Boise Supply Agreement

Exhibit 10.158

 

[***] DENOTES CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITHTHE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIALTREATMENT.


INTEL/MICRONCONFIDENTIAL

 

BOISE SUPPLY AGREEMENT

 

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

 

RECITALS

 

A.                                   TheJoint Venture Company is engaged in the manufacture, assembly and test of NANDFlash Memory Products (as defined hereinafter) and desires additional capacityof NAND Flash Probed Wafers;

 

B.                                     Micronpossesses the ability to manufacture Probed Wafers for NAND Flash MemoryProducts; and

 

C.                                     Microndesires to provide and the Joint Venture Company desires Micron to supplyProbed Wafers to the Joint Venture Company upon the terms and subject to theconditions set forth in this Agreement (each, a “Party”and collectively, the “Parties”).

 

AGREEMENT

 

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

 

ARTICLE 1
DEFINITIONS; CERTAIN INTERPRETIVE MATTERS

 

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

 

1.2                                 CertainInterpretive Matters.

 

(a)                                  Unlessthe 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 Scheduleswill apply only to the corresponding Section or subsection of thisAgreement, (3) each accounting term not otherwise defined in thisAgreement has the meaning commonly applied to it in accordance with GAAP, (4) wordsin 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 meanreferences to this Agreement as a whole and not to any individual Section orportion hereof. All references to $ or dollar amounts will be to lawfulcurrency of the United States of America. All references to “day” or “days”will mean calendar days and all references to “quarter(ly)”, “month(ly)”or “year(ly)” will mean Fiscal Quarter, Fiscal Month or Fiscal Year,respectively, unless specifically identified otherwise.

 



 

(b)                                 Noprovision of this Agreement will be interpreted in favor of, or against, any ofthe Parties by reason of the extent to which any such Party or its counselparticipated in the drafting thereof or by reason of the extent to which anysuch provision is inconsistent with any prior draft of this Agreement or suchprovision.

 

ARTICLE 2
MICRON’S SUPPLY OBLIGATIONS

 

2.1                                 Micron’sSupply Obligations.

 

(a)                                  General.Micron will manufacture, sell and deliver to the Joint Venture Company ProbedWafers in accordance with the Specifications, Performance Criteria and theManufacturing Plan as provided in the terms and conditions contained herein.

 

(b)                                 MicronManufacturing Location. Unless otherwise agreed to by the Parties, allmanufacture of Probed Wafers by Micron under this Agreement shall be performedat Micron’s NAND product line in Boise, Idaho (“NAND ProductLine”).

 

2.2                                 Specifications.The Joint Venture Company shall provide the Specifications for the ProbedWafers supplied hereunder.

 

2.3                                 PerformanceCriteria. The Joint Venture Company and Micron shall develop mutuallyagreed Performance Criteria to evaluate Micron’s performance hereunder. Theinitial Performance Criteria are set forth on Schedule 2.3 and theParties shall further define such Performance Criteria within sixty (60) daysof the Effective Date.

 

2.4                                 Micron’sManufacturing Process and Control. The Joint Venture Company and Micronwill review Micron’s control and process mechanisms, including but not limitedto such mechanisms that are designed to be utilized in meeting or exceeding allparameters of the Specification and the Performance Criteria with respect tothe supply of Probed Wafers hereunder for the Joint Venture Company. TheParties agree to work together in good faith to define mutually agreeablecontrol and process mechanisms relating to the following areas: [***].

 

2.5                                 [***].In addition to the quarterly review and monthly report requirements set forthin ARTICLES 3 and 5, Micron will promptly notify the Joint VentureCompany of all [***].

 

2.6                                 Equipment.Micron shall utilize certain existing equipment to provide the manufacturingcapacity to support the initial Manufacturing Plan as defined in the LLCOperating Agreement. Micron will procure additional manufacturing equipment asspecified in Schedule 2.6 (“Additional Equipment”), which isrequired to meet the Manufacturing Plan hereunder.

 

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2.7                                 Maskworks.Masks required to manufacture the Probed Wafers will either be provided by theJoint Venture Company or purchased by Micron hereunder. Such masks will only beused to produce Probed Wafers for the Joint Venture Company. If the JointVenture Company does not provide the masks required hereunder, then the JointVenture Company shall provide to Micron in a timely manner all of theinformation, in the form typically required, for Micron to purchase therequired masks. Masks will be repaired and replaced solely at mask operationswhich have been approved by the Joint Venture Company, which approval shall notbe unreasonably withheld. While Micron will have possession of masks hereunder,the Joint Venture Company or one of its Members will retain title to such masksand of any underlying copyrights, maskworks, or other intellectual property.

 

2.8                                 Materials.Unless otherwise provided by the Joint Venture Company, Micron shall beresponsible for providing all materials required for the manufacture and supplythe Probed Wafers hereunder. All such materials procured by Micron shall beincluded in the pricing set forth on Schedule 4.6. Micron shallendeavor to manage the entire supply chain hereunder, including equipment,materials, systems, and subcontractors, if any, to create efficiency andmaximize the Performance Criteria. To the extent that the Joint Venture Companydesires to provide certain materials hereunder, the Parties shall work togetherin good faith on the timing and manner of providing such materials so as it canbe accommodated within Micron’s business and manufacturing systems.

 

2.9                                 Traceabilityand Data Retention. Micron and the Joint Venture Company shall reviewMicron’s traceability systems in regards to manufacturing processinginformation [***]. The Parties shall agree upon the data to be traced throughsuch system and which data shall be available with real-time access orotherwise. Micron agrees to maintain such data for a minimum of [***]  from the date of manufacture of the ProbedWafer lot. [***] to the same extent that such access is available to Micron,subject to system limitations related to the exclusion of non-NAND data. TheJoint Venture Company may provide its customers with such data, subject toany confidentiality requirements.

