Document:

Exhibit
10.156

 

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

 

INTEL/MICRON
CONFIDENTIAL

 

 

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

 

 

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

 

OF

 

IM FLASH TECHNOLOGIES, LLC

 

BY AND BETWEEN

 

MICRON TECHNOLOGY, INC. AND INTEL CORPORATION

 

January  6, 2006

 

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 1. ORGANIZATIONAL MATTERS

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  1.1

  	
   

  	
  The Joint
  Venture Company

  	
  1

  
	
  1.2

  	
   

  	
  Name

  	
  1

  
	
  1.3

  	
   

  	
  Term

  	
  1

  
	
  1.4

  	
   

  	
  Purpose of
  the Joint Venture Company; Business

  	
  2

  
	
  1.5

  	
   

  	
  Principal
  Place of Business; Other Places of Business; Registered Office and Agent

  	
  2

  
	
  1.6

  	
   

  	
  Fictitious
  Business Name Statement; Other Certificates

  	
  2

  
	
  1.7

  	
   

  	
  Admission of
  Members

  	
  3

  
	
  1.8

  	
   

  	
  Supply
  Agreements

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2. CAPITALIZATION

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  Initial
  Capital Contributions of the Members

  	
  3

  
	
  2.2

  	
   

  	
  Initial
  Capital Contribution Reserve

  	
  3

  
	
  2.3

  	
   

  	
  Additional
  Capital Contributions

  	
  4

  
	
  2.4

  	
   

  	
  Shortfalls
  in Contributions

  	
  7

  
	
  2.5

  	
   

  	
  Miscellaneous
  Capital Provisions

  	
  8

  
	
  2.6

  	
   

  	
  Contributions
  After a Change in Consolidating Member

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3. MEMBER DEBT FINANCING

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  3.1

  	
   

  	
  Mandatory
  Member Debt Financing

  	
  10

  
	
  3.2

  	
   

  	
  Optional
  [***] Financing

  	
  13

  
	
  3.3

  	
   

  	
  Optional
  Other Member Debt Financing

  	
  14

  
	
  3.4

  	
   

  	
  Change In Committed Capital

  	
  14

  
	
  3.5

  	
   

  	
  Change in Consolidating Member

  	
  14

  
	
  3.6

  	
   

  	
  Loans
  Through Subsidiary

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4. CAPITAL ACCOUNTS AND ALLOCATIONS

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  Capital
  Accounts

  	
  15

  
	
  4.2

  	
   

  	
  Allocations
  of Book Income and Loss

  	
  15

  
	
  4.3

  	
   

  	
  Tax
  Allocations

  	
  15

  
	
  4.4

  	
   

  	
  Restoration
  of Negative Balances

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5. DISTRIBUTIONS

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  Distributions

  	
  15

  
	
  5.2

  	
   

  	
  Withholding
  Tax Payments and Obligations

  	
  17

  
	
  5.3

  	
   

  	
  Distribution
  Limitations

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6. MANAGEMENT; BOARD OF MANAGERS

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Management
  Power

  	
  18

  
	
  6.2

  	
   

  	
  Number of
  Managers; Appointment of Managers

  	
  18

  
	
  6.3

  	
   

  	
  Voting of
  Managers

  	
  20

  

 

ii

 

	
  6.4

  	
   

  	
  Meetings of
  the Board of Managers; Quorum

  	
  23

  
	
  6.5

  	
   

  	
  Notice;
  Waiver

  	
  23

  
	
  6.6

  	
   

  	
  Action
  Without a Meeting; Meetings by Telecommunications

  	
  23

  
	
  6.7

  	
   

  	
  Alternate
  Managers

  	
  24

  
	
  6.8

  	
   

  	
  Compensation
  of Managers

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7. MEMBERS

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  7.1

  	
   

  	
  Rights of
  Members; Meetings

  	
  24

  
	
  7.2

  	
   

  	
  Limitations
  on the Rights of Members

  	
  25

  
	
  7.3

  	
   

  	
  Limited
  Liability of the Members

  	
  26

  
	
  7.4

  	
   

  	
  Voting
  Rights of Members

  	
  26

  
	
  7.5

  	
   

  	
  Defaulting
  Member

  	
  29

  
	
  7.6

  	
   

  	
  Cooperation

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8. OFFICERS AND COMMITTEES

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  8.1

  	
   

  	
  Intel
  Executive Officer

  	
  29

  
	
  8.2

  	
   

  	
  Micron
  Executive Officer

  	
  29

  
	
  8.3

  	
   

  	
  Lead
  Controller/Chief Financial Officer

  	
  30

  
	
  8.4

  	
   

  	
  Chief Executive
  Officer

  	
  31

  
	
  8.5

  	
   

  	
  General
  Provisions Regarding Officers

  	
  31

  
	
  8.6

  	
   

  	
  Manufacturing
  Committee

  	
  32

  
	
  8.7

  	
   

  	
  Waiver of
  Fiduciary Duties

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9. EMPLOYEE MATTERS

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  9.1

  	
   

  	
  Joint
  Venture Company Employees; Seconded Employees

  	
  33

  
	
  9.2

  	
   

  	
  Performance and
  Removal of Seconded Employees

  	
  33

  
	
  9.3

  	
   

  	
  Forms

  	
  34

  
	
  9.4

  	
   

  	
  Compensation
  and Benefits

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10. RECORDS, ACCOUNTS AND REPORTS

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
  10.1

  	
   

  	
  Books and
  Records

  	
  35

  
	
  10.2

  	
   

  	
  Access to
  Information

  	
  36

  
	
  10.3

  	
   

  	
  Operations
  Reports

  	
  37

  
	
  10.4

  	
   

  	
  Financial
  Reports

  	
  37

  
	
  10.5

  	
   

  	
  Reportable
  Events

  	
  39

  
	
  10.6

  	
   

  	
  Tax
  Information

  	
  41

  
	
  10.7

  	
   

  	
  Tax Matters
  and Tax Matters Partner

  	
  42

  
	
  10.8

  	
   

  	
  Bank
  Accounts and Funds

  	
  42

  
	
  10.9

  	
   

  	
  Internal
  Controls

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11. BUSINESS PLAN

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
  11.1

  	
   

  	
  Initial
  Business Plan; Initial Budgets

  	
  44

  
	
  11.2

  	
   

  	
  Subsequent
  Business Plans

  	
  47

  
	
  11.3

  	
   

  	
  Expenditures

  	
  50

  
	
  11.4

  	
   

  	
  Fab Criteria

  	
  50

  
	
  11.5

  	
   

  	
  Quarterly
  Business Plan

  	
  50

  

 

iii

 

	
  11.6

  	
   

  	
  Operating
  Plan

  	
  50

  
	
  11.7

  	
   

  	
  Use of
  Member Names

  	
  51

  
	
  11.8

  	
   

  	
  Insurance

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12. TRANSFER RESTRICTIONS; PURCHASE
  OPTIONS

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
  12.1

  	
   

  	
  Restrictions
  on Transfer

  	
  51

  
	
  12.2

  	
   

  	
  Permitted
  Transfers

  	
  52

  
	
  12.3

  	
   

  	
  Additional
  Members

  	
  53

  
	
  12.4

  	
   

  	
  Purchase of
  Additional Interest

  	
  53

  
	
  12.5

  	
   

  	
  Purchase of
  Remaining Interest

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 13. DISSOLUTION AND LIQUIDATION

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  13.1

  	
   

  	
  Dissolution

  	
  56

  
	
  13.2

  	
   

  	
  Determination
  of [***] Value

  	
  58

  
	
  13.3

  	
   

  	
  No
  Withdrawal

  	
  59

  
	
  13.4

  	
   

  	
  Micron [***]
  Reimbursement; [***] True-Up Payment

  	
  59

  
	
  13.5

  	
   

  	
  Micron
  Purchase Option on [***]

  	
  59

  
	
  13.6

  	
   

  	
  Intel
  Purchase Option

  	
  59

  
	
  13.7

  	
   

  	
  Additional
  Micron Option

  	
  60

  
	
  13.8

  	
   

  	
  Remaining
  Facilities Draft

  	
  60

  
	
  13.9

  	
   

  	
  Auction of
  Single Remaining Facility

  	
  62

  
	
  13.10

  	
   

  	
  Closing of
  Purchases

  	
  62

  
	
  13.11

  	
   

  	
  Auction of
  Remaining Assets

  	
  62

  
	
  13.12

  	
   

  	
  Winding Up

  	
  62

  
	
  13.13

  	
   

  	
  Liquidation

  	
  63

  
	
  13.14

  	
   

  	
  Supply
  Agreements

  	
  64

  
	
  13.15

  	
   

  	
  Employees

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 14. EXCULPATION AND INDEMNIFICATION

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
  14.1

  	
   

  	
  Exculpation

  	
  65

  
	
  14.2

  	
   

  	
  Indemnification

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 15. GOVERNMENTAL APPROVALS 66

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  15.1

  	
   

  	
  Governmental
  Approvals

  	
  66

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 16. FORMATION OF ADDITIONAL ENTITIES

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
  16.1

  	
   

  	
  Formation of
  U.S. Subsidiaries

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
  16.2

  	
   

  	
  Formation of
  Foreign Facilities Company

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 17. DEADLOCK; OTHER DISPUTE
  RESOLUTION; EVENT OF DEFAULT

  	
  69

  
	
   

  	
   

  	
   

  	
   

  
	
  17.1

  	
   

  	
  Deadlock

  	
  69

  
	
  17.2

  	
   

  	
  Resolution
  of Deadlock

  	
  70

  
	
  17.3

  	
   

  	
  Definition of

  	
  70

  
	
  17.4

  	
   

  	
  Definition
  of

  	
  70

  
	
  17.5

  	
   

  	
  Other
  Dispute Resolution

  	
  70

  

 

iv

 

	
  17.6

  	
   

  	
  Mediation

  	
  71

  
	
  17.7

  	
   

  	
  Event of
  Default

  	
  71

  
	
  17.8

  	
   

  	
  Specific
  Performance

  	
  72

  
	
  17.8

  	
   

  	
  Tax Matters

  	
  72

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 18. MISCELLANEOUS PROVISIONS

  	
  72

  
	
   

  	
   

  	
   

  	
   

  
	
  18.1

  	
   

  	
  Notices

  	
  72

  
	
  18.2

  	
   

  	
  Waiver

  	
  73

  
	
  18.3

  	
   

  	
  Assignment

  	
  73

  
	
  18.4

  	
   

  	
  Third Party
  Rights

  	
  73

  
	
  18.5

  	
   

  	
  Choice of
  Law

  	
  74

  
	
  18.6

  	
   

  	
  Headings

  	
  74

  
	
  18.7

  	
   

  	
  Entire
  Agreement

  	
  74

  
	
  18.8

  	
   

  	
  Severability

  	
  74

  
	
  18.9

  	
   

  	
  Counterparts

  	
  74

  
	
  18.10

  	
   

  	
  Further
  Assurances

  	
  74

  
	
  18.11

  	
   

  	
  Consequential
  Damages

  	
  74

  
	
  18.12

  	
   

  	
  Jurisdiction;
  Venue

  	
  74

  
	
  18.13

  	
   

  	
  Confidential
  Information

  	
  75

  
	
  18.14

  	
   

  	
  Certain
  Interpretive Matters

  	
  75

  
	
   

  	
   

  	
   

  	
   

  
	
  APPENDICES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Appendix A

  	
   

  	
  Definitions

  	
   

  
	
  Appendix B

  	
   

  	
  Tax Matters

  	
   

  
	
  Appendix C

  	
   

  	
  Initial Managers

  	
   

  
	
  Appendix D

  	
   

  	
  Initial Capital Contributions

  	
   

  
	
  Appendix E

  	
   

  	
  Manufacturing Committee Charter

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule 1

  	
   

  	
  [***] Schedule

  	
   

  
	
  Schedule 2

  	
   

  	
  Insurance

  	
   

  
	
  Schedule 3

  	
   

  	
  Intel Matters

  	
   

  
	
  Schedule 4

  	
   

  	
  Micron Matters

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Form of Mandatory Note

  	
   

  
	
  Exhibit B

  	
   

  	
  Form of Optional [***] Note

  	
   

  
	
  Exhibit C

  	
   

  	
  Form of Optional Other Note

  	
   

  

 

v

 

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

 

OF

 

IM FLASH TECHNOLOGIES, LLC

 

This LIMITED LIABILITY COMPANY OPERATING AGREEMENT
(this “Agreement”) of IM Flash Technologies,
LLC, a Delaware limited liability company (the “Joint
Venture  Company”),
is made and entered into as of this 6th day of January 2006 (the “Effective  Date”), by and
between Micron Technology, Inc., a Delaware corporation (“Micron”),
and Intel Corporation, a Delaware corporation (“Intel”)
(Micron and Intel are each referred to individually as a “Member,”
and collectively as the “Members”). Capitalized
terms used in this Agreement shall have the respective meanings ascribed to
such terms in Appendix A to this Agreement.

 

RECITALS

 

A.            Prior to the
Effective Date, Micron formed the Joint Venture Company to engage in the
activities set forth in Section 1.4 hereof, and, immediately prior to the
execution and delivery of this Agreement, Micron was the sole member of the
Joint Venture Company; and

 

B.            Prior to or
contemporaneously with the execution of this Agreement, the Joint Venture
Company, Micron and Intel have each entered into the Joint Venture Documents to
which they are a party, as described in the Master Agreement.

 

ARTICLE 1.

ORGANIZATIONAL MATTERS

 

1.1           The Joint Venture
Company. The Joint Venture Company is a limited liability company organized
under the Delaware Limited Liability Company Act (Del. Code Ann. tit. 6
§§ 18-101 et  seq.), as amended from time to time (the “Act”), and governed by the terms and conditions set forth in
this Agreement. The Joint Venture Company is a Delaware limited liability
company as a result of the filing of a certificate of formation (the “Certificate”) in the office of the Delaware Secretary of
State in accordance with the Act.

 

1.2           Name. The
name of the Joint Venture Company is “IM Flash Technologies, LLC.”

 

1.3           Term. The
initial term of the business of the Joint Venture Company shall continue until
the earlier of the tenth anniversary of the Effective Date and the termination
of the Joint Venture Company prior to such date in accordance with this
Agreement (the “Initial  Term”).
Such Initial Term may be extended by mutual written agreement of the Members at
least [***] prior to the expiration of the Initial Term or any Renewal Term
(any such extensions to be on such terms and for such period as set forth in
writing and agreed to by the Members) (each such extended term, a “Renewal  Term,” and
together with the Initial Term, the “Term”).

 

 

1.4           Purpose of the
Joint Venture Company; Business. The purpose of the Joint Venture Company
shall be (A) to engage in the business of manufacturing for the Members
NAND Flash Memory Products in various forms, including NAND Flash Memory
Wafers, and such other forms of memory products as may be determined by the
Board of Managers from time to time, and related memory product manufacturing
development activities, (B) to enter into any other lawful business,
purpose or activity in which a limited liability company may be engaged under
Applicable Law (including the Act), as the Members may determine from time to
time, subject to and in accordance with the terms and conditions of this
Agreement, and (C) to enter into any lawful transaction and engage in any
lawful activities in furtherance of the foregoing purposes and as may be
necessary or incidental to, connected with or arising out of the foregoing
purposes in accordance with the terms and conditions of this Agreement; provided, however, that a
Member having an Economic Interest above [***] percent ([***]%) may, in its
sole discretion, include the manufacture of other forms of memory products in
the purpose of the Joint Venture Company (other than (i) [***] if such Member
is Intel and (ii) Intel [***] if such Member is Micron), so long as the amount,
delivery schedule, pricing and terms of the other Member’s supply of Joint
Venture Products remain as they existed immediately prior to the time at which
the decision to include the manufacture of such other forms of memory products
is made.

 

1.5                                 Principal Place of
Business; Other Places of Business; Registered Office and Agent.

 

(A)          The principal place
of business and mailing address of the Joint Venture Company shall be IM Flash
Technologies, LLC, 1550 East 3400 North, Lehi, Utah 84043, or such other
address within or outside of the State of Delaware as the Board of Managers may
from time to time designate. The Board of Managers may change the principal
place of business of the Joint Venture Company to such other place or places
within or outside the State of Delaware as the Board of Managers may from time
to time determine, in its sole and absolute discretion and, if necessary, the
Board of Managers shall cause the Certificate to be amended in accordance with
the applicable requirements of the Act to effectuate the change in the
principal place of business.

 

(B)           Other places of
business of the Joint Venture Company shall initially be in Boise, Idaho and
Manassas, Virginia. The Joint Venture Company may maintain offices and places
of business at such other place or places within or outside the State of
Delaware as the Board of Managers may deem to be advisable.

 

(C)           The registered
office of the Joint Venture Company in the State of Delaware shall be
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, and
the initial registered agent for service of process at such registered office
shall be The Corporation Trust Company. The registered office and the
registered agent may be changed from time to time by the Board of Managers, by
causing the prescribed form, accompanied by the requisite filing fee, to be
filed with the Delaware Secretary of State in accordance with the Act.

 

1.6           Fictitious
Business Name Statement; Other Certificates. The Authorized Officers, or
the Chief Executive Officer, as applicable, shall, from time to time, cause the
Joint Venture Company to be registered as a foreign limited liability company
and to file fictitious or

 

2

 

trade name statements or certificates in those jurisdictions and
offices as the Board of Managers considers necessary or appropriate. The Joint
Venture Company may engage in business activities under any fictitious business
names selected by the Board of Managers. The Authorized Officers, or the Chief
Executive Officer, as applicable, shall, from time to time, file or cause to be
filed certificates of amendment, certificates of cancellation, or other
certificates as the Board of Managers reasonably considers necessary or
appropriate under the Act or under the laws of any jurisdiction in which the
Joint Venture Company is doing business to establish and continue the Joint
Venture Company as a limited liability company or to protect the limited
liability of the Members.

 

1.7           Admission of
Members. Intel and Micron hereby confirm and agree to their status as
Members of the Joint Venture Company upon the execution of this Agreement.

 

1.8           Supply Agreements.
Contemporaneously with the execution of
this Agreement, Intel and Micron have entered into the Supply Agreements with
the Joint Venture Company pursuant to which, subject to the terms and
conditions set forth in the applicable Supply Agreement, each Member shall
purchase from the Joint Venture Company, and the Joint Venture Company shall
supply to each Member, a percentage of the Joint Venture Company’s output of
Products equal to such Member’s Sharing Interest.

 

ARTICLE 2.

CAPITALIZATION

 

2.1           Initial Capital
Contributions of the Members.

 

(A)          Intel Initial
Capital Contribution. The Members acknowledge and agree that,
contemporaneously herewith, Intel shall be deemed to have delivered to the
Joint Venture Company all of the Intel Initial Contributed Assets, as
identified on Appendix D. These transactions shall be treated by
Intel and the Joint Venture Company as the Initial Capital Contribution by
Intel of the Intel Initial Contributed Assets in the manner and with a value as
set forth on Appendix D.

 

(B)           Micron Initial
Capital Contribution. The Members acknowledge and agree that,
contemporaneously herewith, Micron shall be deemed to have delivered to the
Joint Venture Company all of the Micron Initial Contributed Assets, as
identified on Appendix D. These transactions shall be treated by
Micron and the Joint Venture Company as the Initial Capital Contribution by
Micron of the Micron Initial Contributed Assets in the manner and with a value
as set forth on Appendix D.

 

2.2           Initial Capital
Contribution Reserve. The Joint Venture Company shall use all funds
contributed (either in cash or pursuant to a promissory note, in accordance
with Appendix D) as Initial Capital Contributions before permitting
any Additional Capital Contributions. Moreover, the Intel Additional Cash and
the Micron Additional Cash shall be transferred to a reserve account promptly
after such funds are delivered to the Joint Venture Company. Such monies shall
be invested in such investment or investments as the Board of Managers may
hereafter designate and shall not be expended by the Joint Venture Company
until such time as all other funds contributed as Initial Capital Contributions
of the Members have

 

3

 

been expended. Such amounts shall be deemed to be necessary reserves
for purposes of distributions under Section 5.1(A).

 

2.3           Additional
Capital Contributions.

 

(A)          [***] Capital
Contributions. In addition to the Initial Capital Contributions, each
Member shall make Capital Contributions to the Joint Venture Company equal to
its [***] Capital Contributions; provided, however,
that in no event shall (1) Intel be obligated to make [***] Capital
Contributions in the aggregate in excess of the Intel Maximum Incremental
Capital Amount, or (2) Micron be obligated to make [***] Capital Contributions
in the aggregate in excess of the Micron Maximum Incremental Capital Amount. Such
[***] Capital Contributions shall be made in quarterly installments on the
twenty-fifth (25th) day of each Fiscal Quarter of the Joint Venture
Company (or if such day is not a Business Day, then on the next Business Day
after such day) in amounts equal to the sum of (a) the amounts required for the
remainder of the Fiscal Quarter in which the [***] Capital Contributions are
made and (b) the amounts required for the first twenty-five (25) days of the
upcoming Fiscal Quarter (or if such day is not a Business Day, then through the
next Business Day after such day), each as set forth in the Approved Business
Plan in effect at the time of such contribution.

 

(B)           [***] Capital
Contributions. Except as mutually agreed in writing by both Members, each
Member may, but shall not be required to, make Capital Contributions to the
Joint Venture Company equal to its [***] Capital Contribution. Such [***]
Capital Contributions shall be made in quarterly installments on the
twenty-fifth (25th) day of each Fiscal Quarter of the Joint Venture
Company (or if such day is not a Business Day, then on the next Business Day
after such day) in an amount equal to the sum of (a) the amounts of the [***]
Capital Contributions scheduled for the remainder of the Fiscal Quarter in
which the [***] Capital Contributions are made and (b) the amounts of the [***]
Capital Contributions scheduled for the first twenty-five (25) days of the
upcoming Fiscal Quarter (or if such day is not a Business Day, then through the
next Business Day after such day), each as set forth in the Approved Business
Plan in effect at the time of such contribution.

 

(C)           Other Capital
Contributions. Except as mutually agreed in writing by both Members, each
Member may, but shall not be required to, make Capital Contributions (other
than [***] Capital Contributions and [***] Capital Contributions) to the Joint
Venture Company equal to its [***] as set forth in the Annual Budget included
in the Approved Business Plan for the Fiscal Year in which the contributions
are to be made. Any such Capital Contributions shall be made in quarterly
installments on the twenty-fifth (25th) day of each Fiscal Quarter
of the Joint Venture Company (or if such day is not a Business Day, then on the
next Business Day after such day) in an amount equal to the sum of (a) the
amounts of such Capital Contributions scheduled for the remainder of the Fiscal
Quarter in which such Capital Contributions are made and (b) the amounts of
such Capital Contributions scheduled for the first twenty-five (25) days of the
upcoming Fiscal Quarter (or if such day is not a Business Day, then through the
next Business Day after such day), each as set forth in the Approved Business
Plan in effect at the time of such contribution. Such contributed funds are
hereinafter referred to as the “Other Capital
Contributions” and, together with the [***] Capital Contributions
and the [***] Capital Contributions, the “Additional Capital
Contributions.”

 

4

 

(D)          No Other
Contributions. Except as set forth in Sections 2.1 and 2.3(A), in the
Joint Venture Documents and such other contributions as the Members may agree
shall be required, no Member shall be required to make any Capital
Contributions to the Joint Venture Company, and, except as contemplated by
Section 2.3(B), 2.3(C) and 2.4, in the Joint Venture Documents and such
other contributions as the Members may agree may be made (and except for
Make-Up Contributions and any deemed contributions of amounts outstanding under
Member Notes), no additional Capital Contribution to the Joint Venture Company
shall be made by either Member without the consent of the other Member.

 

(E)           Coordination.
The Members shall coordinate with each other regarding, and provide each other
with advance written notice of, the timing of their delivery of each Additional
Capital Contribution.

 

(F)           Partial
Contributions. In the event that any Member determines to contribute less
than its [***] of any Additional Capital Contribution, such Member shall
provide notice of such determination specifying the amount of such Additional
Capital Contribution it intends to make, if any. Such notice shall be provided
to the Joint Venture Company and to the other Member as soon as practicable
after such determination is made, but in any event not less than ten (10)
Business Days prior to the date such Additional Capital Contribution is to be
made. Any failure or delay in providing such notice shall not affect the right
of any Member to refrain from providing such Additional Capital Contribution,
nor shall it result in any liability for damages. Subject to Section 3.1, to
the extent that a Member contributes less than its [***] of any Additional
Capital Contribution for a given Fiscal Quarter, the other Member shall have
the right to reduce its contribution proportionately. In the event that such
other Member has already remitted any amount in respect of its Additional
Capital Contribution, the Joint Venture Company shall, upon such other Member’s
request and at its option, return such amount or deem all or a portion of such
contribution to be Member Debt Financing hereunder. Any amount so requested to
be returned or refunded shall be remitted to the requesting Member immediately
by wire transfer of immediately available funds. The amount contributed for
such Fiscal Quarter by the non-contributing Member (and the other Member, if
its contribution is proportionately reduced) shall be applied in the following
order:

 

(1)           First,
to satisfy the obligation of such Member to contribute its [***] of any [***]
Capital Contribution for such Fiscal Quarter;

 

(2)           Second,
the remainder, if any, to fulfill the Member’s [***] of the amount, if any, of
any Other Capital Contribution for such Fiscal Quarter relating to an
Operational Fab;

 

(3)           Third,
the remainder, if any, to fulfill the Member’s [***] of the amount, if any, of
any Other Capital Contribution for such Fiscal Quarter relating to matters not
addressed in the immediately preceding clause (2); and

 

(4)           Fourth,
the remainder, if any, to fulfill the Member’s [***] of any amount of the [***]
Capital Contribution for such Fiscal Quarter to be applied to a [***] under the
[***] Budget, and if there is [***] such [***], each of such [***] in the order
in which they appear on the [***] Schedule.

 

5

 

(G)           Priority of
Contributions. Each Member shall contribute its [***] of the cumulative
aggregate [***] Capital Contributions theretofore due (and shall pay any
interest accrued thereon at the rate provided in Section 2.4(A)(3) as a
result of such Member’s failure to make such contributions at the times and in
the amounts required pursuant to Section 2.3(A)) other than any [***]
Capital Contributions as to which the obligation to contribute has been
terminated pursuant to Section 2.4(A)(2), before it may make any other
Capital Contributions, including any [***] Capital Contributions (including by
way of Make-Up Contributions), or any Other Capital Contribution or any Member
Debt Financing; provided, however,
that for purposes of this Section 2.3(G), a Member’s [***] of an
Additional Capital Contribution shall be deemed to exclude any shortfall of an
[***] Capital Contribution (1) for which the Joint Venture Company, or the
other Member acting on its behalf, has not demanded payment or pursued any
claim for payment and (2) any portion of which the Member is restricted from
contributing, or the Joint Venture Company is restricted from paying, under
Article 2 or Article 3.

 

(H)          Interim
Loan. Each remittance of funds in respect of a Member’s [***] of an
Additional Capital Contribution pursuant to this Section 2.3 shall, upon
receipt by the Joint Venture Company of such funds, be deemed to be a loan
(which shall bear no interest) to the Joint Venture Company of the entire
amount so delivered until the other Member remits funds in respect of its [***]
of such Additional Capital Contribution. At such time:

 

(1)           if both Members have
remitted amounts equal to their respective [***] of the Additional Capital
Contribution in full, all such amounts shall be deemed Additional Capital
Contributions (whereupon the respective amounts remitted by the Members shall
no longer be deemed loans and shall be added to the Members’ respective Capital
Contribution Balances);

 

(2)           if there is a
Shortfall Amount, the amount actually remitted by the Non-Funding Member shall
be deemed an Additional Capital Contribution by such Member (and such amount
shall no longer be deemed a loan and shall be added to the Non-Funding Member’s
Capital Contribution Balance), and a portion of the amount actually remitted by
the Funding Member equal to the product of (a) the Funding Member’s [***] of
such Additional Capital Contribution (whether or not contributed in full) multiplied by (b) a fraction, the numerator of which is the
amount actually remitted by the Non-Funding Member and the denominator of which
is the Non-Funding Member’s [***] of the Additional Capital Contribution shall
be deemed an Additional Capital Contribution (and such amount shall be added to
the Funding Member’s Capital Contribution Balance). In such event, the
remainder of the amount remitted by the Funding Member shall continue to be a
loan to the Joint Venture Company until: (i) the return of all or a portion of
such remaining funds upon the receipt by the Joint Venture Company of
instructions from such Member to return all or a portion of such funds to the
Member pursuant to Sections 2.3(F), 2.4(A)(1), 2.4(C) or 3.1(A); (ii) the
Funding Member instructs the Joint Venture Company to deem all or a portion of
such remaining funds an Additional Capital Contribution (whereupon all or such
portion of such funds shall be added to the Member’s Capital Contribution
Balance); or (iii) the Funding Member instructs the Joint Venture Company to
deem all or a portion of such funds to be Member Debt Financing; provided that if the Joint Venture Company has not received
instructions

 

6

 

pursuant to subparagraphs (i), (ii) or (iii) above within fifteen (15)
days of the date the applicable Additional Capital Contribution was due, the
Joint Venture Company shall contact such Member to request such instruction.

 

2.4           Shortfalls in
Contributions.

 

(A)          [***] Capital
Contribution Shortfall.

 

(1)           If a Member fails to
remit in full its [***] Capital Contribution, at the time and in the amount
required pursuant to Section 2.3(A), the other Member, if it has remitted
its [***] of such [***] Capital Contribution, may, at its election, (a) require
that the Joint Venture Company return the remitting Member’s share of such
[***] Capital Contribution to such remitting Member in part or in full, (b) make
a Capital Contribution to the Joint Venture Company of any or all of the
shortfall or (c) provide Optional [***] Financing in accordance with
Section 3.2.

 

(2)           To the extent the
other Member elects to contribute or loan the shortfall under
Section 2.4(A)(1)(b) or (c) above, such other Member may elect, by written
notice to the Joint Venture Company and the non-contributing Member, to
terminate the right and obligation of the non-contributing Member to contribute
any unpaid portion of such non-contributing Member’s [***] of the [***] Capital
Contribution that the non-contributing Member failed to pay.

 

(3)           The other Member, if
it has remitted its [***] of the [***] Capital Contribution, may direct the
Joint Venture Company under Section 7.5 to (or may, on behalf of the Joint
Venture Company) demand payment and pursue a claim against the non-contributing
Member for payment. The non-contributing Member shall be obligated to pay
interest (which interest shall not be treated as a Capital Contribution) on
such uncontributed amount at [***] (as in effect on the date such contribution
was scheduled to be made and adjusted every [***]), compounded [***], from the
date such [***] Capital Contribution is due until the date it is paid. The
Member that did not make an [***] Capital Contribution it was required to make
under the terms of this Agreement shall pay to the Joint Venture Company and
the other Member all costs, including attorneys’ fees, incurred by the Joint
Venture Company and the other Member, respectively, in pursuing such claim for
payment (which payments shall not be treated as Capital Contributions). Such
Member shall not be liable for any additional damages. If the Joint Venture
Company recovers against the non-contributing Member, the funds collected from
the non-contributing Member shall be applied first to the payment in full of
costs theretofore incurred by the Joint Venture Company or the other Member in
the pursuit of the claim for payment against the non-contributing Member (and
such amount shall not be treated as a Capital Contribution), then to all
accrued but unpaid interest on such payment (and such amount shall not be
treated as a Capital Contribution) and then to the payment of the delinquent
portion of the [***] Capital Contribution (and such amount shall be added to
the Capital Contribution Balance of the non-contributing Member). In addition,
upon such payment by the non-contributing Member, (a) if a related Optional
[***] Shortfall Note is then outstanding, the provisions of Section 3.2(D)
(subject to Section 3.2(E)) shall apply and (b) if no related Optional
[***] Shortfall Note is then outstanding, but the other Member has remitted to
the Joint Venture Company the amount that the non-contributing Member was
required to make, then the Joint

 

7

 

Venture Company shall immediately refund to the contributing Member an
amount equal to the non-contributing Member’s payment that was treated as a
Capital Contribution, and the Capital Contribution Balance of the contributing
Member shall be reduced by such amount.

 

(4)           If, after a failure
by a Member to timely make a Capital Contribution of its [***] of an [***]
Capital Contribution that it was required to make under the terms of this
Agreement, such Member wishes to make any payment with respect to such portion
of the [***] Capital Contribution (and the ability to make such contribution
has not been terminated pursuant to Section 2.4(A)(2)), the Joint Venture
Company, with the consent of the other Member (which consent shall not be
necessary if an action to collect such amount has been commenced by or at the
direction of such other Member), shall accept such payment and apply it first
to the payment in full of costs theretofore incurred by the Joint Venture
Company or the other Member in the pursuit of a claim for payment against the
non-contributing Member (and such amount shall not be treated as a Capital
Contribution), then to all accrued but unpaid interest on such payment (and
such amount shall not be treated as a Capital Contribution) and then to the
payment of the delinquent portion of the [***] Capital Contribution (and such
amount shall be added to the Capital Contribution Balance of such Member). In
addition, upon such payment by the non-contributing Member, (a) if a related
Optional [***] Shortfall Note is then outstanding, the provisions of
Section 3.2(D) (subject to Section 3.2(E)) shall apply and (b) if no
related Optional [***] Shortfall Note is then outstanding, but the other Member
has remitted to the Joint Venture Company the amount that the non-contributing
Member was required to make, then the Joint Venture Company shall immediately
refund to the contributing Member an amount equal to the non-contributing
Member’s payment that was treated as a Capital Contribution, and the Capital
Contribution Balance of the contributing Member shall be reduced by such
amount.

 

(5)           Notwithstanding any
provision hereof to the contrary, the failure by a Member to contribute in
[***] of any [***] Capital Contribution shall not constitute a Liquidating
Event.

 

(B)           [***] Capital
Contribution Shortfall. If a Member does not remit in [***] of any [***]
Capital Contribution at the time and in the full amount permitted pursuant to
Section 2.3(B), the provisions of Section 3.1 shall apply.

 

(C)           Other Capital
Contribution Shortfall. If a Member does not remit [***] of any Other
Capital Contribution, at the time and in the full amount permitted pursuant to
Section 2.3(C), the other Member, if it has remitted its [***] of such
Other Capital Contribution may, at its election, (1) require that the Joint
Venture Company [***] of such Other Capital Contribution to the remitting
Member in part or in full, (2) make a [***] to the Joint Venture Company of any
or all of the shortfall or (3) provide Optional Other Financing in
accordance with Section 3.3.

 

2.5           Miscellaneous
Capital Provisions.

 

(A)          Capital Contributions
shall be credited to the Capital Account of the contributing Member to the
extent provided in Article 4 of this Agreement.

 

8

 

(B)           No interest shall be
paid to a Member on Capital Contributions. A Member shall not be entitled to
withdraw any of its Capital Contributions except as provided in
Section 2.3(F), 2.4 or Section 3.1.

 

(C)           Except as otherwise
provided in Article 13, a Member receiving a return of all or any portion of
its Capital Contribution shall have no right to receive a particular type of
property or a particular asset.

 

(D)          Any Capital
Contributions to the Joint Venture Company to be made in cash shall be made by
the Members by wire transfer of immediately available funds to the Joint
Venture Company or its designated agent.

 

(E)           Except as otherwise
provided in Section 2.4 or Article 3 or for trade credit for services or goods
provided by a Member to the Joint Venture Company under any Joint Venture
Document or any other agreement that has been approved as required in this
Agreement, no Member shall advance funds or make loans to the Joint Venture
Company without the approval of the Board of Managers. Any such approved
advances or loans by a Member shall not be Capital Contributions and shall not
result in any increase in the amount of such Member’s Capital Contribution
Balance or entitle such Member to any increase in its Percentage Interest,
except as otherwise provided in Section 2.4 or Article 3. The amount of such
advances or loans shall be a debt of the Joint Venture Company to such Member
and (unless such loan is subject to a written guaranty or other written
agreement governing the liability of another party with respect thereto) shall
be payable or collectible only out of the assets of the Joint Venture Company.

 

(F)           Except as provided
in Section 5.2(C), the Joint Venture Company shall not make loans to, or
guaranty any indebtedness of, any Member or any other Person other than a
Wholly-Owned Subsidiary of the Joint Venture Company or a Foreign Facilities
Company; provided, however,
that the provisions of this Section 2.5(F) shall not prohibit the
Joint Venture Company from providing payment terms to the Members for Joint
Venture Products manufactured by the Joint Venture Company on behalf of the
Members pursuant to any Joint Venture Document or any other agreement that has
been approved as provided in this Agreement.

 

2.6           Contributions
After a Change in Consolidating Member. Notwithstanding anything in this
Article 2 to the contrary, following a Change in Consolidating
Member:

 

(A)          with respect to any
Additional Capital Contribution, (1) the amount of the [***] Member’s [***]
that the [***] Member is required or permitted to make pursuant to this Article
2 shall be reduced to the amount that would not result in the occurrence of
[***] Member or in the reduction of the [***] Economic Interest below the lesser
of [***]% and the [***] Member’s then-existing Economic Interest, and (2) the
[***] Member shall become entitled to contribute the [***] Contribution Amount;
provided, however, that if the [***]
Member fails to make such Additional Capital Contribution (or provide Member
Debt Financing, if applicable) in an amount equal to the full [***]
Contribution Amount then the limitations set forth in this Section 2.6(A)
shall not apply with respect to such Additional Capital Contribution; and

 

9

 

(B)           any payment by the
Joint Venture Company to such [***] Member shall not equal or exceed the amount
that would result in the occurrence of [***] Member or in the reduction of the
[***] Member’s Economic Interest below the lesser of [***]% and the [***]
Member’s then-existing Economic Interest.

 

ARTICLE 3.

MEMBER DEBT FINANCING

 

3.1           Mandatory Member
Debt Financing.

 

(A)          This Section 3.1
shall apply if (1) there occurs a Shortfall Amount in respect of a [***]
Capital Contribution pursuant to Section 2.4(B), (2) the Non-Funding Member has
contributed its [***] of all previously required [***] Capital Contributions
and (3) the other Member has become the “Funding Member”
as a result of (a) such other Member’s timely remittance of its [***] of such
[***] Capital Contribution (after giving effect to the return of any amount so
remitted which such Member requests or any increase in such amount contributed
by such Member, up to its [***] of such [***] Capital Contribution, after receiving
notice from the Joint Venture Company that the other Member has not timely
delivered its [***] of the [***] Capital Contribution), or (b) if neither
Member has timely remitted the amount of its [***] of such [***] Capital
Contribution, such other Member’s remittance of a greater percentage of its
[***] of such [***] Capital Contribution than the other Member (after giving
effect to the return of any amount so remitted which such Member requests or
any increase in such amount contributed by such Member, up to its [***] of such
[***] Capital Contribution, after receiving notice from the Joint Venture
Company that neither Member has timely delivered its [***] of the [***] Capital
Contribution). In such event, the Funding Member shall (y) promptly provide Member
Debt Financing to the Joint Venture Company in an amount equal to the Loan
Amount and (z) the Funding Member Portion shall be deemed to have been provided
as Member Debt Financing, rather than as a Capital Contribution, to the Joint
Venture Company. However, if the Shortfall Amount is less than $[***], then the
Funding Member may elect not to provide the Mandatory Member Debt Financing
and, in such case, the Joint Venture Company shall return to each Member the
portion of the [***] Capital Contribution actually remitted by such Member. Furthermore,
a Funding Member shall not be required to provide Mandatory Member Debt
Financing with respect to a [***] Capital Contribution under a [***] that is
part of a Disputed Approved Business Plan proposed by the Non-Funding Member. No Funding Member shall be obligated to provide
more than $[***] of Mandatory Member
Debt Financing outstanding at any time (not including any Mandatory
Equalization Note) with respect to Shortfall Amounts caused by a given
Non-Funding Member; provided, however,
that in the event there is an Approved Business Plan that calls for [***]
Capital Contributions for [***] that are reasonably expected to meet the
conditions for Mandatory Member Debt Financing set forth in this Section
3.1(A), and if and only if the Funding Member’s board of directors so approves,
the Funding Member shall make available an additional $[***] of Mandatory
Member Debt Financing (not including any Mandatory Equalization Note) for any
related Shortfall Amounts, resulting in an aggregate of $[***] of Mandatory Member Debt Financing available to
the Joint Venture Company at any time (not including any Mandatory Equalization
Note) under this Section 3.1(A); provided further, however,
that in no event shall a Member be obligated to provide more than an aggregate
of $[***] of Mandatory Member Debt Financing outstanding at any given time (not
including

 

10

 

any Mandatory Equalization Note) with respect
to any particular [***]. If such additional $[***] of Mandatory Member Debt
Financing is not made available, then, unless the Members agree otherwise, no
Early Start shall occur.

 

(B)           In exchange for the
Mandatory Member Debt Financing, the Joint Venture Company shall issue to the
Funding Member two convertible notes, one having a principal balance equal to
the Loan Amount (the “Mandatory Shortfall Note”),
and the other having a principal balance equal to the Funding Member Portion
(the “Mandatory Equalization Note” and,
together with the related Mandatory Shortfall Note, the “Mandatory
Notes”), in the form attached hereto as Exhibit A.

 

(C)           Each Mandatory Note
issued in accordance with this Section 3.1 shall have [***] term, subject to
Section 3.1(E). For the first [***] of the term of a Mandatory Shortfall
Note, such Mandatory Shortfall Note shall bear interest at [***] (as in effect
on the issue date (the “Issuance Date”)
thereof and adjusted every [***], [***] ([***]) basis points per annum,
compounded [***]. Thereafter, until the end of the [***] term, such Mandatory
Shortfall Note shall bear interest at [***], adjusted every [***], compounded
[***]. No Mandatory Equalization Note shall [***].

 

(D)          (1)           At any time after the Issuance Date
of a Mandatory Shortfall Note in accordance with this Section 3.1 and prior to
the expiration of the [***] term of such Mandatory Shortfall Note, the
Non-Funding Member may, upon three (3) Business Days’ notice to the Joint
Venture Company and the Funding Member, make one or more Make-Up Contributions
to the Joint Venture Company in an aggregate amount up to the outstanding
principal balance of the Mandatory Shortfall Note. Each Make-Up Contribution
shall be accompanied by a payment equal to the accrued interest on the
corresponding Mandatory Shortfall Note, which interest payment shall not be
deemed to be a Capital Contribution. If the Make-Up Contribution is less than
the entire amount of principal and accrued interest on a Mandatory Shortfall
Note, the Make-Up Contribution shall be deemed to be a payment applied first to
all accrued interest and then to principal on such Mandatory Shortfall Note
(and the amount so treated as a payment with respect to accrued interest shall
not be treated as a Capital Contribution). If a Member is the Non-Funding Member
with respect to more than one Mandatory Shortfall Note outstanding at the time
of such contribution, the Non-Funding Member shall specify the Mandatory
Shortfall Note to which a Make-Up Contribution applies (or, if no such
specification is made, the Make-Up Contribution will be used to repay the
Mandatory Shortfall Note that is closest to its maturity date). Upon receipt of
such funds, the Joint Venture Company shall immediately repay to the Funding
Member the portion of the outstanding principal balance of and accrued interest
on the Mandatory Shortfall Note in an amount equal to the Make-Up Contribution
plus any accrued interest on the amount of such Make-Up Contribution. At such
time, the following shall occur: 
(a) the amount of the Make-Up Contribution equal to the principal
balance of the Mandatory Shortfall Note so repaid shall be deemed to be a
Capital Contribution by the Non-Funding Member and such amount shall be added
to the Capital Contribution Balance of the Non-Funding Member; and (b) a
percentage of the outstanding principal balance of the related Mandatory
Equalization Note equal to the percentage of the principal balance of the
Mandatory Shortfall Note repaid shall convert into a

 

11

 

Capital Contribution by the Funding Member, whereupon such amount shall
be added to the Capital Contribution Balance of the Funding Member.

 

(2)           To the extent excess
cash is available in accordance with Section 5.1 at any time to make
payments on any Mandatory Notes, if the Funding Member elects, by written
notice executed by its chief executive officer and delivered to the Joint
Venture Company prior to the making of the distributions under Section 5.1, to
receive such payments, the Joint Venture Company shall make payments on the
outstanding principal of and accrued interest on the Mandatory Shortfall Notes
(with any such payment being applied first to the payment in full of accrued
interest and then, to the extent of any remaining amount of such payment, to the
repayment of principal) and the outstanding principal of the Mandatory
Equalization Notes; provided, however, that any payment by the Joint Venture Company on
the unpaid principal of a Mandatory Shortfall Note must be accompanied by a
payment by the Joint Venture Company of an equal percentage of the unpaid
principal of the related Mandatory Equalization Note. Upon the Funding Member’s
receipt of funds from the Joint Venture Company to be applied to the repayment
of principal on the Mandatory Notes, the principal portions of the Mandatory
Notes that were so repaid by the Joint Venture Company shall no longer be
outstanding.

 

(E)           To the extent any
amount of a Mandatory Shortfall Note remains outstanding upon its maturity for
any reason, the Funding Member shall elect to do one of the following:  (1) transfer to the Joint Venture
Company as a Capital Contribution all or a portion of the obligations owing to
the Funding Member for (a) the unpaid principal of and accrued interest on the
Mandatory Shortfall Note and (b) the unpaid principal of the Mandatory
Equalization Note, whereupon an amount equal to the sum of (a) and (b) shall be
added to the Capital Contribution Balance of the Funding Member; or
(2) permit the Mandatory Notes to become a continuing note that will
remain outstanding, have a principal amount equal to the sum of (a) the
principal of and accrued interest on the former Mandatory Shortfall Note and
(b) the principal of the former Mandatory Equalization Note and be convertible
at any time thereafter at the option of the Funding Member (a “Continuing Mandatory  Note”), which
Continuing Mandatory Note shall bear no interest and shall mature on the
Liquidation Date. In the event that the Funding Member fails to make an
election, the Funding Member shall be deemed to have elected to permit the
Mandatory Notes to become a Continuing Mandatory Note. Upon conversion of a
Continuing Mandatory Note by the Funding Member, the amount of principal of
such Continuing Mandatory Note shall be added to the Capital Contribution
Balance of the Funding Member. To the extent excess cash is available in
accordance with Section 5.1 at any time to make payments on any Continuing
Mandatory Note, if the Funding Member elects to receive such payments, by
written notice executed by its chief executive officer and delivered to the
Joint Venture Company prior to the making of the distributions under Section
5.1, the Joint Venture Company shall make such payments on the outstanding
principal of the Continuing Mandatory Note. Upon the Funding Member’s receipt
of funds from the Joint Venture Company, the portion of the Continuing
Mandatory Note that was paid by the Joint Venture Company shall no longer be
outstanding.

