

	
1.  

	
Joint Venture Agreement, dated November 26, 2008, by and between MNL and NTC.

 

	
2.  

	
Facilitation Agreement, dated November 26, 2008, by and among MNL, NTC and the Joint Venture Company.

 

	
3.  

	
Master Agreement, dated November 26, 2008, by and among Micron, MNL, NTC, MeiYa and the Joint Venture Company.

 

	
4.  

	
Corporate Opportunities Side Letter, dated November 26, 2008, by and between Micron and NTC.

 

	
5.  

	
Supply Agreement, dated November 26, 2008, by and among Micron, NTC and the Joint Venture Company.

 

	
6.  

	
Second Amended and Restated Mutual Confidentiality Agreement, dated November 26, 2008, by and among Micron, MNL, NTC, MeiYa and the Joint Venture Company.

 

	
7.  

	
Amended and Restated Restricted Activities Side Letter, dated November 26, 2008, by and between Micron and NTC.

 

	
8.  

	
Amended and Restated Non-Suit Agreement, dated November 26, 2008, by and between Micron and NTC.

 

	
9.  

	
Amended and Restated Technology Transfer and License Agreement, dated November 26, 2008, by and between Micron and NTC.

 

	
10.  

	
Technology Transfer Agreement, dated November 26, 2008, by and between Micron, NTC and the Joint Venture Company.

 

	
11.  

	
Technology Transfer Agreement for 68-50 nm Process Nodes, dated October 11, 2008, by and between Micron and the Joint Venture Company.

 

	
12.  

	
Amended and Restated Joint Development Program Agreement, dated November 26, 2008, by and between Micron and NTC.

 

	
13.  

	
Amended and Restated Manufacturing Fab Cooperation Agreement, dated November 26, 2008, by and between Micron and NTC.

 

DLI-6215523v12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}]]