Exhibit 10.68

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

 

INTEL/MICRON CONFIDENTIAL

 

 

 

 

 

 

LIMITED LIABILITY PARTNERSHIP AGREEMENT   OF   IM FLASH SINGAPORE, LLP   BY AND BETWEEN   MICRON SEMICONDUCTOR ASIA PTE. LTD.   AND   INTEL TECHNOLOGY ASIA PTE LTD   FEBRUARY 27, 2007

 

 

 

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	2
1.6	Intentionally Omitted	2
1.7	Intentionally Omitted	2
1.8	Supply Agreements	2
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	3
2.4	Shortfalls in Contributions	6
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	12
3.3	Optional Other Member Debt Financing	13
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	14
4.1	Capital Accounts	14
4.2	Allocations of Book Income and Loss	14
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	17
6.1	Management Power	17
6.2	Number of Managers; Appointment of Managers	18
6.3	Voting of Managers	19
6.4	Meetings of the Board of Managers; Quorum	22
6.5	Notice; Waiver	23

 

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TABLE OF CONTENTS

(continued)

 

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6.6	Action Without a Meeting; Meetings by Telecommunications	23
6.7	Alternate Managers	23
6.8	Compensation of Managers	23
6.9	Statutory Manager	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	Site Manager	29
8.2	Intentionally Omitted	30
8.3	Lead Controller	30
8.4	Intentionally Omitted	30
8.5	General Provisions Regarding Officers	30
8.6	Intentionally Omitted	31
8.7	Waiver of Fiduciary Duties	31
ARTICLE 9.	EMPLOYEE MATTERS	32
9.1	Joint Venture Company Employees; Seconded Employees	32
9.2	Performance and Removal of Seconded Employees	33
9.3	Forms	33
9.4	Compensation and Benefits	33
ARTICLE 10.	RECORDS, ACCOUNTS AND REPORTS	34
10.1	Books and Records	34
10.2	Access to Information	35
10.3	Operations Reports	36
10.4	Financial Reports	36
10.5	Reportable Events	38
10.6	Tax Information	40
10.7	Tax Matters and Precedent Partner	41
10.8	Bank Accounts and Funds	41
10.9	Internal Controls	41
ARTICLE 11.	BUSINESS PLAN	42
11.1	Initial Business Plan; Initial Budgets	42
11.2	Subsequent Business Plans	46
11.3	Expenditures	49
11.4	Fab Criteria	49

 

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TABLE OF CONTENTS

(continued)

 

Page

 

11.5	Quarterly Business Plan	49
11.6	Operating Plan	50
11.7	Use of Member Names	50
11.8	Insurance	51
ARTICLE 12.	TRANSFER RESTRICTIONS	51
12.1	Restrictions on Transfer	51
12.2	Permitted Transfers	51
12.3	Additional Members	53
12.4	Certain Purchases	53
12.5	Purchase of Remaining Interest	54
ARTICLE 13.	TRIGGERING EVENTS; DISSOLUTION AND LIQUIDATION	56
13.1	Triggering Events	56
13.2	Determination of [***] Value	56
13.3	No Withdrawal	57
13.4	Intentionally Omitted	57
13.5	Intentionally Omitted	57
13.6	Intentionally Omitted	57
13.7	Intentionally Omitted	57
13.8	Intentionally Omitted	57
13.9	Intentionally Omitted	57
13.10	Intentionally Omitted	57
13.11	Auction of Remaining Assets	57
13.12	Voluntary Dissolution; Mandatory Dissolution	57
13.13	Liquidation	58
13.14	Supply Agreements	59
13.15	Employees	59
ARTICLE 14.	EXCULPATION AND INDEMNIFICATION	61
14.1	Exculpation	61
14.2	Indemnification	61
ARTICLE 15.	GOVERNMENTAL APPROVALS	62
15.1	Governmental Approvals	62
ARTICLE 16.	FORMATION OF ADDITIONAL ENTITIES	64
16.1	Formation of Domestic Subsidiaries	64
16.2	Intentionally Omitted	64
ARTICLE 17.	DEADLOCK; OTHER DISPUTE RESOLUTION; EVENT OF DEFAULT	64
17.1	Deadlock	64
17.2	Resolution of Deadlock	65

 

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TABLE OF CONTENTS

(continued)

 

Page

 

17.3	Definition of "Intel Singapore Matters."	66
17.4	Definition of "Micron Singapore Matters."	66
17.5	Other Dispute Resolution	66
17.6	Mediation	66
17.7	Event of Default	66
17.8	Specific Performance	67
17.9	Tax Matters	67
ARTICLE 18.	MISCELLANEOUS PROVISIONS	68
18.1	Notices	68
18.2	Waiver	69
18.3	Assignment	69
18.4	Third Party Rights	69
18.5	Choice of Law	69
18.6	Headings	69
18.7	Entire Agreement	69
18.8	Severability	70
18.9	Counterparts	70
18.10	Further Assurances	70
18.11	Consequential Damages	70
18.12	Jurisdiction; Venue	70
18.13	Confidential Information	70
18.14	Certain Interpretive Matters	71

 

 

 

APPENDICES
Appendix A	Definitions
Appendix B	Tax Matters
Appendix C	Initial Managers
Appendix D	Initial Capital Contributions
Appendix E	Intentionally Omitted.
SCHEDULES
Schedule 1	[***] Schedule
Schedule 2	Insurance
Schedule 3	Intentionally Omitted.
Schedule 4	Intentionally Omitted.
Schedule 5	Applicable Joint Ventures and Applicable Joint Venture Agreements
Schedule 6	Relatives

 