 

12

 

3.2           Optional [***]
Financing.

 

(A)          In the event of a
Shortfall Amount in respect of an [***] Capital Contribution, the Funding
Member may, in its sole discretion, elect to extend Member Debt Financing to
the Joint Venture Company (the “Optional [***] Financing”)
consisting of all or a portion of the Shortfall Amount and the related Funding
Member Portion of such [***] Capital Contribution (the aggregate amount so
loaned, the “Optional [***] Loan Amount”).

 

(B)           In exchange for the
Optional [***] Financing, the Joint Venture Company shall issue to the Funding
Member two convertible notes, one having a principal amount equal to the amount
loaned by the Funding Member in respect of the Shortfall Amount (the “Optional [***] Shortfall Note”) and the other having a
principal amount equal to the Funding Member Portion (the “Optional
[***] Equalization Note” and, together with the related Optional
[***] Shortfall Note, the “Optional [***] Notes”),
in the form attached hereto as Exhibit B.

 

(C)           The Optional [***]
Shortfall Notes issued in accordance with this Section 3.2 will mature on
the [***] and shall bear interest at [***] (as in effect on the Issuance Date
thereof and adjusted every [***]), compounded [***]. The Optional [***]
Equalization Notes issued in accordance with this Section 3.2 shall bear
[***] interest and will mature on the [***]. The Optional [***] Notes shall be
convertible at any time. Upon conversion of the Optional [***] Notes by the
Funding Member, the sum of (a) the unpaid principal of and accrued interest on the
Optional [***] Shortfall Note and (b) the unpaid principal of the Optional
[***] Equalization Note shall be added to the Capital Contribution Balance of
the Funding Member.

 

(D)          If the Joint Venture
Company or the Funding Member, on the Joint Venture Company’s behalf, demands
payment and determines to pursue a collection action with respect to the
Non-Funding Member’s failure to deliver the Shortfall Amount relating to the
[***] Capital Contribution and the Joint Venture Company recovers from the
Non-Funding Member, the funds collected from the Non-Funding Member shall be
applied first to the payment to the Joint Venture Company and the Funding
Member, in full of the costs theretofore incurred by the Joint Venture Company
or the Funding Member, respectively, in the pursuit of the claim for payment
against the Non-Funding Member (and such amount shall not be treated as a
Capital Contribution), then to all accrued but unpaid interest on such payment
(and such amount shall not be treated as a Capital Contribution) and then to
the payment of an Optional [***] Shortfall Note to the extent funds are
available. At such time, the following shall occur: (1) a portion of the
Make-Up Contribution recovered from the Non-Funding Member equal to the
principal balance of the Optional [***] Shortfall Note so repaid shall be
deemed to be a Capital Contribution by the Non-Funding Member, and such amount
shall be added to the Capital Contribution Balance of the Non-Funding Member
and (2) a percentage of the outstanding principal balance of the related
Optional [***] Equalization Note equal to the percentage of the principal
balance of the Optional [***] Shortfall Note repaid shall convert into a
Capital Contribution by the Funding Member, and such amount shall be added to
the Capital Contribution Balance of the Funding Member.

 

(E)           To the extent excess
cash is available in accordance with Section 5.1 at any time to make
payments on any Optional [***] Notes, if the Funding Member elects to receive
such payments, by written notice executed by its chief executive officer and
delivered to

 

13

 

the Joint Venture Company prior to the making of the distribution under
Section 5.1, the Joint Venture Company shall make payments on the outstanding
principal of and accrued interest on the Optional [***] Shortfall Notes (with
any such payment being applied first to the payment in full of accrued interest
and then, to the extent of any remaining amount of such payment, to the
repayment of principal) and the outstanding principal of the Optional [***]
Equalization Notes; provided, however, that any payment by the Joint Venture Company on
the unpaid principal on an Optional [***] Shortfall Note must be accompanied by
a payment by the Joint Venture Company of an equal percentage of the unpaid
principal of the related Optional [***] Equalization Note. Upon the Funding
Member’s receipt of funds from the Joint Venture Company, the portion of the
Optional [***] Shortfall Note and related Optional [***] Equalization Note that
was paid by the Joint Venture Company shall no longer be outstanding.

 

3.3           Optional Other
Member Debt Financing.

 

(A)          In the event of a
Shortfall Amount in respect of an Other Capital Contribution, the Funding
Member may, in its sole discretion, elect to extend Member Debt Financing to
the Joint Venture Company (the “Optional Other Financing”),
consisting of all or a portion of the Shortfall Amount and the related Funding
Member Portion of such Other Capital Contribution.

 

(B)           In exchange for the
Optional Other Financing, the Joint Venture Company shall issue to the Funding
Member a convertible note (the “Optional Other Shortfall
Note”), in the form attached hereto as Exhibit C. The
Optional Other Shortfall Note shall bear [***] interest, shall mature on the
[***] and shall be convertible at any time.

 

3.4           Change In Committed Capital. Each time there is a change in a Member’s
Committed Capital, as a result of the making of a Capital Contribution or a
loan evidenced by a Member Note, a payment on a Member Note, or otherwise, each
Member’s respective Percentage Interest, Economic Interest and Sharing Interest
shall be immediately recalculated in accordance with the definitions of such
terms, taking into account any delay provided for in the definition of Sharing
Interest; provided, however, that in accordance
with Section 2.3(H) an adjustment to the Percentage Interests of the Members
relating to any funds remitted in respect of an Additional Capital Contribution
to be made pursuant to Article 2 shall be made when contemplated by
Section 2.3(H).

 

3.5           Change
in Consolidating Member. Following a Change in Consolidating
Member (as a result of which the Non-Funding Member becomes the Former
Consolidating Member), any (A) Make-Up Contribution made by the Non-Funding
Member to the Joint Venture Company or (B) payment on a Member Note by the
Joint Venture Company from excess funds available in accordance with
Section 5.1 shall not equal or exceed the amount that would result in the
occurrence of another Change in Consolidating Member or in the reduction of the
Consolidating Member’s Economic Interest below the lesser of [***]% and the
Consolidating Member’s then-existing Economic Interest.

 

3.6           Loans Through
Subsidiary. Notwithstanding any provision of this Article 3, in lieu of
providing any Member Debt Financing permitted or required of a Member, such
Member may elect to provide such Member Debt Financing through a Wholly-Owned
Subsidiary of such

 

14

 

Member; provided, however, that the
Member, rather than such Wholly-Owned Subsidiary of the Member, shall own the
Economic Interest, Sharing Interest and Committed Capital related to such
Member Debt Financing and shall have all rights against the Joint Venture
Company related to such Member Debt Financing.

 

ARTICLE 4.

CAPITAL ACCOUNTS AND ALLOCATIONS

 

4.1           Capital Accounts.
Each Member shall have a capital account maintained in accordance with the
terms of Article 2 of Appendix B to this Agreement (a “Capital Account”).

 

4.2           Allocations of
Book Income and Loss. Book income and Book loss for any Fiscal Year shall
be allocated to the Members in the manner provided in Article 3 of Appendix B.

 

4.3           Tax Allocations.
All items of income, gain, loss, and deduction shall be allocated among the
Members for federal income tax purposes in the manner provided in Article 4 of Appendix B.

 

4.4           Restoration of
Negative Balances. No Member with a deficit balance in its Capital Account
shall have any obligation to the Joint Venture Company, to any other Member or
to any third party to restore or repay said deficit balance. This
Section 4.4 shall not affect any of the other rights or obligations of the
Members under this Agreement or any other agreement.

 

ARTICLE 5.

DISTRIBUTIONS

 

5.1           Distributions.

 

(A)          Unless otherwise
unanimously agreed by the Members, the Joint Venture Company shall not make any
distributions until after the first anniversary of the Effective Date. Thereafter,
subject to Articles 6, 7 and 13 and the provisions of the Act and after
giving effect to all Capital Contributions or Member Debt Financing to be made
on the same date under Article 2 and Article 3, respectively, the
Joint Venture Company shall, subject to Section 5.1(C), make distributions of cash
to the Members as set forth in this Section 5.1(A), on a [***] basis on the
[***] day of each Fiscal [***] (or if such day is not a Business Day, then on
the first Business Day after such day) to the extent that the Joint Venture
Company’s cash as of the end of the immediately preceding Fiscal [***] is in
excess of the sum of (y) any amounts that have been contributed as a Capital
Contribution or loaned to the Joint Venture Company as Member Debt Financing
and that are being held for the purpose of making capital or operating
expenditures in the current Fiscal [***] or the first twenty-five (25) days of
the immediately succeeding Fiscal [***] (or if such day is not a Business Day,
then on the first Business Day after such day) and (z) all reserves that
are considered reasonably necessary by the Board of Managers to pay other
expenditures that are reasonably likely to be payable in the period described
in clause (y) above, and in any event including the reserve established under
Section 2.2 and amounts remaining in the Accumulated Distributions
Accounts; provided, however,
that the Board of Managers shall cause the Joint Venture Company to use any
cash available for distribution as follows:

 

15

 

(1)           first,
to pay in full all amounts outstanding under any outstanding Mandatory
Shortfall Notes and related Mandatory Equalization Notes (provided
any holder thereof has requested such payment by written notice executed by its
chief executive officer and delivered to the Joint Venture Company prior to the
distribution thereof under this Section 5.1) in order of their respective
maturity dates;

 

(2)           second,
to pay any outstanding Continuing Mandatory Notes (provided
any holder thereof has requested such payment by written notice executed by its
chief executive officer and delivered to the Joint Venture Company prior to the
distribution thereof under this Section 5.1) in the order that the respective
maturity dates of the related Mandatory Shortfall Notes and Mandatory
Equalization Notes occurred;

 

(3)           third,
to pay in full all amounts outstanding under any other outstanding Member Notes
(provided any holder thereof has
requested such payment by written notice executed by its chief executive
officer and delivered to the Joint Venture Company prior to the distribution
thereof under this Section 5.1);

 

(4)           fourth,
to make a distribution to a Member whose aggregate, cumulative distributions
(not including any payments made pursuant to Sections 5.1(A)(1), (2) and
(3)) immediately prior to such distribution are less than the amount equal to
the Member’s Sharing Interest (as such Sharing Interest is determined
immediately after any payments made under Sections 5.1(A)(1), (2) and (3))
multiplied by the aggregate, cumulative distributions (not including any
payments made pursuant to Sections 5.1(A)(1), (2) and (3)) of the Joint
Venture Company immediately prior to such distribution, until such Member’s
aggregate, cumulative distributions (not including payments made pursuant to
Sections 5.1(A)(1), (2) and (3), but including such distribution pursuant
to this Section 5.1(A)(4)) are equal to its Distribution Entitlement; and

 

(5)           finally, to make
distributions pro rata to the Members in
accordance with their respective Sharing Interests (as such Sharing Interests
are determined immediately after any payments made under Sections 5.1(A)(1),
(2) and (3)).

 

(B)           Distributions of
cash are only to be made to the extent cash is available to the Joint Venture
Company without requiring (1) the sale of Joint Venture Company assets (other
than in the ordinary course of business) or the pledge of Joint Venture Company
assets at a time or on terms that the Board of Managers believes are not in the
best interests of the Joint Venture Company or (2) a reduction in reserves that
the Board of Managers believes are reasonably necessary for Joint Venture
Company purposes for the then-current Fiscal [***] and the first twenty-five
(25) days of the immediately succeeding Fiscal [***] (or if such day is not a
Business Day, then through the first Business Day after such day).

 

(C)           The Joint Venture
Company shall maintain in its books of account for each Member a special
purpose account (the “Accumulated Distributions
Accounts”) for purposes of recording amounts that would be
distributed to such Member under Section 5.1(A) but for the application of
this Section 5.1(C). Notwithstanding anything to the contrary in this
Section 5.1, in lieu of actually making the cash distributions
contemplated by this Section 5.1,

 

16

 

the Joint Venture Company shall (except to the extent a Member requests
direct payment to the Member) increase each Member’s Accumulated Distributions
Account by the amount of such cash that was to have been distributed to such
Member. Subsequently, when a Member is required to, or desires to, make a
Capital Contribution required or permitted by this Agreement, in lieu of making
such Capital Contribution such Member may instruct the Joint Venture Company to
reduce such Member’s Accumulated Distributions Account in an amount (not to
exceed the amount in such Member’s Accumulated Distributions Account) up to the
amount of such Capital Contribution, which shall be treated for all purposes
(including for purposes of the definition of Capital Contribution Balance) as
if such Member had made such Capital Contribution at the time designated in
such instruction. A Member may, at any time, demand payment of, and the Joint
Venture Company shall immediately pay, the full amount of such Member’s
Accumulated Distributions Account, in which event the amount so paid shall
reduce the Member’s Accumulated Distributions Account.

 

5.2           Withholding Tax
Payments and Obligations. In the event that withholding taxes are paid or
required to be paid in respect of payments made to or by the Joint Venture
Company, or allocations to a Member, such withholding shall be treated as
follows:

 

(A)          Payments to the
Joint Venture Company. If the Joint Venture Company receives proceeds in
respect of which a tax has been withheld, the Joint Venture Company shall be
treated as having received cash in an amount equal to the amount of such
withheld tax, and, for all purposes of this Agreement, each Member shall be
treated as having received a distribution pursuant to Section 5.1 equal to
the portion of the withholding tax allocable to such Member, as reasonably
determined by the Board of Managers. Such amounts shall not be treated as Joint
Venture Company expenses.

 

(B)           Payments by the
Joint Venture Company. The Joint Venture Company is authorized to withhold,
and the Tax Matters Partner shall take any actions reasonably necessary to
withhold, from any payment made to, or any distributive share of, a Member any
taxes required by law to be withheld, and in such event, such taxes shall be
treated as if an amount equal to such withheld taxes had been distributed to
such Member pursuant to Section 5.1 (or, as provided in
Section 5.2(C), loaned to such Member).

 

(C)           Certain Withheld
Taxes Treated as Demand Loans. Any taxes withheld pursuant to Sections
5.2(A) or 5.2(B) hereof shall be treated as if distributed to the relevant
Member pursuant to Section 5.1 to the extent an amount equal to such withheld
taxes would then be distributable to such Member, and, to the extent in excess
of such distributable amounts, as a demand loan payable by the Member to the
Joint Venture Company with interest at a rate equal to [***] (or, if less, the
maximum rate allowed by law), compounded and adjusted [***], commencing five
(5) days after written demand therefor on behalf of the Joint Venture Company
is made by any other Member.

 

5.3           Distribution
Limitations. Notwithstanding anything in this Agreement to the contrary,
the Joint Venture Company shall not make any distribution of cash or other
property to any Member if the distribution would violate any agreement to which
the Joint Venture Company or any of its Subsidiaries is a party or by which it
or any of them is bound.

 

17

 

ARTICLE 6.

MANAGEMENT; BOARD OF MANAGERS

 

6.1           Management Power.
Except as specifically provided in Article 7, Article 8, and
Sections 11.1, 11.2 and 11.3, all management powers over the business,
property and affairs of the Joint Venture Company are exclusively vested in a
board of Managers (the “Board of Managers”),
and, except as provided in Article 7, Article 8 and Sections 11.1, 11.2
and 11.3, no Member shall have any right to participate in or exercise control
or management power over the business and affairs of the Joint Venture Company
or otherwise to bind, act or purport to act on behalf of the Joint Venture
Company in any manner. Subject to the limitations set forth in this Agreement,
the Board of Managers shall have all the rights and powers that may be
possessed by a manager under the Act, including the power to incur indebtedness
for trade payables and equipment leases, the power to enter into agreements and
commitments of all kinds, the power to manage, acquire and dispose of Joint
Venture Company assets, and all ancillary powers necessary or convenient as to
the foregoing. No individual Manager, in his or her capacity as such, may act
on behalf of the Board of Managers or bind the Joint Venture Company.

 

6.2           Number of
Managers; Appointment of Managers.

 

(A)          The Board of Managers
shall consist of six (6) individuals (each such individual, a “Manager”). Subject to Section 6.2(B), one half of the
Managers shall be appointed by Micron and one half of the Managers shall be
appointed by Intel. The initial Managers appointed by Micron are listed on Appendix
C, and the initial Managers appointed by Intel are listed on Appendix C.
Each Member having the right to appoint a Manager or Managers in accordance
with this Section shall also have the right, in its sole discretion, to remove
such Manager or Managers at any time by delivery of written notice to the other
Member(s) and the Joint Venture Company. Any vacancy in the office of a Manager
for any reason other than pursuant to Section 6.2(B) (including as a
result of such Manager’s death, resignation, retirement or removal pursuant to
this Section) shall be filled by the Member that appointed the relevant Manager.
Unless a Manager resigns, dies, retires or is removed in accordance with this
Section, each Manager shall hold office until a successor shall have been duly
appointed by the appointing Member.

 

(B)           Effect of Change
in Percentage Interest on Managers. While a Member’s Percentage Interest is
below [***] percent ([***] %) but at least [***] percent ([***]%), the number of
Managers such Member is entitled to appoint to the Board of Managers shall be
reduced to [***] ([***]), and the number of Managers the other Member is
entitled to appoint to the Board of Managers shall be increased to [***]
([***]). While a Member’s Percentage Interest is below [***] percent ([***]%)
but at least [***] percent ([***]%), the number of Managers such Member is
entitled to appoint to the Board of Managers shall be reduced to [***] ([***]),
and the number of Managers the other Member is entitled to appoint to the Board
of Managers shall be increased to [***] ([***]). While a Member’s Percentage
Interest is below [***] percent ([***]%), the number of Managers such Member is
entitled to appoint to the Board of Managers shall be reduced to [***] ([***]),
and the other Member shall be entitled to appoint [***] Managers to the Board
of Managers; provided, however,
that the Member with a Percentage Interest of less than [***] percent ([***]%)
shall be entitled to designate, from time to time, an individual who shall not
be a member of, and shall have no right to vote at any

 

18

 

meeting of, the Board of Managers, but who shall have the right to
receive notice of, attend, and act as an observer for such Member at, any
meeting of the Board of Managers, and who shall receive all materials delivered
to the Board of Managers in connection with any such meetings. If either Member’s
Percentage Interest should be below any of the threshold levels set forth above
and if such Member (the “Appointing Member”)
then has more designees serving on the Board of Managers than the number to
which it is entitled, such Appointing Member shall immediately identify by
written notice to the other Member the designee or designees on the Board of
Managers that will cease serving on the Board of Managers and each such
designee shall thereupon cease to be a Manager or member of the Board of
Managers. If such Appointing Member fails to make such designation within five
(5) Business Days after written demand by the other Member, the other Member
may designate by written notice to the Appointing Member one or more (as
appropriate) of the Appointing Member’s designees on the Board of Managers that
will cease serving on the Board of Managers and each such designee shall
thereupon cease to be a Manager or member of the Board of Managers. The other
Member who is entitled to appoint one or more additional Managers to serve on
the Board of Managers may immediately appoint such additional Managers by
written notice to the other Member designating such Managers. Similarly, if a
Member whose Percentage Interest fell below any threshold level set forth in
this Section 6.2(B) subsequently increases its Percentage Interest above
any such level, the process shall be reversed.

 

(C)           Chairman of the
Board of Managers. Until the end of the Fiscal Year ending in 2007, Micron
shall have the right to designate one of its designated Managers as chairman of
the Board of Managers (the “Chairman”), and
thereafter, for each subsequent Fiscal Year of the Joint Venture Company, the
right to designate the Chairman (from among its designated Managers) shall
alternate between Intel and Micron; provided, however, that while the Percentage Interest of a Member is
below [***] percent ([***]%), the Chairman of the Board will be appointed by
the other Member. The Chairman shall preside at all meetings of the Board of
Managers and shall have such other duties and responsibilities as may be
assigned to him or her by the Board of Managers. The Chairman may delegate to
any Manager authority to chair any meeting, either on a temporary or a
permanent basis. The Chairman must include any item submitted by a Member or
Manager for consideration at a meeting of the Board of Managers, may not cut
off debate on any matter being considered by the Board of Managers and shall
call for a vote on any matter at the request of any Manager, including any
matter described in Section 6.3(B).

 

(D)          Presence of
Certain Officers at Meetings of Board of Managers. Each of the Authorized
Officers, or the Chief Executive Officer, as applicable, each of whom shall not
be a member of the Board of Managers, may attend, but shall have no right to
vote at, all meetings of the Board of Managers; provided,
however, that the Board of Managers may
exclude the Authorized Officers, or the Chief Executive Officer, as applicable,
from such meetings or such portions of meetings at which the compensation or
performance of, or any issue involving, either of the Authorized Officers, or
the Chief Executive Officer, as applicable, is discussed as the Board of
Managers, in its sole discretion, deems appropriate. If either Authorized
Officer is excluded from any meeting or portion of a meeting of the Board of
Managers, the other Authorized Officer shall also be excluded from such meeting
or portion of such meeting.

 

19

 

6.3           Voting of
Managers.

 

(A)          Each Manager shall be
entitled to one (1) vote, and Managers shall not be entitled to cast their
votes through proxies (except as provided in Section 6.7). Subject to
Sections 6.3(B) and 6.3(C), all actions, determinations or resolutions of
the Board of Managers shall require the affirmative vote or consent of a
majority of the Board of Managers present at any meeting at which a quorum is
present (i.e., the affirmative vote of four (4)
Managers if the total number of Managers is six (6)), which majority must
include at least [***] appointed by each Member at all times that each Member
has at least [***] to the Board of Managers; provided,
however, that any matter that is a Micron Matter, as specified on Schedule 4,
shall be deemed approved upon the approval of a majority of the Managers
appointed by Micron, and any matter that is an Intel Matter, as specified on Schedule 3,
shall be deemed approved upon the approval of a majority of the Managers
appointed by Intel. Except as specifically provided in Article 7, Article 8 and
Sections 11.1, 11.2 and 11.3, the Board of Managers shall have the right,
power and authority to take all actions of the Joint Venture Company, including
the following, and in no event shall any of the following actions be taken
without the approval of the Board of Managers (which approval may be obtained
through the adoption of an Undisputed Approved Business Plan by the Board of
Managers in accordance with Sections 11.1 and 11.2, provided
that the relevant Undisputed Approved Business Plan sets forth such action in
reasonable detail), by or with respect to the Joint Venture Company or any
Subsidiary of the Joint Venture Company:

 

(1)           entering into any
agreement or making any modification or amendment to, or terminating, any
agreement between (a) the Joint Venture Company or any Subsidiary of the
Joint Venture Company and (b) any Member or an Affiliate of a Member;

 

(2)           selecting attorneys,
accountants, auditors and financial advisors for the Joint Venture Company or
any of its Subsidiaries;

 

(3)           adopting, or making
any material modification, amendment or termination of, material accounting and
tax policies, procedures and principles applicable to the Joint Venture Company
or any of its Subsidiaries other than those made in accordance with
Section 10.9 (provided, however, that the right, power and authority of the Board of
Managers with respect to tax policies, procedures and principles granted under
this Section 6.3 shall be subject to the provisions of Section 10.7 hereof);

 

(4)           adopting or making
any material changes to any employee benefit plan, including any incentive
compensation plan;

 

(5)           setting any
distribution to the Members not required under Article 5;

 

(6)           subject to Section
6.3(B)(1)(b), commencing or settling litigation, except routine employment
litigation matters;

 

20

 

(7)           making any material
purchase, sale or lease (as lessor or lessee) of any real property (except for
any such purchase or lease to effectuate an Intel Matter that is approved by a
majority of the Intel Managers then in office or a Micron Matter that is
approved by a majority of the Micron Managers then in office);

 

(8)           acquiring securities
or any equity ownership interest in any Person, other than a Wholly-Owned
Subsidiary of the Joint Venture Company established to hold a Fab or assets of
the Joint Venture Company or any of its Subsidiaries;

 

(9)           making any public
announcement by the Joint Venture Company or any Subsidiary of the Joint
Venture Company of any material non-public information not previously approved
for public announcement by the Board of Managers;

 

(10)         entering into or
amending any collective bargaining arrangements or waiving any material
provision or requirement thereof;

 

(11)         approving any
Proposed Business Plan, or amending or modifying any Approved Business Plan (or
any modification thereof), subject to Sections 11.1(C), 11.2(D) and 11.2(E);

 

(12)         making any filing
with, public comments to, or negotiation or discussion with, any Governmental
Entity (excluding regular operating filings and other routine administrative
matters and other than any such filing, public comments, or negotiation or
discussion relating to an Intel Matter that is approved by a majority of the
Intel Managers then in office or relating to a Micron Matter that is approved
by a majority of the Micron Managers then in office); and

 

(13)         establishing,
overseeing and modifying the investment policies of the Joint Venture Company
with respect to funds held by the Joint Venture Company, including funds
reserved pursuant to Section 2.2 pending the use of such funds in accordance
with any applicable Approved Business Plan.

 

(B)           (1)           Notwithstanding the foregoing, any
action of the Board of Managers with respect to any of the following matters
relating to a Member (the “Interested Member”)
shall be deemed approved by the Board of Managers if approved either by the
affirmative vote at a meeting of the Board of Managers of a majority of the
Managers appointed by the other Member (the “Independent
Member”) with respect to such action or by written consent of a
majority of the Managers appointed by such Independent Member:

 

(a)           any determination to
grant indemnification to the Interested Member for any matter not contemplated
by Section 14.2 hereof; or

 

(b)           the pursuit of any
remedy by the Joint Venture Company or a Subsidiary of the Joint Venture
Company against the Interested Member or Affiliate of the Interested Member in
accordance with Section 7.5; or

 

21

 

(c)           any other matter
(other than a matter provided for in Section 6.3(B)(2)) in which the
interests of the Joint Venture Company or a Subsidiary of the Joint Venture
Company and the Interested Member, or an officer, director, controlling
stockholder or Affiliate of the Interested Member, are adverse.

 

(2)           The entry into,
modification of, amendment to, or termination by the Joint Venture Company of
any agreement or other transaction between the Joint Venture Company or any
Subsidiary of the Joint Venture Company, on the one hand, and the Interested
Member or an officer, director, controlling stockholder or Affiliate of the
Interested Member, on the other hand, (an “Interested  Member  Transaction”)
shall be permitted only if:

 

(a)           The material facts
as to the relationship or interest of the Interested Member (and its officers,
directors, controlling stockholders and Affiliates) as to the Interested Member
Transaction are disclosed or are known to the Board of Managers and the
Independent Member, and the Board of Managers in good faith authorizes the
Interested Member Transaction by the affirmative votes of a majority of the
Managers appointed by the Independent Member, even though the Managers
appointed by the Independent Member may be less than a quorum; or

 

(b)           The material facts
as to the relationship or interest of the Interested Member (and its officers,
directors, controlling stockholders and Affiliates) as to the Interested Member
Transaction are disclosed or are known to the Independent Member, and the Interested
Member Transaction is specifically approved in writing by the Independent
Member; or

 

(c)           The Interested
Member Transaction is authorized, approved or ratified by the Board of Managers
and is fair as to the Joint Venture Company or the applicable Subsidiary of the
Joint Venture Company and the Independent Member as of the time it is so
authorized, approved or ratified by the Board of Managers.

 

(3)           Managers appointed
by the Interested Member may be counted in determining the presence of a quorum
at a meeting of the Board of Managers which authorizes the Interested Member
Transaction.

 

(C)           Notwithstanding
anything in this Agreement to the contrary, if a Member has only [***] to the
Board of Managers as a result of its Percentage Interest falling below the
requisite threshold set forth in Section 6.2(B), the following actions
will require the approval of a majority of the members of the Board of
Managers, including the Manager appointed by such Member:

 

(1)           any material
modification, amendment or termination of material accounting and tax policies,
procedures and principles applicable to the Joint Venture Company or any of its
Subsidiaries, other than those made in accordance with Section 10.9 (provided, however, that
the right, power and authority of the Board of

 

22

 

Managers with respect to tax policies,
procedures and principles granted under this Section 6.3 shall be subject to
the provisions of Section 10.7 hereof); and

 

(2)           except for any
litigation matter subject to Section 6.3(B)(1)(b), any settlement of a
litigation matter or a group of related litigation matters, other than routine
litigation matters not involving current or former members of management, where
the amount of damages payable by the Joint Venture Company or any of its
Subsidiaries exceeds $[***] or that results in disparate treatment of the
Members.

 

6.4           Meetings of the
Board of Managers; Quorum. The Board of Managers shall hold meetings at
least once per Fiscal Quarter. Subject to a Manager’s right to appoint an
alternate Manager in accordance with Section 6.7, the presence of at least a
majority of the Managers (four (4) while the number of Managers is six (6)), in
person or by telephone conference or by other means of communications
acceptable to the Board of Managers, shall be necessary and sufficient to
constitute a quorum for the purpose of taking action by the Board of Managers
at any meeting of the Board of Managers; provided, that
such quorum shall consist of at least a majority of the Managers appointed by
each Member that appoints an odd number of Managers greater than one, and at
least half of the Managers appointed by each Member that appoints an even
number of Managers. No action taken by the Board of Managers at any meeting
shall be valid unless the requisite quorum is present.

 

6.5           Notice; Waiver.
The regular quarterly meetings of the Board of Managers described in Section
6.4 shall be held upon not less than ten (10) days’ written notice. Additional
meetings of the Board of Managers shall be held (A) at such other times as may
be determined by the Board of Managers, (B) at the request of at least two (2)
Managers or either Authorized Officer, or the Chief Executive Officer, as
applicable, upon not less than five (5) Business Days’ written notice or (C) in
accordance with Section 17.1, following a failure by the Board of Managers to
adopt or reject a proposal for action presented to it. For purposes of this
Section, notice may be provided via facsimile, email or any other manner
provided in Section 18.1, or telephonic notice to each Manager (which
notice shall be provided to the other Managers by the requesting Managers). The
presence of any Manager at a meeting (including by means of telephone
conference or other means of communications acceptable to the Board of
Managers) shall constitute a waiver of notice of the meeting with respect to
such Manager, unless such Manager declares at the meeting that such Manager
objects to the notice as having been improperly given. The Board of Managers
shall cause written minutes to be prepared of all actions taken by the Board of
Managers and shall cause a copy thereof to be delivered to each Manager within
fifteen (15) days of each meeting.

 

6.6           Action Without a
Meeting; Meetings by Telecommunications.

 

(A)          On any matter that is
to be voted on, consented to or approved by the Board of Managers, the Board of
Managers may take such action without a meeting, without prior notice and
without a vote if a consent or consents in writing, setting forth the action so
taken, shall be signed by the Managers having not less than the minimum votes
that would be necessary to authorize or take such action, in accordance with
the terms of this Agreement, at a meeting at which all the Managers were present
and voted.

 

23

 

(B)           Unless the Act
otherwise provides, members of the Board of Managers shall have the right to
participate in all meetings of the Board of Managers by means of a conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other at the same time and
participation by such means shall constitute presence in person at a meeting.

 

6.7           Alternate
Managers. Each Manager shall have the right to designate an individual to
attend and vote at meetings of the Board of Managers as the proxy of such
regularly appointed Manager.

 

6.8           Compensation of
Managers. The Managers, in their capacity as such, shall not receive
compensation from the Joint Venture Company. Each Member shall bear the cost
and expenses incurred by its appointed Managers in connection with the Joint
Venture Company’s business while such Managers are serving in such capacity.

 

ARTICLE 7.

MEMBERS

 

7.1           Rights of
Members; Meetings.

 

(A)          The Members shall be
the members of the Joint Venture Company under the Act, and shall be entitled
to the following:  (1) receive
financial reports and tax reporting information referenced in Sections 10.4 and
10.6; (2) receive (y) the then-current Approved Business Plans, as updated
from time to time in accordance with Section 11.1 or Section 11.2 and any
Proposed Business Plan and (z) the then-current Operating Plan; (3) receive
such additional information of the Joint Venture Company or any of its
Subsidiaries as may reasonably be requested by a Member; (4) copies of any
third party audit findings from any audit of the Joint Venture Company or any
Subsidiary of the Joint Venture Company, any subcontractor for the Joint
Venture Company or any Subsidiary of the Joint Venture Company or any Person
that provides services to the Joint Venture Company or any Subsidiary of the
Joint Venture Company (including a Member in such capacity but only to the
extent contemplated by the applicable service agreement with such Member); and
(5) such additional rights as are elsewhere provided in this Agreement or by
mandatory requirements of Applicable Law, including mandatory requirements of
the Act.

 

(B)           At any time, and
from time to time, the Board of Managers may, but shall not be required to,
call meetings of the Members.

 

(1)           Special meetings of
the Members for any proper purpose or purposes may be called at any time by
either Member. Each meeting of the Members shall be conducted by the Authorized
Officers, or the Chief Executive Officer, as applicable, or any mutually
agreeable designee of the Authorized Officers or designee of the Chief
Executive Officer, as applicable, and shall be held at the principal offices of
the Joint Venture Company or at such other place as may be agreed upon from
time to time by the Members. The Authorized Officers or their designee, or the
Chief Executive Officer or his or her designee, as applicable, shall include
any item submitted by a Member for consideration at a meeting of the Members,
may not cut off debate on any

 

24

 

matter being considered by the Members and shall call for a vote on any
matter at the request of any Member. Meetings may be held by telephone if both
Members so consent.

 

(2)           Except as otherwise
required by Applicable Law, written notice (which may be provided via facsimile
or electronic mail with receipt confirmation) of each meeting of the Members of
the Joint Venture Company shall be given not less than five (5) nor more than
thirty-five (35) days before the date of such meeting.

 

(3)           The presence, either
in person or by proxy, of Members whose combined Percentage Interests equal one
hundred percent (100%) is required to constitute a quorum at any meeting of the
Members.

 

(4)           Each Member may
authorize any Person (provided such
Person is an officer of the Member) to act for it or on its behalf on all
matters in which the Member is entitled to participate. Each proxy must be
signed by a duly authorized officer of the Member. All other provisions
governing, or otherwise relating to, the holding of meetings of the Members
shall be established from time to time as mutually agreed by the Members.

 

(5)           The Members shall be
entitled to vote on any matter submitted to a vote of the Members in proportion
to their Percentage Interests. Members may vote either in person or by proxy at
any meeting. Each Member shall be entitled to cast one (1) vote for each full
percentage of the Percentage Interest held by such Member. Fractional votes
shall be permitted.

 

(6)           Any action permitted
or required by the Act, the Certificate, or this Agreement to be taken at a
meeting of Members may be taken without a meeting if a consent in writing,
setting forth the action to be taken, is signed by the Member or Members whose
vote or approval is required for the taking of such action under this Agreement.
Such consent shall have the same force and effect as if such action was
approved by vote at a meeting at which all the Members were present and voted
and may be stated as such in any document or instrument filed with the
Secretary of State of Delaware, and the execution of such consent shall
constitute attendance or presence in person at a meeting of Members.

 

7.2           Limitations on
the Rights of Members.

 

(A)          Subject to any
mandatory requirements of Applicable Law, including mandatory requirements
under the Act, except as provided in this Agreement, no Member (in its capacity
as a Member) has the right to take any part whatsoever in the management and
control of the business of the Joint Venture Company, sign for or bind the
Joint Venture Company or any of its Subsidiaries, compel a sale or appraisal of
the Joint Venture Company’s or any of its Subsidiaries’ assets, or sell or
assign its Interest in the Joint Venture Company or any of its Subsidiaries.

 

(B)           No Member may,
without the prior written consent of the other Member: (1) confess any judgment
against the Joint Venture Company or any of its Subsidiaries; (2) act

 

25

 

for, enter into any agreement on behalf of or otherwise purport to bind
the other Member, the Joint Venture Company or any of its Subsidiaries; (3) do
any acts in contravention of this Agreement or any of the Affiliate Agreements;
(4) except as contemplated by the Affiliate Agreements, dispose of the goodwill
or the business of the Joint Venture Company or any of its Subsidiaries; (5)
Transfer its Interest in the Joint Venture Company (except as provided in
Sections 12.2, 12.4 or 12.5); or (6) assign the property of the Joint Venture
Company or any of its Subsidiaries in trust for creditors or on the assignee’s
promise to pay any indebtedness of the Joint Venture Company or any of its
Subsidiaries.

 

7.3           Limited Liability
of the Members. Except to the extent expressly set forth in Article 2
of this Agreement or otherwise in a written instrument executed by the Member
against whom any liability is asserted in favor of the Person asserting such
liability, the Members (solely in their capacity as Members) have no obligation
to contribute to the Joint Venture Company or any of its Subsidiaries and shall
not be liable for any debt, obligation or liability of the Joint Venture
Company or any of its Subsidiaries. Any liability to return distributions made
by the Joint Venture Company is limited to mandatory requirements of the Act or
of any other Applicable Law.

 

7.4           Voting Rights of
Members.

 

(A)          Notwithstanding
anything in this Agreement to the contrary, for so long as a Member’s
Percentage Interest is greater than [***] ([***]%) , the following actions
shall require the unanimous approval of the Members:

 

(1)           any amendment,
restatement or revocation of the Certificate, except (a) as provided in
Section 1.5(A) to effectuate a change in the principal place of business of the
Joint Venture Company, (b) to change the name of the Joint Venture
Company, (c) as required by Applicable Law, or (d) to accomplish any
action that would be allowed under the terms and conditions of this Agreement
where the only prohibition on the performance of such action is the terms of
the Certificate;

 

(2)           any material change
in the business purpose of the Joint Venture Company or any of its
Subsidiaries, other than a change in accordance with the proviso to
Section 1.4;

 

(3)           any Transfer of any
Interest to any Person, except as expressly permitted by Sections 12.2, 12.4 or
12.5;

 

(4)           any agreement with
respect to all present or former Members to extend the period for assessing any
tax which is attributable to any Joint Venture Company item or item of any of
the Joint Venture Company’s Subsidiaries;

 

(5)           approving the
inclusion within the business purpose of the Joint Venture Company or any of
its Subsidiaries the manufacture of memory products other than NAND Flash
Memory Products, subject to the proviso to Section 1.4;

 

26

 

(6)           any approval or
setting of any distribution to any Member (other than distributions of cash in
accordance with Article 5); provided, however, that a Member’s consent for the purposes of this
Section 7.4(A)(6) shall not be unreasonably withheld; and

 

(7)           the sale, license,
assignment or other transfer of any intellectual property owned or in the
possession of the Joint Venture Company or any Subsidiary of the Joint Venture
Company (including any technology or know-how, whether or not patented, any
trademark, trade name or service mark, any copyright or any software or other
method or process) to any Person other than a Facilities Company or
Wholly-Owned Subsidiary, except as provided in the Joint Venture Documents.

 

(B)           Notwithstanding
anything in this Agreement to the contrary, and in addition to the provisions
of Section 7.4(A), for so long as a Member’s Percentage Interest is at least
[***] percent ([***]%), the following actions shall require the unanimous
approval of the Members:

 

(1)           the incurrence of
any indebtedness for borrowed money, other than (i) as provided in Article
2 or Article 3 and (ii)  any third-party equipment financing;

 

(2)           any sale, lease,
pledge (other than pledges of equipment under a permitted third-party equipment
financing), assignment, transfer (other than transfers to a Wholly-Owned
Subsidiary of the Joint Venture Company) or other disposition of any asset of
the Joint Venture Company or any of its Subsidiaries or group of assets in each
case other than in the ordinary course, unless approved in an Undisputed
Approved Business Plan or unless made in connection with a dissolution of the
Joint Venture Company as contemplated by Article 13; provided,
however, that unanimous approval will
not be required if the aggregate amount of such sales, leases, pledges (other
than pledges of equipment under a permitted third-party equipment financing),
assignments, transfers (other than transfers to a Wholly-Owned Subsidiary of
the Joint Venture Company) and other dispositions not in the ordinary course do
not exceed the amount provided for in an Undisputed Approved Business Plan by
more than $[***] in any Fiscal Year;

 

(3)           any purchase, lease
or other acquisition, in any single transaction or in a series of related
transactions, of personal property or services or capital equipment
inconsistent with an Approved Business Plan (after taking into account any
general overrun provisions contained in such Approved Business Plan);

 

(4)           any capital
expenditures or series of related capital expenditures, that exceed the amount
provided therefor in the most recently Approved Business Plan (after taking
into account any general spending overrun provisions contained in such Approved
Business Plan) or any commitment by the Joint Venture Company or any Subsidiary
of the Joint Venture Company to make expenditures in any development project in
an amount greater than the amount set forth in the most recently Approved Business
Plan (after taking into account any general spending overrun provisions
contained in such Approved Business Plan);

 

27

 

(5)           any merger,
consolidation or other business combination to which the Joint Venture Company
or any Subsidiary of the Joint Venture Company is a party, or any other
transaction to which the Joint Venture Company or any Subsidiary of the Joint
Venture Company is a party (other than where the Joint Venture Company is
merged or combined with or consolidated into a Wholly-Owned Subsidiary of the
Joint Venture Company), resulting in a change of control of the Joint Venture
Company or any Subsidiary of the Joint Venture Company, other than a change of
control that may occur pursuant to Article 2 or Article 3;

 

(6)           (a) the
voluntary commencement or the failure to contest in a timely and appropriate
manner any involuntary proceeding or the filing of any petition seeking relief
under bankruptcy, insolvency, receivership or similar laws, (b) the
application for or consent to the appointment of a receiver, trustee,
custodian, conservator or similar official for the Joint Venture Company or any
Subsidiary of the Joint Venture Company, or for a substantial part of their
property or assets, (c) the filing of an answer admitting the material
allegations of a petition filed against the Joint Venture Company or any
Subsidiary of the Joint Venture Company in any proceeding described above,
(d) the consent to any order for relief issued with respect to any
proceeding described in this subsection (6), (e) the making of a general
assignment for the benefit of creditors, or (f) the admission in writing
of the Joint Venture Company’s inability, or the failure of the Joint Venture
Company or of any Subsidiary of the Joint Venture Company generally, to pay its
debts as they become due or the taking of any action for the purpose of
effecting any of the foregoing;

 

(7)           the acquisition of
any business or entry into any joint venture or partnership;

 

(8)           the creation of any
direct or indirect Subsidiary of the Joint Venture Company other than a
Facilities Company or any Wholly-Owned Subsidiary; and

 

(9)           negotiating external
sources of additional wafer manufacturing capacity for Joint Venture Products.

 

In addition, such Member shall have the right to review and comment on
any public announcement by the Joint Venture Company or any Subsidiary of the
Joint Venture Company.

 

(C)           Notwithstanding
anything in this Agreement to the contrary, and in addition to the provisions
of Sections 7.4(A) and 7.4(B), for so long as a Member’s Percentage Interest is
at least [***] percent ([***]%), the following actions shall require the
unanimous approval of the Members:

 

(1)           the purchase,
license or other acquisition of rights to third party intellectual property
other than routine software licenses in connection with the Joint Venture
Company’s or any of its Subsidiaries’ ongoing operations.

 

28

 

7.5           Defaulting Member.
Notwithstanding anything in this Agreement to the contrary, in no event shall
the pursuit of any remedy by the Joint Venture Company or any of its
Subsidiaries against a Defaulting Member pursuant to Section 17.7 require the
consent of such Defaulting Member. The Non-Defaulting Member shall have the
right to control the Joint Venture Company’s pursuit of any such claim against
the Defaulting Member.

 

7.6           Cooperation.

 

(A)          Intel
may take action on behalf of the Joint Venture Company as contemplated by Schedule 3
and shall cooperate with and keep Micron regularly informed with respect to any
Intel Matter.

 

(B)           Micron
may take action on behalf of the Joint Venture Company as contemplated by Schedule 4
and shall cooperate with and keep Intel regularly informed with respect to any
Micron Matter.

 

ARTICLE 8.

OFFICERS AND COMMITTEES

 

8.1           Intel Executive
Officer.

 

(A)          Until the [***]
anniversary of the Effective Date (the “Management Conversion Date”),
the Joint Venture Company shall have an executive officer appointed by Intel
(the “Intel Executive Officer”) who, together
with the Micron Executive Officer, shall have responsibility for the day-to-day
management and control of the business and affairs of the Joint Venture Company
and its Subsidiaries and overseeing the implementation of the strategic
direction of the Joint Venture Company and its Subsidiaries. The Intel
Executive Officer shall perform such duties and have such powers specifically
delegated to the Intel Executive Officer by the Board of Managers. The Intel
Executive Officer shall be an employee of Intel seconded to the Joint Venture
Company by Intel, subject to the consent of Micron, which consent shall not be
unreasonably withheld or delayed. Intel shall have the right to remove the
Intel Executive Officer at any time, with or without cause, provided that it provides at least ten (10) days written
notice of such removal to Micron and the Joint Venture Company. Intel shall
have the right to fill any vacancy in the position of Intel Executive Officer
for any reason (including as a result of the Intel Executive Officer’s death,
resignation, retirement or removal pursuant to this Section), subject to the
consent of Micron, which consent shall not be unreasonably withheld or delayed.
The Intel Executive Officer shall report directly to the Board of Managers.

 

(B)           The
Board of Managers shall determine, from time to time, the incentive
compensation for which the Intel Executive Officer may be eligible based upon
the Joint Venture Company’s operational success.

 

8.2           Micron Executive Officer.

 

(A)          Until the Management
Conversion Date, the Joint Venture Company shall have an executive officer
appointed by Micron (the “Micron Executive Officer”)
who, together with the Intel Executive Officer, shall have responsibility for
the general management and

 

29

 

control of the day-to-day business and affairs of the Joint Venture
Company and its Subsidiaries and overseeing the implementation of the strategic
direction of the Joint Venture Company and its Subsidiaries. The Micron
Executive Officer shall perform such duties and have such powers specifically
delegated to the Micron Executive Officer by the Board of Managers. The Micron
Executive Officer shall be an employee of Micron seconded to the Joint Venture
Company by Micron, subject to the consent of Intel, which consent shall not be
unreasonably withheld or delayed. Micron shall have the right to remove the
Micron Executive Officer at any time, with or without cause, provided that it provides at least ten (10) days written
notice of removal to Intel and the Joint Venture Company. Micron shall have the
right to fill any vacancy in the position of Micron Executive Officer for any
reason (including as a result of the Micron Executive Officer’s death, resignation,
retirement or removal pursuant to this Section), subject to the consent of
Intel, which consent shall not be unreasonably withheld or delayed. The Micron
Executive Officer shall report directly to the Board of Managers.

 

(B)           The Board of Managers
shall determine, from to time, the incentive compensation for which the Micron
Executive Officer may be eligible based upon the Joint Venture Company’s
operational success.