 

2.10                           BusinessContinuity Plan. Micron and the Joint Venture Company will review Micron’sBusiness Continuity Plan as it relates to Micron’s supply of Probed Wafershereunder. If the Joint Venture Company requests any changes or additions toMicron’s existing Business Continuity Plan, the Parties shall work together ingood faith to resolve any such requests. The Joint Venture Company may provideMicron’s Business Continuity Plan to its customers, subject to anyconfidentiality requirements.

 

2.11                           Compliancewith Customer Requirements. The Joint Venture Company will inform Micronin writing of any auditable supplier requirements for Probed Wafers suppliedhereunder, which are requested by the Joint Venture Company’s customers. Micronand the Joint Venture Company shall work together in good faith to resolve anysuch requests.

 

2.12                           Equivalencyof Operations. Micron will cooperate in good faith with the Joint VentureCompany in connection with any transfer of Semiconductor ManufacturingTechnology by the Joint Venture Company to Micron for Micron’s use inconnection with the production of Probed Wafers as such technology transfers may berequired pursuant to other Joint Venture Documents and, to the extentapplicable hereto, to establishing similar baseline performance for common Productsat facilities operated or subcontracted by the Joint Venture Company. Suchefforts will include the provision of up to date equivalency materials(including correlation wafers), data and information, as applicable.

 

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2.13                           SecondarySilicon. To the extent any Secondary Silicon is produced in the course ofMicron’s supplying the Probed Wafers under this Agreement, it shall be providedby Micron to the Joint Venture Company, which shall provide the SecondarySilicon to the Members in accordance with the Sharing Interests at the time. Micronshall provide forecast and quantity reports on Secondary Silicon to the JointVenture Company, to the extent that such are reasonably available. ALLSECONDARY SILICON PROVIDED HEREUNDER IS PROVIDED “AS IS,” “WHERE IS” WITHALL FAULTS AND DEFECTS BASIS WITHOUT WARRANTY OF ANY KIND.

 

2.14                           Optionto Designate WIP. As soon as practicable following the Joint VentureCompany’s written request, Micron will ensure that WIP in the NAND Line will bedesignated for specified customers from Wafer Start. If the Joint VentureCompany does not elect to have WIP so designated, Micron will designate the WIPfor specified customers after Probe Testing. Custom product, if any, shall bedesignated by Micron for the Joint Venture Company’s specified customers fromWafer Start.

 

ARTICLE 3
PLANNING MEETINGS, FORECASTS AND MANUFACTURING PLAN

 

3.1                                 Planningand Forecasting.

 

(a)                                  Micronshall furnish the Joint Venture Company with a forecast on a Fiscal Quarterbasis, on a schedule agreed by the Parties, which includes the followinginformation, collectively the (“Planning Forecast”):

 

[***].

 

(b)                                 ProposedLoading Plan. Based on the Planning Forecast, the Joint Venture Companyshall develop a [***] Proposed Loading Plan, which will be a proposed loadingplan for Probed Wafers for such period (“Proposed Loading Plan”).The Joint Venture Company shall provide Micron with the Proposed Loading Planat least [***] ([***]) days prior to its review by the Manufacturing Committee.

 

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(c)                                  QuarterlyReview of Manufacturing Plan. The Joint Venture Company will submit theProposed Loading Plan, the Planning Forecast and other requested information tothe Manufacturing Committee for endorsement. Once endorsed by the ManufacturingCommittee, the Proposed Loading Plan shall become the adopted ManufacturingPlan for provision of Probed Wafers hereunder.

 

3.2                                 PerformanceReviews and Reports. Micron and the Joint Venture Company shall meet eachFiscal Quarter to discuss the Performance Criteria and the most recent monthlyreport. Micron shall provide the Joint Venture Company a monthly report, on adate to be agreed by the Parties, which will include the following information:

 

(a)                                  Describes[***];

 

(b)                                 Describes[***];

 

(c)                                  Describes[***]; and

 

(d)                                 Identifies[***].

 

3.3                                 PerformanceReviews. The Parties shall hold monthly meetings on dates agreed by theParties, with the primary purpose of such monthly meetings to be the [***].

 

ARTICLE 4
PURCHASE AND SALE OF PRODUCT

 

4.1                                 ProductQuantity. The intent of the Parties is that the Joint Venture Company shallorder and purchase from Micron [***] of ProbedWafers [***]. [***].

 

4.2                                 Placementof Purchase Orders. Prior to the commencement of every Fiscal Quarter oranother time period agreed by the Parties, the Joint Venture Company shallplace a non-cancelable blanket purchase order in writing (via e-mail orfacsimile transmission) for the Probed Wafers to be supplied by Micron in thefollowing Fiscal Quarter as indicated in the Manufacturing Plan (each suchorder, a “Purchase Order”). The Joint VentureCompany may issue change orders to such Purchase Orders to reflect changesin the Manufacturing Plan, provided that such changes can be reasonablyaccommodated within Micron’s NAND operations, without disrupting the on-goingproduction in a manner that negatively impacts the previously placed PurchaseOrders. The Joint Venture Company and Micron will work to

 

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accommodate any such changes and minimize theimpact upon the Micron’s NAND operations. The Joint Venture Company may alsorequest special engineering or hot lots in accordance with Section II (e) ofSchedule 4.6. In the case of any conflict between the terms andconditions of this Agreement and the terms and conditions of any Purchase Orderor other document issued by the Joint Venture Company or Micron in connectionwith this Agreement or any addition to any terms and condition in thisAgreement in any such documents, the terms and conditions of this Agreementshall control.

 

4.3                                 Shortfall.Micron shall promptly notify the Joint Venture Company in writing of anyinability to meet a Purchase Order commitment to the Joint Venture Company.

 

4.4                                 Acceptanceof Purchase Order. Each Purchase Order that corresponds to theManufacturing Plan in the manner contemplated by Section 4.2 and,and is otherwise free of errors, shall be deemed accepted by Micron uponreceipt and shall be binding on the Parties, to the extent not inconsistentwith the Manufacturing Plan.