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TABLE OF CONTENTS

(continued)

 

Page

EXHIBITS
Exhibit A	Form of Mandatory Note
Exhibit B	Form of Optional [***] Note
Exhibit C	Form of Optional Other Note

-v-

 

LIMITED LIABILITY PARTNERSHIP AGREEMENT

 

OF

 

IM FLASH SINGAPORE, LLP

 

This LIMITED LIABILITY PARTNERSHIP AGREEMENT (this "Agreement") of IM Flash Singapore, LLP, a limited liability partnership organized under the laws of Singapore (the "Joint Venture Company"), is made and entered into as of this 27th day of February, 2007 (the "Effective Date"), by and between Micron Semiconductor Asia Pte. Ltd., a private limited company organized under the laws of Singapore ("Micron Singapore"), and Intel Technology Asia Pte Ltd, a private limited company organized under the laws of Singapore ("Intel Singapore") (Micron Singapore and Intel Singapore 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 or as otherwise provided in Section 18.14.

 

RECITALS

 

A. Micron Singapore and Intel Singapore registered the Joint Venture Company to engage in the activities set forth in Section 1.4 hereof.

 

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

 

ARTICLE 1.  

ORGANIZATIONAL MATTERS

 

1.1  The Joint Venture Company. The Joint Venture Company is a limited liability partnership organized under the Limited Liability Partnership Act of 2005 (No. 5 of 2005) of Singapore, 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 limited liability partnership as a result of the lodging by each of Micron Singapore and Intel Singapore of a statement in accordance with Section(15)(i) of the Act with the Registrar of Limited Liability Partnerships (the "Registrar") and the issuance of the notice of registration (the "Certificate").

 

1.2  Name. The name of the Joint Venture Company is "IM Flash Singapore, LLP."

 

1.3  Term. The initial term of the business of the Joint Venture Company shall continue until January 6, 2016, unless terminated 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 partnership 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 Singapore and (ii) Intel [***] if such Member is Micron Singapore), 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.

 

(A)  The principal place of business and mailing address of the Joint Venture Company shall be IM Flash Singapore, LLP, c/o Allen & Gledhill, One Marina Boulevard #28-00, Singapore 018989, or such other address within Singapore 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 Singapore 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)  The Joint Venture Company may maintain other offices and places of business at such other place or places within or outside Singapore, and outside of the United States, as the Board of Managers may deem to be advisable.

 

(C)  The registered office of the Joint Venture Company in Singapore shall be IM Flash Singapore, LLP, c/o Allen & Gledhill, One Marina Boulevard #28-00, Singapore 018989. The registered office 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 ACRA in accordance with the Act.

 

1.6  Intentionally Omitted.

 

1.7  Intentionally Omitted.

 

1.8  Supply Agreements. Contemporaneously with the execution of this Agreement, Intel Singapore and Micron Singapore have entered into the Supply Agreements with the Joint Venture Company pursuant to which, subject to the terms and conditions set forth in the

 

2

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 Singapore Initial Capital Contribution. The Members acknowledge and agree that, within three (3) Business Days of the Effective Date, Intel Singapore shall deliver to the Joint Venture Company all of the Intel Initial Contributed Assets, as identified on Appendix D.

 

(B)  Micron Singapore Initial Capital Contribution. The Members acknowledge and agree that, within three (3) Business Days of the Effective Date, Micron Singapore shall deliver to the Joint Venture Company all of the Micron Initial Contributed Assets, as identified on Appendix D.

 

2.2  Initial Capital Contribution Reserve. The Joint Venture Company shall use all funds contributed as Initial Capital Contributions before permitting any Additional Capital Contributions. Moreover, the Initial Capital Contributions 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. 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 Singapore be obligated to make [***] Capital Contributions in the aggregate in excess of the Intel Maximum Incremental Capital Amount, or (2) Micron Singapore 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 (25^th) 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 (25^th) day of each Fiscal

3

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 (25^th) 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."

 

(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 in writing 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 in writing 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

 

4

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.

 

(G)  Priority of Contributions. Each Member shall contribute [***] 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 [***]s of the Additional Capital Contribution in full, all such amounts shall be deemed

 

5

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 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.

 

6

(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 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

 

7

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 Triggering 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.

 

(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 or as otherwise agreed in writing by the Members, 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

 

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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 Domestic 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

 

(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

 

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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.

 

(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-

 

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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 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

 

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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.

 

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 no 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

 

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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 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

 

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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 [***] 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, (A) Intel Singapore may elect to provide such Member Debt Financing through Intel or a Wholly-Owned Subsidiary of Intel and (B) Micron Singapore may elect to provide such Member Debt Financing through Micron or a Wholly-Owned Subsidiary of Micron; provided, however, that the Member, rather than such Affiliate 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 in writing 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

 

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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:

 

(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

 

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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, 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 Precedent 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

 

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 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.

 

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, the business, property and affairs of the Joint Venture Company shall be managed by or under the direction of 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. 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. Subject to the limitations set forth in this Agreement, the Board of Managers shall have all the rights and powers specifically set forth in Section 6.3.

 

6.2  Number of Managers; Appointment of Managers.

 

(A)  The Board of Managers shall consist of eight (8) individuals (each such individual, a "Manager"). Subject to Section 6.2(B), one half of the Managers shall be appointed by Micron Singapore and one half of the Managers shall be appointed by Intel Singapore. The initial Managers appointed by Micron Singapore are listed on Appendix C, and the initial Managers appointed by Intel Singapore 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. Unless the Members agree otherwise, each Member who has the right to appoint three (3) or more Managers shall appoint at least one (1) Manager that is a residen