 

8.3           Lead
Controller/Chief Financial Officer.

 

(A)          The Joint Venture
Company shall have a financial manager (the “Lead
Controller”) who shall serve as the principal financial officer of
the Joint Venture Company and shall have responsibility for and authority over
the day-to-day financial matters of the Joint Venture Company and its Subsidiaries.
The Lead Controller shall perform such duties and have such powers specifically
delegated to the Lead Controller by the Board of Managers. The Lead Controller
shall be an employee of Micron seconded to the Joint Venture by Micron, or
another individual selected by Micron, subject to the consent of Intel, which
consent shall not be unreasonably withheld or delayed. Micron shall have the
right to remove the Lead Controller at any time, with or without cause, provided that it provides at least ten (10) days written
notice of removal to Intel and the Joint Venture Company. Micron shall have the
right to fill any vacancy in the position of Lead Controller for any reason
(including as a result of the Lead Controller’s death, resignation, retirement
or removal pursuant to this Section), subject to the consent of Intel, which
consent shall not be unreasonably withheld or delayed. The Lead Controller
shall report directly to the Board of Managers.

 

(B)           The Board of
Managers shall determine, from time to time, the incentive compensation for
which the Lead Controller may be eligible based upon the Joint Venture Company’s
operational success.

 

(C)           For so long as there
is a Lead Controller who is seconded to the Joint Venture Company by a Member,
the other Member shall be entitled to second to the Joint Venture Company a
senior finance officer to assist the Lead Controller in the execution of his or
her duties set forth in this Section 8.3. The Board of Managers shall
determine, from time to time, the incentive compensation for which such officer
may be eligible based upon the Joint Venture Company’s operational success.

 

30

 

(D)          Upon the Management
Conversion Date, the position of the Lead Controller shall terminate and the
Board of Managers shall appoint a Chief Financial Officer (the “Chief Financial Officer”) who shall be an employee of the
Joint Venture Company and shall report directly to the Chief Executive Officer.
The Chief Financial Officer shall have the responsibilities specifically
delegated to the Lead Controller by the Board of Managers, shall perform all
other duties and shall have all powers that are delegated to him or her by the
Board of Managers or the Chief Executive Officer, and shall be selected by the
Board of Managers. For purposes of this Agreement, the Lead Controller and the
Chief Financial Officer are referred to interchangeably as the “Financial Officer.”

 

8.4           Chief Executive
Officer. Upon the Management Conversion Date, the Board of Managers shall
appoint a Chief Executive Officer (the “Chief Executive Officer”),
who shall have responsibility for the day-to-day general management and control
of the business and affairs of the Joint Venture Company and its Subsidiaries
and overseeing the implementation of the strategic direction of the Joint
Venture Company and its Subsidiaries. The Chief Executive Officer shall perform
or oversee those duties that were specifically delegated to the Intel Executive
Officer and Micron Executive Officer by the Board of Managers prior to the
Management Conversion Date and shall perform all other duties and have all
powers that are that are commonly incident to the office of chief executive
officer or that are specifically delegated to him or her by the Board of
Managers. The Chief Executive Officer shall be an employee of the Joint Venture
Company, selected by the Board of Managers, subject to the consent of any
Member whose Percentage Interest is at least [***] percent ([***]%), which
consent shall not be unreasonably withheld or delayed. The Board of Managers
shall have the right to remove any Chief Executive Officer at any time, with or
without cause, subject to the terms of any employment contract between the
Joint Venture Company and the Chief Executive Officer.

 

8.5           General
Provisions Regarding Officers.

 

(A)          There shall be one or
more site managers of the Joint Venture Company who shall serve as officers of
the Joint Venture Company and shall have such authority and perform or oversee
those duties that are delegated to such officers by the Board of Managers or
the Authorized Officers or Chief Executive Officer, as applicable. The Board of
Managers may, from time to time, designate other officers of the Joint Venture
Company, delegate to such officers such authority and duties as the Board of
Managers may deem advisable and assign titles to any such officers. Except as
otherwise provided in this Agreement, prior to the Management Conversion Date,
officers may either be employees of the Joint Venture Company or Seconded
Employees. Unless the Board of Managers otherwise determines or unless
otherwise provided by this Agreement, if the title assigned to an officer of
the Joint Venture Company is one commonly used for officers for businesses of
comparable size in the same industry, then, subject to the terms of this
Agreement, the assignment of such title shall constitute the delegation to such
officer of the authority and duties that are customarily associated with such
office for businesses of comparable size in the same industry. Except as
otherwise provided in this Agreement, any number of titles may be held by the
same individual.

 

(B)           Subject to all
rights, if any, under any contract of employment, any officer to whom a
delegation is made pursuant to Section 8.5(A) shall serve in the capacity
delegated

 

31

 

unless and until such delegation is revoked by the Board of Managers
for any reason or no reason whatsoever, with or without cause, or such officer
resigns.

 

8.6           Manufacturing
Committee. The Members shall, by mutual agreement, establish a
manufacturing committee (the “Manufacturing Committee”)
to, among other things, consult with the Joint Venture Company and the Members
regarding the output of Joint Venture Products to the Members. The membership,
function, objectives and procedures of the Manufacturing Committee are set
forth in Appendix E to this Agreement.

 

8.7           Waiver of
Fiduciary Duties.

 

(A)          In connection with
the determination of any and all matters presented for action to the Members,
the Board of Managers or the Manufacturing Committee, as applicable, the
Members acknowledge and agree that each Member will be acting on its own behalf
and each Representative serving on the Board of Managers or the Manufacturing
Committee will be acting on behalf of the Member that appointed such
Representative.

 

(B)           Each Member may act,
and, to the fullest extent permitted by Applicable Law, will be protected for
acting, in its own interest (subject to the express terms of any contract
entered into by such Member) without regard to the interest of the other Member
or the Joint Venture Company or any of its Subsidiaries, and, subject to
Section 8.7(D), each Representative may act, and, to the fullest extent
permitted by Applicable Law, will be protected for acting at the direction or
control of, or in a manner that such Representative believes is in the best
interest of, the Member that appointed the Representative without regard to the
interest of the other Member or the Joint Venture Company or any of its
Subsidiaries. Further, each Member may, to the fullest extent permitted by
Applicable Law (subject to the express terms of any contract entered into by
such Member), make decisions and exercise direction and control over the decisions
of the Representatives appointed by such Member without duty to or regard for
the interests of the other Member or the Joint Venture Company or any of its
Subsidiaries.

 

(C)           The Joint Venture
Company, on its own behalf and on behalf of each of its Subsidiaries, and each
Member waives, to the fullest extent permitted by Applicable Law, (1) any
claim or cause of action against any Member or Manager or member of the
Manufacturing Committee appointed by a Member, based on the determination of any
and all matters presented for action to the Members, the Board of Managers or
the Manufacturing Committee, as applicable, (2) breach of fiduciary duty,
duty of care, duty of loyalty or any other duty or (3) breach of the Act; provided, however, the
foregoing will not limit any Member’s obligation under or liability for breach
of the express terms of this Agreement or any other agreement that they have
entered into with the Joint Venture Company or any of its Subsidiaries or the
other Member; and provided  further,
however, that no Member shall negotiate
or enter into or request or otherwise cause the Joint Venture Company to
negotiate or enter into any agreement or transaction that would result in such
Member or any of its Subsidiaries receiving any financial consideration or
other tangible property incentive, payment or other form of financial
consideration or other tangible property consideration from any Governmental
Entity or Person based upon the Joint Venture Company’s taking an action
(including hiring any employees, undertaking any construction or purchasing any
equipment) or entering into such agreement or transaction other than as a
Member of the Joint Venture Company pursuant to this

 

32

 

Agreement, and any Member who receives any such consideration or other
tangible property incentive, payment or other form of financial consideration
or other tangible property consideration from any Governmental Entity or Person
in respect of the Joint Venture Company’s activities, shall promptly convey
such consideration or other tangible property incentive, payment or other form
of financial consideration or other tangible property consideration from any
Governmental Entity or Person to the Joint Venture Company without any
adjustment in the Capital Contribution Balance of such Member.

 

(D)          The term “Representative” shall mean, with respect to a Member, the
Managers and members of the Manufacturing Committee appointed by such Member
and the employees, agents and other representatives of such Member including
the Seconded Employees of such Member, but not including, only for purposes of
Section 8.7(C)(2), the Chief Executive Officer, the Intel Executive
Officer, the Micron Executive Officer, the Lead Controller, the Chief Financial
Officer or any other officer or site manager of the Joint Venture Company (and
each such officer shall be bound by such fiduciary and other duties (including
the duty of care and the duty of loyalty) as would apply to an officer having
comparable authority and duties under the DGCL).

 

ARTICLE 9.

EMPLOYEE MATTERS

 

9.1           Joint Venture
Company Employees; Seconded Employees. The Joint Venture Company shall
employ its own personnel and shall be their exclusive employer. In addition,
certain other persons who are employed by Micron or Intel may be assigned by
Micron or Intel, respectively, to work for the Joint Venture Company for a
given period of time (“Seconded  Employees”) pursuant to the terms and conditions of the
Micron Personnel Secondment Agreement or the Intel Personnel Secondment
Agreement, respectively. Seconded Employees may be utilized to provide services
to the Joint Venture Company until (1) the time specified in Article 8 for
certain Seconded Employees acting as officers of the Joint Venture Company, (2)
with respect to Seconded Employees employed by Micron, until the time
determined under the terms of the Micron Personnel Secondment Agreement, or (3)
with respect to Seconded Employees employed by Intel, until the time determined
under the terms of the Intel Personnel Secondment Agreement. Notwithstanding
the foregoing, no Seconded Employee will become employed by the Joint Venture
Company or any of its Subsidiaries unless agreed among the Joint Venture
Company and the Members.

 

9.2           Performance and
Removal of Seconded Employees. The Intel Executive Officer and Micron
Executive Officer shall consult with one another with respect to any Seconded
Employee, regardless of Member origin, who is not adequately performing or
adequately adapting to the team environment of the Joint Venture Company, and
discuss appropriate action. If a decision is made by the Intel Executive
Officer, in the case of an Intel Seconded Employee, or the Micron Executive
Officer, in the case of a Micron Seconded Employee, that such employee should
be reassigned to duties other than with the Joint Venture Company, the Intel
Executive Officer or the Micron Executive Officer, as the case may be, will
make reasonably prompt efforts to request the seconding Member to reassign such
employee to duties other than with the Joint Venture Company as such seconding
Member shall determine in its sole discretion. In no event will the Intel
Executive Officer or Micron Executive Officer have (i) the

 

33

 

authority to reassign any Seconded Employee of the other Member (either
within the Joint Venture Company or to any other assignment), or (ii) the
ability to terminate the employee relationship between a Seconded Employee of
the other Member and his or her Member employer. Intel and Micron shall each
determine in its own sole discretion with regard to its own Seconded Employees
whether or not, and if so under what conditions, the Intel Executive Officer
(in the case of Intel) or the Micron Executive Officer (in the case of Micron)
may either reassign the duties of (either within the Joint Venture Company or
to any other assignment) or terminate the employment relationship with its own
Seconded Employees.

 

For avoidance of doubt, this Section 9.2 shall not apply to the Intel
Executive Officer, the Micron Executive Officer, or the Lead Controller whose
performance shall be subject to review by the Board of Managers. Furthermore,
the Board of Managers shall possess the authority to require that a Seconded Employee
be reassigned by the seconding Member to duties other than with the Joint
Venture Company. Subject to the terms of the Intel Personnel Secondment
Agreement and the Micron Personnel Secondment Agreement, as the case may be,
the Chief Executive Officer shall possess the authority to require that a
Seconded Employee be reassigned by the seconding Member to duties other than
with the Joint Venture Company.

 

9.3           Forms. (A)             The Joint Venture Company and each
of its Subsidiaries shall have policies applicable to, and ensure that all of
its officers, employees and third-party independent contractors, third-party
consultants, and other third-party service providers enter into appropriate
agreements with respect to, (1)  protection of confidential information of
the Joint Venture Company and its Subsidiaries, (2) compliance with
Applicable Laws, and (3) other matters related to the delivery of services
to, or employment of such Person by, the Joint Venture Company or its
Subsidiaries. The Joint Venture Company and each of its Subsidiaries shall have
policies applicable to, and ensure that all of its officers and employees enter
into appropriate agreements with respect to intellectual property assignment,
including invention disclosures, pursuant to which ownership to any
intellectual property created in the course of employment with the Joint
Venture Company or any of its Subsidiaries shall be assigned to the Joint
Venture Company. The Joint Venture Company and each of its Subsidiaries shall
have policies applicable to, and ensure that all of its third-party independent
contractors, third-party consultants, and other third-party service providers
that create intellectual property in the course of performing services for the
Joint Venture Company or any of its Subsidiaries, enter into appropriate
agreements with the Joint Venture Company with respect to the Joint Venture
Company’s ownership of or the Joint Venture Company and its Subsidiaries’ right
to use such intellectual property. The forms referred to in this Section 9.3
are collectively referred to as the “Service Provider Related
Forms.”

 

(B)           Notwithstanding any
preceding provisions in this Section 9.3 or elsewhere, no Seconded Employee
shall be required to sign any Service Provider Related Forms, except with respect
to acknowledgement of and agreement regarding policies of the Joint Venture
Company addressing conduct while performing services at the premises of the
Joint Venture Company, such as workplace safety, but excluding matters relating
to protection of confidential information of the Joint Venture Company and its
Subsidiaries and intellectual property assignment, which issues have been
addressed in other documents. The Joint Venture Company shall be responsible
for providing those appropriate Service Provider Related Forms, if any,
prepared by

 

34

 

the Joint Venture Company for Seconded Employees to the appropriate
Seconded Employees, following up to make sure they are signed and for properly
storing such forms; however Intel and Micron shall each require that their
Seconded Employees sign the applicable Service Provider Related Forms when
requested to do so by the Joint Venture Company.

 

9.4           Compensation
and Benefits.

 

(A)          The Joint Venture
Company and its Subsidiaries shall have compensation and benefits programs for
the employees of the Joint Venture Company and its Subsidiaries (excluding, for
this purpose, Seconded Employees) at its locations consistent with local
practices in each respective geographic area, as determined by the Intel
Executive Officer and Micron Executive Officer, or the Chief Executive Officer,
as applicable, and, to the extent required by law or this Agreement, approved
by the Board of Managers, which may initially be modeled after Micron’s local
compensation and benefits programs if deemed to be appropriate and competitive
by the Intel Executive Officer and the Micron Executive Officer (or the Chief
Executive Officer, when applicable) and, if applicable, the Board of Managers. Incentive
compensation programs for Joint Venture Company employees and the employees of
any Subsidiary of the Joint Venture Company will be tied to the Joint Venture
Company’s operational success, as determined by the Intel Executive Officer and
the Micron Executive Officer (or the Chief Executive Officer, when applicable)
and approved by the Board of Managers.

 

(B)           It is the intention
of Micron to offer its employees who transfer to the Joint Venture Company the
option to transfer up to [***] hours of their current accrued Time Off
Plan (“TOP”) hours balance to the comparable
plan of the Joint Venture Company to be administered in accordance with the
terms of such plan. If Micron allows such a transfer and if an employee so
elects, the Joint Venture Company shall credit the employee’s Joint Venture
Company TOP (or similar time bank) account with the transferred hours and
Micron shall pay the Joint Venture Company an amount equal to the person’s base
hourly rate (or a calculated base hourly rate in case of salaried employees)
multiplied by the TOP hours transferred.

 

(C)           It is the intention
of Intel to offer its employees who transfer to the Joint Venture Company the
option to transfer up to [***] hours of their current accrued vacation and
personal absence hours balance to the comparable plan of the Joint Venture
Company to be administered in accordance with the terms of such plan. If Intel
allows such a transfer and if an employee so elects, the Joint Venture Company
shall credit the employee’s Joint Venture Company TOP (or similar time bank)
account with the transferred hours and Intel shall pay the Joint Venture
Company an amount equal to the person’s base hourly rate (or a calculated base
hourly rate in case of salaried employees) multiplied by the vacation and personal
absence hours transferred.

 

ARTICLE 10.

RECORDS, ACCOUNTS AND REPORTS

 

10.1         Books and Records.
The Authorized Officers, or the Chief Executive Officer, as applicable, shall
keep or cause to be kept adequate books and records with respect to the Joint
Venture Company’s and each of its Subsidiaries’ business, including the
following:

 

35

 

(A)          a current list of the
full name and last known business address of each Member and its appointed
Managers and all officers and Representatives;

 

(B)           copies of records
that would enable a Member to determine the relative Committed Capital,
Percentage Interests, Sharing Interests, Economic Interests, Member Debt
Financing, Capital Contribution Balances and Accumulated Distributions Accounts
of the Members and to determine whether any Balance Sheet Metric Event or
Operating Metric Event has occurred in any relevant period;

 

(C)           a copy of the
Certificate together with any amendments;

 

(D)          copies of the Joint
Venture Company’s and each of its Subsidiaries’ federal and state income tax
returns and reports, if any, for the longer of (1) five (5) years from the
time of filing or (2) with respect to any such tax return of the Joint
Venture Company, until the expiration of the statute of limitations on the
assessment of income tax liabilities for the taxable year of each Member in
which the income required to be shown on such tax return of the Joint Venture
Company is required to be included (and each Member shall promptly respond to
requests from the officers of the Joint Venture Company in order to determine
whether such statute of limitations has expired);

 

(E)           a copy of this
Agreement, together with any amendments;

 

(F)           copies of any
financial statements of the Joint Venture Company and its Subsidiaries for the
greater of its seven (7) most recent years or all open taxable years;

 

(G)           copies of all
Proposed Business Plans, Approved Business Plans, Member Business Plans and
Operating Plans;

 

(H)          minutes of meetings
of the Members, the Board of Managers, and any other committee appointed by the
Board of Managers from time to time and all written consents in lieu of a
meeting; and

 

(I)            any other records
required to be maintained by the Act.

 

10.2         Access to
Information.

 

(A)          To the extent not in
violation of Applicable Law, each Member and its agents (which may include
employees of the Member or the Member’s independent certified accountants)
shall have the right, at any reasonable time, to inspect, review, copy and
audit (or cause to be audited) at the expense of the inspecting Member any and
all properties, assets, books of account, corporate records, contracts,
documentation and any other material of the Joint Venture Company or any of its
Subsidiaries, at the request of the inspecting Member. Upon such request, the
Joint Venture Company and each of its relevant Subsidiaries shall use
reasonable efforts to make available to such inspecting Member the Joint
Venture Company’s accountants and key employees for interviews to verify information
furnished or to enable such Member to otherwise review the Joint Venture
Company or any of its Subsidiaries and their operations. Such availability is
conditioned upon the terms and conditions of the Confidentiality Agreement.

 

36

 

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

 

(C)           Upon request, each
Member agrees to use reasonable efforts to provide the other Member and the
Joint Venture Company with reasonable access to those portions of its
facilities and to those items of its equipment that are being used to provide
services to the Joint Venture Company, and to those employees who are providing
services to the Joint Venture Company, to verify information regarding such
operations or enable such Member and the Joint Venture Company to otherwise
review the services being provided to the Joint Venture Company.

 

10.3         Operations Reports.
Subject to Section 10.2(B), the Joint Venture Company and each of its
Subsidiaries shall provide both Members with all quarterly, monthly and weekly
reporting packages containing such manufacturing and production reports as may
be required to be delivered under any agreement with, or otherwise requested
by, either Member.

 

10.4         Financial Reports.
The Joint Venture Company and each of its Subsidiaries shall provide the
Members the following:

 

(A)          Monthly Reports.

 

(1)           for each Fiscal
Month, the Joint Venture Company, and if requested, each of its Subsidiaries,
shall provide each Member with the following monthly reports prepared in
accordance with Modified GAAP consistently applied, in each case within the
time period specified below:

 

(a)           Monthly Flash Report
within eight (8) days after the end of each Fiscal Month;

 

(b)           monthly cash flow
report within fifteen (15) days after the end of each Fiscal Month;

 

(c)           month-end balance
sheet within fifteen (15) days after the end of each Fiscal Month;

 

37

 

(d)           monthly profit and
loss statement within fifteen (15) days after the end of each Fiscal Month;

 

(e)           monthly operational
spending summary within fifteen (15) days after the end of each Fiscal Month;
and

 

(f)            such other reports
as may be required to be delivered under any agreement with, or otherwise
reasonably requested by, either Member.

 

(2)           With respect to each
of the monthly reports set forth in Section 10.4(A)(1), each Member may
provide a sample format for such monthly report as is necessary and
appropriate.

 

(B)           Quarterly Reports.
(1)  As soon as available, but not later
than twenty (20) days after the end of each Fiscal Quarter (other than Fiscal
Quarters ending on the last day of a Fiscal Year, provided
that the information required by this Section 10.4(B) will be included in the
reports delivered pursuant to Section 10.4(C) below for the Fiscal Year ending
on such date), the Joint Venture Company shall provide to each Member a
consolidated balance sheet of the Joint Venture Company as of the end of such
period and consolidated statements of income, cash flows and changes in Members’
equity, as applicable, for such Fiscal Quarter and for the period commencing at
the end of the previous Fiscal Year and ending with the end of such period,
setting forth in each case in comparative form the corresponding figures for
the corresponding period of the preceding Fiscal Year, and including
comparisons to the Approved Business Plan, each prepared in accordance with Modified
GAAP. The Financial Officer shall discuss with the Members such quarterly
financial data and the business outlook of the Joint Venture Company and its
Subsidiaries and shall be available to respond to questions from the Members
regarding such data and outlook.

 

(3)           In addition, as soon
as available, but not later than thirty (30) days after the end of each Fiscal
Quarter, the Joint Venture Company shall provide to each Member a consolidated
balance sheet of the Joint Venture Company as of the end of each Fiscal Quarter
and consolidated statements of income and changes in Members’ equity, as
applicable, for such Fiscal Quarter and for the period commencing at the end of
the previous Fiscal Year and ending with the end of such period, setting forth
in each case in comparative form the corresponding figures for the
corresponding period of the preceding Fiscal Year (to the extent such
comparison is appropriate), each prepared in accordance with GAAP. The Joint
Venture Company shall also provide a reconciliation that describes and
quantifies the differences between the consolidated financial statements
prepared in accordance with GAAP and the consolidated financial statements
prepared in accordance with Modified GAAP. The non-Consolidating Member may
reasonably request that the Consolidating Member use its reasonable efforts to
engage the Consolidating Member’s external auditor to perform certain
agreed-upon procedures with respect to such reconciliation. Upon such request,
the Consolidating Member shall not unreasonably deny or delay such request. The
non-Consolidating Member shall promptly reimburse the Consolidating Member for
the incremental costs incurred by the Consolidating Member with respect to the
performance of such agreed-upon procedures by the Consolidating Member’s
external auditor.

 

38

 

(C)           Annual Audit.
As soon as available, but not later than sixty (60) days after the end of each
Fiscal Year of the Joint Venture Company commencing with the Fiscal Year ended
August 31, 2006, audited consolidated financial statements of the Joint
Venture Company and its Subsidiaries, which shall include statements of income,
cash flows and changes in Members’ equity, as applicable, for such Fiscal Year
and a balance sheet as of the last day thereof, each prepared in accordance
with GAAP, consistently applied, and accompanied by the report of a firm of
independent certified public accountants selected from time to time by the
Board of Managers (the “Accountants”).

 

(D)          Right to Audit.
Either Member may conduct a separate audit of the Joint Venture Company’s
financial statements and internal controls over financing reporting at its own
expense, and the Members agree to use all reasonable efforts to coordinate the
timing of any separate audits that any Member elects to conduct.

 

10.5         Reportable Events.

 

(A)          The Joint Venture
Company shall provide notice to the Members of any Member Reportable Event as
soon as possible and in any event no later than [***] ([***]) days following
the occurrence of said event. The following events shall be “Member Reportable Events”:

 

(1)           any action by the
Joint Venture Company or a Subsidiary of the Joint Venture Company that will
result in recording an impairment of assets of the Joint Venture Company or any
of its Subsidiaries, including without limitation, intangibles, goodwill, fixed
assets, accounts receivable and inventory, that is expected to exceed $[***],
individually or when aggregating other similar assets impaired at the same
time;

 

(2)           any decision to
shutdown a business unit, close a facility, dispose of long-lived assets or
terminate employees (in a FAS 146 plan of termination) whereby the Joint
Venture Company or a Subsidiary of the Joint Venture Company may incur an
accounting charge that would exceed $[***];

 

(3)           entry by the Joint
Venture Company or a Subsidiary of the Joint Venture Company into any
off-balance sheet arrangement (unconsolidated transactions with a third party
under which the entity retains or has a contingent interest in transferred
assets or is obligated under derivative instruments classified in equity, or
with a third party that constitutes a “variable interest entity” under FIN 46);

 

(4)           the execution,
amendment or termination of a contract that meets one of the following
thresholds:

 

(a)           patent, copyright or
trademark license requiring payment of more than $[***];

 

(b)           technology licenses
requiring payment of more than $[***];

 

39

 

(c)           contracts for supply
of equipment or materials (i) from either a sole source (single qualified
source or true sole source), a supplier with only one site, or a supplier
located only in a “high risk” geographic area and (ii) where interruption
of supply may cause a key Joint Venture Product to experience a launch delay or
production interruption with revenue impact of more than $[***] in a ninety
(90)-day period; and

 

(d)           other contracts with
a value in excess of $[***]; and

 

(5)           entry into any
short-term debt (payable within one year), long-term debt, capital lease,
operating lease or guaranty in excess of $[***].

 

(B)           The Joint Venture
Company shall provide notice to the Members of any Joint Venture Reportable
Event as soon as possible and in any event no later than [***] ([***]) days
after the Joint Venture Company becomes aware of such Joint Venture Reportable
Event. The following events shall be “Joint Venture Reportable
Events”:

 

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

 

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

 

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

 

(4)           any breach by the
Joint Venture Company or any of its Subsidiaries or a Member or an Affiliate of
a Member of any contract, agreement or understanding between the Joint Venture
Company or any of its Subsidiaries and a Member or an Affiliate of a Member;

 

(5)           any recall of, or
other significant alleged product defects with respect to, any product
manufactured by the Joint Venture Company or any of its Subsidiaries, whether
or not as a result of a request or order by any Governmental Entity;

 

(6)           any material adverse
change with respect to the current status of any item of intellectual property
rights owned by the Joint Venture Company or any of its Subsidiaries (“Intellectual Property Rights”), including receipt of any
adverse notice from any Governmental Entity with respect to such item of
Intellectual Property Rights and notice of any action taken or threatened by any
third party that could affect the validity of any item of Intellectual Property
Rights;

 

40

 

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

 

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

 

10.6         Tax Information.

 

(A)          Estimated Tax
Information. The Financial Officer shall deliver the following information
to each Member, as provided below:

 

(1)           on or prior to the
date that is ninety (90) days following the end of each Joint Venture Company
taxable year, an estimate of the United States federal and material state
taxable income of the Joint Venture Company for such taxable year; and

 

(2)           on or prior to the
date that is thirty (30) days following the end of each Joint Venture Company
taxable quarter, an estimate of the United States federal and material state
taxable income of the Joint Venture Company for the taxable year of the Joint
Venture Company as of the end of such taxable quarter.

 

(B)           Tax Returns. The
Financial Officer shall deliver to each Member, on or prior to the date that is
one hundred twenty (120) days following the end of each Joint Venture Company
taxable year, a draft of the United States federal and material state income
tax returns (and related attachments including Schedule K-1) of the
Joint Venture Company for such taxable year. Each Member shall have fifteen
(15) days to review such tax returns and provide written comments thereon to
the Joint Venture Company, and to the extent the Joint Venture Company does not
intend to incorporate such comments into such tax returns the Joint Venture
Company and the Members shall attempt to resolve any disagreements within
fifteen (15) days after the delivery of such comments to the Joint Venture
Company. If the Members and the Joint Venture Company are unable to resolve any
disputes regarding the content of such tax returns within such fifteen (15)-day
period, the issue or issues shall be referred for resolution to a partner at a “Big
4” accounting firm (or other nationally recognized accounting firm) reasonably
acceptable to the Members and the Joint Venture Company, who shall be requested
to resolve open issues, on the basis of the position most likely to be sustained
if challenged in a court having initial jurisdiction over the matter (which for
federal income tax issues shall be deemed to be the United States Tax Court),
no later than one hundred eighty (180) days following the end of such taxable
year. The decision of such accounting firm shall be final and binding on the
Members and the Joint Venture Company, and the costs of such accounting firm
shall be Joint Venture Company costs. The Joint Venture Company shall deliver
final income tax returns (including related schedules) to the Members within
two hundred twenty (220) days after the end of each taxable year of the Joint
Venture Company, but not prior to the resolution of disputes among the Members
and the Joint Venture Company with respect to such tax returns; provided that if such tax returns become due (taking into
account extensions of time to file, which the Joint Venture Company shall seek
as necessary to avoid the delinquent filing of its tax returns) they shall be
filed as determined by

 

41

 

the Joint Venture Company and shall be amended and re-filed as required
by the outcome of the referral to the accounting firm as provided herein.

 

10.7         Tax Matters and
Tax Matters Partner. The [***] at the end of a given taxable year (or, if
there is no [***] at such time, the Member that served as the Tax Matters
Partner for the prior year) shall serve as the “Tax Matters
Partner” under the Code and in any similar capacity under state,
local or foreign law for such year. The Tax Matters Partner shall supply such
information to the Internal Revenue Service as may be necessary to cause the
other Member to be a “notice partner” as defined in Code Section 6231(a)(8). The
Tax Matters Partner shall keep each Member informed of any administrative or
judicial proceeding relative to any adjustment or proposed adjustment at the
Joint Venture Company level of Joint Venture Company items, and shall provide the other Member with
notice and an opportunity to participate in significant meetings or other
proceedings (both in person and by telephone), preparation of correspondence
and other significant events with respect to taxes pertaining to the Joint
Venture Company. Without the prior written approval of all Members, the
Tax Matters Partner shall not (a) enter into any settlement agreement with
the Internal Revenue Service which purports to bind or otherwise could
adversely affect Persons other than the Tax Matters Partner and any Members who
agree in writing to be bound by such agreement, (b)  file a petition as
contemplated by Sections 6226(a) or 6228 of the Code, (c) intervene
in any action as contemplated by Section 6226(b) of the Code,
(d) file any request as contemplated by Section 6227(c) of the Code,
(e) enter into an agreement extending the period of limitation as
contemplated by Section 6229(b)(1)(B) of the Code, (f) take any actions comparable to those described in clauses (a)
through (e) under state, local or foreign tax law or (g) take any other
action in its capacity as Tax Matters Partner that could significantly affect
the tax liability of the other Member.

 

10.8         Bank Accounts and
Funds. Except as otherwise provided in Section 2.2, Joint Venture
Company funds, including cash Capital Contributions, shall be deposited in an interest-bearing
account or accounts in the name of the Joint Venture Company and shall not be
commingled with the funds of any Member, Manager or any other Person. All
checks, orders or withdrawals shall be signed by any one or more Persons as
authorized by the Board of Managers and subject to the approval rights set
forth in Section 10.9(E).

 

10.9         Internal Controls.

 

(A)          The Joint Venture
Company shall have in place a system of internal controls over financial
reporting in accordance with the policies of the Consolidating Member as of the
Effective Date, the design and operation of which shall be monitored and
approved by the Board of Managers and the Financial Officer. Changes to the
Joint Venture Company’s system of internal controls over financial reporting
shall be made at the request of either Member (and if requested by the
Non-Consolidating Member, the Non-Consolidating Member shall reimburse the
Joint Venture Company for its reasonable costs incurred in implementing the
changes), subject to the other Member’s approval, which approval shall not be
unreasonably withheld, and, subject to the approval of the Board of Managers
and the approval of the Financial Officer, which shall not be unreasonably
withheld; provided, however,
that in the event of a Change of Consolidating Member, the internal controls
over financial reporting and accounting systems of the Joint Venture Company
shall, at the Joint Venture Company’s expense, be modified as

 

42

 

necessary to satisfy the new Consolidating Member’s requirements
relating to internal controls over financial reporting, and such Member shall
be entitled to receive the information and perform the testing that either it
or such Member’s auditors deem necessary or advisable to satisfy their
responsibilities related thereto.

 

(B)           Each Member shall be
entitled, at its own expense, to have one or more internal auditors (not to
exceed three (3) internal auditors at any single Facility) located on site at
the offices and facilities of the Joint Venture Company with full access to all
of the Joint Venture Company’s financial and manufacturing records and
reporting systems; provided, however, that such internal auditors shall be required to
abide by the procedures maintained by the Joint Venture Company pursuant to
Section 10.2(B) for preventing the inappropriate sharing of such
information.

 

(C)           The Consolidating
Member shall provide to the non-consolidating Member such information as the
non-consolidating Member may reasonably request in connection with the
assessment of whether a Change of Consolidating Member has occurred or may
occur. The Consolidating Member, if it is the Non-Funding Member with respect
to any outstanding Member Notes, shall promptly notify the non-consolidating
Member if it has determined that it is reasonably likely to not contribute to
the Joint Venture Company any amounts to be used to repay any such Member Notes
in accordance with Article 3.

 

(D)          The Consolidating
Member shall make available to the non-Consolidating Member the findings of the
external auditor of the Consolidating Member with respect to the Consolidating
Member’s annual audit and of its internal control over financial reporting to
the extent such findings are applicable to the internal control over financial
reporting of the Joint Venture Company. The non-Consolidating Member may
reasonably request that the Consolidating Member use its reasonable efforts to
engage the Consolidating Member’s external auditor to perform certain
agreed-upon procedures with respect to such internal control over financial
reporting of the Joint Venture Company. Upon such request, the Consolidating
Member shall not unreasonably deny or delay such request. The non-Consolidating
Member shall promptly reimburse the Consolidating Member for the incremental
costs incurred by the Consolidating Member with respect to the performance of
such agreed-upon procedures by the Consolidating Member’s external auditor.

 

(E)           The internal
controls over financial reporting referenced in this Section 10.9 shall
provide, among other things, that prior to the Management Conversion Date,
Joint Venture Company expenditures greater than $[***] shall require approval
of both Authorized Officers and shall thereafter require the approval of the
Chief Executive Officer; provided, however, that a decision to approve or disapprove any such
expenditure shall be made in a manner consistent with the [***] Budget and
[***] Budget or Annual Budget, as applicable, included in the then-effective
Approved Business Plan.

 

43

 

ARTICLE 11.

BUSINESS PLAN

 

11.1         Initial Business
Plan; Initial Budgets.

 

(A)          Initial Approved
Business Plan. The Members have agreed upon an initial Approved Business
Plan (the “Initial Business Plan”) of the
Joint Venture Company and its Subsidiaries covering the operations of the Joint
Venture Company and its Subsidiaries from the Effective Date through [***] ,
which is the end of the Applicable Fiscal Quarter (the “Initial
Period”). The Initial Business Plan shall be deemed to be an
Undisputed Approved Business Plan.

 

(B)           Initial Budgets.
The Initial Business Plan includes an [***] budget (the “[***] Budget”)
in accordance with which the Joint Venture Company’s and each of its Subsidiaries’
operating and capital expenditures relating to matters not covered by the [***]
Budget shall be made during the Initial Period and the Capital Contributions
that will be needed from the Members during each Fiscal Quarter of the Initial
Period to fund the [***] Budget. Such operating and capital expenditures will
be funded by the Members’ Initial Capital Contributions and by [***] Capital
Contributions, which [***] Capital Contributions shall not, in the aggregate,
exceed the Maximum Incremental Capital Amount. The Initial Business Plan also
includes a budget (the “[***] Budget”)
in accordance with which the Joint Venture Company’s and each of its
Subsidiaries’ operating and capital expenditures for [***] shall be made during
the Initial Period and the Capital Contributions that will be needed from the
Members during each Fiscal Quarter of the Initial Period to fund [***] Budget.

 

(C)           Modification of
Initial Business Plan. Except as otherwise provided in this
Section 11.1(C), the Initial Business Plan shall not be amended, updated,
modified or superseded without the unanimous written consent of the Members.

 

(1)           Annual Review of
Initial Business Plan. At least ninety (90) days prior to the beginning of
each of the [***] and [***] Fiscal [***] of the Initial Period and the
Applicable Fiscal Quarter, the Board of Managers shall (in consultation with
the Authorized Officers or the Chief Executive Officer, as applicable, and with
the Financial Officer) review the Initial Business Plan and determine whether
any amendment thereto is necessary. Subject to Section 6.3(A)(11), upon a
determination by the Board of Managers that an amendment to the Initial
Business Plan is necessary or appropriate, the Board of Managers may approve
such amendment (and the Initial Business Plan as so amended shall be an
Undisputed Approved Business Plan) and the Authorized Officers, or the Chief
Executive Officer, as applicable, shall thereupon implement such amendment to
the Initial Business Plan as promptly as commercially practicable; provided, however, that
any failure of the Board of Managers to approve any amendment to the Initial
Business Plan shall result in the continuation of the Initial Business Plan,
subject to (a) any prior amendment approved by the Board of Managers and (b) Section 11.1(C)(2).

 

44

 

(2)           Member
Modification of Initial Business Plan. In addition to any amendment to the
Initial Business Plan that may be approved by the Board of Managers pursuant to
Section 11.1(C)(1), during the Initial Period:

 

(a)           (i)            Each Member shall have the right
from time to time to request that the Board of Managers review the Initial
Business Plan to consider whether the [***] Budget should be amended to, among
other things, adjust the Capital Contribution schedule set forth in the [***]
Budget. No such amendment shall cause the [***] Capital Contributions to be
made by Micron in accordance with the [***] Budget, as amended, to exceed the
Micron Maximum Incremental Capital Amount, nor shall such amendment cause the
[***] Capital Contributions to be made by Intel in accordance with the [***]
Budget, as amended, to exceed, in the aggregate, the Intel Maximum Incremental
Capital Amount. Upon such request, the Board of Managers shall, at the next scheduled
meeting of the Board of Managers, or at a special meeting called for such
purpose, review the Initial Business Plan and determine whether such amendment
to the [***] Budget is necessary or appropriate. If the Board of Managers
approves such amendment to the [***] Budget in accordance with
Section 6.3(A)(11), such amended [***] Budget shall become an approved
amendment to the Initial Business Plan (and the Initial Business Plan as so
amended shall be an Undisputed Approved Business Plan), and the Authorized
Officers, or the Chief Executive Officer, as applicable, shall implement the
amended Initial Business Plan as promptly as commercially practicable. Subject
to clause (ii) of this Section 11.1(C)(2)(a), any failure of the Board of
Managers to approve any amendment to the [***] Budget shall result in the
continuation of the Initial Business Plan without the proposed amendment.

 

(ii)           If
the Board of Managers fails to approve such amendment to the [***] Budget
requested by a Member, then such Member may submit a proposed amendment to the
Initial Business Plan to adjust the Capital Contribution schedule for the [***]
Budget (a “Member [***] Budget”) to the Board
of Managers (with a copy delivered to the other Member) for approval. The other
Member may, within twenty (20) days thereof, submit an alternate Member [***]
Budget to the Board of Managers for approval. In no event shall a Member [***]
Budget call for aggregate [***] Capital Contributions to be made by Micron in
excess of the Micron Maximum Incremental Capital Amount or by Intel in excess
of the Intel Maximum Incremental Capital Amount. If, within twenty (20) days
after such twenty (20)-day period, the Board of Managers approves any Member
[***] Budget, such Member [***] Budget shall become an approved amendment to
the Initial Business Plan (and the Initial Business Plan as so amended shall be
an Undisputed Approved Business Plan), and the Authorized Officers, or the
Chief Executive Officer, as applicable, shall implement the amended Initial
Business Plan as promptly as commercially practicable. If the Board of Managers
fails to approve a Member [***] Budget within such twenty (20)-day period, then
the matter shall be referred to the Members’ Authorized Representatives for
resolution. If such referral results in an agreement on a Member [***] Budget,
such Member [***] Budget shall become an approved

 

45

 

amendment to the Initial Business Plan (and
the Initial Business Plan as so amended shall be an Undisputed Approved
Business Plan), and the Authorized Officers, or the Chief Executive Officer, as
applicable, shall implement the amended Initial Business Plan as promptly as
commercially practicable. If such referral does not result in an agreement on a
Member [***] Budget within ten (10) days of such referral, then the [***] shall
become an approved amendment to the Initial Business Plan (and the Initial
Business Plan as so amended shall be a Disputed Approved Business Plan), and
the Authorized Officers, or the Chief Executive Officer, as applicable, shall
implement the amended Initial Business Plan as promptly as commercially
practicable.

 

(b)           (i)            Each Member shall have the right
from time to time to request that the Board of Managers review the Initial Business
Plan to consider whether the [***] Budget should be amended to, among other
things, adjust the [***] Budget and the Capital Contribution schedule set forth
therein. Upon such request, the Board of Managers shall, at the next scheduled
meeting of the Board of Managers, or at a special meeting called for such
purpose, review the Initial Business Plan and determine whether such amendment
to the [***] Budget is necessary or appropriate. If the Board of Managers
approves such amendment to the [***] Budget in accordance with
Section 6.3(A)(11), such amended [***] Budget shall become an approved
amendment to the Initial Business Plan (and the Initial Business Plan as so
amended shall be an Undisputed Approved Business Plan), and the Authorized
Officers, or the Chief Executive Officer, as applicable, shall implement the
amended Initial Business Plan as promptly as commercially practicable. Subject
to clause (ii) of this Section 11.1(C)(2)(b), any failure of the Board of
Managers to approve any amendment to the [***] Budget shall result in the
continuation of the Initial Business Plan without the proposed amendment.

 

(ii)           If
the Board of Managers fails to approve such amendment to the [***] Budget
requested by a Member, then either Member may submit a proposed amendment to
the Initial Business Plan to adjust the [***] Budget and the Capital
Contribution schedule contained therein (a “Member [***]
Budget”) to the Board of Managers (with a copy delivered to the
other Member) for approval. If a Member submits a Member [***] Budget, the
other Member shall have twenty (20) days to present an alternate Member [***]
Budget to the Board of Managers for approval. If, within thirty (30) days after
such twenty (20)-day period, the Board of Managers approves any Member [***] Budget,
such Member [***] Budget shall become an approved amendment to the Initial
Business Plan (and the Initial Business Plan as so amended shall be an
Undisputed Approved Business Plan), and the Authorized Officers, or the Chief
Executive Officer, as applicable, shall implement the amended Initial Business
Plan as promptly as commercially practicable. If the Board of Managers fails to
approve a Member [***] Budget within such thirty (30)-day period, then the
matter shall be referred to the Members’ Authorized Representatives for
resolution. If such referral results in an agreement on a Member [***] Budget,
such Member [***] Budget shall become an approved amendment to the Initial

 

46

 

Business Plan (and the Initial Business Plan as so amended shall be an
Undisputed Approved Business Plan), and the Authorized Officers, or the Chief
Executive Officer, as applicable, shall implement the amended Initial Business
Plan as promptly as commercially practicable. If such referral does not result
in an agreement on a Member [***] Budget within ten (10) days of such referral,
then the [***] shall become an approved amendment to the Initial Business Plan
(and the Initial Business Plan as so amended shall be a Disputed Approved
Business Plan), and the Authorized Officers, or the Chief Executive Officer, as
applicable, shall implement the amended Initial Business Plan as promptly as
commercially practicable.

 

11.2         Subsequent
Business Plans. This Section 11.2 shall apply with respect to any
Fiscal Year or Fiscal Quarter ending after the Initial Period (except that to
the extent a Proposed Business Plan covers the Applicable Fiscal Quarter, the
portion of the Proposed Business Plan covering the [***] Budget for such
Applicable Fiscal Quarter shall be governed by Section 11.1).

 

(A)          Proposed Business
Plan. For each Fiscal Year ending after the end of the Initial Period, the
Authorized Officers, or the Chief Executive Officer, as applicable, and the
Financial Officer shall prepare a proposed three-year business plan (the “Proposed Business Plan”) at least ninety (90) days prior to
the beginning of the applicable Fiscal Year, which shall address, for the
Proposed Business Plan period, (1) [***] by the Joint Venture Company and
its Subsidiaries, (2) [***] of Joint Venture Products for sale to the
Members, (3) [***] needs, (4) [***] proposed and expected to be
incurred, (5) the Joint Venture Company’s and its Subsidiaries’ [***],
(6) [***] needs and sources of the Joint Venture Company and its
Subsidiaries, (7) forecasted [***], together with all supporting
assumptions, (8) the forecasted [***] expected to be [***] of the Joint Venture
Company and its Subsidiaries, (9) the forecasted [***] of the Joint Venture
Company and its Subsidiaries, (10) such other business activities as shall be
necessary and appropriate and (11) any [***] Approved Business Plan with
respect any of the above.

 

(B)           Annual Budgets.
Each Proposed Business Plan shall include a fixed budget (the “Annual Budget”) in accordance with which the Joint Venture
Company’s and each of its Subsidiaries’ [***] are proposed to be made for [***],
and [***] for the Joint Venture Company’s and each of its Subsidiaries’ [***],
subject to the Proposed Business Plan becoming an Approved Business Plan in
accordance with Section 11.2(D). The Annual Budget may include (1) a
budget for [***], which shall set forth in detail the amount of funds expected
to be required for [***] and for [***], (2) a budget for any [***], which shall
set forth in detail the amount of funds expected to be required for [***] and
for [***] for any [***] included in the Proposed Business Plan and (3) another
budget, which shall set forth in detail the amount of funds expected to be
required for any other purpose of the Joint Venture Company consistent with its
Certificate and Section 1.4, and in each case including provision for [***], each
as necessary to effectuate the applicable Proposed Business Plan. Any Proposed
Business Plan approved in accordance with Section 11.2(D) (as may be amended
pursuant to Section 11.2(E)) shall include [***].

 

47

 

(C)           Participation in
the Development of the Proposed Business Plan. In preparing the Proposed
Business Plan, the Authorized Officers, or the Chief Executive Officer, as
applicable, and the Financial Officer shall be advised by the Manufacturing
Committee.

 

(D)          Submission of
Proposed Business Plan for Approval by Board of Managers. The Authorized
Officers, or the Chief Executive Officer, as applicable, and the Financial
Officer shall submit the Proposed Business Plan to the Board of Managers [***].
The Board of Managers shall review the Proposed Business Plan, including the
Annual Budget included in such Proposed Business Plan.

 

(1)           If the Proposed
Business Plan receives the approval of the Board of Managers, such Proposed
Business Plan shall be approved (the “Undisputed  Approved  Business  Plan”); provided, however, that the most recently adopted Undisputed Approved
Business Plan may be amended from time to time in accordance with
Section 11.2(E).