 

4.5                                 Contentof Purchase Orders. Each Purchase Order shall specify the followingregarding the Probed Wafers:

 

(a)                                  PurchaseOrder number;

 

(b)                                 Descriptionand part number for each Probed Wafer;

 

(c)                                  Orderedquantity of each different product for the period;

 

(d)                                 ProjectedPrice for period covered by the Purchase Order;

 

(e)                                  Requesteddelivery date;

 

(f)                                    Placeof delivery; and

 

(g)                                 Otherterms (if any).

 

4.6                                 Pricing.Pricing for the Probed Wafers shall be pursuant to Schedule 4.6,attached hereto and incorporated herein by this reference.

 

4.7                                 Taxes.

 

(a)                                  General.All sales, use and other transfer taxes imposed directly on or solely as aresult of the sale of products and payments therefore provided herein shall bestated separately on Micron’s invoice, collected from he Joint Venture Companyand shall be remitted by Micron to the appropriate tax authority (“Recoverable Taxes”), unless the Joint Venture Companyprovides valid proof of tax exemption. When property is delivered and/orservices are provided or the benefit of services occurs within jurisdictions inwhich collection and remittance of taxes by the Joint Venture Company isrequired by law, Micron shall have sole responsibility for payment of saidtaxes to the appropriate tax authorities. In the event such taxes areRecoverable Taxes and Micron does not collect tax from the Joint VentureCompany or pay such taxes to the appropriate governmental entity on a timelybasis, and is subsequently audited by any tax authority, liability of the JointVenture Company will be limited to the tax assessment for such RecoverableTaxes, with no reimbursement for penalty or interest charges or other amountsincurred in connection therewith. Notwithstanding anything herein to thecontrary, taxes other

 

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thanRecoverable Taxes shall not be reimbursed by the Joint Venture Company, andeach Party is responsible for its own respective income taxes (includingfranchise and other taxes based on net income or a variation thereof), taxesbased upon gross revenues or receipts, and taxes with respect to generaloverhead, including but not limited to business and occupation taxes, and suchtaxes shall not be Recoverable Taxes.

 

(b)                                 WithholdingTaxes. In the event that the Joint Venture Company is prohibited by lawfrom making payments to Micron unless the Joint Venture Company deducts orwithholds taxes therefrom and remits such taxes to the local taxing jurisdiction,then the Joint Venture Company shall duly withhold and remit such taxes andshall 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 shallnot reimburse Micron for the amount of such taxes withheld.

 

4.8                                 Invoicing.Micron shall invoice the Joint Venture Company on a monthly basis in accordancewith the pricing provided in Schedule 4.6. All amounts owed underthis Agreement are stated, calculated and shall be paid in United StatesDollars. Except as otherwise specified in this Agreement, the Joint VentureCompany shall pay Micron for the amounts due, owing, and duly invoiced underthis Agreement within [***] ([***]) days following delivery of an invoice thereforeto such place as Micron may reasonably direct therein.

 

4.9                                 Paymentto Vendors. Micron shall be responsible for and shall hold the JointVenture Company harmless for any and all payments to Micron’s vendors orsuppliers utilized in the performance of this Agreement.

 

4.10                           Delivery,Title and Risk of Loss. The Joint Venture Company shall hold title to allPrime Wafers prior to Wafer Start and all WIP and Probed Wafers thereafter. Micronshall hold risk of loss or damage to Prime Wafers, WIP and Probed Wafers untilthe Probed Wafers are tendered to the carrier for shipment or transferred tothe assembly location, if Micron is performing the assembly services.

 

4.11                           Packagingand Shipping. The packaging of the Probed Wafers supplier hereunder shallbe in conformance with: (i) the Specifications, as applicable; (ii) theJoint Venture Company’s reasonable instructions; (iii) general industrystandards to ensure resistance to damage that may occur duringtransportation. Micron shall mark all shipping containers with necessarylifting, handling, and shipping information, Purchase Order number, date ofshipment, and the names of the Joint Venture Company and applicable customer,is any. If no instructions are given, Micron shall select the most costeffective carrier, given the time constraints known to Micron. At the JointVenture Company’s request, Micron will provide drop-shipment of Probed Wafersto the Joint Venture Company’s customers or as otherwise directed by the JointVenture Company.

 

4.12                           ShipmentCharges. In order to ensure timely and complete shipment of Probed Wafersto the Joint Venture Company, Micron shall arrange for shipping to the JointVenture Company’s customer or assembly services provider. To the extent thatthe shipping charges, insurance, taxes, customs charges and any fees and dutiesin connection with such shipment are not charged to directly to a Joint VentureCompany account, Micron shall pay such costs and invoice them to the JointVenture Company under the appropriate services agreement between the Parties.

 

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4.13                           CustomsClearance. Upon the Joint Venture Company’s request, Micron will promptlyprovide the Joint Venture Company with a statement of origin for all ProbedWafers and with applicable customs documentation for Probed Wafers wholly orpartially manufactured outside of the country of import.

 

ARTICLE 5
VISITATIONS, AUDITS AND MANAGEMENT REVIEWS

 

5.1                                 Visits.Micron will support the Joint Venture Company’s and its customers’ reasonablerequests for visits to the NAND Product Line utilized hereunder for the supplyof Probed Wafers for the purpose of reviewing performance of production ofProbed Wafers, including requests for further information and assistance introubleshooting performance issues. Such requests shall be reasonably grantedby Micron so long as such visits and meetings do not unduly interfere withMicron’s operations and business affairs.

 

5.2                                 InventoryAudit. Micron will grant reasonable access to the Joint Venture Company’spersonnel or appointed auditors to conduct an annual inventory audit of theinventory of WIP and Probed Wafers. Such annual audit shall be coordinated byMicron according to its standard inventory procedures and shall be conducted insuch a manner as to minimize disruptions to the performance Micron’s operationsand business affairs. Any such annual audit will be pre-scheduled to coincidewith a monthly, quarterly or yearly cut-off as reported by Micron or asotherwise agreed to by both Parties.

