SUPPLY AGREEMENT

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

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

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

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

(a)    Unless the context requires otherwise, (1) all references to Sections, Articles, Exhibits, Appendices or Schedules are to Sections, Articles, Exhibits, Appendices or Schedules of or to this Agreement, (2) each of the Schedules will apply only to the corresponding Section or subsection of this Agreement, (3) each accounting term not otherwise defined in this Agreement has the meaning commonly applied to it in accordance with Modified GAAP, (4)

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

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

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

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

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

2.5    Equipment, Systems, Materials . Except as provided in other Joint Venture Documents, the Joint Venture Company shall be responsible for procuring all manufacturing

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

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

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

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

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

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

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

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

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

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

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

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

(d)    The Joint Venture Company will submit the Proposed Loading Plan, Planning Forecast and other requested information to the Manufacturing Committee for

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

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

ARTICLE 4

PURCHASE AND SALE OF PRODUCTS

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

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

4.3    Placement of Purchase Orders . Prior to the commencement of every Fiscal Quarter or another time period agreed by the Parties in conjunction with the planning cycle specified in Article 3 , the Joint Venture Company shall place a non-cancelable blanket purchase order in writing (via e-mail or facsimile transmission) for the quantity of Product to be supplied by the Joint Venture Company in the following Fiscal Quarter as indicated in the Operating Plan (each such order, a “ Purchase Order ”). Micron Singapore may issue change orders to such Purchase Orders

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

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

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

(a)    General. All sales, use and other transfer taxes imposed directly on or solely as a result of the supplying of Products and the payments therefore provided herein shall be stated separately on the Joint Venture Company’s invoice, collected from Micron Singapore and shall be remitted by the Joint Venture Company to the appropriate tax authority ( “Recoverable Taxes” ), unless Micron Singapore provides valid proof of tax exemption prior to the effective date of the transfer of the Products or otherwise as permitted by law prior to the time the Joint Venture

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

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

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

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

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

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

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

ARTICLE 5

VISITATIONS, AUDITS  

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

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

5.3    Financial Audit . Micron Singapore reserves the right to have the Joint Venture Company’s books and records related to the Pricing hereunder inspected and audited not more than [***] during any Fiscal Year to ensure compliance with Schedule 4.8 of this Agreement in regards to Pricing. Such audit will be performed by an independent third party auditor acceptable to both Parties at Micron Singapore’s expense. Micron Singapore shall provide [***] ([***]) days advance written notice to the Joint Venture Company of its desire to initiate an audit and the audit shall be scheduled so that it does not adversely impact or interrupt the Joint Venture Company’s business operations. If the audit reveals any material discrepancies, the Joint Venture Company or Micron Singapore shall reimburse the other, as applicable, for any material discrepancies within

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

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

(a)    Products conform to all agreed Specifications;

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

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

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