 

(2)           If the Board of
Managers fails to approve the Proposed Business Plan within thirty (30) days of
the submission of such Proposed Business Plan to the Board of Managers, then
each Member may, within twenty (20) days after the earlier of the end of such
thirty (30)-day period or the date on which the Board of Managers rejects the
Proposed Business Plan, submit its own proposed business plan (a “Member  Business  Plan”) to the Board of Managers for approval. If, within
twenty (20) days after the submission of a Member Business Plan, the Board of
Managers approves any Member Business Plan or any other Proposed Business Plan,
such Member Business Plan or other Proposed Business Plan shall become an
Undisputed Approved Business Plan. If the Board of Managers fails to approve
any Member Business Plan or other Proposed Business Plan within such twenty
(20)-day period, then the matter shall be referred to the Members’ Authorized
Representatives for resolution. If such referral results in an agreement on a
Member Business Plan or any other Proposed Business Plan, such Member Business
Plan or other Proposed Business Plan, as applicable, shall be an Undisputed
Approved Business Plan. Subject to compliance with the limitations set forth in
paragraph (3) below, if such referral does not result in an agreement on a
Member Business Plan or any other Proposed Business Plan within ten (10) days
of such referral, then the Member Business Plan with the [***], if any, shall
be deemed to be the then-adopted Approved Business Plan (such Approved Business
Plan, a “Disputed Approved Business Plan”); provided that, except as contemplated by paragraph (3)
below, such Annual Budget set forth in any Disputed Approved Business Plan
shall not be inconsistent with the [***] Schedule; and provided
further that the most recently adopted
Disputed Approved Business Plan may be amended from time to time in accordance
with Section 11.2(E).

 

(3)           The [***] Schedule,
which sets forth the [***] timing for the [***], is attached hereto as Schedule 1.
The [***] Schedule shall not be amended or modified without the unanimous
written consent of the Members; provided, however, that, if a Member’s Economic Interest is at least
[***] percent ([***]%), such Member may submit a Member Business Plan that
includes an Annual Budget providing for

 

48

 

capital expenditures relating to the [***] and [***] with [***] for a
[***] that deviates from the [***] Schedule.

 

(E)           Modification of
Approved Business Plan.

 

(1)           Each Member, the
Authorized Officers, or the Chief Executive Officer, as applicable, or the
Financial Officer shall have the right from time to time to request that the
Board of Managers review the Joint Venture Company’s and its Subsidiaries’
operating results and business prospects, the progress to date of the Joint Venture
Company’s and its Subsidiaries’ [***] capital projects, any changes in the
requirements for such projects, and the then-current market conditions for the
Joint Venture Products, to consider whether the then-effective Approved
Business Plan should be amended.

 

(2)           In the event that
any material milestone set forth in, or any other material provision of, the
Approved Business Plan is not achieved or is achieved earlier than contemplated
under the Approved Business Plan, or the occurrence of any event having a
material effect on the assets, business, operations, earnings, prospects,
properties or condition (financial or otherwise) of the Joint Venture Company
or its Subsidiaries, each Member, the Authorized Officers, or the Chief
Executive Officer, as applicable, or the Financial Officer shall have the right
to require that the then-effective Approved Business Plan be reviewed by the
Board of Managers to consider whether the then-effective Approved Business Plan
should be amended.

 

(3)           Upon such request or
requirement pursuant to Sections 11.2(E)(1) or (2), the Board of Managers
shall, at the next scheduled meeting of the Board of Managers, or at a special
meeting called for such purpose, review the then-effective Approved Business
Plan and determine whether such amendment is necessary or appropriate. If the
Board of Managers approves such amendment to the Approved Business Plan in
accordance with Section 6.3(A)(11), such amendment shall become an
approved amendment to the Approved Business Plan (and the Approved Business
Plan as so amended shall be an Undisputed Approved Business Plan), and the
Authorized Officers, or the Chief Executive Officer, as applicable, shall
implement the amended Approved Business Plan as promptly as commercially
practicable; provided, however,
that any failure of the Board of Managers to approve any amendment to the
Approved Business Plan shall, subject to Section 11.2(E)(4), result in the
continuation of such Approved Business Plan without the proposed amendment.

 

(4)           In the event a
Member wishes to propose amendments to the Approved Business Plan for any
reason or the Board of Managers fails to approve an amendment to an Approved
Business Plan under Section 11.2(E)(3), either Member may submit a
proposed amendment to the Approved Business Plan (a “Member Plan
Amendment”) to the Board of Managers (with a copy delivered to the
other Member) for approval. If a Member submits a Member Plan Amendment, the
other Member shall have twenty (20) days to present an alternative Member Plan
Amendment. If, within thirty (30) days after such twenty (20)-day period, the
Board of Managers approves any Member Plan Amendment, such Member Plan
Amendment shall become an approved amendment to the Approved Business Plan (and
the Approved Business Plan as so amended shall be an Undisputed Approved
Business Plan), and the Authorized Officers, or the Chief Executive Officer, as
applicable, shall implement such

 

49

 

amendment to the Approved Business Plan as promptly as commercially
practicable. If the Board of Managers fails to approve a Member Plan Amendment
within such thirty (30)-day period, then the matter shall be referred to the
Members’ Authorized Representatives for resolution. If such referral results in
an agreement on a Member Plan Amendment, such Member Plan Amendment shall
become an approved amendment to the Approved Business Plan (and the Approved
Business Plan as so amended shall be an Undisputed Approved Business Plan), and
the Authorized Officers, or the Chief Executive Officer, as applicable, shall
implement such amendment to the Approved Business Plan as promptly as
commercially practicable. If such referral does not result in an agreement on a
Member Plan Amendment within ten (10) days of such referral, then the Member
Plan Amendment with the [***] for the remainder of the then-current Fiscal Year
(or the Member Plan Amendment, if there is only one) shall be deemed to be an
approved amendment to the Approved Business Plan (and the Approved Business
Plan as so amended shall be a Disputed Approved Business Plan), and the
Authorized Officers, or the Chief Executive Officer, as applicable, shall
implement such amendment to the Approved Business Plan as promptly as
commercially practicable. Except as contemplated by Section 11.2(D)(3),
the Annual Budget (or portion thereof for the remainder of the then-current
Fiscal Year) shall not be inconsistent with the [***] Schedule.

 

11.3         Expenditures. All
operating expenditures and all capital expenditures of the Joint Venture
Company and its Subsidiaries shall be made in accordance with the [***] Budget,
the [***] Budget or the Annual Budget, as applicable, set forth in the
applicable Approved Business Plan (each as may be modified or updated in
accordance with this Article 11) for the Fiscal Year in which such expenditures
are made.

 

11.4         Fab Criteria. Notwithstanding
anything to the contrary in this Agreement, no Approved Business Plan may,
without the unanimous consent of the Members, [***].

 

11.5         Quarterly Business
Plan. At least fifteen (15) days prior to the end of each Fiscal Quarter, a
quarterly business plan addressing at least the next six (6) full Fiscal
Quarters on a rolling basis (which shall be consistent in all material respects
with the then-effective Approved Business Plan) shall be prepared by the
officers of the Joint Venture Company in a manner consistent with the Joint
Venture Company’s financial statements and Modified GAAP and reviewed and
approved by the Authorized Officers, or the Chief Executive Officer, as
applicable, and the Financial Officer.

 

11.6         Operating Plan.

 

(A)          The Members shall
cause the Manufacturing Committee to approve for submission to the Board of
Managers an operating plan (the “Operating Plan”),
which shall be prepared and updated by the Joint Venture Company, and reviewed
by the Manufacturing Committee on a monthly basis. The Operating Plan shall
contain a [***], [***] and [***].

 

(1)           The [***] shall
address (1) Joint Venture Products [***] by the Joint Venture Company and
its Subsidiaries during the [***] (which shall be derived from the [***] developed
by the [***]), (2) [***] of [***] during the applicable [***],
(3) target [***] during the [***], (4) Joint Venture [***]
qualifications and (5) such other [***] activities as shall be necessary
and appropriate.

 

50

 

(2)           The [***] shall
address (1) strategy and capability for [***] by the Joint Venture Company, its
Subsidiaries, and subcontractors during the [***] (which shall be derived from
the [***] developed by the [***]), (2) [***] of [***] during the [***], (3)
target [***] by [***] during the [***], (4) [***] qualifications and (5) such
other [***] activities as shall be necessary and appropriate.

 

(3)           The [***] shall address
(1) strategy and capability for [***] by the Joint Venture Company, its
Subsidiaries and subcontractors during the [***] (which shall be derived from
the [***] developed by the [***]), (2) [***] of [***] during the [***], (3) [***]
by [***] during the [***], (4) [***] qualifications and (5) such other [***]
activities as shall be necessary and appropriate.

 

(4)           The Members shall
cause the Manufacturing Committee, in reviewing the Operating Plan, to strive
to optimize the operating efficiency and output of the Joint Venture Company
and its Subsidiaries. The Members shall cause the Manufacturing Committee to
review, on a monthly basis, a report prepared by the Joint Venture Company,
which includes information on the operations of the Joint Venture Company, its
Subsidiaries and its subcontractors in respect of the topics addressed in the
Operating Plan (the “Monthly Operating Report”),
with a quarterly review of the Monthly Operating Report (“Quarterly Operating Review”).

 

(B)           Participation in
the Development of the Operating Plan. In preparing the Operating Plan, the
Manufacturing Committee shall be advised by the Members, the Authorized
Officers, or the Chief Executive Officer, as applicable, the Financial Officer
and the Technology Committees. The Operating Plan, unless otherwise determined
by the Board of Managers, shall incorporate Micron’s Process of Record and
Model of Record, as amended from time to time by Micron.

 

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

 

11.8         Insurance. The
Joint Venture Company shall at all times be covered by insurance of the types
and in the amounts set forth on Schedule 2 hereto. Such insurance
coverage may be provided through the coverage under one or more insurance
policies maintained by either Member.

 

ARTICLE 12.

TRANSFER RESTRICTIONS; PURCHASE OPTIONS

 

12.1         Restrictions on
Transfer. No Member may, directly or indirectly, by operation of law or
otherwise, sell, assign or transfer or otherwise encumber (whether by pledge or
otherwise), or create a class of tracking stock or other derivative security in
respect of (each of the foregoing, a “Transfer”) all
or any portion of its Interest in the Joint Venture Company or

 

51

 

any of its Subsidiaries or any Member Note, or any interest therein,
and the Joint Venture Company and its Subsidiaries shall not recognize any
Transfer of a Member’s Interest in the Joint Venture Company or any of its
Subsidiaries or any Member Note, other than a Transfer permitted in accordance
with Sections 12.2, 12.4 and 12.5. Neither (A) a Transfer of securities issued
by a Member nor (B) a Member Change of Control shall constitute a Transfer
prohibited by this Section 12.1; provided, however, that in the event of a Member Change of Control,
the provisions of Section 13.1(A)(7)(ii) shall apply.

 

12.2         Permitted
Transfers. Notwithstanding the restrictions on Transfer set forth in
Section 12.1, a Member may Transfer all, but not less than all, of its Interest
in the Joint Venture Company and any Member Note (including the right to
receive any accrued interest thereon) to a Wholly-Owned Subsidiary of such
Member, provided that, (i) while such
Wholly-Owned Subsidiary holds such Interest or any Member Note it remains a
Wholly-Owned Subsidiary of the original Member, (ii) such transferring
Member shall remain liable for its Subsidiary’s failure to perform the
obligations associated with such transferred Interest (including the
obligations set forth in this Agreement), and (iii) prior to the
effectiveness of any permitted Transfer, the transferring Member shall deliver
to the Board of Managers and all of the other Members of the Joint Venture
Company the following:

 

(A)          a certificate of the
transferring Member that the Transfer will not, and could not reasonably be
expected to, cause an adverse effect on the Joint Venture Company or any of its
Subsidiaries or the non-transferring Member, including any adverse effect on,
or resulting loss of, any of the Intellectual Property Rights of the Joint
Venture Company or any of its Subsidiaries;

 

(B)           evidence reasonably
satisfactory to the other Member that all of the following conditions have been
satisfied:

 

(1)           the transferring
Member and its Affiliates are not in material breach of any provision of this
Agreement or any agreement with the Joint Venture Company or any of its
Subsidiaries (collectively, the “Affiliate Agreements”);

 

(2)           the transferee of
the Member’s Interest or any Member Note is financially capable of carrying out
the obligations and paying any liabilities of the transferring Member pursuant
to this Agreement and the Affiliate Agreements;

 

(3)           notwithstanding the
continuing liability of the transferring Member described above, the transferee
has agreed in writing to assume all of the obligations of the transferring
Member relating to the transferred Interest or any Member Note, including the
obligations set forth in this Agreement and any Affiliate Agreement it properly
assumes;

 

(4)           the transferee
executes and becomes a party to the Confidentiality Agreement;

 

(5)           the Transfer will
not result in material adverse tax consequences to the Joint Venture Company or
to the other Member (unless the Member engaging in such

 

52

 

Transfer reimburses the other Member or the
Joint Venture Company, as the case may be, for such tax consequences, which
reimbursement and payment shall not affect the Capital Contributions of the
Members); and

 

(6)           the Transfer will
not result in a Liquidating Event, or in an event or condition that with the
giving of notice or the passage of time or both would constitute a breach or
default, by either the transferring Member or the transferee, under this
Agreement or any of the Affiliate Agreements.

 

12.3         Additional Members.
No Person shall be admitted to the Joint Venture Company as a Member other than
Intel, Micron or any substitute Member for Intel or Micron (as provided in
Section 12.2).

 

12.4         Purchase of
Additional Interest. During the period commencing on the two (2) year
anniversary of the Effective Date and at any time that Intel is a Member and
its Economic Interest (without taking into account in the Committed Capital of
such Member or in the aggregate Committed Capital of all Members, the
outstanding amount under any Mandatory Note payable to Intel) is less than 51%
but at least 49%, Intel shall have the right to purchase from Micron, and upon
the exercise of such right Micron shall sell to Intel, an Interest representing
a percentage (the “Option Percent”)
of the Members’ aggregate Interests necessary to bring Intel’s Economic
Interest to 51% (computed by shifting from the Capital Contribution Balance
(and Committed Capital) of Micron to the Capital Contribution Balance (and
Committed Capital) of Intel the minimum sum necessary to raise the Economic
Interest of Intel to 51%). The purchase price to be paid by Intel for such
Interest shall be an amount in cash equal to the [***] value to Micron of the
right to purchase under the terms of the Supply Agreement – Micron the output
of the Joint Venture Product that will be shifted from Micron to Intel as a
result of the adjustment in the Sharing Interests of the Members following the
exercise of the purchase right (and the resulting shift in the Members’ Capital
Contribution Balances) provided for in this Section, such [***] value to be
determined by a nationally recognized investment bank that is mutually
agreeable to the Members (the “Purchase Value”);
provided, however,
that the purchase price shall in no event be (i) lower than an amount
equal to the Option Percent [***] by the [***] of the [***] of the Joint
Venture Company and its Subsidiaries 
(the “Floor Amount”), or
(ii) greater than the product of [***], multiplied by the Floor Amount
(the “Cap Amount”). If the Purchase Value is
determined to be lower than the Floor Amount, or greater than the Cap Amount,
then the purchase price shall be an amount equal to the Floor Amount or the Cap
Amount, respectively. Intel may exercise this purchase right by delivering a
written notice of its intent to exercise to the Joint Venture Company and
Micron. The closing of the purchase and sale shall take place on a date agreed
to by the Joint Venture Company, Micron and Intel, but in no event later than
thirty (30) days following the date the notice is delivered. Such closing shall
take place at the principal office of the Joint Venture Company, or at such
other location as the Joint Venture Company, Micron and Intel may mutually
determine. At the closing, the Joint Venture Company shall record in its books
and records the contemplated shift in the Members’ Capital Contribution Balances,
and the appropriate changes to the Capital Accounts of the Members, and Intel
shall pay to Micron the purchase price for such Option Percent by wire transfer
of immediately available funds.

 

53

 

12.5         Purchase of
Remaining Interest.

 

(A)          If the Economic
Interest of a Member (the “Minority Member”)
drops to ten percent (10%) or less and remains at or below ten percent (10%)
for more than six (6) consecutive months, the other Member or a Subsidiary
thereof (such other Member or Affiliated Company thereof, the “Majority Member”) shall have the option, exercisable at any
time prior to the day that is six (6) months prior to the end of the Initial
Term, to purchase all of the remaining Interest of, and outstanding Member
Notes payable to, the Minority Member at a cash purchase price equal to the
Option Price, subject to the terms and conditions set forth in Section 12.5(C).
The Majority Member may exercise this purchase option by delivering a written
notice of its intent to exercise to the Minority Member. The closing of the
purchase and sale of the Minority Member’s remaining Interest and any
outstanding Member Notes held by the Minority Member (the “Minority
Closing”) shall take place as of the last day of the Fiscal Month in
which the notice is delivered (unless such notice is delivered within the last
ten (10) days of the end of a Fiscal Month, in which case the Minority Closing
shall take place on the last day of the first full Fiscal Month thereafter). Such
Minority Closing shall take place at the principal office of the Joint Venture
Company, or at such other location as the Majority Member and the Minority
Member may mutually determine. At the Minority Closing, (i) the Minority
Member shall transfer its remaining Interest in the Joint Venture Company and
outstanding Member Notes held by the Minority Member to the Majority Member,
free and clear of any liens or encumbrances, (ii) the Majority Member
shall pay the Minority Member the Minority Closing Price by wire transfer of
immediately available funds and (iii) the Minority Member shall deliver to
the Majority Member such instrument of conveyance as the Majority Member
reasonably requests.

 

(B)           Upon the Minority
Closing, the Majority Member shall pay to the Minority Member a sum (the “Minority Closing Price”) equal to the [***] of (i) the
[***] of (a) the [***] of the [***] of the Joint Venture Company and its
Subsidiaries as of the last day of the Fiscal Month immediately prior to the
Minority Closing, [***] (b) the [***] of all liabilities of the Joint
Venture Company and its Subsidiaries as of the last day of the Fiscal Month
immediately prior to the Minority Closing (excluding, however, any liabilities
with respect to Member Notes), and (ii) the Economic Interest of the
Minority Member at the time the option provided for in Section 12.5(A) is
exercised. Within five (5) Business Days after the month-end balance sheet
(prepared in accordance with Modified GAAP consistently applied) as of the date
of the Minority Closing becomes available, the Minority Closing Price shall be
recalculated using the [***] of the [***] of the Joint Venture Company and its
Subsidiaries as of such date and the [***] of the liabilities of the Joint
Venture Company and its Subsidiaries as of such date (excluding any liabilities
with respect to Member Notes) (such recalculated sum, the “Option Price”).
If the Option Price is greater than the Minority Closing Price, the Majority
Member shall deliver the difference to the Minority Member by wire transfer of
immediately available funds within three (3) Business Days of such
recalculation. If the Option Price is less than the Minority Closing Price, the
Minority Member shall refund the difference to the Majority Member by wire
transfer of immediately available funds within three (3) Business Days of such
recalculation.

 

(C)           Upon an election of
the Majority Member to purchase the Minority Member’s remaining Interest and
the outstanding Member Notes held by such Minority Member pursuant to Section
12.5(A), if the Minority Member is Micron, then the following shall apply:

 

54

 

(1)           Micron shall, at its
option, exercisable by written notice to Intel not more than five (5) days
after the exercise of the option contemplated by Section 12.5(A), purchase
either (i) the [***] or (ii) all of the equity interest in any Facilities
Company that owns or leases only the [***]. The purchase price shall be the
[***] of the [***] or of such Facilities Company, as applicable (excluding, for
purposes of this determination, any [***] attributable to the [***]). The
closing of the purchase and sale provided for in this Section 12.5(C)(1) (the “Micron Minority Closing”) shall take place on the same date,
at the same time and at the same location as the Minority Closing. At the
Micron Minority Closing, (x) the Joint Venture Company shall transfer the
purchased assets, rights and equity interest to Micron, free and clear of any
liens or encumbrances other than liens securing indebtedness exclusively
associated with the Fab located at the [***], (y) Micron shall pay the
Joint Venture Company the purchase price determined in accordance with this
Section 12.5(C)(1) by wire transfer of immediately available funds and (z) the
Joint Venture Company shall deliver to Micron such instrument(s) of conveyance
as Micron reasonably requests.

 

(2)           Micron
shall pay to the Joint Venture Company an amount equal to the [***].

 

(3)           The [***] shall
terminate at the time of the Micron Minority Closing with no payment
obligation, other than as contemplated by Section 12.5(C)(2), thereunder by
Micron; provided, however,
that in the event that Micron fails to acquire the [***] under
Section 12.5(C)(1), the [***] shall continue for a reasonable period of
time to allow the Joint Venture Company to remove the [***] from the Premises,
and Micron shall permit the Joint Venture Company to have reasonable access to
the Premises, for a reasonable period and on a reasonable basis, in order to
remove such [***] from the Premises.

 

(4)           The Boise Supply
Agreement shall continue for the remainder of its term, if any, but shall be
modified such that a percentage of the products to be sold thereunder equal to
the Sharing Interest of Micron at the time of the exercise of the option under
Section 12.5(A) shall be retained by Micron and the remaining portion shall be
sold to the Joint Venture Company (which may then assign its rights and
obligations thereunder to Intel).

 

(5)           Micron may, at its
option, cause to continue in effect any existing supply agreements it has with
the Joint Venture Company or any Subsidiary of the Joint Venture Company for
[***] from the Minority Closing with the same amounts and at the same delivery
schedule, pricing and terms as are in effect on the date of the Minority
Closing; provided, however,
that the quantity of Products Micron shall be entitled to purchase thereunder,
measured in 300 millimeter equivalents, shall be the [***] between (i) the
quantity (determined based on the three (3)-month period immediately preceding
the Minority Closing) of Products Micron would have been permitted to purchase
had the option provided for in Section 12.5(A) not been exercised, and (ii) the
[***] of (a) the quantity of Products that the assets acquired by Micron in
accordance with Section 12.5(C)(1) have been producing in the ordinary course
as determined based on the three (3)-month period immediately preceding the
Minority Closing and (b) the quantity of 

 

55

 

Products that is retained by Micron under Section 12.5(C)(4). Such
quantity will be [***] for the first year and then will [***] of such fixed
quantity per Fiscal Quarter to [***] over the next [***] Fiscal Quarters. The
Members will work together in good faith so that such supply arrangements
minimize disruption to the business of the Joint Venture Company and the
Members and to maintain, subject to such decline in amount, substantially the
same supply of custom Products and substantially the same composition of types
of Products as Micron had obtained from the Joint Venture Company immediately
prior to the Minority Closing.

 

ARTICLE 13.

DISSOLUTION AND LIQUIDATION

 

13.1         Dissolution.

 

(A)          Upon the occurrence
of any of the following events (each, a “Liquidating Event”),
the Joint Venture Company shall dissolve and commence winding up and
liquidation activities in accordance with this Article 13, whether or not the
event would cause a dissolution under the Act:

 

(1)           the expiration of
the Term in accordance with Section 1.3;

 

(2)           the unanimous
agreement of the Members to dissolve the Joint Venture Company;

 

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

 

(4)           the election of
Intel to dissolve the Joint Venture Company in the event of one or more
breaches by Micron of either or both of (i) the [***] Agreement, dated as of
the Effective Date, between the Joint Venture Company and Micron or (ii) with
respect to any obligations of Micron to [***] or [***] that are [***] at [***],
the [***] and [***] Services Agreement, dated as of the Effective Date, between
the Joint Venture Company and Micron that remain uncured after any applicable
cure period set forth in such agreement, provided that
all such breaches described in clauses (i) and (ii) from the Effective Date to
the date of such election result in [***] damages to the Joint Venture Company
of [***] (that would be recoverable [***] under such agreements) (without
taking into account the effect of the dissolution, winding up and liquidation
of the Joint Venture Company under this Article 13);

 

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

 

(6)           the election by
either Member to dissolve and wind up the affairs of the Joint Venture Company
upon (i) the occurrence of a Bankruptcy of the Joint 

 

56

 

Venture Company of the type described in
clause (iv) of the definition of the term “Bankruptcy,” provided
that the Member making such election is not in default of any payment
obligation to the Joint Venture Company or (ii) the Bankruptcy (as hereinafter
defined), dissolution or liquidation of a Member, and further
provided that, in either event, such election shall be made only
after entry by the court presiding over the Bankruptcy of an order granting
relief from the automatic stay to make such election to the Member making such
election;

 

(7)           the election by
either Member to dissolve and wind up the affairs of the Joint Venture Company,
if (i) the Joint Venture Company ceases operations for more than [***] or
(ii) the other Member undergoes a Member Change of Control; or

 

(8)           the
election of a Member by written notice to the Joint Venture Company and the
other Member upon the occurrence of a Balance Sheet Metric Event on or prior to
the Transition Date; provided, however,
that such notice shall be given not more than thirty (30) days after the
receipt by the notifying Member from the Joint Venture Company of financial
reports indicating that such Balance Sheet Metric Event has occurred;

 

(9)           the
first day on which each of the following conditions is satisfied:

 

(a)           an
Initial Operating Metric Event has occurred on or prior to the Transition Date;

 

(b)           either
Member provides a written notice (the “Election Notice”)
to the Joint Venture Company and the other Member of its election to dissolve
the Joint Venture Company unless there is a Subsequent Operating Metric Cure; provided, however, that:

 

(i)            the
Election Notice shall be given only after completion of [***] Fiscal Quarters
after the Initial Operating Metric Event and only if a Subsequent Operating
Metric Cure has not occurred by the end of such [***] Fiscal Quarters;

 

(ii)           such
Election Notice shall be given not more than [***] after the later of (A)
receipt by the notifying Member from the Joint Venture Company of financial
reports for the [***]Fiscal Quarter after the Initial Operating Metric Event
and (B) the receipt by such Member of notice from the Joint Venture Company or
the other Member that the Transition Date has occurred; and

 

(iii)          a
Member who has not remitted in full its [***] of any [***] Capital Contribution
in accordance with Section 2.3(A) shall not be eligible to submit an Election
Notice unless the other Member failed to contribute in full its [***] of that
or any earlier [***] Capital Contribution under Section 2.3(A);

 

57

 

(c)           not
less than [***] Fiscal Quarters after the Initial Operating Metric Event have
been completed;

 

(d)           there
shall not have been a Subsequent Operating Metric Cure in any period of [***]
Fiscal Quarters completed prior to the end of the Fiscal Quarter most recently
completed prior to the date the Election Notice is given; provided,
however, that if the Election Notice is given in the [***] Fiscal
Quarter after the Initial Operating Metric Event, there shall not have been a
Subsequent Operating Metric Cure in any period of [***] Fiscal Quarters
completed prior to the end of, and including, such [***] Fiscal Quarter; and

 

(e)           [***]
shall have expired from the date the Election Notice was given; or

 

(10)         the election of a
Member by written notice to the Joint Venture Company and the other Member upon
the occurrence of a Critical Deadlock, provided such notice is given not more
than thirty (30) days after the later of the end of the [***] period described
in subsection (B) of the definition of Critical Deadlock and the receipt by the
electing Member from the Joint Venture Company of financial reports indicating
that no Subsequent Operating Metric Cure has occurred in the period of [***]
Fiscal Quarters described in subsection (C) of the definition of Critical
Deadlock.

 

(B)           For
the purposes of this Section 13.1, the term “Bankruptcy”
shall mean (i) the entry of a decree or order for relief of the Person by
a court of competent jurisdiction in any involuntary case involving the Person
under any bankruptcy, insolvency or other similar law now or hereafter in
effect; (ii) the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or other similar agent for the Person or for
any substantial part of the Person’s assets or property; (iii) the
ordering of the winding up or liquidation of the Person’s affairs;
(iv) the filing with respect to the Person of a petition in any such
involuntary bankruptcy case, which petition remains undismissed for a period of
sixty (60) days or which is dismissed or suspended pursuant to Section 305 of
the U.S. Bankruptcy Code (or any corresponding provision of any future U.S.
bankruptcy law); (v) the commencement by the Person of a voluntary case
under any bankruptcy, insolvency or other similar law now or hereafter in
effect; (vi) the consent by the Person to the entry of an order for relief
in an involuntary case under any such law or to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar agent for the Person or for any substantial part
of the Person’s assets or property; (vii) the making by the Person of any
general assignment for the benefit of creditors; or (viii) the failure by
the Person generally to pay its debts as such debts become due.

 

13.2         Determination of
[***] Value. Upon the occurrence of a Liquidating Event, the Members
shall promptly proceed to determine the [***] Value of each Facility or
Facilities Company and the [***] (the date of receipt of the last such
determination, the “Buyout Determination Date”).
The Members and the Joint Venture Company shall use reasonable efforts to cause
the determination to be made as promptly as practicable, but not later than
[***] after the Liquidating Event or, in the case of a Liquidating Event under
Section 13.1(A)(1), not later than such Liquidating Event.

 

58

 

13.3         No Withdrawal.
No Member shall have any right to withdraw from the Joint Venture Company. No
event that would constitute a withdrawal of a Member under the Act shall in any
way be deemed to be a withdrawal under this Agreement or cause a dissolution of
the Joint Venture Company.

 

13.4         Micron [***]
Reimbursement; [***] True-Up Payment.

 

(A)          If
a Liquidating Event occurs before the [***] becomes an Operational Fab, Micron
shall not be obligated to reimburse the Joint Venture Company for any unused
portion of the pre-paid rent under the [***] transferred to the Joint Venture
Company by Micron as described in Section 2.1(B). If a Liquidating Event occurs
after the [***] becomes an Operational Fab, Micron shall reimburse the Joint
Venture Company for any unused portion of the prepaid rent under the [***]
transferred to the Joint Venture Company determined as of the day of closing of
the Micron [***] Purchase Option, if exercised, or following the sale of the
last Facility to be sold if such option is not exercised and based on the
assumption that, for the [***], such prepaid rent was being amortized on a
straight line basis over a ten (10)-year period. Such reimbursement shall be
paid by Micron to the Joint Venture Company no later than the Liquidation Date
and, if not so paid, shall be deducted from the amount to be distributed to
Micron under this Article 13.

 

(B)           If
a Liquidating Event occurs pursuant to Section 13.1(A)(1), Micron shall,
on the Liquidation Date, make a one-time true-up payment to the Joint Venture
Company in an amount equal to the [***] as of the date of the termination of
the [***]. A real estate appraiser mutually selected by the Members shall
determine such [***] on a final and conclusive basis. Such appraiser shall be
instructed to consider all factors that in his or her professional opinion may
affect the [***].

 

13.5         Micron Purchase
Option on [***]. Within thirty (30) days after the [***] Determination
Date, Micron may elect to purchase all, but not less than all, of either (i)
the [***] or (ii) the equity interest in the U.S. Facilities Company that owns
or leases only the [***]. Micron’s election to purchase (the “Micron [***] Purchase Option”) shall be exercised by
delivering a written notice (the “Micron [***] Exercise
Notice”) of such election to the other Member and the Joint Venture
Company. The purchase price for, as applicable, either (x) the [***] or (y) the
equity interest, purchased pursuant to the Micron [***] Purchase Option shall be
the [***] Value of such [***] or the equity interest in the applicable U.S.
Facilities Company, respectively (excluding, for purposes of this
determination, any value attributable to the [***]).

 

13.6         Intel Purchase
Option.

 

(A)          If a Liquidating
Event occurs before [***] is an Operational Fab, then within thirty (30) days
after the Buyout Determination Date, Intel may, subject to
Section 13.8(C), elect to purchase all, but not less than all, of either
(i) the [***] and its Associated Assets or (ii) the equity interest in the U.S.
Facilities Company that owns or leases only the [***] and its Associated
Assets, irrespective of whether the [***] is then not an Operational Fab and
irrespective of whether any additional [***].

 

59

 

(B)           If the Liquidating
Event occurs after [***] is an Operational Fab but before [***] is an
Operational Fab (a “Later Liquidating Event”),
then within thirty (30) days after the Buyout Determination Date, Intel may,
subject to Section 13.8(C), elect to purchase under this Section 13.6(B) all,
but not less than all, of either (i) [***] and its Associated Assets or (ii)
the equity interest in the Facilities Company that owns or leases only [***]
and its Associated Assets.

 

(C)           Intel shall exercise
the purchase option contained in Sections 13.6(A) or 13.6(B) (in either case,
an “Intel Purchase Option”) by delivering a
written notice (the “Intel Exercise Notice”)
of such election to the Joint Venture Company and Micron. The purchase price for,
as applicable, either (i) (a) the [***] and its Associated Assets or (b) [***]
and its Associated Assets or (ii) the equity interest in (a) the U.S.
Facilities Company that owns or leases only the [***] and its Associated Assets
or (b) the Facilities Company that owns or leases only [***] and its Associated
Assets, purchased pursuant to the Intel Purchase Option shall be the [***]
Value of such assets or equity, respectively.

 

13.7         Additional Micron
Option.

 

(A)          If a Later
Liquidating Event occurs, then within thirty (30) days after the Buyout
Determination Date, Micron may, subject to Section 13.8(C), elect to purchase
under this Section 13.7(A) all, but not less than all, of either (i) the [***]
and its Associated Assets or (ii) the equity interest in the U.S. Facilities
Company that owns or leases only the [***] and its Associated Assets.

 

(B)           Micron shall
exercise the purchase option contained in Section 13.7(A) (the “Micron Purchase Option”) by delivering a written notice (the
“Micron Exercise Notice”) of such
election to the Joint Venture Company and Intel. The purchase price for, as
applicable, either (i) the [***] and its Associated Assets or (ii) the equity
interest in the U.S. Facilities Company that owns or leases only the [***] and
its Associated Assets, purchased pursuant to the Micron Purchase Option shall
be the [***] Value of such assets or equity, respectively.

 

13.8         Remaining
Facilities Draft.

 

(A)          Within fifteen (15)
days (the “Fab Draft Period”) after the
expiration of the last to expire of the options set forth in Sections 13.5,
13.6 and 13.7 (to the extent such options are applicable), any Facility or the
equity of any Facilities Company that owns or leases only a single Facility
that is not the subject of a Micron [***] Exercise Notice, an Intel Exercise
Notice or a Micron Exercise Notice (each such
Facility, a “Remaining Facility”) shall be
offered to the Members for purchase at their respective [***] Values in a draft
(the “Draft”) to be conducted under the
following procedure; provided, however, that in the event there is only one Remaining
Facility, such Remaining Facility shall be offered to the Members under
Section 13.9, and the provisions of this Section 13.8 shall not apply to
such Remaining Facility.

 

(B)           Within fifteen (15)
days after the commencement of the Fab Draft Period, the Members will appoint
an independent third party to administer the Draft (the “Draft
Administrator”). If the Members fail to mutually agree on the Draft
Administrator within fifteen (15) days, Deloitte & Touche shall be
appointed the Draft Administrator by written

 

60

 

request of either Member. Within fifteen (15) days after the
appointment of the Draft Administrator, each of the Members may submit a
written bid to the Draft Administrator for the right to select the first
Facility to be acquired in the Draft under this Section 13.8, unless the right
to select the first Facility has been designated pursuant to Section 13.8(C) or
either of the last two sentences of this paragraph (B). Such bid shall be a
binding, irrevocable offer to pay in cash to the Joint Venture Company a sum
specified by the bidding Member in the bid for the right to select the first
Facility in the Draft. The Draft Administrator shall hold such bids in
confidence until the earlier of receipt of bids from both Members and the end
of such fifteen (15)-day period, whereupon the Draft Administrator shall
announce to the Members which Member submitted the highest bid on a timely
basis in accordance with the provisions hereof (the “First
Drafter”). Such Member shall pay to the
Joint Venture Company the amount of its bid within ten (10) days thereafter by
wire transfer of immediately available funds. If no bids are timely submitted
in accordance with the provisions hereof, the Draft Administrator shall
designate the First Drafter by lot. Notwithstanding the foregoing, in the event
of a Liquidating Event described in Section 13.1(A)(10) after the fifth
anniversary of the Effective Date, the Member who did not elect for the
Critical Deadlock to be a Liquidating Event shall be the First Drafter without
any requirement to bid therefor. Notwithstanding the foregoing, if at the time
of a Liquidating Event, a Member’s Economic Interest is above [***] percent
([***]%), that Member will be the First Drafter without any requirement to bid
therefor and will also get [***], with the other Member having the [***] and,
notwithstanding anything to the contrary in Section 13.8(D), [***] between the
Members [***] (for the Member whose Economic Interest is above [***] percent
([***]%)) [***] (for the Member whose Economic Interest is below [***] percent
([***]%)) basis (except that, if there are only [***] Remaining Facilities
after a [***], the ratio in that [***] will be [***] to [***]).

 

(C)           Notwithstanding
anything to the contrary in Sections 13.6 and 13.7 and this Section 13.8, in
the event of a Liquidating Event described in Section 13.1(A)(7)(ii), the
Member electing under such Section to dissolve and wind up the Joint Venture
Company on the occurrence of the Member Change of Control shall be the First
Drafter without any requirement to bid therefor, Sections 13.6 and 13.7 shall
not be effective, and the [***] and its Associated Assets and [***] (if it is
an Operational Fab) and its Associated Assets shall be deemed to be included in
the Remaining Facilities for purposes of the draft contemplated by this Section
13.8.

 

(D)          Within fifteen (15)
days after the date (the “Draft Commencement Date”)
on which the Draft Administrator announces the identity of the First Drafter,
the First Drafter may (but shall not be obligated to) select for purchase a
[***] or the equity of a Facilities Company that owns or leases [***] by
written notice to the Joint Venture Company and the other Member (the “Second Drafter”). After such [***] ([***])-day period
expires, but within [***] ([***]) days after the Draft Commencement Date, the
Second Drafter may (but shall not be obligated to) select for purchase a [***]
or the equity of a Facilities Company that owns or leases [***] (other than
that selected previously by the First Drafter) by written notice to the Joint
Venture Company and the other Member. If there are [***] after the [***]
selections by the First Drafter and the Second Drafter, then after such [***]
([***])-day period expires, but within [***] ([***]) days after the Draft
Commencement Date, the First Drafter may (but shall not be obligated to) select
for purchase a [***] or the equity of a Facilities Company that owns or leases
[***] in the Draft. After such [***] ([***])-day period expires, but within
[***] ([***]) days

 

61

 

after the Draft Commencement Date, the Second Drafter may (but shall
not be obligated to) select for purchase a [***] or the equity of a Facilities
Company that owns or leases [***] in the Draft. After the foregoing [***], the
Draft shall [***] in the foregoing manner until (1) [***] in the Draft, (2)
there [***], or (3) neither Member wishes to [***].

 

13.9         Auction of Single
Remaining Facility. If (1) there is only a single Remaining Facility
(and therefore no Draft has occurred) or (2) after the final round of
picks in the Draft under Section 13.8(D) there remains without a pick only a
single Remaining Facility, each Member may submit an irrevocable, binding
written offer (a “Remaining Facility
Purchase Offer”) to purchase the Remaining Facility or the equity of
the Facilities Company that owns or leases only such Remaining Facility. Such
offer shall be submitted to the Draft Administrator within thirty (30) days
after the Draft Commencement Date (in the case of an auction under clause (1)
above) or thirty (30) days after the last pick was permitted to be submitted in
the Draft (in the case of an auction under clause (2) above). Immediately after
the end of such thirty (30) day period, the Draft Administrator shall announce
the winning bid.

 

13.10       Closing of
Purchases. The closing of any purchase to be made under a Purchase Option
shall each take place as soon as reasonably practicable (but in no event later
than one-hundred twenty (120) calendar days) following the last to occur of the
expiration of any of the Micron [***] Purchase Option, the Intel Purchase
Option, the Micron Purchase Option or a Remaining
Facility Purchase Offer, the completion of the Draft and the expiration of the
thirty (30) day period contemplated by Section 13.9. Such closing shall take
place at the principal office of the Joint Venture Company, or at such other
time and location as the Members may mutually determine. At the closing of the
Purchase Options, the applicable assets, rights or equity interest, as
applicable, shall be conveyed, assigned or otherwise transferred to the Member
purchasing such assets, rights or equity, free and clear of any liens and
encumbrances other than liens securing indebtedness exclusively associated with
the applicable Fab, and each Member shall pay the Joint Venture Company the
purchase price for the assets, rights or equity it is purchasing by wire transfer
of immediately available funds and the Joint Venture Company shall deliver to
each Member such instrument(s) of conveyance as the purchasing Member
reasonably requests. For purposes hereof, the term “Purchase
Options” shall mean any purchase made under Section 13.8 and
the Micron [***] Purchase Option, the Intel Purchase Option, the Micron
Purchase Option and any Remaining Facility
Purchase Offer.

 

13.11       Auction of
Remaining Assets. As soon as reasonably practicable following the closing
of the Purchase Options pursuant to Section 13.10 (or if any Purchase Options
are not exercised, the expiration of all Purchase Options), but not later than
[***] ([***]) days after the Buyout Determination Date, the Board of Managers
shall cause the Joint Venture Company and its Subsidiaries to sell, in an
auction process reasonably designed to maximize the price, all of the assets,
other than cash, remaining in the Joint Venture Company and its Subsidiaries
that were not sold to the Members in accordance with the Purchase Options (the “Remaining Assets”). Each of the Members shall be entitled to
participate as a bidder in the auction. The Remaining Assets shall be sold to
the Person providing the best bid.

 

13.12       Winding Up. Following
the conclusion of any sale conducted in accordance with Section 13.11, the
Joint Venture Company shall continue solely for the purposes of winding up its
affairs in an orderly manner, liquidating its assets, and satisfying the claims
of its creditors

 

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and Members. To the extent not inconsistent with the foregoing, all
covenants and obligations in this Agreement shall continue in full force and
effect until such time as the Joint Venture Company’s property has been
distributed pursuant to this Section 13.12 and Section 13.13 and the Joint
Venture Company has been dissolved in accordance with the Act.

 

13.13       Liquidation. (A)  Upon the occurrence of a Liquidating Event
and following the completion of (i) the consummation of any sale under any
of the Purchase Options and (ii) the auction of assets contemplated by
Section 13.11 (the date on which all such events have been completed, the “Liquidation Date”), the Board of Managers shall act as the
liquidating committee of the Joint Venture Company. The liquidating committee
shall liquidate the Joint Venture Company’s remaining assets and terminate its
business in accordance with this Section 13.13. The liquidating committee shall
promptly prepare or cause to be prepared, at the expense of the Joint Venture
Company, a statement setting forth the assets and liabilities of the Joint
Venture Company as of the date of dissolution and shall furnish that statement
to all Members. The liquidating committee shall proceed to liquidate any assets
of the Joint Venture Company that remain unsold after the auction contemplated
by Section 13.11 and to terminate the Joint Venture Company’s business as
promptly as practicable but shall be allowed a reasonable time for the orderly
liquidation of Joint Venture Company assets and the discharge of liabilities to
creditors (including Members who are creditors) in order to minimize losses
normally incident to a liquidation. The liquidating committee shall have full
power and authority to operate Joint Venture Company properties in the ordinary
course of business for the account of the Joint Venture Company.

 

(B)           At least ten (10)
days prior to the first distribution of assets or other proceeds of the
liquidation under Section 13.13(C) (which distribution shall occur no earlier
than the Liquidation Date), the liquidating committee shall deliver written
notice of such pending first liquidating distribution to both Members. Prior to
the time of such first liquidating distribution, (i) any Member that is the
Funding Member with respect to any Member Note outstanding at such time may, by
delivering written notice to the Joint Venture Company, convert the outstanding
principal balance of and accrued interest on such Member Note into a Capital
Contribution and (ii) any Member that is the Non-Funding Member with respect to
any Member Note outstanding at such time may, by delivering written notice to
the Joint Venture Company, cause the Joint Venture Company to convert the
outstanding principal balance of and accrued interest on any such Member Note
into a Capital Contribution. Any conversion of a Member Note made pursuant to
this Section 13.13(B) shall be effective prior to the commencement of the
first liquidating distribution pursuant to Section 13.13(C).

 

(C)           The assets and other
proceeds of the liquidation, as and when available, shall be applied and
distributed in the following order and priority:

 

(1)           first,
to the payment of all debts and liabilities of the Joint Venture Company,
excluding debts and liabilities to Members and former Members;

 

(2)           second,
to the setting up of reserves that the liquidating committee deems reasonably
necessary for contingent, unmatured or unforeseen liabilities or obligations of
the Joint Venture Company;

 

63

 

(3)           third,
to the payment of all debts and liabilities to Members and any former Members;
and

 

(4)           fourth,
to the Members in accordance with Section 5.1.

 

(D)          In
the event that, at the time of a liquidating distribution in accordance with
Section 13.13(C), there exists any outstanding obligation of a Member to the
Joint Venture Company (including, but not limited to, any amounts owed by such
Member to the Joint Venture Company under any Purchase Option that remains
unpaid), all amounts to be distributed to such Member under Section 13.13(C)
shall be subject to offset, and no distribution shall be made to such Member
until after all such obligations have been satisfied in full.

 

(E)           In
the event that Micron does not exercise the Micron [***] Purchase Option, or
does not otherwise acquire the [***] pursuant to this Article 13, then Micron
shall permit the Joint Venture Company, or the purchaser of any such [***] in
an auction contemplated by Section 13.11, as applicable, to have reasonable
access to the Premises, for a reasonable period and on a reasonable basis, in
order to remove such [***] from the Premises.

 

13.14       Supply Agreements.
Notwithstanding the occurrence of a Liquidating Event, the Boise Supply
Agreement shall remain in effect for the remainder of its term, if any, but
shall be modified as described in Section 12.5(C)(4) based on the Members’
respective Sharing Interests at the time of such Liquidating Event, and the
Products to be sold thereunder to, and purchased by, the Joint Venture Company
instead shall be sold to, and purchased by, Intel. If a Liquidating Event has
occurred, then, from and after the consummation of a sale under a Purchase
Option, each Member shall enter into a supply agreement with the other Member,
on substantially the same terms (including amount, delivery schedule, pricing
terms and other terms) as the Supply Agreement that the Member is entering into
with the Joint Venture Company on the date of this Agreement, under which each
Member agrees to provide the other Member with its Sharing Interest on the date
of the Liquidating Event of the output of each type of Product from each of the
Facilities purchased by that Member in accordance with the provisions of this
Article 13. The quantity (determined based on the three (3)-month period
immediately preceding the effectiveness of the contemplated Supply Agreement)
of Product, measured in 300 millimeter diameter equivalents (excluding Product
provided to either Member under the Boise Supply Agreement) that a Member shall
be obligated to provide from each Facility under that Member’s supply agreement
will be fixed for the first year after the consummation of a sale under a
Purchase Option and then will decline by [***] ([***]) of such fixed quantity
per Fiscal Quarter to [***] ([***]) over the next [***] ([***]) Fiscal Quarters.
The Members will work together in good faith so that such supply agreements
minimize disruption to the business of the Members and to maintain, subject to
such decline in amount, substantially the same supply of custom Products and
substantially the same composition of types of Products as the Members had
obtained from the Joint Venture Company immediately prior to the date of the
Liquidating Event.