 

5.3                                 PerformanceAudit. The Joint Venture Company representatives shall be allowed to visitMicron’s NAND Product Line during normal working hours upon reasonable advancedwritten notice to Micron for the purposes of auditing the processes andcompliance with any requirements set forth in this Agreement. Upon completionof the audit, Micron and the Joint Venture Company shall work in good faith toagree to an audit closure plan, which will be documented in the audit reportissued by the Joint Venture Company. If the Joint Venture Company requests anychanges or additions to Micron’s existing process and control mechanisms, theParties shall work together in good faith to resolve any such requests.

 

5.4                                 Auditof Pricing and Additional Equipment. The Joint Venture Company reserves theright to have Micron’s books and records related to the pricing of ProbedWafers and the purchase of Additional Equipment hereunder inspected and auditednot more than [***] during any Fiscal Year to ensure compliance with Schedules2.6 and 4.6 of this Agreement in regards to pricing of the Probed Wafers. Suchaudit will be performed by an independent third party auditor acceptable toboth Parties at the Joint Venture Company’s expense. If the Parties cannotagree, the Joint Venture Company may select one of the majorinternationally recognized audit firms, which is not the auditor for either ofthe Joint Venture Company’s customers. The Joint Venture Company shall provide[***] ([***]) days advance written notice to Micron of its desire to initiatean audit and the audit shall be scheduled so that it does not adversely impactor interrupt Micron’s business operations. If the audit reveals any materialdiscrepancies, Micron or the Joint Venture Company shall reimburse the other,as applicable, for any material discrepancies within [***] ([***]) days aftercompletion of the audit. The results of such audit shall be kept confidentialby the auditor and only the discrepancies shall be reported to the Parties and

 

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its customers, and be limited to the (i) discrepanciesidentified by the audit, (ii) results of the physical inspection of theAdditional Equipment;  and, (iii) subjectto any limitations imposed by law, results regarding purchase and utilizationof such Additional Equipment. Notwithstanding the foregoing, any auditorreports shall not disclose any Micron pricing or terms of purchase for anypurchases of materials or equipment hereunder to the Joint Venture Company’scustomers other than Micron, absent written agreement from the customers’respective legal counsel. If any audit reveals a material discrepancy, theJoint Venture Company may increase the frequency of such audits toquarterly for the subsequent [***] ([***]) month period.

 

ARTICLE 6
REPRESENTATIONS; WARRANTIES; HAZARDOUS MATERIALS;
DISCLAIMER

 

6.1                                 ProductWarranty. Micron warrants that the Probed Wafers supplied hereunder:

 

(a)                                  conform inall material aspects to the agreed Specification;

 

(b)                                 arefree from defects in materials or workmanship; and

 

(c)                                  freeof liens and encumbrances, not including any express or implied warranty ofnon-infringement and Micron has the necessary right, title, and interest toprovide the Probed Wafers to the Joint Venture Company.

 

Each of the warranties Sections 6.1 (a), (b) and (c) shallsurvive any delivery, inspection, acceptance, payment, or resale of the ProbedWafers.

 

6.2                                 WarrantyClaims. Within a period of time, [***] for the NAND Flash Memory Productproduced from the Probed Wafers at issue [***] of the Probed Wafers at issue tothe Joint Venture Company (“Warranty Notice Period”),the Joint Venture Company shall notify Micron if it believes that any ProbedWafers do not meet the Probed Wafers warranty set forth in Section 6.2.The Joint Venture Company shall return such Probed Wafers to Micron as directedby the Joint Venture Company. If a Probed Wafer is determined not to be incompliance with such warranty, then the Joint Venture Company shall be entitledto return such Probed Wafer and cause Micron to replace at Micron’s expense or,at the Joint Venture Company’s option, receive a credit or refund of any moniespaid to Micron in respect of such Probed Wafer, [***]. The basis for suchrefund or credit shall be [***]. THE FOREGOING REMEDY IS [***].

 

6.3                                 Inspections.The Joint Venture Company may, upon reasonable advance written notice, requestsamples of WIP hereunder for purposes of determining compliance with theSpecifications and Performance Criteria hereunder, provided that the provisionof such samples shall not materially impact Micron’s NAND Product Line or itsability to meet delivery

 

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requirementsunder any accepted Purchase Order. Prior to requesting such samples, the Joint VentureCompany shall use good faith efforts to determine compliance using alternativemethods, including but not limited to the review of data provided pursuant to Section 2.9.Any samples provided hereunder shall be: (i) limited in quantity to theamount reasonably necessary for the purposes hereunder; (ii) included inthe pricing; and (iii) included in any performance requirements, if any. Micronshall provide reasonable assistance for the safety and convenience of the JointVenture Company in obtaining the samples in such manner as shall notunreasonably hinder or delay Micron’s performance.

 

6.4                                 HazardousMaterials.

 

(a)                                  IfProbed Wafers provided hereunder include Hazardous Materials as determined inaccordance with applicable law, Micron represents and warrants that Micron andMicron’s employees, agents, and subcontractors, if any, actually working withsuch materials in supplying the Probed Wafers hereunder to the Joint VentureCompany shall be trained in accordance with applicable law regarding the natureof and hazards associated with the handling, transportation and use of suchHazardous Materials, as applicable to Micron.

 

(b)                                 Tothe extent required by applicable law, Micron shall provide the Joint VentureCompany with Material Safety Data Sheets (MSDS) either prior to or accompanyingany delivery of Probed Wafers to the Joint Venture Company.