 

13.15       Employees. Each
Member shall be free to offer employment to or continue the employment of any
or all of the Joint Venture Company employees whose primary place of business
is at a Fab owned or leased by the Joint Venture Company or by a Facilities
Company if

 

64

 

such Fab or the equity of such Facilities Company is purchased by that
Member in accordance with the provisions of this Article 13.

 

ARTICLE 14.

EXCULPATION AND INDEMNIFICATION

 

14.1         Exculpation. No
Manager (or alternate Manager) shall be liable to the Joint Venture Company,
any Subsidiary of the Joint Venture Company or the Members (in their capacities
as members of the Joint Venture Company) for monetary damages for breach of
fiduciary duty as a Manager or otherwise liable, responsible or accountable to
the Joint Venture Company, any Subsidiary of the Joint Venture Company or the
Members (in their capacities as members of the Joint Venture Company) for
monetary damages or otherwise for any acts performed, or for any failure to
act, except that this provision shall not eliminate or limit the liability of a
Manager (or alternate Manager) (i) for acts or omissions that involve
willful or intentional misconduct or gross negligence or (ii) for any
transaction from which the Manager (or alternate Manager) received any improper
personal benefit.

 

14.2         Indemnification.

 

(A)          The Joint Venture
Company shall, to the fullest extent permitted by Applicable Law, indemnify,
defend and hold harmless (1) each Manager and alternate Manager and (2) the
Chief Executive Officer, the Intel Executive Officer, the Micron Executive
Officer, the Financial Officer and any other officer or site manager of the
Joint Venture Company (each, an “Executive Indemnified
Party” and collectively with the Managers, the “Indemnified
Party”), against any losses, claims, damages or liabilities to which
such Indemnified Party may become subject in connection with any matter arising
out of or incidental to any act performed or omitted to be performed by any
such Indemnified Party in connection with this Agreement or the Joint Venture
Company’s or any of its Subsidiaries’ business or affairs; provided,
however, that in the case of an
Executive Indemnified Party, such act or omission was taken in good faith and
was reasonably believed by the Executive Indemnified Party, as applicable, to
be within the scope of authority granted to such Executive Indemnified Party;
and provided  further,
however, that in the case of any
Indemnified Party such act or omission was not attributable in whole or in part
to the fraud, bad faith, willful misconduct or gross negligence of such
Indemnified Party. If an Indemnified Party becomes involved in any capacity in
any action, proceeding or investigation in connection with any matter arising
out of or in connection with this Agreement or the Joint Venture Company’s or
any of its Subsidiaries’ business or affairs, the Joint Venture Company shall
reimburse such Indemnified Party for its reasonable legal and other reasonable
out-of-pocket expenses (including the cost of any investigation and
preparation) as they are incurred in connection therewith, provided
that such Indemnified Party shall promptly repay to the Joint Venture Company
the amount of any such reimbursed expenses paid to it if it shall ultimately be
determined that such Indemnified Party was not entitled to be indemnified by
the Joint Venture Company in connection with such action, proceeding or
investigation. If for any reason (other than the fraud, bad faith, willful
misconduct or gross negligence of such Indemnified Party) the foregoing
indemnification is unavailable to such Indemnified Party, or insufficient to
hold it harmless, then the Joint Venture Company shall contribute to the amount
paid or payable by such Indemnified Party as a result of such loss, claim, damage,
liability or expense in such proportion as is appropriate to reflect the
relative benefits received by the Joint

 

65

 

Venture Company on the one hand and such Indemnified Party on the other
hand or, if such allocation is not permitted by Applicable Law, to reflect not
only the relative benefits referred to above but also any other relevant
equitable considerations. Any indemnity under this Section 14.2(A) shall be
paid solely out of and to the extent of the Joint Venture Company’s and its
Subsidiaries’ assets and shall not be a personal obligation of any Member and
in no event will any Member be required or permitted, without the consent of
the other Member, to contribute additional capital under Article 2 to
enable the Joint Venture Company to satisfy any obligation under this Section
14.2.

 

(B)           The provisions of
this Section 14.2 shall survive for a period of two (2) years from the date of
dissolution of the Joint Venture Company, provided that
(1) if at the end of such period there are any actions, proceedings or
investigations then pending, an Indemnified Party may so notify the Joint
Venture Company and the Members at such time (which notice shall include a
brief description of each such action, proceeding or investigation and the
liabilities asserted therein) and the provisions of this Section 14.2 shall
survive with respect to each such action, proceeding or investigation set forth
in such notice (or any related action, proceeding or investigation based upon
the same or similar claim) until such date that such action, proceeding or
investigation is finally resolved and (2) the obligations of the Joint
Venture Company under this Section 14.2 shall be satisfied solely out of Joint
Venture Company assets, including the assets of any Subsidiary of the Joint
Venture Company.

 

ARTICLE 15.

GOVERNMENTAL APPROVALS

 

15.1         Governmental
Approvals. In the event that either Member takes any action contemplated by
this Agreement that could reasonably be expected to result in an event or
transaction, including without limitation (i) the purchase by either Member of
an Interest pursuant to Sections 12.4 or 12.5, (ii) the exercise by either
Member of a Purchase Option or the purchase of a Facility or Facilities Company
pursuant to Sections 13.5, 13.6, 13.7, 13.8 or 13.9, (iii) a Change of
Consolidating Member, (iv) the making of a Capital Contribution, (v) the
conversion of a Member Note or (vi) the creation or acquisition of interests in
a Facilities Company, which event or transaction, as to each of the foregoing,
would require either Member to make a filing, notification or any other
required or requested submission under the HSR Act or any other applicable
Competition Law (any such event or transaction, a “Filing Event”
and any such filing, notification, or any such other required or requested
submission, a “Filing”), then:

 

(A)          the Member taking
such action, in addition to complying with any other applicable notice
provisions under this Agreement, shall promptly notify the other Member of such
Filing Event, which notification shall include an indication that Filings under
the HSR Act or any other applicable Competition Law will be required;

 

(B)           notwithstanding any
provision to the contrary in this Agreement, a Filing Event may not occur or
close until after any applicable waiting period (including any extension
thereof) under the HSR Act or any other Competition Law, as applicable to such
Filing Event, shall have expired or been terminated, and all approvals under
antitrust regulatory Filings in any jurisdiction that shall be necessary for
such Filing Event to occur or close shall have been obtained, and any
applicable deadline for the occurrence or

 

66

 

closing of such Filing Event contained in
this Agreement shall be delayed, so long as both Members are proceeding
diligently in accordance with this Section 15.1 to seek any such expiration,
termination or approval, and so long as there are no other outstanding
conditions preventing the occurrence or closing of the Filing Event;

 

(C)           the Members shall,
and shall cause any of their relevant Affiliates to:

 

(1)           as
promptly as practicable, make their respective Filings under the HSR Act or any
other applicable Competition Law,

 

(2)           promptly
respond to any requests for additional information from the Federal Trade
Commission, the Department of Justice or any other Governmental Entity,

 

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

 

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

 

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

 

67

 

(6)           subject
to Applicable Laws, prior to the making or submission of any analysis,
appearance, presentation, memorandum, brief, argument, opinion or proposal by
or on behalf of either Member in connection with proceedings under or relating
to the HSR Act or any other applicable Competition Law, consult and cooperate
with one another, and consider in good faith the views of one another, in
connection with any such analyses, appearances, presentations, memoranda,
briefs, arguments, opinions and proposals, and will provide one another with
copies of all material communications from and filings with, any Governmental
Entities in connection with any Filing Event;

 

(D)          notwithstanding
anything to the contrary in this Section 15.1, nothing in this Section 15.1
shall require either Member or its respective Affiliates, or the Joint Venture
Company, to take any Divestiture Action; and

 

(E)           if the Filing Event
is prevented from occurring or closing as a result of any applicable
Competition Laws, after exhausting all efforts permitted under this
Section 15.1 to obtain the necessary approval of any applicable
Governmental Entity, then the Members shall negotiate in good faith to agree
upon an alternative event or transaction that would be permissible under
applicable Competition Laws, and would approximate, as closely as possible, the
intent and contemplated effect of the original Filing Event.

 

ARTICLE 16.

FORMATION OF ADDITIONAL ENTITIES

 

16.1         Formation of U.S.
Subsidiaries. The Members agree that certain of the Facilities located in
the United States may be held through a Wholly-Owned Subsidiary of the Joint
Venture Company (each, a “U.S. Facilities Company”).
Unless the Members agree otherwise, each U.S. Facilities Company shall be owned
directly or indirectly by the Joint Venture Company. Each U.S. Facilities
Company shall elect to be treated as a disregarded entity or a partnership for
U.S. federal income tax purposes, as appropriate. The Members agree that the
charter and other organizational documents of each U.S. Facilities Company and
all contractual and other arrangements between the Joint Venture Company and
such U.S. Facilities Company, and between the Members and the U.S. Facilities
Company, shall have such terms and conditions as shall be necessary to achieve
the purposes of the Members in entering into this Agreement and the Joint
Venture Documents and to achieve as closely as practicable the same beneficial
results (including with respect to Joint Venture Products produced by such U.S.
Facilities Company and the pricing thereof; tax matters, financial accounting
matters, assets to be distributed, and rights provided, on dissolution and
liquidation; profits; losses; distributions; governance; control and the like)
for the Members as would be achieved if the Facility held by such U.S.
Facilities Company were held directly by the Joint Venture Company.

 

16.2         Formation of
Foreign Facilities Company. Notwithstanding any provision hereof to the
contrary, the Members anticipate that each Facility with respect to which this
Agreement applies (or would apply but for the ownership of such Facility
outside of the Joint Venture Company as provided herein) and which is located
outside the United States will be held in a separate entity (each, a “Foreign Facilities Company”) as the Members shall mutually

 

68

 

determine in good faith (which entity may be owned directly or
indirectly by the Joint Venture Company or by the Members or their Affiliates
outside the Joint Venture Company, as provided herein). If the Members fail to
agree as to the type of entity that will act as a Foreign Facilities Company
with respect to a Facility or whether such Foreign Facilities Company shall be
owned directly or indirectly by the Joint Venture Company or by the Members or
their Affiliates outside the Joint Venture Company, then such Foreign
Facilities Company shall be organized as an entity (1) that is formed under the
laws of the jurisdiction in which the Facility is located, (2) that, to the
extent permitted under the laws of such jurisdiction, shall be an “eligible
entity” as defined in United States Treasury Regulation 301.7701-3(a), (3) that
elects to be treated as a partnership for United States federal income tax
purposes, (4) in which each Member’s direct interest in such Foreign Facilities
Company is owned by a direct or indirect Wholly-Owned Subsidiary of such Member
(the “Foreign Facilities Company Member”)
formed in the jurisdiction in which the Foreign Facilities Company is formed
(unless both Members consent to have such direct interest owned by an entity
formed in another jurisdiction), and (5) that will sell Joint Venture Product
to the Foreign Facilities Company Members using pricing methodology and terms
comparable to the pricing methodology and terms applicable to sales of Joint
Venture Product by the Joint Venture Company to the Members. If the immediately
preceding sentence applies to a Foreign Facilities Company, further transfers
of Joint Venture Product between each Foreign Facilities Company Member and its
Affiliates shall be structured in a manner that both Members reasonably and in
good faith agree will maximize in a commercially reasonable manner and without
undue tax risk (including tax risks unrelated to the Foreign Facilities
Company) the benefits of owning the applicable Facility in the jurisdiction in
which the Foreign Facilities Company is formed. The Members agree that the
charter and other organizational documents of each Foreign Facilities Company
and all contractual and other arrangements between the Joint Venture Company
and such Foreign Facilities Company, and between the Members and such Foreign
Facilities Company, shall have such terms and conditions as shall be necessary
to achieve the purposes of the Members in entering into this Agreement and the
Joint Venture Documents, viewed in the aggregate. The Members further agree
that if the Foreign Facilities Company is [***], such charter, organizational
documents, contractual and other arrangements shall, [***], provide [***]
(including with respect to [***]) [***]; provided, however, that at the option of Intel, Intel may, contribute
additional funds to the capital of such Foreign Facilities Company so that
Intel shall own [***]% and Micron [***]% of the shares or other ownership
interests of such Foreign Facilities Company.

 

ARTICLE 17.

DEADLOCK; OTHER DISPUTE RESOLUTION; EVENT OF DEFAULT

 

17.1         Deadlock. “Deadlock” shall occur with respect to any matter for which
an affirmative vote by at least one Manager appointed by each Member is
required for approval, and such matter is not approved as a result of a vote in
which a majority of the Managers appointed by one Member (or the sole Manager
appointed by a Member, if there is only one) have voted against the matter and
a majority of the Managers appointed by the other Member (or the sole Manager
appointed by the other Member, if there is only one) have voted for the matter
other than an Intel Matter or a Micron Matter (a “Tie Vote”)
on a matter submitted to it at a meeting or in the form of a proposed written
consent, and during the [***] period following this Tie Vote, the Board of
Managers is unable or fails to break the Tie Vote (if the matter is presented
in the

 

69

 

form of a proposed written consent, the [***] period shall commence on
the date that the Manager who was last to receive the proposal received it). During
this [***] period, the Board of Managers shall seek in good faith to hold at
least [***] ([***]) additional meetings at which it shall make a good faith
effort to break the Deadlock. To the extent practicable, the Board of Managers
shall seek to resolve the matter in a manner consistent with the Joint Venture
Company’s then-current Approved Business Plan. The additional meetings shall be
held at the time and place agreed to by the Managers, or if the Managers are
unable to agree, at a time and place determined by the Authorized Officers, or
the Chief Executive Officer, as applicable, on at least two (2) days’ written
notice.

 

17.2         Resolution of
Deadlock. If a Deadlock occurs, (i) if the matter is an Intel Matter,
the matter shall be resolved in the manner specified by the general manager of
Intel’s memory products group, whose decision shall be final and binding on the
Joint Venture Company and its Subsidiaries, (ii) if the matter is a Micron
Matter, the matter shall be resolved in the manner specified by the general
manager of Micron’s memory products group, whose decision shall be final and
binding on the Joint Venture Company and its Subsidiaries, and (iii) if
the matter is neither an Intel Matter nor a Micron Matter, the Joint Venture
Company shall (a) first submit the matter that was the subject of the
Deadlock to the general manager of Intel’s memory products group and to the
general manager of Micron’s memory products group by providing notice of the
Deadlock to the Members, and the general manager of Intel’s memory products group
and the general manager of Micron’s memory products group shall then make a
good faith effort to resolve the dispute and break the Deadlock within [***] of
the Members’ receiving notice of the Deadlock and (b) next, if the
Deadlock is still not resolved, submit the matter to the principal executive
officer for each of the Members (each, an “Authorized Representative”),
who shall then make a good faith effort to resolve the Deadlock within [***] of
submission to the Authorized Representatives. If the matter remains unresolved,
then the Members shall submit the Deadlock to non-binding mediation. Either
Member may initiate the non-binding meditation by providing to JAMS and the
other Member a written request for mediation, setting forth the subject of the
Deadlock. The Members will cooperate with JAMS and with one another in
selecting a retired judge from JAMS panel of neutrals, and in scheduling the
mediation proceedings. The Members covenant that they will participate in the
mediation in good faith, and that they will share equally in its costs. The
provisions of this Section 17.2 may be enforced by any court of competent
jurisdiction, and the Member seeking enforcement shall be entitled to an award
of all costs, fees and expenses, including attorneys’ fees, to be paid by the
Member against whom enforcement is ordered.

 

17.3         Definition of “Intel
Matters.”  For purposes of this
Agreement, any matter described on Schedule 3 is an “Intel  Matter.”

 

17.4         Definition of “Micron
Matters.”  For purposes of this Agreement,
any matter described on Schedule 4 is a “Micron
Matter.”

 

17.5         Other Dispute
Resolution. In the event of any other dispute over a purported breach of
this Agreement (a “Dispute”), the
Members shall endeavor to settle, through their respective designees to the
Board of Managers, the Dispute. All Disputes arising under this Agreement that
are not resolved by the Board of Managers shall be resolved as follows:  the Joint Venture Company shall first submit
the matter to the general manager of the memory

 

70

 

products group for each of the Members by providing notice of the
Dispute to the Members. The general managers of the memory products groups
shall then make a good faith effort to resolve the Dispute. If they are unable
to resolve the Dispute within [***] of receiving notice of the Dispute, the
matter shall then be submitted to the Authorized Representative for each of the
Members, who shall then make a good faith effort to resolve the Dispute. If the
Dispute cannot be resolved within [***] of submission of the matter to the
Authorized Representatives, then a civil action with respect to the Dispute may
be commenced, but only after the matter has been submitted to JAMS for
mediation as contemplated by Section 17.6.

 

17.6         Mediation. If
there is a Dispute, either Member may commence mediation by providing to JAMS
and the other Member a written request for mediation, setting forth the subject
of the Dispute and the relief requested. The Members will cooperate with JAMS
and with one another in selecting a mediator from JAMS panel of neutrals, and
in scheduling the mediation proceedings. The Members covenant that they will
participate in the mediation in good faith, and that they will share equally in
its costs. All offers, promises, conduct and statements, whether oral or
written, made in the course of the mediation by any of the Members, their
agents, employees, experts and attorneys, and by the mediator and any JAMS
employees, are confidential, privileged and inadmissible for any purpose,
including impeachment, in any litigation or other proceeding involving the
Members, provided that evidence that is otherwise
admissible or discoverable shall not be rendered inadmissible or
non-discoverable as a result of its use in the mediation. Either Member may
seek equitable relief prior to the mediation to preserve the status quo pending
the completion of that process. Except for such an action to obtain equitable
relief, neither Member may commence a civil action with respect to a Dispute
until after the completion of the initial mediation session, or [***] after the
date of filing the written request for mediation, whichever occurs first.
Mediation may continue after the commencement of a civil action, if the Members
so desire. The provisions of this Section may be enforced by any court of
competent jurisdiction, and the Member seeking enforcement shall be entitled to
an award of all costs, fees and expenses, including attorneys’ fees, to be paid
by the Member against whom enforcement is ordered.

 

17.7         Event of Default.

 

(A)          An “Event of Default” shall occur if a Member (the “Defaulting Member”) fails to perform any material obligation
under this Agreement or any of the Joint Venture Documents to which it is a
party.

 

(B)           Upon the occurrence
of an Event of Default, the Joint Venture Company and the other Member (the “Non-Defaulting Member”) shall each have the right to deliver
to the Defaulting Member notice (a “Notice of Default”).
The Notice of Default shall set forth the nature of the obligations that the
Defaulting Member has failed to perform. If the Defaulting Member fails to cure
the Event of Default within the Cure Period, the Non-Defaulting Member may take
any of the actions set forth in Section 17.7(C). For purposes hereof, “Cure Period” means a period commencing on the date that the
Notice of Default is provided by the Non-Defaulting Member or the Joint Venture
Company and ending (i) thirty (30) days after Notice of Default is so
provided, or (ii) in the case of any obligation (other than an obligation
to pay money) which cannot reasonably be cured within such thirty (30) day
period, such longer period not to exceed one hundred twenty (120) days after
the Notice of Default as is necessary to effect

 

71

 

a cure of the Event of Default, so long as the Defaulting Member
diligently attempts to effect a cure throughout such period.

 

(C)           Upon the occurrence
of an Event of Default and the expiration of the Cure Period set forth in
Section 17.7(B), the Non-Defaulting Member may request the Joint Venture
Company to pursue all legal and equitable rights and remedies against the
Defaulting Member available to it (subject to any limitations in the agreement
containing the obligation that was not performed) or may pursue its own legal
and equitable rights and remedies against the Defaulting Member (subject to any
limitations in the agreement containing the obligation that was not performed);
provided, however,
that the Non-Defaulting Member may seek dissolution of the Joint Venture
Company under such circumstances only if expressly permitted pursuant to
Section 13.1(A)(4). The Defaulting Member shall pay all costs, including
attorneys’ fees, incurred by the Joint Venture Company and the other Member in
pursuing such legal remedies.

 

17.8         Specific
Performance. The Parties agree that irreparable damage will result if this
Agreement is not performed in accordance with its terms, and the parties agree
that any damages available at law for a breach of this Agreement would not be
an adequate remedy. Therefore, the provisions hereof and the obligations of the
parties hereunder shall be enforceable in a court of equity, or other tribunal
with jurisdiction, by a decree of specific performance, and appropriate
preliminary or permanent injunctive relief may be applied for and granted in
connection therewith. Except as otherwise limited by this Agreement, such
remedies and all other remedies provided for in this Agreement shall, however,
be cumulative and not exclusive and shall be in addition to any other remedies
that a party may have under this Agreement; provided, however,
that in no event shall the dissolution of the Joint Venture Company be
permitted unless it is expressly permitted by Section 13.1(A).

 

17.9         Tax Matters. Notwithstanding
anything in this Article 17 to the contrary, the resolution of disputes
concerning tax matters governed by Section 10.6(B) shall be governed by Section
10.6(B) of this Agreement.

 

ARTICLE 18.

MISCELLANEOUS PROVISIONS

 

18.1         Notices. All
notices to the Joint Venture Company shall be sent addressed to the Authorized
Officers, or the Chief Executive Officer, as applicable, at the Joint Venture
Company’s principal place of business. All notices to a Member shall be sent
addressed to such Member at the address as may be specified by the Member from
time to time in a notice to the Joint Venture Company, provided
that the initial notice address for each Member is as follows:

 

(A)          if to Intel:

 

Intel
Corporation

2200 Mission College Blvd.

Mailstop SC4-203

Santa Clara, CA  95054

 

72

 

Attention:  General Counsel

Facsimile:  (408) 653-8050

 

with a copy
to:

 

Intel
Corporation

2200 Mission College Blvd.

Mailstop RN6-46

Santa Clara, CA  95054

Attention:  [***]

Facsimile:  [***]

 

(B)           if to Micron:

 

Micron
Technology, Inc.

8000 S. Federal Way

Mail Stop 1-507

Boise, ID  83716

Attn:  General Counsel

Facsimile:  (208) 368-4537

 

All notices to a Manager shall be sent addressed to such Manager at the
address as may be specified by the Manager from time to time in a notice to the
Joint Venture Company. All notices are effective the next day, if sent by
recognized overnight courier or facsimile, or five (5) days after deposit in
the United States mail, postage prepaid, properly addressed and return receipt
requested.

 

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

 

18.3         Assignment. This
Agreement shall be binding upon and inure to the benefit of the successors and
permitted assigns of each party hereto. Except as otherwise specifically
provided in this Agreement, neither this Agreement nor any right or obligation
hereunder may be assigned or delegated in whole or in part to any other Person.

 

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

 

73

 

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

 

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

 

18.7         Entire Agreement.
This Agreement, together with the Appendices, Exhibits and Schedules hereto and
the agreements (including the Confidentiality Agreement) and instruments
expressly provided for herein, constitute the entire agreement of the parties
hereto with respect to the subject matter hereof and supersede all prior
agreements and understandings, oral and written, among the parties hereto with
respect to the subject matter hereof.

 

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

 

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

 

18.10       Further Assurances.
Each Member shall execute such deeds, assignments, endorsements, evidences of
transfer and other instruments and documents and shall give such further
assurances as shall be necessary to perform such Member’s obligations hereunder.
The obligations of the Members set forth in this Section 18.10 shall survive
the termination of this Agreement.

 

18.11       Consequential
Damages. No party shall be liable to any other party under any legal theory
for indirect, special, incidental, consequential or punitive damages, or any
damages for loss of profits, revenue or business, even if such party has been
advised of the possibility of such damages.

 

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

 

74

 

forum. Process in any such suit, action or proceeding may be served on
any party anywhere in the world, whether within or without the jurisdiction of
any such court.

 

18.13       Confidential
Information.

 

(A)          The Members shall
abide by the terms of that certain Mutual Confidentiality Agreement between
Micron, Intel and the Joint Venture Company of even date herewith, and as may
be amended or replaced from time to time (the “Confidentiality
Agreement”), which agreement is incorporated herein by reference
with respect to the Joint Venture Company, its Subsidiaries and the Facilities
Companies and the activities of the Joint Venture Company, its Subsidiaries and
the Facilities Companies. The Members agree that the Confidentiality Agreement
shall govern the confidentiality and non-disclosure obligations between the
Members respecting the information provided or disclosed pursuant to this
Agreement as such information relates to the Joint Venture Company, its
Subsidiaries and the Facilities Companies and their activities.

 

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

 

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

 

18.14       Certain
Interpretive Matters.

 

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

 

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

 

75

 

[SIGNATURE PAGE FOLLOWS]

 

76

 

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

 

	
   

  	
   

  	
  INTEL
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ ARVIND SODHANI

  	
   

  
	
   

  	
   

  	
  Print Name: Arvind Sodhani

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President, Intel Corporation

  President, Intel Capital

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MICRON
  TECHNOLOGY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ STEVEN R. APPLETON

  	
   

  
	
   

  	
   

  	
  Print Name: Steven R. Appleton

  
	
   

  	
   

  	
  Title: Chief Executive Officer and
  President

  
							

 

THIS IS
THE SIGNATURE PAGE FOR THE

LIMITED LIABILITY COMPANY OPERATING AGREEMENT OF

IM FLASH TECHNOLOGIES, LLC ENTERED INTO BY AND BETWEEN

INTEL CORPORATION AND MICRON TECHNOLOGY, INC.

 

 

APPENDIX A

 

IM FLASH
TECHNOLOGIES, LLC

 

DEFINITIONS

 

“[***] Fab” means a Fab that has [***]
construction, Tool Install and equipment and process qualification, including
all related facilities necessary to commence production of semiconductor
devices and such production output has reached a minimum level of [***]% of its
intended high volume output level (as measured in Wafer Starts per week).

 

“Accountants” shall have the meaning set
forth in Section 10.4(C) of this Agreement.

 

“Act” shall have the meaning set forth
in Section 1.1 of this Agreement.

 

“Accumulated Distributions Account”
shall have the meaning set forth in Section 5.1(C) of this Agreement.

 

“Actual Performance Projection” shall
mean, with respect to either the number of [***] or [***] for any given Fiscal
Quarter, a projection thereof derived by [***], or the [***], the Joint Venture
Company and its Subsidiaries for the most recent [***] in which there was not
an Operating Metric Event; provided, however, that if, prior to such Fiscal
Quarter, [***], there [***] Actual Performance Projection and the provisions of
paragraph (B)(1)(c) and (B)(2)(c) of the definition of Applicable Projection [***].

 

“Additional Capital Contributions” shall
have the meaning set forth in Section 2.3(C) of this Agreement.

 

“Adjusted Contribution Amount” means,
after a Change in Consolidating Member, an amount equal to the sum of (i) the
Consolidating Member’s Pro Rata Share
of a given Additional Capital Contribution and (ii) the portion of the Former
Consolidating Member’s Pro Rata Share
of such Additional Capital Contribution that such Former Consolidating Member
is not [***].

 

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

 

“Affiliate Agreements” shall have the
meaning set forth in Section 12.2(B)(1) of this Agreement.

 

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

 

“Annual Budget” shall have the meaning
set forth in Section 11.2(B) of this Agreement.

 

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

 

“Applicable Percentage” shall be [***]%
with respect to any Fiscal Quarter ending on or prior to the Transition Date
and [***]% for the remainder of the Term.

 

A-1

 

“Applicable Fiscal Quarter” means Micron’s
first fiscal quarter in its [***] fiscal year.

 

“Applicable Projection” with respect to any Fiscal Quarter
means:

 

(A)          if the Approved Business Plan for such
Fiscal Quarter is an Undisputed Approved Business Plan, the projection set
forth in such Undisputed Approved Business Plan; and

 

(B)           if the Approved Business Plan for such
Fiscal Quarter is a Disputed Approved Business Plan, the projection determined
as follows:

 

(1)           in the case of the
projection of [***], the Applicable Projection shall be [***]:

 

(a)           the [***] Undisputed
Approved Business Plan (including, in the case of any Fiscal Quarter [***]), if
there is an Undisputed Approved Business Plan originally submitted for a prior
year, but which included a projection that covered such Fiscal Quarter,

 

(b)           the [***] Disputed
Approved Business Plan ([***]), and

 

(c)           the [***]; provided,
however, that this clause (c) shall not apply with respect to [***], if the
Joint Venture Company has [***] set forth in [***] prior to the date of
determination and [***];

 

(2)           in the case of the
projection of [***], the Applicable Projection shall be [***]:

 

(a)           the weighted average
cost [***] Undisputed Approved Business Plan (including, in the case of any
Fiscal Quarter [***]), if there is an Undisputed Approved Business Plan
originally submitted for a prior year, but which included a projection that
covered such Fiscal Quarter,

 

(b)           the weighted average
cost [***] Disputed Approved Business Plan ([***]), and

 

(c)           the weighted average
cost [***].

 

“Appointing Member” shall have the
meaning set forth in Section 6.2(B) of this Agreement.

 

“Appraiser” means two nationally
recognized investment banking firms (one to be selected by each Member) and a
manufacturing equipment reseller (mutually agreed upon by the two investment
banking firms).

 

“Approved Business Plan” means either an
Undisputed Approved Business Plan or a Disputed Approved Business Plan, as in
effect from time to time.

 

A-2

 

“Assembly Plan” means an assembly plan
set forth in the Operating Plan, as more particularly described in
Section 11.6(A)(2) of this Agreement.

 

“Associated Assets” means, with respect
to any Fab, the Joint Venture Equipment, inventory and other tangible personal
property owned by the Joint Venture Company or any of its Subsidiaries and
located at that Fab on the date of the Liquidating Event or thereafter and all
rights and obligations pursuant to contracts, permits and governmental
approvals associated with such Fab, Joint Venture Equipment, inventory or other
tangible personal property, including all liabilities exclusively associated
with such Fab, except for assets sold or disposed of in any of the following
transactions that occurs after the Liquidating Event:  (a) the sale of inventory in the
ordinary course; (b) the sale or other disposition of obsolete or surplus
equipment or other assets to third parties in the ordinary course in arm’s-length
transactions; and (c) the sale of any other asset with the approval of the
Board of Managers. Any transfer of Associated Assets under this Agreement shall
include the assumption by the transferee of the liabilities exclusively
associated with such Fab.

 

“Authorized Officers” means both the
Intel Executive Officer and the Micron Executive Officer.

 

“Authorized Representative” shall have
the meaning set forth in Section 17.2 of this Agreement.

 

“Balance Sheet Metric Event”  means, with respect to any given Fiscal
Quarter, the occurrence of either of the following:

 

(A)          any event,
circumstance or occurrence ([***]) that the Members [***] and that is of [***]
and that causes the [***] of the Joint Venture Company and its Subsidiaries,
determined in accordance with [***], [***], to [***] over such Fiscal Quarter
[***] (excluding any [***] to Members); or

 

(B)           any event,
circumstance or occurrence ([***]) that the Members [***] and that is of [***]
and that causes the [***] of the Joint Venture Company and its Subsidiaries,
determined in accordance with [***], [***], to [***], as of the end of such
Fiscal Quarter, [***] the Joint Venture Company and its Subsidiaries projected
in the currently-effective Approved Business Plan (excluding [***]).

 

“Bankruptcy” shall have the meaning set
forth in Section 13.1(B) of this Agreement.

 

“Board of Managers” shall have the
meaning set forth in Section 6.1 of this Agreement.

 

“Boise Supply Agreement” means that
certain agreement, of even date herewith, between Micron and the Joint Venture
Company to supply products to the Joint Venture Company.

 

“Book” shall have the meaning set forth
in Appendix B to this Agreement.

 

A-3

 

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

 

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

 

“[***] Value” means either (a) or (b)
below, determined as follows:  each
Member shall select its own Appraiser and the two Appraisers shall mutually
select a third Appraiser. Each Appraiser shall conduct its own independent
appraisal to determine the [***] Value, and the average of the two (2)
determinations that are the closest in value shall be the [***] Value.

 

(a)           With respect to any
Facility or Facilities Company ([***], which are provided for in (b) below),
the [***] of the applicable Facility or [***] of the applicable Facilities
Company, as the case may be, as of the date [***]. The Appraisers shall be
instructed to consider all factors that in their professional opinion may
affect [***] of the applicable Facility or Facilities Company, as the case may
be, but in any event [***] Member or the Joint Venture Company.

 

(b)           With respect to [***],
or the [***] in the U.S. Facilities Company that [***], the [***] thereof, as
of the date [***] (and the Appraisers shall be instructed to consider all
factors that in their professional opinion may affect [***] or the [***] in the
U.S. Facilities Company that [***]); provided, however,
that if [***], the [***] Value of the [***], or the [***] in the U.S.
Facilities Company that [***], shall be the [***] thereof, as of the date [***].

 

“Cap Amount” shall have the meaning set
forth in Section 12.4 of this Agreement.

 

“Capital Account” shall have the meaning
set forth in Section 4.1 of this Agreement.

 

“Capital Contribution” means, for each
Member, any amount contributed or deemed to be contributed to the Joint Venture
Company as a capital contribution, including (without duplication of any
capital contribution in clauses (i) – (v)):

 

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

 

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

 

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

 

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

 

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

 

“Capital Contribution Balance” means,
for each Member, the sum of all Capital Contributions made to the Joint Venture
Company by such Member, minus the sum of any

 

A-4

 

capital contributions returned or refunded to such Member pursuant to
Article 2 or Article 3. As of the Effective Date, each Member shall, for
purposes of determining its Capital Contribution Balance, receive full credit
for its Initial Capital Contribution.

 

“Certificate” shall have the meaning set
forth in Section 1.1 of this Agreement.

 

“Chairman” shall have the meaning set
forth in Section 6.2(C) of this Agreement.

 

“Change in Consolidating Member” means a change in the Member that is required under GAAP to
consolidate the financial results of the Joint Venture Company with its
financial results.

 

“Chief Executive Officer” shall have the
meaning set forth in Section 8.4 of this Agreement.

 

“Chief Financial Officer” shall have the
meaning set forth in Section 8.3(D) of this Agreement.

 

“Code” means the Internal Revenue Code
of 1986, as amended.

 

“Committed Capital” means, for a Member,
on a given date, the sum of (1) the Capital Contribution Balance of such Member
through such date and (2) the principal and accrued interest (provided, that for purposes of this definition, accrued
interest shall be accrued only on the first day of each Fiscal Month) owed to
such Member under any Member Debt Financing outstanding on such date.

 

“Competition Laws” means the Sherman
Antitrust Act of 1890, as amended, the Clayton Act of 1914, as amended, the HSR
Act, the Federal Trade Commission Act, as amended, and all other domestic or
foreign Applicable Laws issued by a domestic or foreign Governmental Entity
that are designed or intended to prohibit, restrict or regulate actions having
the purpose or effect of monopolization or restraint of trade or lessening of
competition through merger or acquisition.

 

“Competitively
Sensitive Information” means any information, in whatever form,
that has not been made publicly available relating
to products and services that a Member sells in competition with the other
Member at the execution of this Agreement or thereafter during the Term
including, without limitation, NAND Flash Memory Product, to the extent
such information of the Member selling such products and services includes price
or any element of price, customer terms or conditions of sale, Member-specific
costs, volume of sales, output (but not including the Joint Venture Company’s
output), or bid terms of the foregoing type and such similar information
as is specifically identified electronically or in writing to the Joint Venture
Company by a Member as competitively sensitive information.

 

“Completion,” with respect to a Fab,
means the time at which the Fab has successfully completed Process
Qualification/Certification and is capable of manufacturing completed
semiconductor devices.

 

“Confidentiality Agreement” shall have
the meaning set forth in Section 18.13 of this Agreement.

 

A-5

 

“Conforming Wafer” means a NAND Flash
Memory Wafer with greater than [***] percent ([***]%) functional die, or that
is otherwise accepted by a Member.

 

“Consolidating Member” means the Member
that is required to consolidate the financial results of the Joint Venture
Company with its financial results under GAAP.

 

“Continuing Mandatory Notes” shall have
the meaning set forth in Section 3.1(E) of this Agreement.

 

“Critical Deadlock” means a Deadlock
between the Members about how to address the circumstances giving rise to an
Initial Operating Metric Event or a Balance Sheet Metric Event, provided that:

 

(A)          such Deadlock (1) is
not with respect to a Micron Matter or an Intel Matter, (2) is not with respect
to a matter within the scope of the provisions of any of subsections (1) - (13)
of Section 6.3(A), Section 6.3(B), Section 6.3(C) or
Section 7.4, and (3) does not relate to a proposal to require any Capital
Contributions or Member Debt Financing;

 

(B)           the Deadlock about
how to address the circumstances giving rise to such Initial Operating Metric
Event or Balance Sheet Metric Event, as applicable, has not been resolved
within [***] of the occurrence of such Deadlock; and

 

(C)           with respect to a
Deadlock about how to address the circumstances giving rise to an Initial
Operating Metric Event, there has not been a Subsequent Operating Metric Cure
within the following [***] Fiscal Quarters after such Initial Operating Metric
Event.

 

“Cure Period” shall have the meaning set
forth in Section 17.7(B) of this Agreement.

 

“Deadlock” shall have the meaning set
forth in Section 17.1 of this Agreement.

 

“Defaulting Member” shall have the meaning
set forth in Section 17.7(A) of this Agreement.

 

“DGCL” means the Delaware General
Corporation Law (Del. Code Ann. tit. 8 §§101 et seq.).

 

“Dispute” shall have the meaning set
forth in Section 17.5 of this Agreement.

 

“Disputed Approved Business Plan” shall
have the meaning set forth in Section 11.2(D)(2) of this Agreement.

 

“Dissolving Member Event” shall mean any
event, circumstance or occurrence, the proximate cause of which is an action
taken by the Member who has sent a notice pursuant to Section 13.1(A)(8) or
(10) electing to dissolve the Joint Venture Company which is sent after the
occurrence of a Balance Sheet Metric Event. A Member shall not be deemed to
have taken any action solely as a result of (a) the voting of the Managers
appointed by such Member to the Board of Managers or the members of any
committee appointed by such Member or (b) actions of any Seconded Employee,
employee or officer of the Joint Venture Company (other than an

 

A-6

 

action taken by any Seconded Employee at the specific direction of the
Member that employs him or her).

 

“Distribution Entitlement” means with
respect to any proposed distribution under Section 5.1(A)(4) to a Member, the
amount, if any, equal to the Member’s Sharing Interest (as such Sharing
Interest is determined immediately after any payments made under Sections
5.1(A)(1), (2) and (3)) multiplied by the aggregate, cumulative distributions
(not including any payments made pursuant to Sections 5.1(A)(1), (2) and (3)
but including the amount to be distributed to such Member in such proposed
distribution under Section 5.1(A)(4)).

 

“Draft” shall have the meaning set forth
in Section 13.8(A) of this Agreement.

 

“Draft Administrator” shall have the
meaning set forth in Section 13.8(B) of this Agreement.

 

“Draft Commencement Date” shall have the
meaning set forth in Section 13.8(D) of this Agreement.

 

“DRAM” has the meaning set forth in that
certain [***] Agreement, dated [***], between Intel and Micron.

 

“Early Start” means the [***].

 

“Economic Interest” means, for each
Member, a percentage determined from time to time by dividing the Committed
Capital of such Member at the time of determination by the aggregate Committed
Capital of all Members at the time of determination.

 

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

 

“Event of Default” shall have the
meaning set forth in Section 17.7(A) of this Agreement.

 

“Executive Indemnified Party” shall have
the meaning set forth in Section 14.2(A) of this Agreement.

 

“[***] Budget” shall have the meaning
set forth in Section 11.1(B) of this Agreement.

 

“[***] Capital Contribution” shall mean
an Additional Capital Contribution of funds required by the Joint Venture
Company as set forth in the [***] Budget of the Initial Business Plan, as it
may be modified in accordance with Section 11.1(C)(2).

 

“Fab” means a manufacturing facility for
manufacturing NAND Flash Memory Wafers and shall include the related automated
material handling system (AMHS), process tools, and support tools/fixtures used
for manufacturing NAND Flash Memory Wafers in the cleanroom, sub fab and all
related laboratories. It also includes all non-clean support equipment and gas
and chemical delivery systems required to support the production tools in the
Fab.

 

A-7

 

“Fab Criteria” means a Fab capable of
producing a minimum of [***] and a maximum of [***] Wafer Starts per week.

 

“Fab Draft Period” shall have the
meaning set forth in Section 13.8(A) of this Agreement.

 

“Facility” means a Fab that is owned or
leased by the Joint Venture Company or any of its Subsidiaries or any
Facilities Company and the Associated Assets of such Fab.

 

“Facilities Company” means a U.S.
Facilities Company or a Foreign Facilities Company.

 

“Filing” shall have the meaning set
forth in Section 15.1 of this Agreement.

 

“Filing Event” shall have the meaning
set forth in Section 15.1 of this Agreement.

 

“Financial Officer” shall
have the meaning set forth in Section 8.3(D) of this Agreement.

 

“First Drafter” shall have the meaning
set forth in Section 13.8(B) of this Agreement.

 

“Fiscal Month” means the fiscal month of
the Joint Venture Company as determined by the Board of Managers from time to
time, and, initially, the period commensurate with Micron’s fiscal month; provided that, if the Member with whom the Joint Venture
Company’s financial statements are consolidated changes prior to the end of any
Fiscal Month, the Fiscal Month shall, at such Member’s discretion, change to be
commensurate with the Fiscal Month of such Member at such time as such Member
may thereafter specify.

 

“Fiscal Quarter” means the fiscal
quarter of the Joint Venture Company as determined by the Board of Managers
from time to time, and, initially, the period commensurate with Micron’s fiscal
quarter; provided that, if the Member with whom
the Joint Venture Company’s financial statements are consolidated changes prior
to the end of any Fiscal Quarter, the Fiscal Year shall, at such Member’s
discretion, change to be commensurate with the Fiscal Quarter of such Member at
such time as such Member may thereafter specify.

 

“Fiscal Year” means the fiscal year of
the Joint Venture Company as determined by the Board of Managers from time to
time, and corresponding to the fiscal year of the Member having the greater
Percentage Interest, initially, the period commencing as of the Effective Date
and ending August 31, 2006 and thereafter a fifty-two (52) or fifty-three (53)
week period ending on the Thursday closest to August 31 of each year; provided that, if the Member with whom the Joint Venture
Company’s financial statements are consolidated changes prior to the end of any
Fiscal Year, the Fiscal Year shall, at such Member’s discretion, change to be
commensurate with the Fiscal Year of such Member at such time as such Member
may thereafter specify.

 

“Flash Memory Integrated Circuit” means
a non-volatile memory integrated circuit that contains memory cells that are
electrically programmable and electrically erasable whereby the memory cells
consist of one or more transistors that have a floating gate, charge-trapping
regions or any other functionally equivalent structure utilizing one or more
different charge

 

A-8

 

levels (including binary or multi-level cell structures) with or
without any on-chip control, I/O and other support circuitry.

 

“Floor Amount” shall have the meaning
set forth in Section 12.4 of this Agreement.

 

“Foreign Facilities Company” shall have
the meaning set forth in Section 16.2 of this Agreement.

 

“Foreign Facilities Company Member”
shall have the meaning set forth in Section 16.2 of this Agreement.

 

“Former Consolidating Member” means the
Member that was required to consolidate the financial results of the Joint
Venture Company with its financial results under GAAP immediately prior to a
Change in Consolidating Member.

 

“Funding Member” shall have the meaning
set forth in Section 3.1(A) of this Agreement.

 

“Funding Member Portion” means that
portion of the amount of a Funding Member’s Additional Capital Contribution
that is deemed to be a loan (rather than a Capital Contribution) as part of a
Member Debt Financing, which amount is determined by [***] the Funding Member’s
[***] of such Additional Capital Contribution (whether or not contributed in
full) [***] is the amount actually loaned to the Joint Venture Company by the
Funding Member in respect of the Shortfall Amount and the [***] is the
Non-Funding Member’s [***] of the Additional Capital Contribution.

 

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

 

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

 

“HSR Act” means the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended.

 

“Indemnified Party” shall have the
meaning set forth in Section 14.2(A) of this Agreement.

 

“Independent Member” shall have the
meaning set forth in Section 6.3(B)(1) of this Agreement.

 

“Initial Business Plan” shall have the
meaning set forth in Section 11.1(A) of this Agreement.

 

“Initial Capital Contribution” means the
total amount of money or other property initially contributed or agreed to be
contributed to the Joint Venture Company by a Member pursuant to Section 2.1,
as set forth on Appendix D.

 

A-9

 

“Initial Operating Metric Event” means the occurrence
of an Operating Metric Event [***] during [***]. For purposes of this
Agreement, any Initial Operating Metric Event shall be deemed to occur on the [***].

 

“Initial Period” shall have the meaning
set forth in Section 11.1(A) of this Agreement.

 

“Initial Term” shall have the meaning
set forth in Section 1.3 of this Agreement.

 

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

 

“Intel Additional Cash” shall have the
meaning set forth on Appendix D.

 

“Intel Executive Officer” shall have the
meaning set forth in Section 8.1(A) of this Agreement.

 

“Intel Exercise Notice” shall have the
meaning set forth in Section 13.6(C) of this Agreement.

 

“Intel Initial Contributed Assets” means
the total amount of money or other property contributed or agreed to be
contributed to the Joint Venture Company by Intel as of the Effective Date, as
described on Appendix D.

 

“Intel Matter” shall have the meaning
set forth in Section 17.3 of this Agreement.

 

“Intel Maximum Incremental Capital Amount”
means $[***]. Such amount does not include
any funds contributed as part of Intel’s Initial Capital Contribution.

 

“Intel Personnel Secondment Agreement”
means that certain Intel Personnel Secondment Agreement, of even date herewith,
by and between the Joint Venture Company and Intel, as amended.

 

“Intel [***]” has the meaning set forth
in that certain [***] Agreement, dated [***], between Intel and Micron.

 

“Intel Purchase Option” shall have the
meaning set forth in Section 13.6(C) of this Agreement.

 

“Intellectual Property Rights” shall
have the meaning set forth in Section 10.5(B)(6) of this Agreement.

 

“Interest” means the ownership interest
of a Member in the Joint Venture Company, including any and all benefits to
which a Member may be entitled under this Agreement and the obligations of a
Member under this Agreement, including, without limitation, the right to vote
or to participate in the management of the Joint Venture Company, and the right
to information concerning the business and affairs of the Joint Venture Company
and its Subsidiaries.

 

“Interested Member” shall have the
meaning set forth in Section 6.3(B)(1) of this Agreement.

 

A-10

 

“Interested Member Transaction” shall
have the meaning set forth in Section 6.3(B)(2) of this Agreement.

 

“Issuance Date” shall have the meaning
set forth in Section 3.1(C) of this Agreement.

 

“JAMS” means
Judicial Arbitration and Mediation Services.

 

“Joint Development Committee” shall have
the meaning ascribed to such term in the Joint Development Program Agreement,
of even date herewith, between Micron and Intel.

 

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

 

“Joint Venture Documents” shall have the
meaning ascribed to such term in the Master Agreement.

 

“Joint Venture Equipment” means all of
the personal property, equipment and tangible assets owned by the Joint Venture
Company or any of its Subsidiaries.

 

“Joint Venture Products” means all NAND
Flash Memory Products and any other memory products that the Joint Venture
Company and its Subsidiaries or any Facilities Company shall produce.

 

“Joint Venture Reportable Event” shall
have the meaning set forth in Section 10.5(B) of this Agreement.

 

“Later Liquidating Event” shall have the
meaning set forth in Section 13.6(B) of this Agreement.

 

“Lead Controller” shall have the meaning
set forth in Section 8.3(A) of this Agreement.

 

“Lehi Fab” means the Fab to be built out
by the Joint Venture Company or one of its Subsidiaries at Lehi, Utah.

 

“Lehi Lease” shall have the meaning
ascribed to such term in the Master Agreement.

 

“Lehi Property” means the Lehi
Contributed Property (as defined in the Lehi Lease) and all personal property,
equipment and other tangible assets that are conveyed to the Joint Venture
Company pursuant to the Lehi Bill of Conveyance.

 

“[***]” means the [***] in effect from
time to time (as reported in the [***]).

 

“Liquidating Event” shall have the
meaning set forth in Section 13.1(A) of this Agreement.

 

“Liquidation Date” shall have the
meaning set forth in Section 13.13(A) of this Agreement.

 

A-11

 

“Loan Amount” means the [***] (1) the
[***] of (a) the Non-Funding Member’s full Pro Rata
Share of an Additional Capital Contribution, [***] (b) a [***]
is the amount of the Additional Capital Contribution actually contributed by
the Funding Member and the [***] is the Funding Member’s [***] of such
Additional Capital Contribution and (2) the amount of such Additional Capital
Contribution actually contributed by the Non-Funding Member.

 

“Majority Member” shall have the meaning
sent forth in Section 12.5(A) of this Agreement.

 

“Make-Up Contribution” means a Capital
Contribution made by a Non-Funding Member in respect of a Shortfall Amount (but
not including any interest thereon).

 

“Mandatory Equalization Note” shall have the meaning set forth in Section 3.1(B) of this
Agreement.

 

“Mandatory Member Debt Financing” means
Member Debt Financing made in accordance with Section 3.1 of this Agreement.

 

“Mandatory Notes” shall
have the meaning set forth in Section 3.1(B) of this Agreement.

 

“Mandatory Shortfall Note” shall have the meaning set forth in Section 3.1(B) of this
Agreement.

 

“Management Conversion Date” shall have
the meaning set forth in Section 8.1(A) of this Agreement.

 

“Manager” shall have the meaning set
forth in Section 6.2(A) of this Agreement.

 

“Manufacturing Committee” shall have the
meaning set forth in Section 8.6 of this Agreement.

 

“Manufacturing Plan” means a
manufacturing plan set forth in the Operating Plan, as described more
particularly in Section 11.6(A)(1) of this Agreement.

 

“Master Agreement” means that certain
Master Agreement, by and between Intel and Micron, dated as of
November 18, 2005.

 

“Maximum Incremental Capital Amount”
means $[***]. Such amount does not include
any funds contributed as Initial Capital Contributions.

 

“Member” or “Members”
shall have the meaning set forth in the preamble of this Agreement.

 

“Member Business Plan” shall have the
meaning set forth in Section 11.2(D)(2) of this Agreement.

 

A-12

 

“Member Change of Control” means
(i) any consolidation, merger, recapitalization, liquidation or other
extraordinary transaction involving a Member pursuant to which such Member’s
stockholders immediately prior to such consolidation, merger, recapitalization,
liquidation or other extraordinary transaction own, immediately after such
consolidation, merger, recapitalization, liquidation or other extraordinary
transaction securities representing less than 50% of the combined voting power
of all voting securities of the surviving entity; (ii) any transaction or
series of related transactions as a result of which securities representing 50%
or more of the combined voting power of all voting securities of such Member
are sold, conveyed, transferred, assigned or pledged, either directly or
indirectly, to persons other than such Member’s stockholders immediately prior
to such transaction or series of transactions; or (iii) the sale,
conveyance, transfer or assignment, either directly or indirectly, of all or
substantially all of the assets of such Member, in one transaction or a series
of related transactions, to a person that does not control, is not controlled
by and is not under common control with such Member.

 

“Member Debt Financing” as of any date shall mean all loans to the Joint Venture
Company under Article 3 of this Agreement.

 

“Member [***] Budget” shall have the
meaning set forth in Section 11.1(C)(2)(a)(ii) of this Agreement.

 

“Member [***] Budget” shall have the
meaning set forth in Section 11.1(C)(2)(b)(ii) of this Agreement.

 

“Member Notes” means any promissory
notes issued under Article 3 of this Agreement, including a Mandatory Shortfall
Note, Mandatory Equalization Note, Continuing Mandatory Note, Optional [***]
Shortfall Note, Optional [***] Equalization Note or Optional Other Shortfall
Note outstanding pursuant to the terms of this Agreement.

 

“Member Plan Amendment” shall have the
meaning set forth in Section 11.2(E)(4) of this Agreement.

 

“Member Reportable Events” shall have
the meaning set forth in Section 10.5(A) of this Agreement.

 

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

 

“Micron Additional Cash” shall have the
meaning set forth on Appendix D.

 

“Micron Executive Officer” shall have
the meaning set forth in Section 8.2(A) of this Agreement.

 

“Micron Exercise Notice” shall have the
meaning set forth in Section 13.7(B) of this Agreement.

 

“Micron Initial Contributed Assets”
means the total amount of money or other property contributed or agreed to be
contributed to the Joint Venture Company by Micron as of the Effective Date, as
described on Appendix D.

 

A-13

 

“Micron Matter” shall have the meaning
set forth in Section 17.4 of this Agreement.

 

“Micron Maximum Incremental Capital Amount”
means $1,457,904,917. Such
amount does not include any funds contributed as part of Micron’s Initial
Capital Contribution.

 

“Micron Minority Closing” shall have the
meaning set forth in Section 12.5(C)(1) of this Agreement.

 

“Micron [***] Exercise Notice” shall
have the meaning set forth in Section 13.5 of this Agreement.

 

“Micron [***] Purchase Option” shall
have the meaning set forth in Section 13.5 of this Agreement.

 

“Micron Personnel Secondment Agreement”
means that certain Micron Personnel Secondment Agreement, of even date
herewith, by and between the Joint Venture Company and Micron, as amended.

 

“Micron Purchase Option” shall have the
meaning set forth in Section 13.7(B) of this Agreement.

 

“Minority Closing” shall have the
meaning set forth in Section 12.5(A) of this Agreement.

 

“Minority Closing Price” shall have the
meaning set forth in Section 12.5(B) of this Agreement.

 

“Minority Member” shall have the meaning
sent forth in Section 12.5(A) of this Agreement.

 

“Model of Record” or “MOR” means a representation of the POR and TOR for use in
determining the number of tools required to produce a specific number of
semiconductor wafers. The MOR includes assumptions used to model overall tool
throughput and productivity as well as assumptions on process yield.

 

“Modified GAAP” means United States generally
accepted accounting principles as in effect from time to time, except that the
value of any asset contributed or otherwise transferred to the Joint Venture
Company from a Member shall be the value as agreed upon by the Members at the
time of the contribution or transfer, as applicable, and, if such asset is to be
depreciated or amortized under GAAP, the useful life and method of depreciation
or amortization for such assets shall be determined by applying the accounting
policies used by the Joint Venture Company for like assets.  The value of
the Boise Supply Agreement, the MTV Lease and the Lehi Property shall be the
value specified with respect to such items in Appendix D.

 

“Monthly Flash Report” means operating
performance metrics reasonably acceptable to each Member for the most recent
month.

 

A-14

 

“Monthly Operating Report” shall have
the meaning set forth in Section 11.6(A)(4) of this Agreement.

 

“MTV Assets” means the Associated Assets
at the Fab located at the [***] .

 

“MTV Lease” shall have the meaning
ascribed to such term in the Master Agreement.

 

“NAND Flash Memory Die”
means a discrete integrated circuit die, wherein such die includes at least one
NAND Flash Memory Integrated Circuit and such die is designed, developed,
marketed and used primarily as a non-volatile memory die.

 

“NAND Flash Memory Die
Package” means a discrete integrated circuit package for a NAND
Flash Memory Die, including TSOP, COB, BOC, BGA and FBGA or other type package,
wherein such package contains only one or more NAND Flash Memory Die but no
other die.

 

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

 

“NAND Flash Memory Product” means any
NAND Flash Memory Wafer, NAND Flash Memory Die or NAND Flash Memory Die
Package.

 

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

 

“Net Book Value”
means, with respect to (i) any assets, the value thereof, net of accumulated
depreciation, amortization and other adjustments, as would be included in a
consolidated balance sheet of the entity owning such assets prepared in
accordance with Modified GAAP, (ii) any liabilities, the amount thereof as
would be included in a consolidated balance sheet of the entity having the
liabilities prepared in accordance with Modified GAAP and (iii) any equity
security of a Facilities Company or other entity, (a) the value of the assets
of such entity, net of accumulated depreciation, amortization or other
adjustments, as would be included in a consolidated balance sheet of the entity
prepared in accordance with Modified GAAP, minus the amount of the liabilities
of such entity, as would be included in a consolidated balance sheet of such
entity prepared in accordance with Modified GAAP, multiplied by (b) a
percentage equal to the percentage of the equity of such entity represented by
such equity security.

 

“[***]” means any Fab that is, or is to
be, owned or leased by the Joint Venture Company, any of its Subsidiaries or
any Facilities Company other than the [***].

 

“[***] Budget”
shall have the meaning set forth in Section 11.1(B).

 

A-15

 

“[***]
Capital Contribution” shall mean (i) any Additional Capital
Contribution to be made by the Members, as contemplated by an Approved Business
Plan, to make [***] an Operational Fab or (ii) any Additional Capital
Contribution to be made by the Members, as contemplated by an Approved Business
Plan, to make [***] an Operational Fab, but only in the event that the [***]
for [***] is reasonably expected to begin before [***].

 

“[***]” means the first Fab that is,
[***], owned or leased by the Joint Venture Company, any of its Subsidiaries or
any Facilities Company other than the [***].

 

“[***]” means the first Fab that is,
[***], owned or leased by the Joint Venture Company, any of its Subsidiaries or
any Facilities Company other than [***].

 

“Non-Defaulting Member” shall have the
meaning set forth in Section 17.7 of this Agreement.

 

“Non-Funding Member” shall be the Member
that is determined not to be the Funding Member in accordance with Section
3.1(A) of this Agreement.

 

“Notice of Default” shall have the
meaning set forth in Section 17.7(B) of this Agreement.

 

“Operating Metric Event” means, with respect to any Fiscal
Quarter, the occurrence of either of the following:

 

(A)          the [***] the Joint Venture Company
and its Subsidiaries in such Fiscal Quarter is [***] the Applicable Percentage
[***] in the Applicable Projection for such Fiscal Quarter; or

 

(B)           the [***] the Joint Venture Company
and its Subsidiaries in such Fiscal Quarter is [***] the Applicable Percentage
[***] in the Applicable Projection for such Fiscal Quarter.

 

In comparing either the [***] or the [***] to the Applicable
Projection, as provided in subsections (A) and (B) above, [***] that are, or
are to be, [***] the Joint Venture Company [***] shall be [***] (1) in [***]
and (2) [***] the Applicable Projection.

 

“Operating Plan” shall have the meaning
set forth in Section 11.6(A) of this Agreement

 

“Operational Fab” means a Fab that has
completed construction, Tool Install and equipment and process qualification,
including all related facilities necessary to commence production of
semiconductor devices and such production output has reached a minimum level of
[***]% of its intended high volume output level (as measured in [***]).

 

“Option Percent” shall have the meaning
set forth in Section 12.4 of this Agreement.

 

“Option Price” shall have the meaning
set forth in Section 12.5(B) of this Agreement.

 

“Optional [***] Equalization Note” shall
have the meaning set forth in Section 3.2(B) of this Agreement.

 

A-16

 

“Optional [***] Financing” shall have
the meaning set forth in Section 3.2(A) of this Agreement.

 

“Optional [***] Notes” shall have the
meaning set forth in Section 3.2(B) of this Agreement.

 

“Optional [***] Shortfall Note” shall
have the meaning set forth in Section 3.2(B) of this Agreement.

 

“Optional Other Financing” shall have
the meaning set forth in Section 3.3(A) of this Agreement.

 

“Optional Other Shortfall Note” shall
have the meaning set forth in Section 3.3(B) of this Agreement.

 

“Other Capital Contributions” shall have
the meaning set forth in Section 2.3(C) of this Agreement.

 

“Percentage Interest” means, at any time
of determination, with respect to any Member, a percentage determined by
dividing such Member’s Capital Contribution Balance at the time of
determination by the aggregate Capital Contribution Balances of all Members at
the time of determination.

 

“Person” or “Persons”
means any natural person and any corporation, firm, partnership, trust, estate,
limited liability company, or other entity resulting from any form of
association.

 

“Premises” shall have the meaning
ascribed to such term in the [***].

 

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

 

“Process of Record” or “POR” means documents and/or systems that specify a series of
operations that a semiconductor wafer must process through. The POR includes
the process recipes and parameters at each operation for the specified Tool of
Record.

 

“Product” shall have the meaning set
forth in the Supply Agreements.

 

“Product Design Committee” shall have
the meaning set forth in the Product Design Committee Agreement.

 

Product Design Committee Agreement” shall have
the meaning set forth in the Product Design Committee Agreement, of even date
herewith, between Micron and Intel.

 

“Product Design Roadmap” shall have the
meaning set forth in the Product Design Committee Agreement.

 

A-17

 

“Proposed Business Plan” shall have the
meaning set forth in Section 11.2(A) of this Agreement.

 

“Pro Rata Share”
means the pro rata share of a Member determined in
accordance with the Members’ respective Percentage Interests at the time of the
determination.

 

“Purchase Options” shall have the
meaning set forth in Section 13.10 of this Agreement.

 

“Purchase Value” shall have the meaning
set forth in Section 12.4 of this Agreement.

 

“Quarterly Operating Review” shall have
the meaning set forth in Section 11.(6)(A)(4) of this Agreement.

 

“Remaining Assets” shall have the
meaning set forth in Section 13.11 of this Agreement.

 

“Remaining Facility” shall have the
meaning set forth in Section 13.8(A) of this Agreement.

 

“Remaining Facility Purchase Offer”
shall have the meaning set forth in Section 13.9 of this Agreement.

 

“Renewal Term” shall have the meaning
set forth in Section 1.3 of this Agreement.

 

“Representative” shall have the meaning
set forth in Section 8.7(D) of this Agreement.

 

“Second Drafter” shall have the meaning
set forth in Section 13.8(D) of this Agreement.

 

“Seconded Employees” shall have the
meaning set forth in Section 9.1 of this Agreement.

 

“Service Provider Related Forms” shall
have the meaning set forth in Section 9.3(A) of this Agreement.

 

“Sharing Interest” means, with respect
to any Member, the percentage determined by dividing (1) such Member’s
Committed Capital at the time of determination, by (2) the aggregate Committed
Capital of all Members at the time of determination; provided,
however, that, for purposes of this
definition only, Committed Capital shall be adjusted as follows:

 

(a)                                  [***]% of any [***] Capital
Contribution that has been made by such Member, but that was not timely made,
shall be deducted from that Member’s Committed Capital and added to the other
Member’s Committed Capital;

 

(b)                                 any [***] Capital Contribution made,
and any loans made or deemed made that are represented by Mandatory Notes,
within the twelve months prior to the time of determination shall be deducted
from Committed Capital; and

 

A-18

 

(c)                                  any Other Capital Contributions
made, and any loans made or deemed made that are represented by Optional Other
Shortfall Notes shall be deducted from Committed Capital, but the exclusion
under this subparagraph (c) shall apply only to such Capital Contributions and
such loans made within (i) the [***] prior to the time of determination if the
Capital Contribution or loan related to [***] Fab, other than the [***], that
was not a [***] Fab at the time the contribution was due or (ii) the [***]
prior to the time of determination if the Other Capital Contribution made, or
loan made or deemed made that is represented by an Optional Other Shortfall
Notes relates to any operating expenditure, capital expenditure or other
expenditure not subject to the [***] period in the immediately preceding clause
(i) and provided, further,
however, that a Make-Up Contribution
shall be deemed made on the date on which the related Shortfall Amount first
arose, so that the applicable [***] and [***] periods shall apply from the date
the Shortfall Amount occurred. Notwithstanding the foregoing, subparagraphs (b)
and (c) of this definition shall not apply with respect to any use of the term “Sharing
Interests” in connection with a distribution under Section 13.13(C)(4) of
this Agreement.

 

“Shortfall Amount” means any
uncontributed dollar amount of any Member’s [***] of an Additional Capital
Contribution.

 

“Subsequent Operating Metric Cure”
means, with respect to any Initial Operating Metric Event, the [***] the Joint
Venture Company of [***] (a) which [***] at any [***], and (b) in which the
Joint Venture Company [***] Operating Metric Event (i.e.
an Operating Metric Event described in subparagraph (A) of the definition of “Operating
Metric Event” if the Initial Operating Metric Event occurred under subparagraph
(A), and an operating Metric Event described in subparagraph (B) thereof, if
the Initial Operating Metric Event occurred under subparagraph (B)) in either
of [***].

 

“Subsidiary” means as to any Person, a
corporation, partnership, limited liability company or other entity of which
shares of stock or other ownership interests having ordinary voting power
(other than stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the board of
directors or other managers of such corporation, partnership or other entity
are at the time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by such
Person.

 

“Supply Agreement - Intel” means that
certain Supply Agreement of even date herewith, by and between the Joint
Venture Company and Intel, as amended.

 

“Supply Agreement - Micron” means that
certain Supply Agreement of even date herewith, by and between the Joint
Venture Company and Micron, as amended.

 

“Supply Agreements” means the Supply
Agreement – Intel and the Supply Agreement – Micron.

 

A-19

 

“Tax Matters Partner” shall have the
meaning set forth in Section 10.7 of this Agreement.

 

“Technology Committees” means the
Product Design Committee and the Joint Development Committee.

 

“Term” shall have the meaning set forth
in Section 1.3 of this Agreement.

 

“Testing Plan” means a testing plan set
forth in the Operating Plan, as more particularly described in Section
11.6(A)(3) of this Agreement.

 

“Tie Vote” shall have the meaning set
forth in Section 17.1 of this Agreement.

 

“Tool Install” means the installation of
the automated material handling system (AMHS), process tools, and support
tools/fixtures used for semiconductor manufacturing (including sort) in the
cleanroom and in all related laboratories in the Fab.

 

“Tool of Record” or “TOR” means the specified tool required to modify, handle, or
otherwise fulfill its intended purpose in the manufacture of a semiconductor
process pursuant to the POR. The TOR encompasses the tool purchase price,
configuration and associated documentation required to procure, conduct
acceptance testing and administer service contracts.

 

“TOP” shall have the meaning set forth
in Section 9.4(B) of this Agreement.

 

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

 

“Transition Date” means the earlier of the
[***] anniversary of the Effective Date and the date on which the [***] becomes
an Operational Fab producing not less than [***] Wafer Starts per week.

 

“Treasury Regulation” shall have the
meaning set forth in Section 1.1 of Appendix B to this Agreement.

 

“Unamortized MTV Lease
Value” means for the purposes of [***], an [***] to
(i) the [***] of the [***], based on [***], assuming that such value were
amortized on a [***] beginning on [***], with respect to [***] to the [***],
(ii) [***] with respect to [***] the [***] and [***], (iii) [***] with respect
to [***] the [***] and [***], and (iv) [***] with respect to [***].

 

“Undisputed Approved Business Plan”
shall have the meaning set forth in Section 11.2(D)(1) of this Agreement. The
Initial Business Plan approved by the Members shall be deemed to be an
Undisputed Approved Business Plan.

 

“U.S. Facilities Company” shall have the
meaning set forth in Section 16.1 of this Agreement.

 

“Wafer” means a silicon wafer.

 

A-20

 

“Wafer Start” means the initial Wafer
introduction to a process flow. When the context requires reference to a
quantity of “Wafer Starts,” such term shall be expressed in 300 millimeter
diameter equivalents.

 

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

 

A-21

 

APPENDIX B

 

IM FLASH
TECHNOLOGIES, LLC

 

TAX
MATTERS

 

This Appendix B is attached to
and is a part of the LIMITED LIABILITY COMPANY OPERATING AGREEMENT (the “Agreement”) of IM FLASH TECHNOLOGIES, LLC, a Delaware
limited liability company (the “Joint Venture Company”),
dated as of 6th day of January, 2006. The parties to the Agreement
intend that the Joint Venture Company be classified as a partnership for
federal income tax purposes pursuant to section 7701(a)(2) of the Code and the
regulations thereunder. The provisions of this Appendix are intended to effect
an allocation of tax items of the Joint Venture Company that are in accordance
with the Members’ “interests in the partnership” (i.e., the Joint Venture
Company) within the meaning of Treas. Reg. § 1.704-1(b)(3) by utilizing
the principles of allocation contained in Treas. Reg. § 1.704-1(b)(2)(iv) and
Treas. Reg. § 1.704-2 with respect to maintenance of capital accounts and
allocations, and shall be interpreted and applied accordingly. For purposes of
applying the provisions of this Appendix, it shall be assumed that the Joint
Venture Company satisfies the requirements of Treas. Reg. §
1.704-1(b)(2)(ii)(b)(2) and (3), notwithstanding that the Joint Venture Company
does not satisfy such requirements.

 

ARTICLE 1

DEFINITIONS

 

1.1           Definitions. For purposes of this Appendix, the capitalized
terms listed below shall have the meanings indicated. Capitalized terms not
listed below and not otherwise defined in this Appendix shall have the meanings
specified in the Agreement.

 

“Account Reduction Item”
means (i) any adjustment described in Treas. Reg. § 1.704-1(b)(2)(ii)(d)(4);
(ii) any allocation described in Treas. Reg. § 1.704-1(b)(2)(ii)(d)(5), other
than a Nonrecourse Deduction or a Member Nonrecourse Deduction; or (iii) any
distribution described in Treas. Reg. § 1.704-1(b)(2)(ii)(d)(6).

 

“Adjusted Capital Account
Balance” means, as of any date, a Member’s Capital Account balance
as of such date (and if such date is other than the last day of the taxable
year of the Joint Venture Company, determined as if the taxable year of the
Joint Venture Company ended on such date), taking into account all
contributions made by such Member and distributions made to such Member during
such taxable year and any special allocations or other adjustments required by
Sections 3.2, 3.3, 3.4(A), (B), and (D), 3.5, 3.6 and 3.7, and 5.2(B) and 5.9
of this Appendix, and increased by the sum of (i) such Member’s share of Joint
Venture Company Minimum Gain and (ii) such Member’s share of Member Nonrecourse
Debt Minimum Gain, both determined after taking into account any such special
allocations and other adjustments.

 

B-1

 

“Adjusted Fair Market Value” of an item of Joint Venture
Company property means the greater of (i) the fair market value of such
property as reasonably determined by the Board of Managers (provided, that in
the case of any sale of Joint Venture Company property, such amount shall be
presumed to be the sales price realized by the Joint Venture Company on such
sale) or (ii) the amount of any nonrecourse indebtedness to which such
property is subject within the meaning of section 7701(g) of the
Code.

 

“Book” means the method of accounting prescribed for
compliance with the capital account maintenance rules set forth in Treas.
Reg. § 1.704-1(b)(2)(iv) as reflected in Articles 1 and 2 of this
Appendix, as distinguished from any accounting method which the Joint Venture
Company may adopt for other purposes such as financial reporting.

 

“Book Value” means, with respect to any item of Joint Venture
Company property, the book value of such property within the meaning of Treas.
Reg. § 1.704-1(b)(2)(iv)(g)(3); provided, however, that if the Joint Venture Company adopts the
remedial allocation method described in Treas. Reg. § 1.704-3(d) with
respect to any item of Joint Venture Company property, the Book Value of such
property shall be its book basis determined in accordance with Treas. Reg. § 1.704-3(d)(2).

 

“Deemed Liquidation” means a liquidation of the Joint Venture
Company that is deemed to occur pursuant to Treas. Reg. § 1.708-1(b)(1)(iv) in
the event of a termination of the Joint Venture Company pursuant to section 708(b)(1)(B) of
the Code.

 

“Excess Deficit Balance” means the amount, if any, by which
the balance in a Member’s Capital Account as of the end of the relevant taxable
year is more negative than the amount, if any, of such negative balance that
such Member is treated as obligated to restore to the Joint Venture Company
pursuant to Treas. Reg. § 1.704-1(b)(2)(ii)(c), Treas. Reg. § 1.704-1(b)(2)(ii)(h),
Treas. Reg. § 1.704-2(g)(1), and Treas. Reg. § 1.704-2(i)(5). Solely
for purposes of computing a Member’s Excess Deficit Balance, such Member’s
Capital Account shall be reduced by the amount of any Account Reduction Items
that are reasonably expected as of the end of such taxable year.

 

“Excess Nonrecourse Liabilities” means excess nonrecourse
liabilities within the meaning of Treas. Reg. § 1.752-3(a)(3).

 

 “Joint Venture Company
Minimum Gain” means partnership minimum gain determined pursuant to
Treas. Reg. § 1.704-2(d) and Section 5.3 of this Appendix.

 

“Member Nonrecourse Debt” means any “partner nonrecourse debt”
as such term is defined in Treas. Reg. § 1.704-2(b)(4).

 

“Member Nonrecourse Debt Minimum Gain” means minimum gain
attributable to Member Nonrecourse Debt pursuant to Treas. Reg. § 1.704-2(i)(3).

 

“Member Nonrecourse Deduction” means any item of Book loss or
deduction that is a partner nonrecourse deduction within the meaning of Treas.
Reg. § 1.704-2(i)(1) and (2).

 

B-2

 

“Member Nonrecourse Distribution” means a distribution to a
Member that is allocable to a net increase in such Member’s share of Member
Nonrecourse Debt Minimum Gain pursuant to Treas. Reg. § 1.704-2(i)(6).

 

“Nonrecourse Deduction” means a nonrecourse deduction
determined pursuant to Treas. Reg. § 1.704-2(b)(1) and Treas. Reg. § 1.704-2(c).

 

“Nonrecourse Distribution” means a distribution to a Member
that is allocable to a net increase in Joint Venture Company Minimum Gain
pursuant to Treas. Reg. § 1.704-2(h)(1).

 

“Regulatory Allocation” means any allocation made pursuant to
Section 3.2, 3.3, 3.4 or 3.5 of this Appendix.

 

“Related Person” means, with respect to a Member, a Person
that is related to such Member pursuant to Treas. Reg. § 1.752-4(b).

 

“Revaluation Event” means (i) a liquidation of the Joint
Venture Company (within the meaning of Treas. Reg. § 1.704-1(b)(2)(ii)(g) but
not including a Deemed Liquidation); (ii) a contribution of more than a de
minimis amount of money or other property to the Joint Venture Company by a
Member or a distribution of more than a de minimis amount of money or other
property to a retiring or continuing Member where such contribution or
distribution alters the Sharing Interest of any Member; or (iii) the grant
of an interest in the Joint Venture Company as consideration for the provision
of services to or for the benefit of the Joint Venture Company.

 

“Section 705(a)(2)(B) Expenditures” means
nondeductible expenditures of the Joint Venture Company that are described in section 705(a)(2)(B) of
the Code, and organization and syndication expenditures and disallowed losses
to the extent that such expenditures or losses are treated as expenditures
described in section 705(a)(2)(B) of the Code pursuant to Treas. Reg.
§ 1.704-1(b)(2)(iv)(i).

 

“Section 751 Property” means unrealized receivables and
substantially appreciated inventory items within the meaning of Treas. Reg. § 1.751-1(a)(1).

 

“Target Balance” means, for any Member as of any date, the
amount that would be distributable to such Member on such date pursuant to Section 5.1
of the Agreement if (i) all the assets of the Company were sold for cash
equal to their respective Book Values as of such date, (ii) all
liabilities of the Company (other than any liabilities under outstanding Member
Notes) were paid in full (except that in the case of a nonrecourse liability,
such payment would be limited to the Book Value of the asset or assets securing
such liability), and (iii) all remaining cash were distributed to the
Members pursuant to Section 5.1 (assuming, for this purpose, that the
holders of any Member Notes have converted such Member Notes immediately prior
to such distribution).

 

“Tax Basis” means, with respect to any item of Joint Venture
Company property, the adjusted basis of such property as determined in
accordance with the Code.

 

B-3

 

“Treasury Regulation” or “Treas. Reg.”
means the temporary or final regulation(s) promulgated pursuant to the Code by
the U.S. Department of the Treasury, as amended, and any successor
regulation(s).

 

ARTICLE 2

CAPITAL ACCOUNTS

 

2.1                                 Maintenance.

 

(A)                              A
single Capital Account shall be maintained for each Member in accordance with
this Article 2.

 

(B)                                Each
Member’s Capital Account shall from time to time be increased by:

 

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

 

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

 

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

 

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

 

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

 

B-4

 

(i)                                     the amount of
money distributed to such Member by the Joint Venture Company (including the
amount of such Member’s individual liabilities which the Joint Venture Company
is deemed to assume as provided in Treas. Reg. § 1.704-1(b)(2)(iv)(c)),
including the amount of any amount paid or accrued on any Member Note that is
not treated as a guaranteed payment pursuant to Section 5.2 of this Appendix
B;

 

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

 

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

 

(D)                               The
Joint Venture Company shall make such other adjustments to the Capital Accounts
of the Members as are necessary to comply with the provisions of Treas. Reg. § 1.704-1(b)(2)(iv).

 

2.2                                 Revaluation of Joint Venture Company Property.

 

(A)                              Upon
the occurrence of a Revaluation Event, the Board of Managers may revalue
all Joint Venture Company property (whether tangible or intangible) for Book
purposes to reflect the Adjusted Fair Market Value of Joint Venture Company
property immediately prior to the Revaluation Event. In the event that Joint
Venture Company property is so revalued, the Capital Accounts of the Members
shall be adjusted in accordance with Treas. Reg. § 1.704-1(b)(2)(iv)(f) as
provided in Section 3.1 of this Appendix.

 

(B)                                Upon
the distribution of Joint Venture Company property to a Member, the property to
be distributed shall be revalued for Book purposes to reflect the Adjusted Fair
Market Value of such property immediately prior to such distribution, and the
Capital Accounts of all Members shall be adjusted in accordance with Treas.
Reg. § 1.704-1(b)(2)(iv)(e).

 

2.3                                 Transfers of Interests. Upon the transfer of a Member’s
entire interest in the Joint Venture Company in accordance with Section 12.2
of the Agreement, the Capital Account of such Member shall carry over to the
transferee.

 

ARTICLE 3

ALLOCATION OF BOOK INCOME AND LOSS

 

3.1                                 Book Income And Loss.

 

(A)                              The
Book income or loss of the Joint Venture Company for purposes of determining
allocations to the Capital Accounts of the Members shall be determined in the
same manner as the determination of the Joint Venture Company’s taxable income,
except that (i) items that are required by section 703(a)(1) of
the Code to be separately stated shall be included; (ii)

 

B-5

 

items of income that are exempt from inclusion
in gross income for federal income tax purposes shall be treated as Book
income; (iii) Section 705(a)(2)(B) Expenditures shall be treated
as deductions; (iv) items of gain, loss, depreciation, amortization, or
depletion that would be computed for federal income tax purposes by reference
to the Tax Basis of an item of Joint Venture Company property shall be
determined by reference to the Book Value of such item of property in
accordance with Section 3.1(B) hereof; and (v) the effects of
upward and downward revaluations of Joint Venture Company property pursuant to Section 2.2
of this Appendix shall be treated as Book gain or loss respectively from the
sale of such property.

 

(B)                                In
the event that the Book Value of any item of Joint Venture Company property
differs from its Tax Basis, the amount of Book depreciation, depletion, or
amortization for a period with respect to such property shall be computed so as
to bear the same relationship to the Book Value of such property as the
depreciation, depletion, or amortization computed for tax purposes with respect
to such property for such period bears to the Tax Basis of such property. If
the Tax Basis of such property is zero, the Book depreciation, depletion, or
amortization with respect to such property shall be computed by using a method
consistent with the method that would be used for tax purposes if the Tax Basis
of such property were greater than zero and the property were placed in service
on the date it is acquired by the Joint Venture Company.

 

(C)                                The
Book income and loss of the Joint Venture Company for any taxable year shall be
allocated in such a manner as to cause the Adjusted Capital Account Balances of
the Members as nearly as possible to equal their respective Target Balances as
of the end of such taxable year.

 

3.2                                 Allocation of Nonrecourse Deductions. Notwithstanding any
other provisions of the Agreement, Nonrecourse Deductions shall be allocated
among the Members in proportion to their respective Sharing Interests as of the
end of the taxable year in which such deductions arise.

 

3.3                                 Allocation of Member Nonrecourse Deductions. Notwithstanding
any other provisions of the Agreement, any item of Member Nonrecourse Deduction
with respect to a Member Nonrecourse Debt shall be allocated to the Member or
Members who bear the economic risk loss for such Member Nonrecourse Debt in
accordance with Treas. Reg. § 1.704-2(i).

 

3.4                                 Chargebacks of Income And Gain. Notwithstanding any other
provisions of the Agreement:

 

(A)                              Joint
Venture Company Minimum Gain. In the event that there is a net decrease in
Joint Venture Company Minimum Gain for a taxable year of the Joint Venture
Company, then before any other allocations are made for such taxable year, each
Member shall be allocated items of Book income and gain for such year (and, if
necessary, for subsequent years) to the extent provided by Treas. Reg. § 1.704-2(f).

 

(B)                                Member
Nonrecourse Debt Minimum Gain. In the event that there is a net decrease in
Member Nonrecourse Debt Minimum Gain for a taxable year of the Joint Venture
Company, then after taking into account allocations pursuant to paragraph (a) immediately
preceding, but before any other allocations are made for such taxable year,
each Member with a

 

B-6

 

share of Member Nonrecourse Debt Minimum Gain
at the beginning of such year shall be allocated items of Book income and gain
for such year (and, if necessary, for subsequent years) to the extent provided
by Treas. Reg. § 1.704-2(i)(4).

 

(C)                                [Reserved.]

 

(D)                               Qualified
Income Offset. In the event that any Member unexpectedly receives any
Account Reduction Item that results in an Excess Deficit Balance at the end of
any taxable year after taking into account all other allocations and
adjustments under this Agreement, then items of Book income and gain for such
year (and, if necessary, for subsequent years) will be reallocated to each such
Member in the amount and in the proportions needed to eliminate such Excess
Deficit Balance as quickly as possible.

 

3.5                                 Reallocation To Avoid Excess Deficit Balances. Notwithstanding
any other provisions of the Agreement, no Book loss or deduction shall be
allocated to any Member to the extent that such allocation would cause or
increase an Excess Deficit Balance in the Capital Account of such Member. Such
Book loss or deduction shall be reallocated away from such Member and to the
other Members in accordance with the Agreement, but only to the extent that
such reallocation would not cause or increase Excess Deficit Balances in the
Capital Accounts of such other Members.

 

3.6                                 Corrective Allocation. Subject to the provisions of Sections
3.2, 3.3, 3.4, and 3.5 of this Appendix, but notwithstanding any other
provision of the Agreement, in the event that any Regulatory Allocation is made
pursuant to this Appendix for any taxable year, then remaining Book items for
such year (and, if necessary, Book items for subsequent years) shall be
allocated or reallocated in such amounts and proportions as are appropriate to
restore the Adjusted Capital Account Balances of the Members to the position in
which such Adjusted Capital Account Balances would have been if such Regulatory
Allocation had not been made. Adjustments pursuant to this Section 3.6
shall only be made if such Regulatory Allocations are not reasonably expected
to be reversed with offsetting allocations in subsequent taxable years. The
Members intend that the allocations of Book income and loss pursuant to this
Appendix shall result in Adjusted Capital Account Balances of the Members, as
of the end of each taxable year of the Joint Venture Company and after all
allocations pursuant to this Appendix have been made, equaling their Target
Balances. This Appendix shall be interpreted in a manner consistent with such
intent.

 

3.7                                 Other Allocations.

 

(A)                              If
during any taxable year of the Joint Venture Company there is a change in any
Member’s interest in the Joint Venture Company, allocations of Book income or
loss for such taxable year shall take into account the varying interests of the
Members in the Joint Venture Company in a manner consistent with the
requirements of Section 706 of the Code and Section 5.2(B) hereof.

 

(B)                                If
and to the extent that any distribution of Section 751 Property to a
Member in exchange for the distributee Member’s interest in property other than
Section 751 Property is treated as a sale or exchange of such Section 751
Property by the Joint Venture Company pursuant

 

B-7

 

to Treas. Reg. § 1.751-1(b)(2), any Book
gain or loss attributable to such deemed sale or exchange shall be allocated
only to Members other than the distributee Member in a manner consistent with
such Treasury Regulation.

 

(C)                                If
and to the extent that any distribution of property other than Section 751
Property to a Member in exchange for the distributee Member’s interest in Section 751
Property is treated as a sale or exchange of such other property by the Joint
Venture Company pursuant to Treas. Reg. § 1.751-1(b)(3), any Book gain or
loss attributable to such deemed sale or exchange shall be allocated only to
Members other than the distributee Member in a manner consistent with such
Treasury Regulation.

 

ARTICLE 4

ALLOCATION OF TAX ITEMS

 

4.1                                 In General. Except as otherwise provided in this Article 4,
all items of income, gain, loss, and deduction shall be allocated among the
Members for federal income tax purposes in the same manner as the corresponding
allocation for Book purposes.

 

4.2                                 Section 704(c) Allocations.

 

(A)                              In
the event that the Book Value of an item of Joint Venture Company property
differs from its Tax Basis, allocations of depreciation, depletion,
amortization, gain, and loss with respect to such property will be made for
federal income tax purposes in a manner that takes account of the variation
between the Tax Basis and Book Value of such property in accordance with section 704(c)(1)(A) of
the Code and Treas. Reg. § 1.704-1(b)(4)(i). The Board of Managers may select
as the method for making such allocations, either the method described in
Treas. Reg. § 1.704-3(c) or (d); provided, however,
that the method selected for any asset shall be one that minimizes the effect
of the “ceiling rule” on allocations to the Member that did not contribute such
asset.

 

(B)                                For
purposes of complying with Section 263A of the Code, depreciation,
amortization and cost recovery deductions of the Joint Venture Company that are
included in the capitalized cost of the Joint Venture Company’s inventory shall
be determined based on the Book Values of the Joint Venture Company’s assets,
and any difference between such amounts and the corresponding amounts as
computed for U.S. federal income tax purposes shall be allocated separately to
the Members pursuant to Section 704(c) of the Code.

 

4.3                                 Tax Credits. Tax credits shall be allocated among the
Members in accordance with Treas. Reg. § 1.704-1(b)(4)(ii).

 

ARTICLE 5

OTHER TAX MATTERS

 

5.1                                 Excess Nonrecourse Liabilities. For the purpose of
determining the Members’ shares of the Joint Venture Company’s Excess Nonrecourse
Liabilities pursuant to Treas. Reg. §§ 1.752-3(a)(3) and
1.707-5(a)(2)(ii), and solely for such purpose, the Members’ interests in
profits are hereby specified to be their respective Sharing Interests.

 

B-8

 

5.2                                 Treatment of Loan Transactions.

 

(A)                              The
Members agree that amounts outstanding under Member Notes (which for purposes
of this Appendix B includes amounts outstanding under loans made pursuant to Section 2.3(H) of
the Agreement) shall be treated for federal and applicable state income tax
purposes as equity and not as debt for U.S. federal income tax purposes. To the
extent a Non-Funding Member makes a Make-Up Contribution together with accrued
interest, such interest (solely for purposes of this Appendix B) shall be
treated as a capital contribution, the payment of such interest to the Funding
Member on the related Member Note shall be treated as a guaranteed payment
pursuant to Section 707(c) of the Code, and the deduction of the
Joint Venture Company in respect of such guaranteed payment shall be specially
allocated to the Non-Funding Member. To the extent accrued interest on a Member
Note has not been paid as of the end of a taxable year of the Joint Venture
Company, the Members shall consult with each other to determine the appropriate
income tax treatment of such accrued interest, and if they are unable to agree
on such treatment the dispute resolution provisions of Section 10.6(B) shall
apply.

 

(B)                                Upon
a change in the Members’ Sharing Interests, the Members agree that the Capital
Accounts of the Members shall be adjusted so that to the greatest extent
possible, but consistent with the goal of minimizing the adverse tax
consequences to the Member whose interest increased (as reasonably determined
by such Member)(other than adverse consequences resulting solely from receiving
allocations of income or loss in accordance with its revised Sharing Interest),
the Adjusted Capital Account Balances of the Members will equal their Target
Balances immediately following the conversion.

 

5.3                                 Treatment of Certain Distributions. (A) In the event
that (i) the Joint Venture Company makes a distribution that would (but
for this Subsection (A)) be treated as a Nonrecourse Distribution; and (ii) such
distribution does not cause or increase a deficit balance in the Capital
Account of the Member receiving such distribution as of the end of the Joint
Venture Company’s taxable year in which such distribution occurs; then the
Board of Managers may treat such distribution as not constituting a
Nonrecourse Distribution to the extent permitted by Treas. Reg. § 1.704-2(h)(3).

 

(B)                                In
the event that (i) the Joint Venture Company makes a distribution that
would (but for this Subsection (B)) be treated as a Member Nonrecourse
Distribution; and (ii) such distribution does not cause or increase a
deficit balance in the Capital Account of the Member receiving such
distribution as of the end of the Joint Venture Company’s taxable year in which
such distribution occurs; then the Board of Managers may treat such
distribution as not constituting a Member Nonrecourse Distribution to the
extent permitted by Treas. Reg. § 1.704-2(i)(6).

 

5.4                                 Reduction of Basis. In the event that a Member’s interest in
the Joint Venture Company may be treated in whole or in part as
depreciable property for purposes of reducing such Member’s basis in such
interest pursuant to section 1017(b)(3)(C) of the Code, the Board of
Managers may, upon the request of such Member, make a corresponding reduction
in the basis of its depreciable property with respect to such Member. Such
request shall be submitted to the Joint Venture Company in writing, and shall
include such information as may be reasonably required in order to effect
such reduction in basis. The costs of the Joint Venture Company in

 

B-9

 

making and implementing any such adjustments
shall be borne by the Member making such request.

 

5.5                                 Entity Classification. Neither the Joint Venture Company nor
any Member shall file or cause to be filed any election, the effect of which
would be to cause the Joint Venture Company to be classified as other than a
partnership for federal income tax purposes, without the prior written consent
of all Members.

 

5.6                                 Unified Audit Election. The Joint Venture Company will
elect, pursuant to section 6231(a)(1)(B)(ii) of the Code, to be
subject to the unified audit rules of sections 6221-6234 of the Code, and
all Members agree to sign such election.

 

5.7                                 Application of Section 707(b) of the Code. For
purposes of determining the Members’ respective interests in capital or profits
of the Joint Venture Company under Section 707(b) of the Code, the
Members agree that, unless otherwise agreed in writing, such interests shall be
computed as of each date of determination as follows: (a) the Joint
Venture Company shall be deemed to have a hypothetical taxable year that began
with the beginning of its actual taxable year including such date of
determination and ended as of such date of determination, with a closing of the
Joint Venture Company’s books as of such date (provided that deductions such as
depreciation, amortization and the like that are computed on an annual basis
shall be prorated on a daily basis so as to take into account only the portion
attributable to the period up to that date), (b) the interests in profits
of each Member as of such date shall equal the percentage of Book income or
loss (excluding amounts, if any, required to be disregarded for purposes of
applying Section 707(b) of the Code) that would have been allocated
to each Member for such hypothetical taxable year, and (c) the capital
interests of the Members as of such date shall equal the percentage of the
total Capital Accounts of each Member as of such date, after adjustment to
reflect the items described in Section 2.1(B), (C) and (D) of
this Appendix B treated as occurring during such hypothetical taxable
year.

 

5.8                                 Section 754 Election. The Joint Venture Company shall
make or seek the revocation of, as applicable, an election under Section 754
of the Code with respect to the Joint Venture Company upon request of any
Member whose Percentage Interest as of the end of any taxable year of the Joint
Venture Company exceeds its Percentage Interest as of the Effective Date.

 

5.9                                 Imputed Income. If a Member is deemed for applicable income
tax purposes to have received income from the Joint Venture Company as a result
of one or more transactions that were not treated by the Joint Venture Company
as giving rise to income to such Member, the Joint Venture Company shall make
such adjustments to its allocations as are necessary so that, as closely as
possible, such Member is placed in the same tax position as if such income was
not deemed to have been recognized, provided that such adjustments shall not
result in consequences to the other Member that are significantly more adverse
to such other Member than if the position originally taken by the Joint Venture
Company were upheld.

 

B-10

 

5.10                           Treatment of MTV Lease and Boise Supply Agreement.

 

(A)                              The
Members agree that the issuance of Joint Venture Company interests to Micron in
exchange for the MTV Lease and the Boise Supply Agreement shall be treated for
U.S. federal income tax purposes as taxable prepaid rent and as a taxable
payment for services, respectively, by the Joint Venture Company to Micron and
not as a contribution of property by Micron to the Joint Venture Company, in
each case for the amount ascribed on Appendix D to such item. Consequently, the
Members agree that Micron shall recognize income, and the Joint Venture Company
shall have an initial tax basis, for U.S. federal income tax purposes equal to
such amounts. The Members further agree that the Joint Venture Company’s initial
tax basis in such amounts shall equal the income so recognized, and that such
basis shall be amortized pursuant to Treas. Reg. § 1.167(a)-14 over the
initial terms of such agreements.

 

(B)                                The
Members further agree that if the treatment described in subsection (A) above
ultimately is determined not to be the proper treatment for either of such
items, the Members shall make such adjustments to the determination and
allocation of the Joint Venture Company’s items of income, gain, loss or
deduction as are necessary (to the extent possible) to place the Members in the
same tax position as if such treatment were respected.

 

5.11                           Tax Accounting Methods. To the extent permitted by
applicable law, the Joint Venture Company shall implement such tax elections
that to the greatest extent possible result in the Joint Venture Company’s cost
of goods sold for purposes of determining the Joint Venture Company’s Book
income or loss equaling the sum of (a) “Cost” as such term is defined in
the Supply Agreements, plus (b) any additional amounts included in the “amount
realized” by the Joint Venture Company upon the sale of products to Intel and
Micron, respectively.