 

6.5                                 Disclaimer.EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS ARTICLE 6, MICRONHEREBY 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 OROTHERWISE, WITH RESPECT TO THE PROBED WAFERS PROVIDED UNDER THIS AGREEMENT. THEWARRANTIES WILL NOT APPLY TO: (i) ANY WARRANTY CLAIM OR ISSUE, OR DEFECTTO THE EXTENT CAUSED BY ITEMS PROVIDED OR SPECIFIED BY, THROUGH OR ON BEHALF OFTHE JOINT VENTURE COMPANY OR ANY COMMITTEE OF THE MEMBERS HEREUNDER, [***]; OR (ii) ANYOF THE PROBED WAFERS THAT HAVE BEEN REPAIRED OR ALTERED, EXCEPT AS AUTHORIZEDBY MICRON OR WHICH WERE SUBJECTED TO MISUSE, NEGLIGENCE, ACCIDENT OR ABUSE.

 

ARTICLE 7
CONFIDENTIALITY

 

7.1                                 Protectionand Use of Confidential Information. All information provided, disclosed orobtained in connection with this Agreement or the performance of any of theParties’ activities under this Agreement shall be subject to all applicableprovisions of the Confidentiality Agreement. Furthermore, the terms andconditions of this Agreement shall be considered “ConfidentialInformation” under the Confidentiality Agreement for which eachParty is considered a “Receiving Party”under such agreement. To the extent there is a conflict between this Agreementand the Confidentiality Agreement, the terms of this Agreement shall control.

 

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ARTICLE 8
INDEMNIFICATION

 

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

 

8.2                                 GeneralProcedures. Promptly after the receipt by any Indemnified Party of a noticeof any Third Party Claim that an Indemnified Party seeks to be indemnifiedunder this Agreement, such Indemnified Party shall give written notice of suchThird Party Claim to the Indemnifying Party, stating in reasonable detail thenature and basis of each allegation made in the Third Party Claim and theamount of potential Indemnified Losses with respect to each allegation, to theextent known, along with copies of the relevant documents received by theIndemnified Party evidencing the Third Party Claim and the basis forindemnification sought. Failure of the Indemnified Party to give such noticeshall not relieve the Indemnifying Party from liability on account of thisindemnification, except if and only to the extent that the Indemnifying Partyis actually prejudiced by such failure or delay. Thereafter, the IndemnifiedParty shall deliver to the Indemnifying Party, promptly after the IndemnifiedParty’s receipt thereof, copies of all notices and documents (including courtpapers) received by the Indemnified Party relating to the Third Party Claim. TheIndemnifying Party shall have the right to assume the defense of theIndemnified Party with respect to such Third Party Claim upon written notice tothe Indemnified Party delivered within [***] ([***]) days after receipt of theparticular notice from the Indemnified Party. So long as the Indemnifying Partyhas assumed the defense of the Third Party Claim in accordance herewith andnotified the Indemnified Party in writing thereof: (i) the IndemnifiedParty may retain separate co-counsel at its sole cost and expense andparticipate in the defense of the Third Party Claim, it being understood thatthe Indemnifying Party shall pay all reasonable costs and expenses of counselfor the Indemnified Party after such time as the Indemnified Party has notifiedthe Indemnifying Party of such Third Party Claim and prior to such time as theIndemnifying Party has notified the Indemnified Party that it has assumed thedefense of such Third Party Claim; (ii) the Indemnified Party shall notfile any papers or, other than in connection with a settlement of the ThirdParty Claim, consent to the entry of any judgment without the prior writtenconsent of the Indemnifying Party (not to be unreasonably withheld, conditionedor delayed); and (iii) the Indemnifying Party will not consent to theentry of any judgment or enter into any settlement with respect to the ThirdParty Claim (other than a judgment or settlement that is solely for moneydamages and is accompanied by a release of all indemnifiable claims against theIndemnified Party) without the prior written consent of the Indemnified Party(not to be unreasonably withheld, conditioned or delayed). Whether or not theIndemnifying Party shall have assumed the defense of the Indemnified Party fora Third Party Claim, such Indemnifying Party shall not be obligated toindemnify and hold harmless the Indemnified Party hereunder for any consent tothe entry of judgment or settlement entered into with respect to such ThirdParty Claim without the Indemnifying Party’s prior written consent, whichconsent shall not be unreasonably withheld, conditioned or delayed.

 

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(a)                                  EquitableRemedies. In the case of any Third Party Claim where the Indemnifying Partyreasonably believes that it would be appropriate to settle such Third PartyClaim using equitable remedies (i.e., remedies involving the future activityand conduct of the Joint Venture Company), the Indemnifying Party and theIndemnified 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 anysuch settlement.

 

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

 

(c)                                  CertainAdditional Procedures. The Indemnified Party shall cooperate and assist theIndemnifying Party in determining the validity of any Third Party Claim forindemnity by the Indemnified Party and in otherwise resolving such matters. TheIndemnified Party shall cooperate in the defense by the Indemnifying Party ofeach Third Party Claim (and the Indemnified Party and the Indemnifying Partyagree with respect to all such Third Party Claim that a common interestprivilege agreement exists between them), including:, (i) permitting theIndemnifying Party to discuss the Third Party Claim with such officers,employees, consultants and representatives of the Indemnified Party as theIndemnifying Party reasonably requests; (ii)  providing to theIndemnifying Party copies of documents and samples of products as theIndemnifying Party reasonably requests in connection with defending such ThirdParty Claim; (iii)  preserving all properties, books, records, papers,documents, plans, drawings, electronic mail and databases of the Joint VentureCompany and relating to matters pertinent to the conduct of the Joint VentureCompany under the Indemnified Party’s custody or control in accordance withsuch Party’s corporate documents retention policies, or longer to the extentreasonably requested by the Indemnifying Party; (iv) notifying theIndemnifying Party promptly of receipt by the Indemnified Party of any subpoenaor other third party request for documents or interviews and testimony; (v) providingto the Indemnifying Party copies of any documents produced by the IndemnifiedParty in response to or compliance with any subpoena or other third partyrequest for documents; and (vi) except to the extent inconsistent with theIndemnified Party’s obligations under applicable law and except to the extentthat to do so would subject the Indemnified Party or its employees, agents orrepresentatives to criminal or civil sanctions, unless ordered by a court to dootherwise, not producing documents to a third party until the IndemnifyingParty has been provided a reasonable opportunity to review, copy and assertprivileges covering such documents.

 

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ARTICLE 9
LIMITATION OF LIABILITY

 

9.1                                 DamagesLimitation. SUBJECT TO SECTION 9.3, IN NO EVENT SHALL EITHER PARTY BELIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR OTHERINDIRECT DAMAGES OR ANY PUNITIVE OR EXEMPLARY DAMAGES ARISING OUT OF OR INCONNECTION WITH THIS AGREEMENT, WHETHER SUCH DAMAGES ARE BASED ON BREACH OFCONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHER THEORY OF LIABILITY, AND EVEN IFA PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE PARTIES AGREETHAT TO THE EXTENT A CLAIM ARISES UNDER THIS AGREEMENT, THE CLAIM SHALL BEBROUGHT UNDER THIS AGREEMENT.

 

9.2                                 DamagesCap. SUBJECT TO SECTION 9.3 AND SPECIFICALLY EXCLUDING ANYAMOUNTS DUE EITHER PARTY UNDER SECTIONS III AND/OR IV OF SCHEDULE 4.6,IF EITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY MATTER RELATING TOOR ARISING FROM THIS AGREEMENT, WHETHER BASED UPON AN ACTION OR CLAIM INCONTRACT, WARRANTY, EQUITY, NEGLIGENCE, INTENDED CONDUCT OR OTHERWISE(INCLUDING ANY ACTION OR CLAIM ARISING FROM AN ACT OR OMISSION, NEGLIGENT OROTHERWISE, OF THE LIABLE PARTY), THE AMOUNT OF DAMAGES RECOVERABLE AGAINST THELIABLE PARTY WITH RESPECT TO ANY BREACH, PERFORMANCE, NONPERFORMANCE, ACT OROMISSION HEREUNDER WILL NOT EXCEED AN AMOUNT [***].

 

9.3                                 Exclusionsand Mitigation. Sections 9.1 and 9.2 will not applyto either Party’s breach of ARTICLE 7, and Section 9.2shall not apply to the Joint Venture Company’s payment obligations for ProbedWafers. Each Party shall have a duty to use commercially reasonable efforts tomitigate damages for which the other Party is responsible.

 

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

 

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of theParties.

 

ARTICLE 10
TERM AND TERMINATION

 

10.1                           Term.The term of this Agreement commences on the Effective Date and continues untilthe earlier of: (i) five (5) years from the Effective Date, (ii) terminationby mutual agreement of the Parties; or (iii) termination by either Partypursuant to Section 10.3 (such period of time, the “Term”). [***].In addition, upon a [***] pursuant to the LLC Operating Agreement, the [***]. Notwithstandingthe foregoing, in the event of such a [***] pursuant to the LLC OperatingAgreement, all payments [***].

 

10.2                           RenewalTerms. The Parties may extend the term of this Agreement beyond theexpiration of the initial term as set forth in Section 10.1(i) uponmutual agreement.

 

10.3                           Terminationfor Cause. Either party may terminate this Agreement for cause if theother party materially breaches this Agreement and fails to cure the samewithin one hundred eighty (180) days after receipt of written notice from thenon-breaching party. In the event that the Joint Venture Company terminates theAgreement for cause hereunder, the Probed Wafer Output Performance Metric in Section III-Vof Schedule 4.6 shall be the Joint Venture Company’s sole remedy forsuch termination. Notwithstanding any provision to the contrary, if Micronterminates the Agreement for cause hereunder, Sections III-V of Schedule 4.6shall not survive termination and neither the Joint Venture Company nor any ofits Members shall be entitled to any payments there under commencing with thedate of the Joint Venture Company’s material breach, which resulted in thetermination for cause hereunder.

 

10.4                           Survival.Termination of this Agreement shall not affect any of the Parties’ respectiverights accrued or obligations owed before termination, including any rights orobligations of the Parties in respect of any accepted Purchase Orders existingat the time of termination. In addition, the following shall survivetermination of this Agreement for any reason: Sections 4.7, 4.8, 5.4, 6.2,6.5 and 7.1 and ARTICLES 7, 8, 9, and 11. The survival of SectionsIII – V of Schedule 4.6 shall be governed by Section 10.3and Section V of Schedule 4.6.

 

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ARTICLE 11
MISCELLANEOUS

 

11.1                           ForceMajeure Events. The Parties shall be excused from any failure to perform anyobligation hereunder to the extent such failure is caused by a Force MajeureEvent. A Force Majeure Event shall operate to excuse a failure to perform anobligation hereunder only for the period of time during which the Force MajeureEvent renders performance impossible or infeasible and only if the Partyasserting Force Majeure as an excuse for its failure to perform hasprovided written notice to the other party specifying the obligation to beexcused and describing the events or conditions constituting the Force MajeureEvent. As used herein, “Force Majeure Event” means the occurrence of an eventor 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) actsof war (declared or undeclared), acts of terrorism, insurrection, riots, civildisorders, rebellion or sabotage; (c) acts of federal, state, local orforeign governmental authorities or courts; (d) labor disputes, lockouts,strikes or other industrial action, whether direct or indirect and whetherlawful or unlawful; (e) failures or fluctuations in electrical power ortelecommunications service or equipment; and (f) delays caused by theother Party’s nonperformance hereunder.

 

11.2                           Assignment.Except as otherwise provided in the Joint Venture Documents, neither thisAgreement nor any right or obligation hereunder may be assigned or delegatedby either Party in whole or in part to any other Person, other than aWholly-Owned Subsidiary of such Party, without the prior written consent of thenon-assigning Party. Any purported assignment in violation of the provisions ofthis Section shall be null and void and have no effect. This Agreementshall be binding upon and inure to the benefit of the permitted successors andpermitted assigns of each Party hereto.

 

11.3                           Compliancewith Laws and Regulations. Each of the Parties shall comply with, and shalluse reasonable efforts to require that its respective subcontractors complywith, Applicable Laws relating to this Agreement and the performance of a Party’srights hereunder.