 

5.12                           No Indemnity for Tax Consequences. Neither of the Members
nor the Joint Venture Company shall be responsible for the income tax
consequences to the other Members resulting from this Appendix or the
Agreement; provided, however, that the Members
shall reasonably cooperate as requested in order to effectuate the intent of
this Appendix, although such cooperation shall not require either Member to
incur significant additional costs that are not reimbursed by the requesting
Member.

 

5.13                           Precedent Agreements. Amounts paid to Micron pursuant to the
Precedent Agreement to Joint Venture, dated September 27, 2005, and the
Second Precedent Agreement to Joint Venture, dated November 18, 2005, in
each case by and between Micron and Intel, shall be treated as reimbursements
to Micron of preformation expenditures as provided in Treas. Reg. § 1.707-4(d).

 

5.14                           Conflicts with Agreement. In the event of any conflict
between the terms of this Appendix B and any provision of the Agreement, the
terms of this Appendix B shall govern.

 

B-11

 

APPENDIX C

 

IM FLASH
TECHNOLOGIES, LLC

 

INITIAL
MANAGERS

 

The initial Managers appointed by Intel will
be:

 

Leslie S. Culbertson

Thomas R. Franz

Brian L. Harrison

 

The initial Managers appointed by Micron will
be:

 

D. Mark Durcan

Brian J. Shields

W. G. Stover, Jr.

 

C-1

 

APPENDIX D

 

IM FLASH
TECHNOLOGIES, LLC

 

INITIAL
CAPITAL CONTRIBUTIONS

 

Intel Initial Capital Contribution

 

The Initial Capital Contribution of Intel is
$1,196,176,471, payable as follows:

 

	
  Intel Initial Contributed Assets:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Cash (to be delivered [***])

  	
   

  	
  $[***]

  
	
   

  	
   

  	
   

  
	
  Cash (to be delivered [***]) (the “Intel Additional Cash”)

  	
   

  	
  $[***]

  
	
   

  	
   

  	
   

  
	
  Promissory Note substantially in the form attached
  hereto as Attachment D-1 in the amount of $[***] (representing funds to be
  delivered [***] the Joint Venture Company).

  	
   

  	
  $[***]

  
	
   

  	
   

  	
   

  
	
  Cash in the amount of $[***] (to be
  delivered to the Joint Venture Company upon certification from Micron (and
  Micron shall make reasonable efforts to provide at least ten (10) Business
  Days’ notice of such pending certification), not contested by the Joint
  Venture Company after reasonable review and within 10 Business Days of the
  Joint Venture Company’s receipt of Micron’s certification, that construction
  is complete and the [***] Fab is ready for [***]).

  	
   

  	
  $[***]

  
	
   

  	
   

  	
   

  
	
  Total Intel Initial Capital Contribution
  (deemed to be contributed to the Joint Venture Company in full as of the
  Effective Date)

  	
   

  	
  $1,196,176,471

  
	
   

  	
   

  	
   

  
	
  If a
  Liquidating Event occurs prior to the delivery in full of such Initial
  Capital Contribution, all undelivered cash and amounts represented by
  Promissory Notes shall be delivered promptly after the occurrence of such
  Liquidating Event; provided, however, that if the construction and readiness
  for [***] at the [***] Fab referred to in the provisions of this
  Appendix D of the Micron Initial Capital Contribution is not complete at
  the time of such Liquidating Event, only a portion of the $[***] described
  above shall be delivered, which portion shall be proportionate to the
  percentage of completion of such construction as determined by the Members in
  good faith.

  	
   

  	
   

  

 

D-1

 

Micron Initial Capital Contribution

 

The Initial Capital Contribution of Micron is
$1,245,000,000, payable as follows:

 

Micron Initial Contributed Assets:

 

	
  Cash (to be delivered [***]) (the “Micron Additional Cash”)

  	
   

  	
  $250,000,000

  
	
   

  	
   

  	
   

  
	
  Lehi Property (pursuant to entry into the
  Lehi Lease (which is treated as a transfer of property for federal income tax
  purposes as described in the Lehi Lease) and delivery of the Lehi Bill of
  Conveyance and all rights of Micron under express or implied warranties or
  indemnities from third parties with respect to the Lehi Property

  	
   

  	
  Value $[***]

  
	
   

  	
   

  	
   

  
	
  Prepaid Rent on [***], as follows:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  On the
  Effective Date

  	
   

  	
  Value $[***]

  
	
   

  	
   

  	
   

  
	
  Upon certification from Micron (and Micron
  shall make reasonable efforts to provide at least ten (10) Business Days’
  notice of such pending certification), not contested by the Joint Venture
  Company after reasonable review and within 10 Business Days of the Joint
  Venture Company’s receipt of Micron’s certification, that construction is
  complete and the [***] Fab is ready for [***]

  	
   

  	
  Value $[***]

  
	
   

  	
   

  	
   

  
	
  Boise Supply Agreement Prepay

  	
   

  	
  Value $[***]

  
	
   

  	
   

  	
   

  
	
  Total Micron Initial Capital Contribution (deemed
  to be contributed to the Joint Venture Company in full as of the Effective
  Date)

  	
   

  	
  Value
  $1,245,000,000

  
	
   

  	
   

  	
   

  
	
  If a
  Liquidating Event occurs prior to the delivery in full of such Initial
  Capital Contribution, (a) all undelivered cash and amounts shall be
  delivered promptly after the occurrence of such Liquidating Event and (b) if
  the construction and readiness for [***] at the [***] Fab referred to in the
  provisions of this Appendix D of the Micron Initial Capital Contribution
  is not complete at the time of such Liquidating Event, a portion of the
  $[***] described above shall be deemed contributed, which portion shall be
  proportionate to the percentage of completion of such construction as
  determined by the Members in good faith.

  	
   

  	
   

  

 

D-2

 

ATTACHMENT
D-1

 

FORM OF
INITIAL CONTRIBUTION NOTE

 

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

 

INTEL CORPORATION

 

PROMISSORY NOTE

 

	
   

  	
   

  	
  No.: [                  ]

  
	
  Principal Amount: $[               ]

  	
   

  	
  Location: [                  ]

  
	
  Date of Issuance: [                      ]

  	
   

  	
   

  

 

FOR VALUE RECEIVED, Intel Corporation, a
Delaware corporation (“Intel”),
promises to pay to IM Flash Technologies, LLC, a Delaware limited liability
company (the “Joint Venture Company”), the
principal sum of [                                                            ]
Dollars ($[                        ])
in accordance with Section 2 of this Promissory Note (this “Note”).

 

This Note is delivered as a Capital
Contribution to the Joint Venture Company pursuant to Section 2.1(A) of
the Limited Liability Company Operating Agreement dated January 6th, 2006,
of the Joint Venture Company (the “Operating Agreement”)
and is issued under and subject to the terms, provisions and conditions of the
Operating Agreement. Capitalized terms used in this Note and not defined shall
have the meanings set forth in the Operating Agreement.

 

1.                                       TERM.

 

(a)                                  This Note shall
remain outstanding until the payment of the entire principal balance of this
Note (such unpaid principal balance at any given time is referred to a the “Outstanding Balance”).

 

2.                                       PAYMENTS.

 

Payments of the Outstanding Balance shall
become due and payable by Intel to the Joint Venture Company (a) in whole
or in part on the tenth Business Day following written notice by the Lead
Controller of the Joint Venture Company sent to Intel that such amounts are
necessary for the operation of the Joint Venture Company in accordance with the
then-effective Approved Business Plan; and (b) in whole upon the
liquidation of the Joint Venture Company in accordance with Article 13 of
the Operating Agreement.

 

D-1-1

 

3.                                       MISCELLANEOUS.

 

3.1                                 This Note shall be
construed and enforced in accordance with and governed by the laws of the State
of Delaware without giving effect to the principles of conflict of laws
thereof.

 

3.2                                 The titles, captions
and headings of this Note are provided for convenience of reference only and
shall not be deemed to constitute a part of this Note. Unless otherwise
specifically stated, all references herein to “sections” and “appendices” will
mean “sections” and “appendices” to this Note.

 

3.3                                 All notices to the
Joint Venture Company shall be sent addressed to the Authorized Officers, or
the Chief Executive Officer, as applicable, of the Joint Venture Company at the
Joint Venture Company’s principal place of business. All notices to Intel shall
be addressed to Intel at the address as may be specified by Intel from
time to time in a notice to the Joint Venture Company. Notwithstanding the
foregoing, the initial notice addresses for the Joint Venture Company and Intel
are set forth below. All notices are effective the next day, if sent by
recognized overnight courier or facsimile, or five (5) days after deposit
in the United States mail, postage prepaid, properly addressed and return
receipt requested.

 

	
  To the Joint Venture Company:

  	
   

  	
  To Intel:

  
	
  IM Flash Technologies,
  LLC

  1550 East 3400 North

  Lehi, Utah 84043

  	
   

  	
  2200 Mission College Blvd.

  Mailstop SC4-203

  Santa Clara, CA 95054

  
	
   

  	
   

  	
   

  
	
  Fax Number: (801)
  767-5370

  	
   

  	
  Fax Number: (408)
  653-8050

  

 

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

 

3.5                                 Should any provision
of this Note be deemed in contradiction with the laws of any jurisdiction in
which it is to be performed or unenforceable for any reason, such provision
shall be deemed null and void, but this Note shall remain in full force in all
other respects and the parties hereto shall negotiate in good faith appropriate
modifications to this Note that most nearly effects the parties’ intent in
entering into this Note.

 

3.6                                 Intel hereby waives
presentment, demand, protest, notice of dishonor, diligence and all other
notices, any release or discharge arising from any extension of time, discharge
of a prior party, release of any or all of any security given from time to time
for this Note, or other cause of release or discharge other than actual payment
in full hereof.

 

3.7                                 It is expressly agreed
that if this Note is referred to an attorney or if suit is brought to collect
or interpret this Note or any part hereof or to enforce or protect any
rights conferred upon the Joint Venture Company by this Note or any other
document evidencing this Note, then Intel promises and agrees to pay all costs,
including attorneys’ fees, incurred by the Joint Venture Company.

 

D-1-2

 

3.8                                 In the event of any
conflict between the provisions of the Operating Agreement and this Note, the
provisions of the Operating Agreement shall control.

 

D-1-3

 

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

 

 

	
  INTEL CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					

 

 

	
  ACKNOWLEDGED AND ACCEPTED:

  
	
   

  
	
  IM FLASH TECHNOLOGIES, LLC

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
						

 

SIGNATURE
PAGE TO

PROMISSORY
NOTE

ISSUED
BY INTEL CORPORATION

TO
IM FLASH TECHNOLOGIES, LLC

 

D-1-4

 

APPENDIX E

 

IM FLASH
TECHNOLOGIES, LLC

 

MANUFACTURING
COMMITTEE

 

Manufacturing
Committee Charter

 

The Manufacturing Committee is formed by the
Members to perform certain functions in relation to the LLC Operating
Agreement, the Supply Agreements between the Members and the Joint Venture
Company and the manufacturing, supply and services agreements entered into by
the Joint Venture Company.

 

A.                                   Purpose and Functions of the Manufacturing
Committee.

 

The primary purpose of the Manufacturing
Committee is to review and approve certain proposed plans and actions of the
Joint Venture Company prior to submission to the Members and/or the Board of Managers.
In addition, the Manufacturing Committee shall assist and advise the Joint
Venture Company and the Members in establishing, monitoring and improving the
Product roadmap and loading, output and assembly and testing strategy of the
Joint Venture Company. In fulfilling such purpose, the Manufacturing Committee
shall approve the Joint Venture Company’s proposed plans or actions as
specified herein and may request the Joint Venture Company to explore
alternatives to such proposals for resubmission to the Manufacturing Committee.
The Manufacturing Committee’s functions shall include:

 

1.                                       Review the
performance and projected performance of the Joint Venture Company against the
Operating Plan and Performance Criteria (including projected cost, capacity,
cycle-time, yield and quality) on a quarterly basis.

 

2.                                       Review and
approve proposed adjustments to the Probed Wafer Cost Forecast and the
Projected Output Forecast, all as specified and defined in the Boise Supply
Agreement.

 

3.                                       Review of the
Joint Venture Company’s monthly updates and reports of performance to the
Operating Plan (including the Manufacturing Plan, Assembly Plan and Test Plan)
and performance to the ramp plan.

 

4.                                       Review and
approve for submission to the Board of Managers the Joint Venture Company’s
quarterly update of the Operating Plan and the Proposed Loading Plan.

 

5.                                       Review and
approve for submission to the Board of Managers the Joint Venture Company’s
proposed Operating Plan (annually) in support of the Joint Venture Company’s
Annual Business Plan, including but not limited to the Joint Venture Company’s
proposed operating and capital expenditure plan.

 

6.                                       Review and
advisory endorsement of the Joint Venture Company’s packaging, assembly and
test strategy in support of the Joint Venture Company’s Annual Business Plan,

 

E-1

 

including but not limited to
the Joint Venture Company’s proposed operating and capital expenditure plan.

 

7.                                       Review and
approve the Joint Venture Company’s proposed service agreement and support
requests of each Member.

 

8.                                       Review the Joint
Venture Company’s proposals for project related secondment.

 

9.                                       Serve as an
advice forum (on a non-binding basis) on best known methods and arrange for
advice to the Joint Venture Company from Micron and Intel regarding
manufacturing, assembly and testing process and operations, with the goal of
improved production performance and ramp issue resolution. Such advice may include,
but not necessarily be limited to advice on manufacturing process integration,
manufacturing operations, fab automation, and strategy on assembly and testing
operations or subcontracting.

 

10.                                 Such other functions
as the Joint Venture Company and the Members may specify by written
consent.

 

B.                                    Membership
and Procedure.

 

1.               Membership on Manufacturing Committee.

 

a.                                       Number
and Appointment of Manufacturing Committee Members. The Manufacturing
Committee shall have eight (8) members or such other number as the Parties
may specify by written consent. The members shall be the Intel Executive
Officer and the Micron Executive Officer (or their replacement) with the
remaining members being appointed one-half by Micron and one-half by Intel. Unless
the Members otherwise specify, the members of the Manufacturing Committee appointed
by each Member shall include:

 

(i)                                     A
planning manager having factory tactical planning, loading and scheduling
experience, including logistics;

 

(ii)                                  A
manufacturing finance officer or director or business officer; and

 

(iii)                               A
director with manufacturing, strategic factory capacity, materials, purchasing
and demand planning experience.

 

The qualifications of any
individual appointed by any Member to serve on the Manufacturing Committee
shall be determined in the discretion of that Member. The initial members
appointed by Micron and Intel to the Manufacturing Committee shall be named
within thirty (30) days of the Effective Date.

 

b.                                      Removal
and Vacancies. Each Member having the right to appoint a member of the
Manufacturing Committee in accordance with this Section shall also have
the right, in its sole discretion, to remove such member at any time by
delivery of written notice to the other

 

E-2

 

Member and the Joint Venture
Company. Any vacancy on the Manufacturing Committee for any reason (including
as a result of the death, resignation, retirement or removal pursuant to this Section of
any member of the Manufacturing Committee) shall be filled by the Member that
appointed such member of the Manufacturing Committee. Unless a member of the
Manufacturing Committee resigns, dies, retires or is removed in accordance with
this Section, he or she shall hold office until a successor shall have been
duly appointed by the appointing Member.

 

2.                                       Additional Attendees at Manufacturing Committee Meetings. The
Chief Financial Officer and the Planning Manager of the Joint Venture Company may attend
all meetings of the Manufacturing Committee, but shall not be deemed members of
the Manufacturing Committee and shall have no right to vote. In addition, the
Manufacturing Committee may establish rules with respect to the
attendance at the Manufacturing Committee meetings of staff and other invitees.

 

3.                                       Chairman of the Manufacturing Committee. The Board of
Managers of the Joint Venture shall annually appoint the Intel or Micron
Executive Officer (or their replacement) on a rotating basis to serve as the
chairman of the Manufacturing Committee (the “Chairman”). The Chairman shall
preside at all meetings of the Manufacturing Committee and shall have such
other duties and responsibilities as may be assigned to him by the
Manufacturing Committee. The Chairman may delegate to the other Executive
Officer, if any, authority to chair any meeting, either on a temporary or a
permanent basis. The Chairman shall determine the agenda of each meeting of the
Manufacturing Committee, but the other Executive Officer, if any, and any
member of the Manufacturing Committee shall have the right to request that
additional items be included in the agenda for any meeting and such items shall
be included in the agenda and presented for discussion. The Chairman shall not
have the power to end discussion on an agenda item, unless termination of the
discussion is agreed to by a majority of the Committee members present at the
meeting.

 

4.                                       Voting. The Joint Venture Company, Micron and Intel shall
each be entitled to one (1) vote for each respective company. If the
members representing any one company (the Joint Venture Company, Micron or
Intel) cannot agree on how to cast their vote they must abstain from the vote.
All actions, determinations or resolutions of the Manufacturing Committee at a
meeting shall require the unanimous affirmative vote or consent of the three (3) votes
at such meeting at which a quorum is present.

 

5.                                       Meetings of the Manufacturing Committee; Quorum. The
Manufacturing Committee shall hold meetings at least once per calendar month at
such times and at such locations as the Manufacturing Committee may establish.
The presence of the Intel and Micron Executive Officers (or their replacement)
and at least two (2) members of the Manufacturing Committee appointed by
each Member, in person or by telephone conference or by other means of

 

E-3

 

communications acceptable to
the Manufacturing Committee, shall be necessary and sufficient to constitute a
quorum for the purpose of taking action at any meeting of the Manufacturing
Committee. No action taken by the Manufacturing Committee at any meeting shall
be valid unless the requisite quorum is present.

 

6.                                       Failure to Reach Agreement.

 

a.               If the
Manufacturing Committee fails to secure a unanimous vote on any matter in Section A
requiring approval of the Manufacturing Committee, then “Deadlock” shall be deemed
to occur with respect to such matter. The Manufacturing Committee shall then
have a ten (10) day period during which it shall hold at least one (1) additional
meeting at which it shall make a good faith effort to break the Deadlock. The
additional meetings shall be held at the time and place agreed to by the
members of the Manufacturing Committee, or if the members are unable to agree,
at a time and place determined by the Chairman of the Manufacturing Committee,
on at least two (2) days’ written notice.

 

b.              If the Manufacturing
Committee fails to break the Deadlock during such ten (10) day period the
matter shall then be referred to the Board of Managers of the Joint Venture
Company for resolution that shall be binding on the Joint Venture Company and each
of the Members. Any Tie Vote at the Board of Managers on such matter shall be
resolved in the manner set forth in the Operating Agreement. Notwithstanding
the foregoing, if the Board of Managers fails to approve a specific [***] for a
[***], then Intel and Micron may designate the [***] for such [***] in
accordance with their respective Sharing Interests.

 

7.                                       Notice; Waiver. The regular monthly meetings of the
Manufacturing Committee shall be held upon not less than five (5) Business
Days’ written notice. Additional meetings of the Manufacturing Committee shall
be held (A) at such other times as may be determined by the
Manufacturing Committee, (B) at the request of at least two (2) members
of the Manufacturing Committee or the Intel or Micron Executive Officer (or
their replacement), upon not less than five (5) Business Days’ written
notice or (C) in accordance with Section 5, following a failure by
the Manufacturing Committee to adopt or reject a proposal for action presented
to it. For purposes of this Section, notice may be provided via facsimile,
e-mail or any other manner provided in Section 18.1 of the Operating
Agreement, or telephonic notice to each member of the Manufacturing Committee
(which notice shall be provided to the other members of the Manufacturing
Committee by the requesting members of the Manufacturing Committee). The
presence of any member of the Manufacturing Committee at a meeting (including
by means of telephone conference or other means of communications acceptable to
the Manufacturing Committee) shall constitute a waiver of notice of the meeting
with respect to such Manager, unless such member of the Manufacturing Committee
declares at the meeting that such member of the Manufacturing Committee objects
to the notice as having been improperly given. The Manufacturing Committee
shall cause written minutes to be prepared of all actions taken by the
Manufacturing Committee and shall cause

 

E-4

 

a copy thereof to be delivered
to each member of the Manufacturing Committee within fifteen (15) days.

 

8.                                       Action without a Meeting. On any matter that is to be voted
on, consented to or approved by the Manufacturing Committee, the Manufacturing
Committee may take such action without a meeting, without prior notice and
without a vote if a consent or consents in writing, setting forth the action so
taken, shall be signed by the members of the Manufacturing Committee having not
less than the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all the members of the Manufacturing
Committee were present and voted.

 

9.                                       Meetings by Telecommunications. Unless the Manufacturing
Committee determines otherwise, members of the Manufacturing Committee shall
have the right to participate in all meetings of the Manufacturing Committee by
means of a telephone conference or similar communications equipment by means of
which all persons participating in the meeting can hear each other at the same
time and participation by such means shall constitute presence in person at a
meeting.

 

10.                                 Compensation
of Members of the Manufacturing Committee. The members of the
Manufacturing Committee, in their capacity as such, shall not receive
compensation. Each Member shall bear the cost and expenses incurred by its
appointed members of the Manufacturing Committee in connection with the Joint
Venture Company’s business while such members of the Manufacturing Committee
are serving in such capacity.

 

E-5

 

EXHIBIT A

 

FORM OF 

MANDATORY NOTE

 

NEITHER THIS NOTE NOR ANY INTEREST IN THE
JOINT VENTURE COMPANY (AS DEFINED BELOW) THAT MAY BE ACQUIRED UPON
CONVERSION OF THIS NOTE HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES
LAWS OF ANY STATES. THIS NOTE HAS BEEN ISSUED IN RELIANCE UPON THE
REPRESENTATION OF THE HOLDER THAT IT HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TOWARDS THE RESALE OR OTHER DISTRIBUTION THEREOF. THIS NOTE
AND ANY INTEREST IN THE JOINT VENTURE COMPANY ACQUIRED UPON CONVERSION OF THIS
NOTE ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT
BE TRANSFERRED OR RESOLD UNLESS PERMITTED UNDER SECTIONS 12.2 OR 12.5 OF THE
LIMITED LIABILITY COMPANY OPERATING AGREEMENT, DATED JANUARY 6, 2006, OF
THE JOINT VENTURE COMPANY AND THEN ONLY PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS. INVESTORS
SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF
THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

IM FLASH TECHNOLOGIES, LLC

 

REDEEMABLE NOTE

 

	
   

  	
  No.:                    

  
	
  Principal Amount: $[                         ]

  	
  Location: [                       ]

  
	
  Date of Issuance: [                        ]

  	
  Maturity
  Date: [                       ]

  

 

FOR VALUE RECEIVED, IM Flash Technologies,
LLC, a Delaware limited liability company (the “Joint
Venture Company”), promises to pay to [                     ],
a Delaware corporation (the “Funding Member”),
or such Wholly-Owned Subsidiary of the Funding Member as the Funding Member may designate,
the principal sum of [                  ]
Dollars ($[                    ])
and to pay interest on the outstanding principal of this Convertible Promissory
Note (this “Note”), in accordance with Section 2
of this Note.

 

This Note is delivered in exchange for Member
Debt Financing received from the Funding Member pursuant to Section 3.1 of
the Limited Liability Company Operating Agreement dated January 6, 2006,
of the Joint Venture Company (the “Operating Agreement”)
and is issued under and subject to the terms, provisions and conditions of the
Operating Agreement. Reference is hereby made to the Operating Agreement for a
full statement of the respective rights, limitations of rights and duties of
the Joint Venture Company, the Funding Member and [                       ],
a Delaware corporation (the “Non-Funding Member”)
and the terms under which this Note is issued and delivered. Capitalized terms used
in this Note and not

 

A-1

 

defined shall have the meanings
set forth in the Operating Agreement. This Note may be one of a series of
Notes issued pursuant to Section 3.1 of the Operating Agreement. This Note
is [a Mandatory Shortfall Note] [a Mandatory Equalization Note].

 

1.                                       TERM.

 

(a)                                  Subject to paragraph (b) below,
from and after the date that is [***] after the date of this Note (the “Maturity Date”), the Funding Member shall elect to either:

 

(i)                                     convert this Note
in accordance with Section 4 below; or

 

(ii)                                  permit this Note to
remain outstanding (in which case this Note shall become a Continuing Mandatory
Note) with the Maturity Date being the Liquidation Date (the Maturity Date as
so extended, the “Extended Maturity Date”).

 

In the event that the Funding Member fails to
make an election under clause (i) or clause (ii) above, the
Funding Member shall be deemed to have elected to permit this Note to remain
outstanding in accordance with clause (ii) above, and this Note and
the related Mandatory [Equalization][Shortfall] Note, shall automatically
become a Continuing Mandatory Note.

 

(b)                                 Subject to Section 4
below, upon the date of the first distribution under Section 13.13(C) of
the Operating Agreement, the Outstanding Balance, plus all accrued and unpaid
interest thereon, shall become due.

 

2.                                       INTEREST. [Mandatory Equalization Note:  [***].]

 

[Mandatory Shortfall Note:  As provided in the Operating Agreement,
interest on the unpaid principal balance of this Note (such unpaid principal
balance at any given time is referred to as the “Outstanding
Balance”) will accrue as follows:

 

(a)                                  For the [***] after
the issue date of this Note, interest will accrue at the [***] (as reported in
the [***]), as in effect on the issue date of this Note and adjusted every
[***], plus [***] ([***]) basis points, per annum, compounded [***], calculated
on the basis of a 360 day year and actual days elapsed.

 

(b)                                 For the period
starting on the day after the [***] anniversary of the issue date of this Note
through the Maturity Date, interest will accrue at the [***] (as reported in
the [***]), as in effect on the [***] anniversary of the issue date of this
Note and adjusted every [***], per annum, compounded [***], calculated on the
basis of a 360 day year and actual days elapsed.

 

(c)                                  [***] will accrue on
the Outstanding Balance from the Maturity Date until this Note is converted or
redeemed in full.]

 

All payments received shall be applied first
against costs of collection and enforcement (if any), then against accrued and
unpaid interest, and then against principal.

 

A-2

 

 

3.                                       PREPAYMENT. The
Joint Venture Company shall prepay, without premium or penalty, this Note if,
as and to the extent required by the Operating Agreement, but only upon written
notice executed by the chief executive officer of the holder of this Note.

 

4.                                       CONVERSION.

 

(a)                                  At any time, and from
time to time, from the Maturity Date through the Extended Maturity Date, the
Funding Member may, at its election, transfer to the Joint Venture Company as a
Capital Contribution all or a portion of the Outstanding Balance plus all
accrued and unpaid interest thereon and such amount shall be added to the
Capital Contribution Balance of the Funding Member (a “Conversion”).

 

(b)                                 If the Outstanding
Balance plus all accrued and unpaid interest thereon shall become due as set
forth in Section 1(b) above, (i) the Funding Member may elect
to make a Conversion in full, but not in part, of the Outstanding Balance plus
all accrued and unpaid interest thereon or (ii) if the Funding Member does
not so elect, a Conversion of the Outstanding Balance plus all accrued and
unpaid interest thereon (in full, but not in part) may be effected in
accordance with Section 13.13(B) of the Operating Agreement.

 

(c)                                  Upon the occurrence
of an Event of Default under Section 5 below, the Funding Member may, in
addition to the remedies set forth in Section 6 below, elect to make a
Conversion.

 

5.                                       DEFAULT. The
occurrence of any one or more of the following events, acts or occurrences
shall constitute an event of default (each an “Event of
Default”):

 

(a)                                  failure by the Joint
Venture Company to pay any principal of or interest on this Note as and when
required by the Operating Agreement or the terms hereof, unless the Funding
Member makes an election under Section 1(a) hereof; and

 

(b)                                 (i) the entry of
a decree or order for relief of the Joint Venture Company by a court of
competent jurisdiction in any involuntary case involving the Joint Venture
Company under any bankruptcy, insolvency or other similar law now or hereafter
in effect; (ii) the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or other similar agent for the Joint Venture
Company or for any substantial part of the Joint Venture Company’s assets
or property; (iii) the ordering of the winding up or liquidation of the
Joint Venture Company’s affairs; (iv) the filing with respect to the Joint
Venture Company of a petition in any such involuntary bankruptcy case, which
petition remains undismissed for a period of sixty (60) days or which is
dismissed or suspended pursuant to Section 305 of the Federal Bankruptcy
Code (or any corresponding provision of any future United States bankruptcy
law); (v) the commencement by the Joint Venture Company of a voluntary
case under any bankruptcy, insolvency or other similar law now or hereafter in
effect; (vi) the consent by the Joint Venture Company to the entry of an
order for relief in an involuntary case under any such law or to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar agent for the Joint Venture
Company or for any substantial part of the Joint Venture Company’s assets
or property; or (vii) the making by the Joint Venture Company of any
general assignment for the benefit of creditors.

 

A-3

 

6.                                       REMEDIES. If an
Event of Default occurs, the Funding Member may, at its election, (a) elect
to make a Conversion in accordance with Section 4 above, (b) accelerate
repayment of the Outstanding Balance, in which case the Outstanding Balance
plus all accrued and unpaid interest thereon shall be due and payable
immediately, and (c) pursue a claim for payment of the amounts required to
be paid under the Operating Agreement or this Note.

 

7.                                       MISCELLANEOUS.

 

7.1                                 This Note shall be
construed and enforced in accordance with and governed by the laws of the State
of Delaware without giving effect to the principles of conflict of laws
thereof.

 

7.2                                 The titles, captions
and headings of this Note are provided for convenience of reference only and
shall not be deemed to constitute a part of this Note. Unless otherwise
specifically stated, all references herein to “sections” and “appendices” will
mean “sections” and “appendices” to this Note.

 

7.3                                 All notices to the
Joint Venture Company shall be sent addressed to the Authorized Officers, or
the Chief Executive Officer, as applicable, of the Joint Venture Company at the
Joint Venture Company’s principal place of business. All notices to the Funding
Member or the Non-Funding Member shall be sent addressed to such Member at the
address as may be specified by Members from time to time in a notice to
the Joint Venture Company. Notwithstanding the foregoing, the initial notice
addresses for the Joint Venture Company and the Members are set forth below. All
notices are effective the next day, if sent by recognized overnight courier or
facsimile, or five (5) days after deposit in the United States mail,
postage prepaid, properly addressed and return receipt requested.

 

	
  To the Joint Venture
  Company:

  	
  To the Funding Member:

  
	
  [                        ]

  	
  [                        ]

  
	
  [                        ]

  	
  [                        ]

  
	
  [                        ]

  	
  [                        ]

  
	
  [                        ]

  	
  [                        ]

  
	
   

  	
   

  
	
  Fax Number:  [                        ]

  	
  Fax Number:  [                        ]

  

 

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

 

A-4

 

remedies provided for in this
Note shall be exclusive and shall be in lieu of any other remedies that the Funding
Member may have in respect of this Note, at law or in equity.

 

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

 

7.6                                 Should any provision
of this Note be deemed in contradiction with the laws of any jurisdiction in
which it is to be performed or unenforceable for any reason, such provision
shall be deemed null and void, but this Note shall remain in full force in all
other respects and the parties hereto shall negotiate in good faith appropriate
modifications to this Note that most nearly effects the parties’ intent in
entering into this Note.

 

7.7                                 The Joint Venture
Company hereby waives presentment, demand, protest, notice of dishonor,
diligence and all other notices, any release or discharge arising from any
extension of time, discharge of a prior party, release of any or all of any
security given from time to time for this Note, or other cause of release or
discharge other than actual payment in full hereof.

 

7.8                                 The Funding Member
shall not be deemed, by any act or omission, to have waived any of its rights
or remedies hereunder unless such waiver is in writing and signed by the
Funding Member and then only to the extent specifically set forth in such
writing. A waiver with reference to one event shall not be construed as
continuing or as a bar to or waiver of any right or remedy as to a subsequent
event.

 

7.9                                 Time is of the essence
hereof.

 

7.10                           It is expressly agreed that
if this Note is referred to an attorney or if suit is brought to collect or
interpret this Note or any part hereof or to enforce or protect any rights
conferred upon the Funding Member by this Note or any other document evidencing
this Note, then the Joint Venture Company promises and agrees to pay all costs,
including attorneys’ fees, incurred by the Funding Member.

 

7.11                           If any provisions of this
Note would require the Joint Venture Company to pay interest hereon at a rate
exceeding the highest rate allowed by applicable law, the Joint Venture Company
shall instead pay interest under this Note at the highest rate permitted by
applicable law.

 

7.12                           In the event of any conflict
between the provisions of the Operating Agreement and this Note, the provisions
of the Operating Agreement shall control.

 

A-5

 

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

 

 

	
  IM FLASH TECHNOLOGIES, LLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  
	
  Title:

  	
   

  	
   

  
					

 

 

	
  ACKNOWLEDGED AND ACCEPTED:

  
	
   

  
	
  [                      ],
  the Funding Member

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					

 

SIGNATURE
PAGE TO

PROMISSORY
NOTE

ISSUED
BY IM FLASH TECHNOLOGIES

TO
[               ]

 

A-6

 

EXHIBIT B

 

FORM OF
OPTIONAL [***] NOTE

 

NEITHER THIS NOTE NOR ANY INTEREST IN THE
JOINT VENTURE COMPANY (AS DEFINED BELOW) THAT MAY BE ACQUIRED UPON
CONVERSION OF THIS NOTE HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES
LAWS OF ANY STATES. THIS NOTE HAS BEEN ISSUED IN RELIANCE UPON THE
REPRESENTATION OF THE HOLDER THAT IT HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TOWARDS THE RESALE OR OTHER DISTRIBUTION THEREOF. THIS NOTE
AND ANY INTEREST IN THE JOINT VENTURE COMPANY ACQUIRED UPON CONVERSION OF THIS
NOTE ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT
BE TRANSFERRED OR RESOLD UNLESS PERMITTED UNDER SECTIONS 12.2 OR 12.5 OF THE
LIMITED LIABILITY COMPANY OPERATING AGREEMENT, DATED JANUARY 6, 2006, OF
THE JOINT VENTURE COMPANY AND THEN ONLY PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS. INVESTORS
SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF
THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

IM FLASH TECHNOLOGIES, LLC

 

REDEEMABLE NOTE

 

 

	
   

  	
   

  	
  No.:                  

  
	
  Principal Amount: $[                      ]

  	
   

  	
  Location: [                     ]

  
	
  Date of Issuance: [                        ]

  	
   

  	
  Maturity
  Date: [                     ]

  

 

FOR VALUE RECEIVED, IM Flash Technologies,
LLC, a Delaware limited liability company (the “Joint
Venture Company”), promises to pay to [                       ],
a Delaware corporation (the “Funding Member”),
or such Wholly-Owned Subsidiary of the Funding Member as the Funding Member may designate,
the principal sum of [                  ]
Dollars ($[                   ])
and to pay interest on the outstanding principal of this Convertible Promissory
Note (this “Note”), in accordance with Section 2
of this Note.

 

This Note is delivered in exchange for Member
Debt Financing received from the Funding Member pursuant to Section 3.2 of
the Limited Liability Company Operating Agreement dated January 6, 2006,
of the Joint Venture Company (the “Operating Agreement”)
and is issued under and subject to the terms, provisions and conditions of the
Operating Agreement. Reference is hereby made to the Operating Agreement for a
full statement of the respective rights, limitations of rights and duties of
the Joint Venture Company, the Funding Member and [               ],
a Delaware corporation (the “Non-Funding Member”)
and the terms under which this Note is issued and delivered. Capitalized terms
used in this Note and not defined shall have the meanings set forth in the
Operating Agreement. This Note may be one of

 

B-1

 

a series of Notes issued
pursuant to Section 3.2 of the Operating Agreement. This Note is [an
Optional [***] Shortfall Note] [an Optional [***] Equalization Note].

 

1.                                       TERM. (a) This
note will mature on the [***].

 

(b)                                 Subject to Section 4
below, upon the date of the first distribution under Section 13.13(C) of
the Operating Agreement, the Outstanding Balance, plus all accrued and unpaid
interest thereon, shall become due.

 

2.                                       INTEREST. [Optional [***] Equalization Note:  [***].]

 

[Optional [***] Shortfall
Note:  As provided in the
Operating Agreement, interest on the unpaid principal balance of this Note
(such unpaid principal balance at any given time is referred to as the “Outstanding Balance”) will accrue at the [***] (as reported
in the [***]), as in effect on the issue date of this Note and adjusted every
[***], per annum, compounded [***], calculated on the basis of a 360 day year
and actual days elapsed.

 

All payments received shall be applied first
against costs of collection and enforcement (if any), then against accrued and
unpaid interest, and then against principal.

 

3.                                       PREPAYMENT. The
Joint Venture Company shall prepay, without premium or penalty, this Note if,
as and to the extent required by the Operating Agreement, but only upon written
notice executed by the chief executive officer of the holder of this Note.

 

4.                                       CONVERSION.

 

(a)                                  At any time, and from
time to time, the Funding Member may, at its election, transfer to the Joint
Venture Company as a Capital Contribution all or a portion of the Outstanding
Balance plus all accrued and unpaid interest thereon and such amount shall be
added to the Capital Contribution Balance of the Funding Member (a “Conversion”).

 

(b)                                 If the Outstanding
Balance plus all accrued and unpaid interest thereon shall become due as set
forth in Section 1(b) above, (i) the Funding Member may elect
to make a Conversion in full, but not in part, of the Outstanding Balance plus
all accrued and unpaid interest thereon or (ii) if the Funding Member does
not so elect, a Conversion of the Outstanding Balance plus all accrued and
unpaid interest thereon (in full, but not in part) may be effected in
accordance with Section 13.13(B) of the Operating Agreement.

 

(c)                                  Upon the occurrence
of an Event of Default under Section 5 below, the Funding Member may, in
addition to the remedies set forth in Section 6 below, elect to make a
Conversion.

 

5.                                       DEFAULT. The
occurrence of any one or more of the following events, acts or occurrences
shall constitute an event of default (each an “Event of
Default”):

 

(a)                                  failure by the Joint
Venture Company to pay any principal of or interest on this Note as and when
required by the Operating Agreement or the terms hereof; and

 

B-2

 

(b)                                 (i) the entry of
a decree or order for relief of the Joint Venture Company by a court of
competent jurisdiction in any involuntary case involving the Joint Venture
Company under any bankruptcy, insolvency or other similar law now or hereafter
in effect; (ii) the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or other similar agent for the Joint Venture
Company or for any substantial part of the Joint Venture Company’s assets
or property; (iii) the ordering of the winding up or liquidation of the
Joint Venture Company’s affairs; (iv) the filing with respect to the Joint
Venture Company of a petition in any such involuntary bankruptcy case, which
petition remains undismissed for a period of sixty (60) days or which is
dismissed or suspended pursuant to Section 305 of the Federal Bankruptcy
Code (or any corresponding provision of any future United States bankruptcy
law); (v) the commencement by the Joint Venture Company of a voluntary
case under any bankruptcy, insolvency or other similar law now or hereafter in
effect; (vi) the consent by the Joint Venture Company to the entry of an
order for relief in an involuntary case under any such law or to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar agent for the Joint Venture
Company or for any substantial part of the Joint Venture Company’s assets
or property; or (vii) the making by the Joint Venture Company of any
general assignment for the benefit of creditors.

 

6.                                       REMEDIES. If an
Event of Default occurs, the Funding Member may, at its election, (a) elect
to make a Conversion in accordance with Section 4 above, (b) accelerate
repayment of the Outstanding Balance, in which case the Outstanding Balance
plus all accrued and unpaid interest thereon shall be due and payable
immediately, and (c) pursue a claim for payment of the amounts required to
be paid under the Operating Agreement or this Note.

 

7.                                       MISCELLANEOUS.

 

7.1                                 This Note shall be
construed and enforced in accordance with and governed by the laws of the State
of Delaware without giving effect to the principles of conflict of laws
thereof.

 

7.2                                 The titles, captions
and headings of this Note are provided for convenience of reference only and
shall not be deemed to constitute a part of this Note. Unless otherwise
specifically stated, all references herein to “sections” and “appendices” will
mean “sections” and “appendices” to this Note.

 

7.3                                 All notices to the
Joint Venture Company shall be sent addressed to the Authorized Officers, or
the Chief Executive Officer, as applicable, of the Joint Venture Company at the
Joint Venture Company’s principal place of business. All notices to the Funding
Member or the Non-Funding Member shall be sent addressed to such Member at the
address as may be specified by Members from time to time in a notice to
the Joint Venture Company. Notwithstanding the foregoing, the initial notice
addresses for the Joint Venture Company and the Members are set forth below. All
notices are effective the next day, if sent by recognized overnight courier or
facsimile, or five (5) days after deposit in the United States mail,
postage prepaid, properly addressed and return receipt requested.

 

B-3

 

	
  To the Joint Venture
  Company:

  	
  To the Funding Member:

  
	
  [                        ]

  	
  [                        ]

  
	
  [                        ]

  	
  [                        ]

  
	
  [                        ]

  	
  [                        ]

  
	
  [                        ]

  	
  [                        ]

  
	
   

  	
   

  
	
  Fax Number:  [                        ]

  	
  Fax Number:  [                        ]

  

 

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

 

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

 

7.6                                 Should any provision
of this Note be deemed in contradiction with the laws of any jurisdiction in
which it is to be performed or unenforceable for any reason, such provision
shall be deemed null and void, but this Note shall remain in full force in all
other respects and the parties hereto shall negotiate in good faith appropriate
modifications to this Note that most nearly effects the parties’ intent in
entering into this Note.

 

7.7                                 The Joint Venture
Company hereby waives presentment, demand, protest, notice of dishonor,
diligence and all other notices, any release or discharge arising from any
extension of time, discharge of a prior party, release of any or all of any
security given from time to time for this Note, or other cause of release or
discharge other than actual payment in full hereof.

 

7.8                                 The Funding Member
shall not be deemed, by any act or omission, to have waived any of its rights
or remedies hereunder unless such waiver is in writing and signed by the
Funding Member and then only to the extent specifically set forth in such
writing. A waiver with reference to one event shall not be construed as
continuing or as a bar to or waiver of any right or remedy as to a subsequent
event.

 

7.9                                 Time is of the essence
hereof.

 

7.10                           It is expressly agreed that
if this Note is referred to an attorney or if suit is brought to collect or
interpret this Note or any part hereof or to enforce or protect any rights
conferred

 

B-4

 

upon the Funding Member by this
Note or any other document evidencing this Note, then the Joint Venture Company
promises and agrees to pay all costs, including attorneys’ fees, incurred by
the Funding Member.

 

7.11                           If any provisions of this
Note would require the Joint Venture Company to pay interest hereon at a rate
exceeding the highest rate allowed by applicable law, the Joint Venture Company
shall instead pay interest under this Note at the highest rate permitted by
applicable law.

 

7.12                           In the event of any conflict
between the provisions of the Operating Agreement and this Note, the provisions
of the Operating Agreement shall control.

 

B-5

 

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

 

	
  IM FLASH TECHNOLOGIES, LLC

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  
	
  Title:

  	
   

  	
   

  
					

 

 

	
  ACKNOWLEDGED AND ACCEPTED:

  
	
   

  
	
  [                          ],
  the Funding Member

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  
	
  Title:

  	
   

  	
   

  
					

 

SIGNATURE
PAGE TO

PROMISSORY
NOTE

ISSUED
BY IM FLASH TECHNOLOGIES

TO
[              ]

 

B-6

 

EXHIBIT C

 

FORM OF
OPTIONAL OTHER NOTE

 

NEITHER THIS NOTE NOR ANY INTEREST IN THE
JOINT VENTURE COMPANY (AS DEFINED BELOW) THAT MAY BE ACQUIRED UPON
CONVERSION OF THIS NOTE HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES
LAWS OF ANY STATES. THIS NOTE HAS BEEN ISSUED IN RELIANCE UPON THE
REPRESENTATION OF THE HOLDER THAT IT HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TOWARDS THE RESALE OR OTHER DISTRIBUTION THEREOF. THIS NOTE
AND ANY INTEREST IN THE JOINT VENTURE COMPANY ACQUIRED UPON CONVERSION OF THIS
NOTE ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT
BE TRANSFERRED OR RESOLD UNLESS PERMITTED UNDER SECTIONS 12.2 OR 12.5 OF THE
LIMITED LIABILITY COMPANY OPERATING AGREEMENT, DATED JANUARY 6, 2006, OF
THE JOINT VENTURE COMPANY AND THEN ONLY PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM
AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS. INVESTORS
SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF
THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

IM FLASH TECHNOLOGIES, LLC

 

REDEEMABLE NOTE

 

	
   

  	
  No.:                

  
	
  Principal Amount:  $[                      ]

  	
  Location: [                      ]

  
	
  Date of Issuance: [                      ]

  	
  Maturity
  Date: [                      ] 

  

 

FOR VALUE RECEIVED, IM Flash Technologies,
LLC, a Delaware limited liability company (the “Joint
Venture Company”), promises to pay to [                         ],
a Delaware corporation (the “Funding Member”),
or such Wholly-Owned Subsidiary of the Funding Member as the Funding Member may designate,
the principal sum of [                     ]
Dollars ($[                     ])of
this Convertible Promissory Note (this “Note”), in
accordance with Section 2 of this Note.

 

This Note is delivered in exchange for Member
Debt Financing received from the Funding Member pursuant to Section 3.3 of
the Limited Liability Company Operating Agreement dated January 6, 2006,
of the Joint Venture Company (the “Operating Agreement”)
and is issued under and subject to the terms, provisions and conditions of the
Operating Agreement. Reference is hereby made to the Operating Agreement for a
full statement of the respective rights, limitations of rights and duties of
the Joint Venture Company, the Funding Member and [                      ],
a Delaware corporation (the “Non-Funding Member”)
and the terms under which this Note is issued and delivered. Capitalized terms
used in this Note and not defined shall have the meanings set forth in the
Operating Agreement. This Note may be one of

 

C-1

 

a series of Notes issued
pursuant to Section 3.3 of the Operating Agreement. This Note is an
Optional Other Shortfall Note.

 

1.                                       TERM. This Note
will mature on the [***].

 

2.                                       INTEREST. [***].

 

3.                                       PREPAYMENT. The
Joint Venture Company shall prepay, without premium or penalty, this Note if,
as and to the extent required by the Operating Agreement, but only upon written
notice executed by the chief executive officer of the holder of this Note.

 

4.                                       CONVERSION.

 

(a)                                  At any time, and from
time to time, the Funding Member may, at its election, transfer to the Joint
Venture Company as a Capital Contribution all or a portion of the Outstanding
Balance thereon and such amount shall be added to the Capital Contribution
Balance of the Funding Member (a “Conversion”).

 

(b)                                 Upon the occurrence of
an Event of Default under Section 5 below, the Funding Member may, in
addition to the remedies set forth in Section 6 below, elect to make a
Conversion.