 

11.4                           Notice.All notices and other communications hereunder shall be in writing and shall bedeemed given upon (a) transmitter’s confirmation of a receipt of afacsimile transmission, (b) confirmed delivery by a standard overnightcarrier or when delivered by hand, (c) the expiration of five (5) BusinessDays after the day when mailed in the United States by certified or registeredmail, postage prepaid, or (d) delivery in Person, addressed at thefollowing addresses (or at such other address for a party as shall be specifiedby like notice):

 

In the case of the Joint Venture Company:

IM Flash Technologies, LLC

1550 East 3400 North

Lehi, UT 84043

Attention: David A. Baglee; Rodney Morgan

Facsimile: (801) 767-5370

 

In the case of Intel:

Intel Corporation

2200 Mission College Blvd.

Mail Stop SC4-203

Santa Clara, CA 95054

 

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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:  [***]

 

In the case of Micron:

Micron Technology, Inc.

8000 S. Federal Way
Boise, ID 83707-0006

Attention:  General Counsel
Facsimile: (208) 368-4540

 

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

 

11.5                           Waiver.The failure at any time of a Party to require performance by the other Party ofany responsibility or obligation required by this Agreement shall in no wayaffect a Party’s right to require such performance at any time thereafter, norshall the waiver by a Party of a breach of any provision of this Agreement bythe other Party constitute a waiver of any other breach of the same or anyother provision nor constitute a waiver of the responsibility or obligationitself.

 

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

 

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11.7                           ThirdParty Rights. Nothing in this Agreement, whether express or implied, isintended or shall be construed to confer, directly or indirectly, upon or giveto any Person, other
than the Parties hereto, any legal or equitable right, remedy or claim under orin respect of this Agreement or any covenant, condition or other provisioncontained herein.

 

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

 

11.9                           EntireAgreement. This Agreement and the applicable provisions of theConfidentiality Agreement, which are incorporated herein and made a part hereof,together with the Exhibits and Schedules hereto and the agreements andinstruments expressly provided for herein, constitute the entire agreement ofthe Parties hereto with respect to the subject matter hereof and supersede allprior agreements and understandings, oral and written, between the Partieshereto with respect to the subject matter hereof.

 

11.10                     Choiceof Law. This Agreement shall be construed and enforced in accordance withand governed by the laws of the State of Delaware, without giving effect to theprinciples of conflict of laws thereof.

 

11.11                     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 Agreementshall be brought in a state or federal court of competent jurisdiction locatedin the State of Delaware, and each of the Parties to this Agreement herebyconsents and submits to the exclusive jurisdiction of such courts (and of theappropriate appellate courts therefrom) in any such suit, action or proceedingand irrevocably waives, to the fullest extent permitted by Applicable Law, anyobjection which it may now or hereafter have to the laying of the venue ofany 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 aninconvenient forum. Process in any such suit, action or proceeding may beserved on any party anywhere in the world, whether within or without thejurisdiction of any such court.

 

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

 

11.13                     Compliance with Policies. Each Party and its employees, contractors orother representatives shall observe and be subject to all safety, security andother policies and regulations regarding visitors and contractors while on siteat a facility of the other Party or its Affiliate. A Party’s employees,contractors or other representatives who access any facility of the other Partyor its Affiliate shall not interfere with, and except as otherwise agreed bythe Parties, shall not participate in the Party’s business or operations.

 

11.14                     Insurance.Without limiting or qualifying Micron’s liabilities, obligations, orindemnities otherwise assumed by Micron pursuant to this Agreement, Micronshall maintain with companies acceptable to the Joint Venture Company:

 

(a)                                  CommercialGeneral Liability with limits of liability not less than $[***] per occurrenceand including liability coverage for bodily injury or property damage (1) assumedin a contract or agreement pertaining to Micron’s business and (2) arisingout of Micron’s products, Services, or work. Micron’s insurance shall beprimary with respect to liabilities assumed by Micron in this Agreement to theextent such liabilities are the subject of Micron’s insurance, and anyapplicable insurance maintained by the Joint Venture Company shall be excessand non-contributing. The above coverage shall name Parent as additionalinsured as respects Micron’s work or services provided to or on behalf ofParent.

 

(b)                                 AutomobileLiability Insurance with limits of liability not less than $[***] per accidentfor bodily injury or property damage.

 

(c)                                  StatutoryWorkers’ Compensation coverage, including a Broad Form All StatesEndorsement in the amount required by law, and Employers’ Liability Insurancein the amount of $[***] per occurrence. Such insurance shall include mutualinsurer’s waiver of subrogation.

 

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

 

[Signature page follows]

 

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IN WITNESS WHEREOF, this Agreement has been duly executed by and onbehalf 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 ISTHE SIGNATURE PAGE FOR THE BOISE SUPPLY AGREEMENT
ENTERED INTO BY AND BETWEEN MICRON TECHNOLOGY, INC. AND IM
FLASH TECHNOLOGIES, LLC

 

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EXHIBIT A

DEFINITIONS

 

In addition to the terms defined elsewhere in this Agreement,capitalized terms used in this Agreement shall have the respective meanings setforth below:

 

“Affiliate” means a Person that directly or indirectly throughone or more intermediaries, controls, or is controlled by, or is under commoncontrol with, the Person specified.

 

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

 

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

 

“Business Continuity Plan” means a plan to recover theproduction process in the event of a natural disaster or any other event thatdisrupts the production process or the ability to meet its delivery commitmentsor satisfy customer orders.

 

“Business Day” means a day that is not a Saturday, Sunday orother day on which commercial banking institutions in the State of Delaware areauthorized or required by Applicable Law to be closed.

 

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

 

“Capacity” means the rate of output (defined in terms of unitsper time period), at a particular point in time, at which a particular facilityor set of facilities of Micron (or of a third party on Micron’s behalf) iscapable of producing such units.

 

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

 

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

 

“Excursion” means an occurrence, either during production orafter customer delivery, that is outside normal historical behavior asestablished by both Parties in writing in the applicable Specification which may impactperformance, Quality and Reliability, or customer delivery commitments forProbed Wafers, NAND Flash Memory Product or Known Good Die.

 

“Fiscal Month” means any of the twelve financial accounting monthswithin Micron’s Fiscal Year.

 

“Fiscal Quarter” means any of the four financial accountingquarters within Micron’s Fiscal Year.

 

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“Fiscal Year” means the fiscal year of Micron for financialaccounting purposes.

 

“Flash Memory Integrated Circuit” means a non-volatile memoryintegrated circuit that contains memory cells that are electricallyprogrammable and electrically erasable whereby the memory cells consist of oneor more transistors that have a floating gate, charge-trapping regions or anyother functionally equivalent structure utilizing one or more different chargelevels (including binary or multi-level cell structures), together with anyon-chip control, I/O and other support circuitry.

 

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

 

“Governmental Entity” means any governmental authority orentity, 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 ashazardous by relevant local, state, national, or international law, regulationsand standards.

 

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

 

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

 

“Indemnifying Party” shall mean the Party owing a duty ofindemnification to another Party with respect to a particular Third PartyClaim.

 

“Intel” means Intel Corporation, a Delaware corporation.

 

“Joint Venture Company” means IM Flash Technologies, LLC, aDelaware limited liability company that is the subject of the Joint Venture Documents.

 

“Joint Venture Documents” means that certain Master Agreement byand between Intel Corporation and Micron dated November 18, 2005, and each agreement referenced therein (whether directly orindirectly through reference in any of such referenced agreements).

 

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

 

“Indemnified Losses” shall mean all direct, out-of-pocketliabilities, damages, losses, costs and expenses of any nature incurred by anIndemnified Party, including reasonable attorneys’ fees and consultants’ fees,and all damages, fines, penalties and judgments awarded or

 

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entered against an Indemnified Party, butspecifically excluding any special, consequential or other types of indirectdamages.

 

“Indemnifying Party” shall mean the Party owing a duty ofindemnification to another Party with respect to a particular Third PartyClaim.

 

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

 

“Manufacturing Committee” means the Manufacturing Committee asdefined in Section 8.6 of the LLC Operating Agreement.

 

“Manufacturing Plan” means the manufacturing plan developedpursuant to Section 8.5(b) of the LLC Operating Agreement.

 

“Members” means Micron and Intel.

 

“Micron” means Micron Technology, Inc., a Delawarecorporation.

 

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

 

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

 

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

 

“Performance Criteria” means[***].

 

“Person” means any neutral person, corporation, joint stockcompany, limited liability company, association, partnership, firm jointventure, organization, individual, business, trust, estate or any other entityor organization of any kind or character from any form of association.

 

“Price” shall have the meaning as set forth on Schedule 4.6.

 

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

 

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

 

“Probed Wafer” means a Prime Wafer that has been processed tothe point of containing NAND Flash Memory Integrated Circuits organized inmultiple semiconductor die and that has undergone Probe Testing to the levelrequested by the Joint Venture Company, but before singulation of said die intoindividual semiconductor die.

 

“Products” means aProbed Wafer, Known Good Die, or NAND Flash Memory Product, or such otherproducts that are manufactured by or for the Joint Venture Company.

 

“Purchase Order” shall have the meaning set forth in Section 3.3hereof.

 

“Quality and Reliability” or “Q&R” means building andsustaining relationships which assess, anticipate, and fulfill the quality andreliability standards as set forth in the Specification or Manufacturing Planfor products and other areas of the Joint Venture or its facilities (including,environmental health and safety, environmental compliance, employment law).

 

“Receiving Party” shall have the meaning set forth in thedefinition of Confidential Information.

 

“Secondary Silicon” shall mean a Prime Wafer that has beenprocessed to the point of containing NAND Flash Memory Integrated Circuitsorganized in multiple semiconductor die and that has undergone Probe Testing: (a) wouldotherwise constitute a Probed Wafer but for failure to achieve qualificationand (b) otherwise conform to the applicable Secondary SiliconSpecifications.

 

“Specifications” means those data sheet specifications used todescribe, characterize, and define the quality and performance of NAND FlashMemory Products, Known Good Die and Probed Wafers, including any interimperformance specifications at Probe Testing or other testing, as suchspecifications may be determined from time to time by the Joint VentureCompany in accordance with the Joint Venture Documents.

 

“Term” shall have the meaning set forth in Section 10.1hereof.

 

“Third Party Claim” shall mean any claim, demand, action, suitor proceeding, and any actual or threatened lawsuit, complaint, cross-complaintor counter-complaint, arbitration or other legal or arbitral proceeding of anynature, brought in any court, tribunal or judicial forum anywhere in the world,regardless of the manner in which such proceeding is captioned or styled, byany Person other than Intel, Micron, the Joint Venture Company and Affiliatesof the foregoing, against an Indemnified Party, in each case allegingentitlement to any Indemnified Losses pursuant to any indemnificationobligation under this Agreement.

 

“Warranty Claim Period” shall have the meaning set forth in Section 6.4hereof.

 

“WIP” means work in process. This includes all wafers andproduct in wafer fabrication, sort, assembly, and/or final test, includingprime and secondary wafers, and all completed product units not yet deliveredto the Joint Venture Company.

 

“Yield” means anticipated output of Probed Wafers from WIP at aparticular point in time, including line yield, die yield, assembly yield andfinal testing yield.

 

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SCHEDULES

 

Schedule 2.3

Performance Criteria

 

 

Schedule 2.6

Additional Equipment

 

 

Schedule 2.6(A)

Form Of Addendum To Agreement

 

 

Schedule 2.6 (B)

Additional Equipment

 

 

Schedule 4.6

Prepaid, Pricing And Performance Metrics

 

 

Schedule 4.6(A)

Cost Forecast

 

 

Schedule 4.6(B)

Projected Output

 

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