 

5.                                       DEFAULT. The
occurrence of any one or more of the following events, acts or occurrences
shall constitute an event of default (each an “Event of
Default”):

 

(a)                                  failure by the Joint
Venture Company to pay any principal of on this Note as and when required by
the Operating Agreement or the terms hereof; and

 

(b)                                 (i) the entry of
a decree or order for relief of the Joint Venture Company by a court of
competent jurisdiction in any involuntary case involving the Joint Venture
Company under any bankruptcy, insolvency or other similar law now or hereafter
in effect; (ii) the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or other similar agent for the Joint Venture
Company or for any substantial part of the Joint Venture Company’s assets
or property; (iii) the ordering of the winding up or liquidation of the
Joint Venture Company’s affairs; (iv) the filing with respect to the Joint
Venture Company of a petition in any such involuntary bankruptcy case, which
petition remains undismissed for a period of sixty (60) days or which is
dismissed or suspended pursuant to Section 305 of the Federal Bankruptcy
Code (or any corresponding provision of any future United States bankruptcy
law); (v) the commencement by the Joint Venture Company of a voluntary
case under any bankruptcy, insolvency or other similar law now or hereafter in
effect; (vi) the consent by the Joint Venture Company to the entry of an
order for relief in an involuntary case under any such law or to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar agent for the Joint Venture
Company or for any substantial part of the Joint Venture Company’s assets
or property; or (vii) the making by the Joint Venture Company of any
general assignment for the benefit of creditors.

 

C-2

 

6.                                       REMEDIES. If an
Event of Default occurs, the Funding Member may, at its election, (a) elect
to make a Conversion in accordance with Section 4 above, (b) accelerate
repayment of the Outstanding Balance, in which case the Outstanding Balance
shall be due and payable immediately, and (c) pursue a claim for payment
of the amounts required to be paid under the Operating Agreement or this Note.

 

7.                                       MISCELLANEOUS.

 

7.1                                 This Note shall be
construed and enforced in accordance with and governed by the laws of the State
of Delaware without giving effect to the principles of conflict of laws
thereof.

 

7.2                                 The titles, captions
and headings of this Note are provided for convenience of reference only and
shall not be deemed to constitute a part of this Note. Unless otherwise
specifically stated, all references herein to “sections” and “appendices” will
mean “sections” and “appendices” to this Note.

 

7.3                                 All notices to the
Joint Venture Company shall be sent addressed to the Authorized Officers, or
the Chief Executive Officer, as applicable, of the Joint Venture Company at the
Joint Venture Company’s principal place of business. All notices to the Funding
Member or the Non-Funding Member shall be sent addressed to such Member at the
address as may be specified by Members from time to time in a notice to
the Joint Venture Company. Notwithstanding the foregoing, the initial notice
addresses for the Joint Venture Company and the Members are set forth below. All
notices are effective the next day, if sent by recognized overnight courier or
facsimile, or five (5) days after deposit in the United States mail,
postage prepaid, properly addressed and return receipt requested.

 

	
  To the Joint Venture Company:

  	
   

  	
  To the Funding
  Member:

  
	
  [                        ]

  	
   

  	
  [                        ]

  
	
  [                        ]

  	
   

  	
  [                        ]

  
	
  [                        ]

  	
   

  	
  [                        ]

  
	
  [                        ]

  	
   

  	
  [                        ]

  
	
   

  	
   

  	
   

  
	
  Fax Number:  [                        ]

  	
   

  	
  Fax Number:  [                        ]

  

 

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

 

C-3

 

remedies provided for in this
Note shall be exclusive and shall be in lieu of any other remedies that the
Funding Member may have in respect of this Note, at law or in equity.

 

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

 

7.6                                 Should any provision
of this Note be deemed in contradiction with the laws of any jurisdiction in
which it is to be performed or unenforceable for any reason, such provision
shall be deemed null and void, but this Note shall remain in full force in all
other respects and the parties hereto shall negotiate in good faith appropriate
modifications to this Note that most nearly effects the parties’ intent in
entering into this Note.

 

7.7                                 The Joint Venture
Company hereby waives presentment, demand, protest, notice of dishonor,
diligence and all other notices, any release or discharge arising from any
extension of time, discharge of a prior party, release of any or all of any
security given from time to time for this Note, or other cause of release or
discharge other than actual payment in full hereof.

 

7.8                                 The Funding Member
shall not be deemed, by any act or omission, to have waived any of its rights
or remedies hereunder unless such waiver is in writing and signed by the
Funding Member and then only to the extent specifically set forth in such
writing. A waiver with reference to one event shall not be construed as
continuing or as a bar to or waiver of any right or remedy as to a subsequent
event.

 

7.9                                 Time is of the essence
hereof.

 

7.10                           It is expressly agreed that
if this Note is referred to an attorney or if suit is brought to collect or
interpret this Note or any part hereof or to enforce or protect any rights
conferred upon the Funding Member by this Note or any other document evidencing
this Note, then the Joint Venture Company promises and agrees to pay all costs,
including attorneys’ fees, incurred by the Funding Member.

 

7.11                           If any provisions of this
Note would require the Joint Venture Company to pay interest hereon at a rate
exceeding the highest rate allowed by applicable law, the Joint Venture Company
shall instead pay interest under this Note at the highest rate permitted by
applicable law.

 

7.12                           In the event of any conflict
between the provisions of the Operating Agreement and this Note, the provisions
of the Operating Agreement shall control.

 

C-4

 

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

 

 

	
  IM FLASH TECHNOLOGIES, LLC

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  
	
  Title:

  	
   

  	
   

  
					

 

 

	
  ACKNOWLEDGED AND ACCEPTED:

  
	
   

  
	
  [                          ],
  the Funding Member

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  
	
  Title:

  	
   

  	
   

  
					

 

SIGNATURE
PAGE TO

PROMISSORY
NOTE

ISSUED
BY IM FLASH TECHNOLOGIES

TO
[              ]

 

C-5Exhibit 10.157

 

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

 

INTEL/MICRON CONFIDENTIAL

 

 

MANUFACTURING SERVICES
AGREEMENT

 

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

 

RECITALS

 

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

 

B.                                     Micron
possesses the ability to perform manufacturing services in connection with
Probed Wafers for NAND Flash Memory Products; and

 

C.                                     Micron
desires to provide and the Joint Venture Company desires to purchase
manufacturing services upon the terms and subject to the conditions set forth
in this Agreement (Micron and the Joint Venture Company are each, a “Party” and collectively, the “Parties”).

 

AGREEMENT

 

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

 

SECTION 1

 

DEFINITIONS; CERTAIN INTERPRETIVE MATTERS

 

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

 

1.2                                 Certain
Interpretive Matters.

 

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

 

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

 

 

SECTION 2

 

PROVISION OF MANUFACTURING SERVICES; CONTROLS

 

2.1                                 Provision
of Manufacturing Services. Micron will provide to the Joint Venture Company
Manufacturing Services, as described on Schedule 2.1 in accordance
with the terms and conditions contained herein.

 

2.2                                 Level
of Manufacturing Services. The Joint Venture Company shall provide Micron
with the Ramp Plan for the Site, as initially set forth in the Initial Business
Plan in the LLC Operating Agreement and subject to adjustment in the
Manufacturing Plan. Micron shall prepare for the Joint Venture Company, in
response to the Ramp Plan, a proposal for the level of services to be provided
at the Site. The Parties shall review such proposal and mutually agree on the
level of Manufacturing Services, subject to mutually agreeable adjustment based
upon changes in the Initial Business Plan and Manufacturing Plan. Micron shall
staff and operate the Site to enable Micron to provide the agreed level of
Manufacturing Services. The Parties acknowledge that in the normal course of
performing Manufacturing Services, variances in output may and do occur
and that nothing in the Approved Business Plan, Manufacturing Plan or the
agreed level of Manufacturing Services is a binding commitment to achieve a
specific output of Probed Wafers.

 

2.3                                 Control;
Processes. Micron and the Joint Venture Company will periodically review
Micron’s processes and control mechanisms relating to the performance of the
Manufacturing Services, including the Performance Criteria. If the Joint
Venture Company requests any changes or additions to Micron’s existing process
and control mechanisms, the Parties shall work together in good faith to
resolve any such requests.

 

2.4                                 Option to Designate
WIP. As soon as practical following the Joint Venture Company’s written
request, Micron will ensure that WIP at the Site destined for the Joint Venture
Company will be designated for specified customers from Wafer Start. If the
Joint Venture Company does not elect to have WIP so designated, Micron shall
designate the WIP for specified customers after Probe Testing. Custom product,
if any, must be designated for the Joint Venture Company’s specified customers
from Wafer Start.

 

2.5                                 [***]. In addition to
the quarterly review and monthly report requirements set forth in ARTICLE 5,
Micron will notify the Joint Venture Company promptly of all [***].

 

2.6                                 Masks.
Masks required for the Manufacturing Services will either be provided by the
Joint Venture Company or purchased by Micron hereunder. Such masks will only be
used to perform the Manufacturing Services for the Joint Venture Company. Masks
will be repaired and replaced solely at mask operations that have been approved
by the Joint Venture Company, which approval shall not be unreasonably withheld.
While Micron will have possession of masks, title to such masks and of any
underlying copyrights, maskworks, or other intellectual property will remain
with the Joint Venture Company’s customers.

 

2.7                                 Traceability
and Data Retention. The Joint Venture Company and Micron shall review
Micron’s Manufacturing Services process traceability system in regards to the
manufacturing process [***] and will agree on the level of data to be traced
through such system and which data shall be available with real-time access or
as otherwise mutually agreed by the Parties. Micron agrees to maintain such
data for a minimum of [***] from completion of the Probed Wafer lot and [***]
to the extent such level of data is offered real-time within Micron, subject to
system limitations related to the exclusion of non-NAND data. The Joint Venture
Company may provide its customers with access to such data, subject to any
confidentiality requirements.

 

2.8                                 Business Continuity
Plan. Micron and the Joint Venture Company will review Micron’s Business
Continuity Plan as it relates to the Manufacturing Services provided hereunder.
If the Joint Venture Company requests any changes or additions to Micron’s
existing Business Continuity Plan, the Parties shall work together in good
faith to resolve any such agreed resolutions. The Joint Venture 

 

2

 

Company may provide Micron’s
Business Continuity Plan to its customers, subject to any confidential
requirements.

 

2.9                                 Additional Customer
Requirements. The Joint Venture Company will inform Micron in writing
of any auditable supplier requirements relating to Manufacturing Services
requested by the Joint Venture Company’s customers. Micron and the Joint
Venture Company shall work together in good faith to resolve any such requests.

 

2.10                           Transfer of Manufacturing
Technology; Equivalency of Operations. Micron will cooperate in good faith
with the Joint Venture Company in connection with the transfer of Semiconductor
Manufacturing Technology for Micron’s use in performing the Manufacturing
Services as such technology transfers may be required under other Joint
Venture Documents or as reasonably necessary to implement the process
technology to offer Manufacturing Services. The Joint Venture Company will work
in good faith with Micron to establish similar baseline performance standards
for the Manufacturing Services to promote consistency of Products produced by
the Joint Venture Company, including form, fit and function. Such standards
will include the provision of up to date equivalency materials (including
correlation wafers), data and information.

 

SECTION 3

 

ITEMS TO BE SUPPLIED BY THE JOINT VENTURE COMPANY

 

3.1                                 Leased
Space and Manufacturing Equipment; [***]. In
order for Micron to perform Manufacturing Services hereunder, the Joint
Venture Company shall provide Micron with access to all equipment owned or
leased by the Joint Venture Company and installed at the Site, including, but
not limited, to the automated material handling system, manufacturing equipment
and other required equipment not provided by Micron hereunder (collectively “Joint Venture Equipment”). [***].

 

3.2                                 [***]. The Joint Venture Company
shall be responsible for providing to Micron in accordance with the
requirements of the Joint Venture Documents, [***] as the Parties agree is
reasonably necessary to enable Micron to [***].

 

3.3                                 Title
and Risk of Loss or Damage to Joint Venture Equipment, WIP and Other Materials.
Title to Joint Venture Equipment and other materials provided by the Joint
Venture Company to Micron under this Agreement shall at all times [***]. All
Joint Venture Equipment will be marked as property of the Joint Venture Company
and [***] unless otherwise disposed of [***] pursuant to another Joint Venture
Document. Except as provided in Section 12.5, risk of loss and/or
damage to the Joint Venture Equipment and materials provided by the Joint
Venture Company under this Agreement, WIP and Probed Wafers shall at all times
reside with [***]. [***] title to Prime Wafer(s) and WIP, whether or not
acquired by the Joint Venture Company or Micron, which are in the possession of
Micron to perform Manufacturing Services.

 

3.4                                 Provision
of Technical Assistance. The Joint Venture Company shall furnish or have
furnished to Micron in accordance with the requirements of the Joint Venture
Documents such technical assistance as the Parties agree is reasonably
necessary to enable Micron to perform the Manufacturing Services
hereunder.

 

SECTION 4

 

ITEMS TO BE SUPPLIED BY MICRON

 

4.1                                 Facilities
Maintenance, Manufacturing Systems, Secondary Equipment and Support. Micron
shall utilize certain of its Site systems and equipment to perform the
Manufacturing Services (collectively “Micron Equipment”).
Micron shall provide necessary repair and maintenance of the Micron Equipment
and Joint Venture Equipment in order to maintain such equipment in good working
order and in accordance with any applicable, recommended manufacturer’s
guidelines, until such time as 

 

3

 

any of such equipment becomes obsolete or
uneconomical to maintain or repair. All costs to repair or replace, maintain or
to add to or expand or enhance the facilities and/or the Micron Equipment as
reasonably required to perform the Manufacturing Services hereunder in
accordance with Joint Venture Company’s requirements hereunder shall be
expensed or capitalized in accordance with Micron’s accounting policies and
charged accordingly in the pricing set forth on Schedule 6.5. Micron
shall provide the Joint Venture Company with ninety (90) days advance written
notice of any change in Micron’s accounting policies that would materially
change the manner of calculating the pricing hereunder. To the extent that any
of the terms of this Section 4.1 conflict with the terms of the MTV
Lease Agreement, the MTV Lease Agreement shall control, including the section entitled
Limitation of Tenants Claims.

 

4.2                                 Manufacturing
Services Location. Unless otherwise agreed to by the Joint Venture Company,
all Manufacturing Services by Micron under this Agreement shall be performed at
the Site specified in Schedule 2.1.

 

4.3                                 Service
Providers. Micron shall staff the Site with the quantity of service
providers reasonably necessary for Micron to provide the level of Manufacturing
Services agreed to in Section 2.2, above. Micron shall provide
services providers with substantially the same level of qualification and
skills as Micron requires for personnel performing such services for its
wholly-owned facilities. Micron shall provide substantially the same training
for such service providers as Micron requires for personnel performing such
services at its wholly-owned facilities. The Prices for the service providers
are included in the pricing set forth on Schedule 6.5.

 

4.4                                 Materials.
Micron shall procure on behalf of the Joint Venture Company the materials
required for performance of the Manufacturing Services. To the extent that the
Joint Venture Company desires to provide certain materials, the Parties shall
work together in good faith on the timing and manner for providing such
materials so that it can be accommodated within Micron’s business and
manufacturing systems. Micron shall manage the use of materials as necessary to
provide the Manufacturing Services. All such materials acquired by Micron are
included in the pricing set forth on Schedule 6.5.

 

4.5                                 Title
and Risk of Loss or Damage to Materials and Micron Equipment.

 

(a)                                        Materials.
Except as provided in Section 12.5, title to all materials procured
by Micron for provision of the Manufacturing Services under this Agreement
shall [***]. Micron shall bear the risk of loss or damage with respect to all
materials thereto until transfer of title to [***] as set forth above.

 

(b)                                       Micron
Equipment. Title to all Micron Equipment shall [***] at all times. [***]
shall bear the risk of loss or damage with respect thereto, except to the
extent that such loss or damage is caused by [***] or items provided by or
through [***] as specified in ARTICLE 3, unless at the direction or
specification of [***] or due to the negligence of [***] or as otherwise agreed
by the Parties.

 

ARTICLE 5

 

PLANNING MEETINGS AND FORECASTS; 

 

PERFORMANCE REVIEWS AND REPORTS

 

5.1                                 Planning
and Forecasting

 

(a)                                  Starting
upon the Effective Date and continuing on a Fiscal Quarter basis pursuant to a schedule agreed
by the Parties, the Joint Venture Company will provide Micron a demand forecast
setting forth the Joint Venture Company’s Probed Wafer demand. The forecast
shall project Probed Wafer demand for the next [***] ([***]) Fiscal Quarters by
design id, technology node and probe level (“Demand
Forecast”).

 

4

 

(b)                                 In
response to the Demand Forecast, Micron shall furnish the Joint Venture Company
with a Fiscal Quarter written forecast of Manufacturing Services reasonably
necessary to meet the Demand Forecast, on a schedule to be determined by
the Parties. This written response (the “Manufacturing Services
Forecast”), will include:

 

[***].

 

(c)                                  Based
on the Demand Forecast and the Manufacturing Services Forecast, the Joint
Venture Company will prepare a [***] ([***]) Fiscal Quarter proposed loading
plan (“Proposed Loading Plan”), which will be
subject to review by the Manufacturing Committee. The Joint Venture Company shall
provide Micron with the Proposed Loading Plan at least [***] ([***]) Business
Days prior to submission to the Manufacturing Committee.

 

(d)                                 The
Joint Venture Company will submit the Proposed Loading Plan and other requested
information to the Manufacturing Committee for endorsement. Once endorsed by
the Manufacturing Committee, the Proposed Loading Plan shall become part of
the Manufacturing Plan. Micron shall use the Manufacturing Plan as the basis
for determining the final quantity of Manufacturing Services that Micron will
provide to the Joint Venture Company pursuant to Section 2.2 above.

 

5.2                                 Performance
Review and Monthly Report on Performance. Micron shall meet with the Joint
Venture Company on a quarterly basis to review Micron’s performance of
Manufacturing Services and to determine whether such services are resulting in
the production of Probed Wafers that meet or exceed the desired Performance
Criteria. Micron shall provide to the Joint Venture Company, on a monthly basis
as agreed by the Parties, a written report that:

 

(a)                                  Describes
[***];

 

(b)                                 Describes
[***];

 

(c)                                  Describes
[***];

 

(d)                                 Identifies
[***];

 

(e)                                  Describes
[***]; and

 

(f)                                    Identifies
[***].

 

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

 

ARTICLE 6

ORDER PLACEMENT, PRICING AND INVOICING

 

6.1                                 Placement of
Purchase Orders. Prior to the commencement of every Fiscal Quarter or
another time period agreed by the Parties, the Joint Venture Company shall
place a non-cancelable blanket purchase order in writing (via e-mail or
facsimile transmission) for Manufacturing Services to be supplied by Micron in
the following Fiscal Quarter as agreed in the Manufacturing Services Forecast
and Manufacturing Plan (each such order, a “Purchase Order”).
The Joint Venture Company may issue change orders to such Purchase Orders
to reflect approved changes in the Manufacturing Plan, provided that such
changes can be reasonably accommodated within Micron’s performance of the
Manufacturing Services without disrupting the on-going services in a manner to
negatively impact the previously placed Purchase Orders. The Joint Venture
Company may also request Manufacturing Services relating to special
engineering or hot lots in accordance with Section II of Schedule 6.5.
The terms and conditions of this Agreement supersede the terms and conditions
contained in either Party’s sales or purchase documentation provided in
connection herewith unless expressly agreed otherwise in a writing signed  by each Party.

 

5

 

6.2                                 Shortfall. Micron
shall immediately notify the Joint Venture Company in writing of any inability
to meet a Purchase Order commitment for Manufacturing Services to be provided
to the Joint Venture Company and which may result in shortfall in
achieving the quantity of Probed Wafers set forth in the approved Manufacturing
Plan.

 

6.3                                 Acceptance of
Purchase Order. Each Purchase Order that corresponds to the Manufacturing
Plan in the manner contemplated by Section 6.1 and, and is
otherwise free of errors, shall be deemed accepted by Micron upon receipt and
shall be binding on the Parties, to the extent not inconsistent with the
Manufacturing Plan.

 

6.4                                 Content of Purchase
Orders. Each Purchase Order shall specify the following information:

 

(a)                                  Purchase Order
number;

 

(b)                                 Quantity of wafer
starts by part number, design id, technology node and probe level;

 

(c)                                  Place of delivery of
Probe Wafer output produced in the course of the Manufacturing Services; and

 

(d)                                 Other terms (if any).

 

6.5                                 Pricing and
Invoicing. Micron shall invoice the Joint Venture Company on a monthly
basis for the Manufacturing Services provided hereunder in accordance with the
pricing provided in Schedule 6.5. All amounts owed under this
Agreement are stated, calculated and shall be paid in United States Dollars. Except
as otherwise specified in this Agreement, the Joint Venture Company shall pay
Micron for the amounts due, owing, and duly invoiced under this Agreement
within [***] ([***]) days following delivery of an invoice therefore to such
place as Micron may reasonably direct therein.

 

6.6                                 Taxes.

 

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

 

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

 

6

 

6.7                                 Payment to Vendors.
Micron shall be responsible for and shall hold the Joint Venture Company
harmless for any and all payments to Micron’s contractors or vendors utilized
in the performance of Manufacturing Services under this Agreement.

 

6.8                                 Shipment. Micron,
in order to ensure timely and complete shipment of Probed Wafers to the Joint
Venture Company, shall arrange for shipping to the Joint Venture Company’s
customer or assembly services provider. To the extent that the shipping
charges, insurance, taxes, customs charges and any fees and duties in
connection with such shipment are not charged to directly to a Joint Venture
Company account, Micron shall pay such costs and invoice to the Joint Venture
Company in under the appropriate services agreement between the Parties. Micron
shall mark all shipping containers with necessary lifting, handling, and
shipping information, Purchase Order number, date of shipment, and the names of
the Joint Venture Company and applicable customer, is any. If no instructions
are given, Micron shall select the most cost effective carrier, given the time
constraints known to Micron. At the Joint Venture Company’s request, Micron
will provide drop-shipment of Probed Wafers to the Joint Venture Company’s
customers or as otherwise directed by the Joint Venture Company.

 

6.9                                 Packaging. All
shipment packaging of the Probed Wafers produced in the course of the
Manufacturing Services hereunder shall be in conformance with: (i) the
Specifications; (ii) the Joint Venture Company’s reasonable instructions; (iii) general
industry standards to ensure resistance to damage that may occur during
transportation. Marking on the packages shall be made by Micron in accordance
with the Joint Venture Company’s instructions.

 

6.10                           Customs Clearance. Upon
the Joint Venture Company’s request, Micron will promptly provide the Joint
Venture Company with a statement of origin for all Probed Wafers produced in
the course of the Manufacturing Services hereunder and with applicable customs
documentation for Probed Wafers wholly or partially manufactured outside of the
country of import.

 

ARTICLE 7

 

PROVISION OF MANUFACTURING SERVICES; 

SECONDARY SILICON

 

7.1                                 Performance
Criteria. Micron will work with the Joint Venture Company in good faith to
improve manufacturing Performance Criteria and to minimize Price.

 

7.2                                 Secondary
Silicon. Any Secondary Silicon segregated as a result of the Manufacturing
Services shall be provided by Micron to the Joint Venture Company, which shall
provide the Secondary Silicon to its customers in accordance with the Sharing
Interests at the time. ALL SECONDARY SILICON PROVIDED HEREUNDER IS PROVIDED “AS IS,”
“WHERE IS” WITH ALL FAULTS AND DEFECTS BASIS WITHOUT WARRANTY OF ANY KIND.

 

ARTICLE 8

 

VISITATIONS AND AUDITS 

 

8.1                                 Visits. Micron
will support the Joint Venture Company’s and 
its customers’ reasonable requests for visits to the facility where
Micron performs the Manufacturing Services hereunder for the purpose of
reviewing Micron’s performance of the Manufacturing Services, including
requests for further information and assistance in troubleshooting performance
issues. Such requests shall be reasonably granted by Micron so long as such
visits and meetings do not unduly interfere with Micron’s performance of the
Manufacturing Services and other operations.

 

8.2                                 Performance Audit.
The Joint Venture Company’s  and its
customers’ representatives upon reasonable advance notice,  shall have the right to observe Micron’s
performance of Manufacturing Services at the Site during normal working hours
as agreed by the Parties for the purposes of monitoring and auditing Micron’s
performance of the Manufacturing Services and compliance with any requirements 

 

7

 

set forth in this Agreement. Upon
completion of the audit, Micron and the Joint Venture Company shall work in
good faith to agree to an audit closure plan, which will be documented in the
audit report issued by the Joint Venture Company. The Joint Venture Company may provide
such audit report to its customers, subject to any confidentiality
requirements.

 

8.3                                 Financial Audit.
The Joint Venture Company reserves the right to have Micron’s books and records
related to the pricing of Probed Wafers hereunder inspected and audited not
more than [***] during any Fiscal Year to ensure compliance with Schedules 6.5
of this Agreement in regards to Pricing of Manufacturing Services. Such audit
will be performed by an independent third party auditor acceptable to both
Parties at the Joint Venture Company’s expense. The Joint Venture Company shall
provide [***] ([***]) days advance written notice to Micron of its desire to
initiate an audit and the audit shall be scheduled so that it does not
adversely impact or interrupt Micron’s business operations. If the audit
reveals any material discrepancies, Micron or the Joint Venture Company shall
reimburse the other, as applicable, for any material discrepancies within [***]
([***]) days after completion of the audit. The results of such audit shall be
kept confidential by the auditor and only the discrepancies shall be reported
to the Parties and the Joint Venture Company’s customers, and be limited to
discrepancies identified by the audit. Notwithstanding the foregoing, any
auditor reports shall not disclose any Micron pricing or terms of purchase for
any purchases of materials or equipment hereunder to the Joint Venture Company’s
customers other than Micron, absent written agreement from the customers’
respective legal counsel. If any audit reveals a material discrepancy, the
Joint Venture Company may increase the frequency of such audits to
quarterly for the subsequent [***] ([***]) month period.

 

8.4                                 Subcontractor;
Vendor Visits. Upon the Joint Venture Company’s reasonable written request,
Micron shall take reasonable commercial efforts to request that its
subcontractors or vendors, if any, utilized in the performance of the
Manufacturing Services hereunder allow a Joint Venture Company or customer
representative to visit the vendor or subcontractors’ site.

 

ARTICLE 9

 

WARRANTY; DISCLAIMER; LIMIT OF LIABILITY

 

9.1                                 Manufacturing
Services Warranty. Micron warrants that it will perform the
Manufacturing Services in a competent and workmanlike manner, and in no case
with less than reasonable care and that Probed Wafers will be processed in
accordance with the Process Specification (the “Standard of
Care”). For the avoidance of doubt, Micron makes no representation
or warranty that Manufacturing Services provided hereunder shall result in (i) Probed
Wafers that meet a stated performance level or quality under the Product
Specification or any applicable Performance Criteria, or (ii) that the
level of Manufacturing Services supplied by Micron will result in the number of
Probed Wafers stated in the Manufacturing Plan.

 

9.2                                 Warranty
Claims. Within a period of time, [***] for the NAND Flash Memory Product
produced from the Probed Wafers at issue produced as a result of the
Manufacturing Services performed hereunder [***] of such Probed Wafers at issue
to the Joint Venture Company (“Warranty Notice Period”),
the Joint Venture Company shall notify Micron if it believes that any
Manufacturing Services were not performed with respect to the Probed Wafers at
issue in accordance with the warranties in Section 9.1. The Joint
Venture Company shall return such Probed Wafers to Micron as directed by Micron.
If a Probed Wafer is determined not to be in compliance with such warranty,
then the Joint Venture Company shall be entitled to reject such Probed Wafer
and to the extent commercially reasonable and practicable, cause Micron to re-work
at Micron’s expense or, at the Joint Venture Company’s option, if the rework is
not financially attractive to the Joint Venture Company or Micron or is not
possible, receive a refund of any monies paid to Micron in respect of such
rejected Probed Wafer, [***]. THE FOREGOING REMEDY IS [***].

 

9.3                                 Inspections. The
Joint Venture Company may, upon reasonable advance written notice, request
samples of WIP upon which Micron is performing Manufacturing Services for
purposes of 

 

8

 

determining whether the Manufacturing Services meet or exceed the
Performance Criteria and are performed in accordance with Process
Specification, provided that the provision of such samples shall not materially
impact Micron’s performance of the Manufacturing Services or its ability to
meet delivery requirements under any accepted Purchase Order. Any samples
provided hereunder shall be: (i) limited in quantity to the amount
reasonably necessary for the purposes hereunder and (ii) included in the
pricing. Micron shall provide reasonable assistance for the safety and
convenience of the Joint Venture Company in obtaining the samples in such
manner as shall not unreasonably hinder or delay Micron’s performance.

 

9.4                                       Hazardous
Materials.

 

(a)                                  If
the Manufacturing Services performed hereunder include Hazardous Materials as
determined in accordance with applicable law, Micron represents and warrants
that Micron and Micron’s employees, agents, and subcontractors, if any,
performing Manufacturing Services involving such materials shall be trained in
accordance with applicable law regarding the nature of and hazards associated
with the handling, transportation, and use of such Hazardous Materials, as
applicable to Micron.

 

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

 

9.5                                 Disclaimer.
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS SECTION 9, MICRON HEREBY
EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY,
SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, NON-INFRINGEMENT OR
OTHERWISE, WITH RESPECT TO THE MANUFACTURING SERVICES, PROBED WAFERS, SECONDARY
SILICON OTHER SERVICES OR MATERIALS PROVIDED UNDER THIS AGREEMENT OR USED IN
THE PROVISION OF THE SERVICES OR ANY PORTION OF ANY OF THE FOREGOING. UNLESS
OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, ALL MANUFACTURING SERVICES,
PROBED WAFERS, SECONDARY SILICON OR OTHER SERVICES OR MATERIALS PROVIDED UNDER
THIS AGREEMENT OR USED IN THE PROVISION OF THE MANUFACTURING SERVICES OR ANY
PORTION OF ANY OF THE FOREGOING, ARE SO PROVIDED OR USED ON AN “AS IS,” “WHERE
IS” WITH ALL FAULTS AND DEFECTS BASIS WITHOUT WARRANTY OF ANY KIND. THE
WARRANTIES HEREIN WILL NOT APPLY TO: (i) ANY WARRANTY CLAIM OR ISSUE, OR
DEFECT ARISING FROM OR CAUSED BY TECHNICAL MATERIALS PROVIDED OR SPECIFIED BY,
THROUGH OR ON BEHALF OF THE JOINT VENTURE COMPANY OR ANY COMMITTEE OF THE JOINT
VENTURE COMPANY OR ANY COMMITTEE OF THE MEMBERS, [***]; OR (ii) ANY OF THE
PROBED WAFERS, SECONDARY SILICON OR RESULTING NAND FLASH MEMORY PRODUCTS THAT
HAVE BEEN REPAIRED OR ALTERED, EXCEPT AS AUTHORIZED BY MICRON, OR WHICH HAVE
BEEN SUBJECTED TO MISUSE, NEGLIGENCE, ACCIDENT, OR ABUSE.

 

ARTICLE 10

 

CONFIDENTIALITY; OWNERSHIP

 

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

 

9

 

10.2                           Intellectual
Property Ownership. Ownership of any intellectual property developed by the
Joint Venture Company will be governed by either the Technology License
Agreement or Product Designs Development Agreement, as the case may be.

 

ARTICLE 11

 

INDEMNIFICATION

 

11.1                           Mutual General Indemnity.
Subject to ARTICLE 12, each Party (“Indemnifying
Party”) shall indemnify, defend and hold harmless the other Party (“Indemnified Party”) from and against any and all Indemnified
Losses based on or attributable to any Third Party Claim or threatened Third
Party Claim arising under this Agreement and as a result of the Indemnifying
Party’s negligence, gross negligence or willful misconduct of the Indemnifying
Party or any of its respective officers, directors, employees, agents or
subcontractors. Notwithstanding the foregoing, this Section 11.1
shall not apply to any claims or losses based on or attributable to
intellectual property infringement.

 

11.2                           Indemnification
Procedures.

 

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

 

(b)                                 Equitable
Remedies. In the case of any Third Party Claim where the Indemnifying Party
reasonably believes that it would be appropriate to settle such Third Party
Claim 

 

10

 

using equitable remedies (i.e., remedies involving the future activity
and conduct of the Joint Venture Company), the Indemnifying Party and the
Indemnified Party shall work together in good faith to agree to a settlement;
provided, however, that no Party shall be under any obligation to agree to any
such settlement.

 

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

 

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

 

ARTICLE 12

 

LIMITATION OF LIABILITY

 

12.1                           Damages
Limitation. SUBJECT TO SECTION 12.4, IN NO EVENT SHALL EITHER
PARTY BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL
OR OTHER INDIRECT DAMAGES OR ANY PUNITIVE OR EXEMPLARY DAMAGES ARISING OUT OF
OR IN CONNECTION WITH THIS AGREEMENT, WHETHER SUCH DAMAGES ARE BASED ON BREACH
OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHER THEORY OF LIABILITY, AND EVEN
IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

12.2                           THE
PARTIES AGREE THAT TO THE EXTENT A CLAIM ARISES UNDER THIS AGREEMENT, THE CLAIM
SHALL BE BROUGHT UNDER THIS AGREEMENT; PROVIDED, HOWEVER, ANY DIRECT
DAMAGES GIVING RISE TO SUCH CLAIM AGREEMENT ACTUALLY INCURRED BY THE JOINT
VENTURE COMPANY SHALL BE COUNTED TOWARD 

 

11

 

THE AGGREGATE DAMAGE REFERRED TO IN SECTION 13.1(A)(A) OF THE
LLC OPERATING AGREEMENT.

 

12.3                           Damages
Cap. SUBJECT TO SECTION 12.4, IF EITHER PARTY SHALL BE LIABLE
TO THE OTHER PARTY FOR ANY MATTER ARISING FROM THIS AGREEMENT, WHETHER BASED
UPON AN ACTION OR CLAIM IN CONTRACT, WARRANTY, EQUITY, NEGLIGENCE, INTENDED
CONDUCT OR OTHERWISE (INCLUDING ANY ACTION OR CLAIM ARISING FROM AN ACT OR
OMISSION, NEGLIGENT OR OTHERWISE, OF THE LIABLE PARTY), THE AMOUNT OF DAMAGES
RECOVERABLE AGAINST THE LIABLE PARTY WITH RESPECT TO ANY BREACH, PERFORMANCE,
NONPERFORMANCE, ACT OR OMISSION HEREUNDER WILL NOT EXCEED AN AMOUNT [***].

 

12.4                           Exclusions
and Mitigation. Sections 12.1 and 12.3 will not apply to
either Party’s breach of ARTICLE 10 or any claim that should be
brought under the [***]. Section 12.3 will not apply to the Joint
Venture Company’s payment obligations for Manufacturing Service hereunder. Each
Party shall have a duty to use commercially reasonable efforts to mitigate
damages for which the other Party is responsible.

 

12.5                           Losses. Except as
provided under Section 11.1, the Joint Venture Company and Micron
each shall be responsible for Losses to their respective tangible personal or
real property (whether owned or leased), and each Party agrees to look only to
their own insurance arrangements with respect to such damages. The Joint
Venture Company and Micron waive all rights to recover against each other,
including each Party’s insurers’ subrogation rights, if any, for any loss or
damage to their respective tangible personal property or real property (whether
owned or leased) from any cause covered by insurance maintained by each of
them, including their respective deductibles or self-insured retentions. In the event of
a loss hereunder involving a property, transit or crime event or occurrence
that: (i) is insured under Micron’s insurance policies; (ii) a single
insurance deductible applies; and (iii) the loss event or occurrence
affects the insured ownership or insured legal interests of both Parties, then
the Parties shall share the cost of the deductible in proportion to each Party’s
insured ownership or legal interests in relative proportion to the total
insured ownership or legal interests of the Parties.

 

ARTICLE 13

 

TERM AND TERMINATION; REMEDIES

 

13.1                           Term. The term of this Agreement
commences on the Effective Date and continues in effect until the earlier of: (i) a
period of ten (10) years from the Effective Date; (ii) the Liquidation Date (as defined the LLC
Operating Agreement); (iii) termination by mutual agreement of the
Parties; (iv)  the date provided pursuant to Section 13.2;  (v) the date of the Micron Minority
Closing [i.e., 10% buy-out] as defined in Section 12.5(C)(1) of the
LLC Operating Agreement, provided Micron exercises its option thereunder; (vi) sixty
(60) days from the Micron Minority Closing provided Micron does not elect to
purchase the [***] or all of the equity interest in any Facilities Company that
[***] pursuant to Section 12.5(C)(1) of the LLC Operating Agreement
or (vii) the closing of the purchase of all, but not less than all, of the
[***] or all of the equity interest in any Facilities Company that [***] as
defined in the LLC Operating Agreement pursuant to the Micron [***] Purchase
Option set forth in Section 13.5 of the LLC Operating Agreement
(such period of time, the “Term”).

 

13.2                           Termination
for Cause. Micron may terminate this Agreement for cause if the Joint
Venture Company fails to make a payment which is due and payable under the
terms of this Agreement and the Joint Venture Company fails to cure the same
within one hundred eighty (180) days after receipt of written notice from the
Micron, unless such failure to pay was in response to Micron’s material breach.
The Joint Venture Company may terminate this Agreement for cause as agreed
in Section 13.4(c).

 

12

 

13.3                           Survival. Termination of this Agreement shall not affect any of the Parties’
respective rights accrued or obligations owed before termination including any
rights or obligations of the Parties in respect of any accepted Purchase Orders
existing at the time of termination. In addition, the following shall survive
termination of this Agreement for any reason: 
Sections 2.7, 3.3, 4.5, 6.7 and 13.3 and ARTICLE 1, 9,
10, 12 and 14.

 

13.4                           Failure
to Adequately Perform Services. If Micron fails to adequately perform the
Manufacturing Services, using as the Standard of Care, as set forth in Section 9.1,
a triggering event shall occur (“Trigger Event”).
The Parties acknowledge that Micron’s performance of the Manufacturing Services
may require certain inputs from the Joint Venture Company, including but
not limited to the timely: (1) [***]; (2) [***]; and (3) [***]
(collectively “Provided Inputs”). A Trigger Event
shall not be deemed to have occurred hereunder to the extent that such failure
was directly caused by a Provided Input. If a Trigger Event occurs, the Parties
shall implement the following actions:

 

(a)                                  If
a Triggering Event [***] Micron shall work with the Joint Venture Company on a
corrective action plan to remedy deficient performance and [***];

 

(b)                                 If
a Triggering Event [***], then the Joint Venture Company [***] Micron in
correcting the deficient performance;

 

(c)                                  If
a Triggering Event [***] then the Joint Venture Company [***].

 

ARTICLE 14

 

MISCELLANEOUS

 

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

 

14.2                           Specific
Performance. The Parties agree that irreparable damage will result if
Micron ceases to perform or unreasonably delays in providing Manufacturing
Services during the Term in breach of its obligations hereunder, and the
Parties agree that any damages available at law for such a breach of this
Agreement would not be an adequate remedy. Therefore, Micron’s obligation to
continue performing the Manufacturing Services hereunder shall be enforceable
in a court of equity, or other tribunal with jurisdiction, by a decree of
specific performance, and appropriate preliminary or permanent injunctive
relief may be applied for and granted in connection therewith. Such remedy
shall be cumulative and not exclusive and shall be in addition to any other
remedies that a Party may have under this Agreement.

 

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

 

13

 

14.4                           Compliance with Laws and Regulations. Each of the Parties shall comply with, and
shall use reasonable efforts to require that its respective subcontractors
comply with, Applicable Laws relating to the Manufacturing Services.

 

14.5                           On-Site
Visitations. Each Party and its employees, contractors or other representatives shall
observe and be subject to all safety, security and other policies and
regulations regarding visitors and contractors while on site at a facility of
the other Party or its Affiliate. A Party’s employees, contractors or other
representatives who access any facility of the other Party or its Affiliate
shall not interfere with, and except as otherwise agreed by the Parties, shall
not participate in,  the business or
operations of the facility accessed.

 

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

 

In the case of IM Flash Technologies, LLC:

 

IM Flash Technologies, LLC.

1550 East 3400 North

Lehi, Utah 
84043

Attention:  David A. Baglee;
Rodney Morgan

Facsimile Number:  (801) 767-5370

 

With a mandatory copy to:

 

Intel Corporation

2200 Mission College Blvd.

Mail-Stop SC4-203

Santa Clara, California 95054

Attention:  General Counsel

Facsimile Number:  (408) 653-8050

 

In the case of Micron:

 

Micron Technology, Inc.

8000 S. Federal Way

Boise, Idaho  83707-0006

Attention:  General Counsel

Facsimile Number:  (208)
368-4540.

 

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

 

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

 

14.8                           Severability.
Should any provision of this Agreement be deemed in contradiction with the laws
of any jurisdiction in which it is to be performed or unenforceable for any
reason, such provision shall be deemed null and void, but this Agreement shall
remain in full force in all other respects. Should any provision of this Agreement
be or become ineffective because of changes in Applicable Laws or 

 

14

 

interpretations thereof, or should this
Agreement fail to include a provision that is required as a matter of law, the
validity of the other provisions of this Agreement shall not be affected
thereby. If such circumstances arise, the Parties hereto shall negotiate in
good faith appropriate modifications to this Agreement to reflect those changes
that are required by Applicable Law.

 

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

 

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

 

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

 

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

 

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

 

14.14                     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.

 

14.15                     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.

 

Signature page follows

 

15

 

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

 

 

	
  MICRON TECHNOLOGY, INC.

  	
  IM FLASH TECHNOLOGIES, LLC

  
	
   

  	
   

  
	
  By:

  	
  /s/ STEVEN R. APPLETON

  	
   

  	
  By:

  	
  /s/ DAVID A. BAGLEE

  	
   

  
	
  Name:  Steven R. Appleton

  	
  Name:  David A. Baglee

  
	
  Title:  Chief Executive Officer and President

  	
  Title:  Authorized Officer

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ RODNEY MORGAN

  	
   

  
	
   

  	
  Name:  Rodney Morgan

  
	
   

  	
  Title:  Authorized Officer

  
							

 

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

 

16

 

EXHIBIT A

COMMON DEFINITIONS 

 

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

 

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

 

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

 

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

 

“Business Continuity Plan” means a plan to
recover the production process in the event of a natural disaster or any other
event that disrupts the production process.

 

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

 

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

 

“Confidential Information” shall have the
meaning set forth in Section 10.1 hereof.

 

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

 

“Demand Forecast” shall have the meaning set
forth in Section 5.1(a).

 

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

 

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

 

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

 

“Fiscal Year” means the fiscal year of Micron
for financial accounting purposes

 

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

 

“Force Majeure Event” shall have the meaning
set forth in Section 14.1, hereof.

 

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

 

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

 

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

 

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

 

17

 

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

 

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

 

“Intel” means Intel Corporation, a Delaware
corporation.

 

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

 

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

 

“Joint Venture Company”
means IM Flash Technologies, LLC, a Delaware limited liability company that is
the subject of the Joint Venture Documents.

 

“Joint Venture Documents”
shall have the meaning set forth in that certain Master Agreement by and
between Intel and Micron.

 

“Joint Venture Equipment” shall have the
meaning set forth in Section 3.1 hereof.

 

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

 

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

 

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

 

“Manufacturing Committee” shall have the
meaning set forth in Section 8.6 of the LLC Operating Agreement.

 

“Manufacturing Plan” shall have the meaning
set forth in Section 11.6.A.1 of the LLC Operating Agreement.

 

“Manufacturing Services” shall have the
meaning set forth on Schedule 2.1 hereof.

 

“Manufacturing Services Forecast” shall have
the meaning set forth in Section 5.1(b) hereof.

 

“Master Agreement” shall mean that certain
Master Agreement by and between Intel and Micron dated November 18, 2005.

 

“Members” means Micron and Intel.

 

“Micron” means Micron Technology, Inc.,
a Delaware corporation.

 

“Micron Equipment” shall have the meaning set
forth in Section 4.1 hereof.

 

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

 

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

 

“MTV Lease Agreement” shall mean that certain
MTV Lease Agreement by and between Intel and Micron.

 

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

 

18

 

directly accessible, and the drain of the
uppermost bit of such string is coupled to the bitline of the memory array.

 

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

 

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

 

“Performance Criteria” means [***].

 

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

 

“Price” and “Pricing” shall
have the meaning set forth in Schedule 6.5.

 

“Prime Wafer(s)” means raw silicon wafers.

 

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

 

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

 

“Process Specification” shall mean those
specifications or documents used to describe, characterize, and define the
process by which Prime Wafers become Probed Wafers.

 

“Product Designs Development Agreement”
means that Product Designs Development Agreement by and between Intel and Micron
dated as of the Effective Date.

 

“Product Specifications” shall mean those
specifications used to describe, characterize, and define the quality and
performance of NAND Flash Memory Product, including any interim performance
requirements at Probe Testing or back-end testing.

 

“Proposed Loading Plan” shall have the meaning
set forth in Section 5.1(c) hereof.

 

“Provided Inputs” shall have the meaning set
forth in Section 13.4 hereof.

 

“Purchase Order” shall have the meaning set
forth in Section 6.1 hereof.

 

“Quality and Reliability” means Product
quality and reliability standards as set forth in the Product Specification.

 

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

 

“Receiving Party” shall have the meaning set
forth in Section 10.1 hereof.

 

“Recoverable Taxes” shall have the meaning set
forth in Section 6.6, hereof.

 

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

 

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

 

“Site(s)” shall mean the facilities described
on Schedule 2.1 hereof.

 

19

 

“Standard of Care” shall
have the meaning set forth in Section 9.1 hereof.

 

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

 

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

 

“Term” shall have the meaning set forth in Section 13.1
hereof.

 

“Trigger Event” shall have the meaning set
forth in Section 13.4 hereof.

 

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

 

“Wafer Map” shall mean a map in electronic form or
other form as mutually agreed of a Probed Wafers processed by Micron
pursuant to this Agreement, such map depicting the location of each die on the
wafer and whether it constitutes a Product, Secondary Silicon or a Reject.

 

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

 

“Warranty Notice Period” shall have the
meaning set forth in Section 9.2 hereof.

 

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

 

“WIP” shall mean work in process of a Prime
Wafer after Wafer Start towards but before becoming a NAND Flash Memory Wafer.

 

20

 

	
  SCHEDULES

  
	
   

  
	
  Schedule 2.1

  	
   

  	
  Manufacturing
  Services

  
	
  Schedule 6.5

  	
   

  	
  Pricing

  

 

21

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