BOISE SUPPLY TERMINATION AND AMENDMENT AGREEMENT
EXHIBIT 10.65
[***]
DENOTES CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT
CONFIDENTIAL
BOISE
SUPPLY TERMINATION AND AMENDMENT AGREEMENT
This
Boise
Supply Termination and Amendment Agreement (“Agreement”)
is made and entered into as of the 10th day of October, 2008 (“Effective
Date”), by and among Intel Corporation, a Delaware corporation (“Intel”),
Micron Technology, Inc., a Delaware corporation (“Micron”),
and IM Flash Technologies, LLC, a Delaware limited liability company (“Joint Venture
Company”). Each of Intel, Micron, and Joint Venture Company
may be referred to herein individually as a “Party” and
collectively as the “Parties.”
RECITALS
A. Pursuant
to the Joint Venture Documents (as defined hereinafter) and the transactions
contemplated thereby, Micron and Intel have formed the Joint Venture
Company.
B. The
Joint Venture Documents include the Boise Supply Agreement (as defined
hereinafter) pursuant to which Micron supplies to the Joint Venture Company
Products (as defined below) manufactured at Micron’s fabrication facility in
Boise, Idaho and which Products, in turn are supplied by the Joint Venture
Company to Intel and Micron under the Supply Agreements (as defined
below).
C. Intel
no longer desires the Joint Venture Company to supply Intel with Products made
at Micron’s fabrication facility in Boise, Idaho.
D. The
Parties desire that this Agreement terminate the Boise Supply Agreement and
outline the commitments of Micron and Intel and amends the Joint Venture
Documents resulting from the termination of the Boise Supply Agreements, as
defined below.
AGREEMENT
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties intending to be legally bound do
hereby agree as follows:
ARTICLE
I.
DEFINITIONS; CERTAIN
INTERPRETIVE MATTERS
Section
1.01 Definitions.
Capitalized
terms used in this Agreement shall have the respective meanings set forth below
in this Section 1.01 unless defined elsewhere in this Agreement:
“Agreement”
shall have the meaning set forth in the preamble to this Agreement.
“Applicable Joint
Venture” shall have the meaning set forth in the Omnibus
Agreement.
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“Applicable
Law” means any applicable laws, statutes, rules, regulations, ordinances,
orders, codes, arbitration awards, judgments, decrees or other legal
requirements of any Governmental Entity.
“Boise Fab”
means that Micron fabrication facility located in Boise, Idaho that maintains a
NAND flash memory product line.
“Boise Side Letter
Agreement” means the Boise Side Letter Agreement by and among Micron, the
Joint Venture Company and Intel dated July 13, 2006.
“Boise Supply
Agreement” means the Boise Supply Agreement by and between the Joint
Venture Company and Micron dated January 6, 2006.
“Business
Day” means a day that is not a Saturday, Sunday or other bank holiday in
the State of New York or country of organization of any Applicable Joint
Venture.
“Effective
Date” shall have the meaning set forth in the preamble to this
Agreement.
“Governmental
Entity” means any governmental authority or entity, including any agency,
board, bureau, commission, court, department, subdivision or instrumentality
thereof, or any arbitrator or arbitration panel.
“Intel”
shall have the meaning set forth in the preamble to this Agreement.
“Joint Venture
Company” shall have the meaning set forth in the preamble to this
Agreement.
“Joint Venture
Documents” means the Master Agreement relating to the formation of the
Joint Venture Company, and each agreement referenced therein (whether directly
or indirectly through reference in any of such referenced agreements) and
includes any such agreements as amended and/or restated from time to time, as
well as this Agreement.
“LLC Operating
Agreement” means the Amended and Restated Limited Liability Company
Operating Agreement by and between Micron and Intel dated February 27,
2007.
“Master
Agreement” means the Master Agreement by and between Micron and Intel
dated November 18, 2005.
“Member Activities
Letter Agreement” means the Amended and Restated Member Activities Letter
Agreement by and between Micron and Intel dated February 27, 2007, as
amended.
“Micron”
shall have the meaning set forth in the preamble to this Agreement.
“Omnibus
Agreement” means the Omnibus Agreement by and between Micron and Intel
dated February 27, 2007.
“Party” and
“Parties”
shall have the meaning set forth in the preamble to this Agreement.
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“Person”
means any natural person, corporation, joint stock company, limited liability
company, association, partnership, firm, joint venture, organization,
individual, business, trust, estate or any other entity or organization of any
kind or character from any form of association.
“Products”
means certain NAND flash memory products, as more specifically defined in the
Supply Agreements.
“Purchase
Orders” shall have the meaning set forth in the Boise Supply
Agreement.
“Scrap, or
Scrapped” means the lawful disposal of WIP Product by Micron other than
by commercial sale of such WIP Product in any form.
“Ship, or
Shipped” means the customary transfer of WIP Product by Micron to the
Joint Venture Company following normal procedures under the Boise Supply
Agreement.
“Supply
Agreement” means either the Supply Agreement between Micron and the Joint
Venture Company dated January 6, 2006 or the Supply Agreement between Intel and
the Joint Venture Company dated January 6, 2006, as the context dictates, and
“Supply
Agreements” means both of them.
Section
1.02 Certain Interpretive
Matters.
(a) Unless
the context requires otherwise, (i) all references to Sections, Articles,
Exhibits, Appendices or Schedules are to Sections, Articles, Exhibits,
Appendices or Schedules of or to this Agreement, (ii) each accounting term not
otherwise defined in this Agreement has the meaning commonly applied to it in
accordance with GAAP, (iii) words in the singular include the plural and visa
versa, (iv) the term “including” means “including without limitation,” and (v)
the terms “herein,” “hereof,” “hereunder” and words of similar import shall mean
references to this Agreement as a whole and not to any individual section or
portion hereof. All references to $ or dollar amounts will be to
lawful currency of the United States of America. All references to
“day” or “days” will mean calendar days.
(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.
ARTICLE
II.
TERMINATION OF BOISE SUPPLY
AGREEMENT
Section
2.01 Termination of
Agreement. The Boise Supply Agreement is terminated pursuant
to Section 10.1(ii) thereof, effective as of the Effective
Date. Except as modified by Section 2.02 and 2.03 below, those
obligations of Micron and the Joint Venture Company intended to survive
termination pursuant to Section 10.4 of the Boise Supply Agreement shall
continue to so survive in accordance with their respective terms. The
Boise Side Letter Agreement is also terminated as of the Effective
Date.
Section
2.02 Wind Down of
Supply.
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(a) On the
Effective Date, the Joint Venture Company will cease submitting non-zero demand
forecasts to Micron on behalf of Intel for Products that would have been
manufactured at the Boise Fab.
(b) On the
Effective Date, Micron will cease initiating wafer production at the Boise Fab
for Products destined for supply to the Joint Venture Company under the Boise
Supply Agreement.
(c) For those
Products that are intended to fulfill the Joint Venture Company’s supply
obligations to Intel under the Supply Agreement with Intel and that have already
begun the manufacturing process at the Boise Fab on or before the Effective Date
(“WIP
Product”), Micron will complete or discontinue manufacture of, or
otherwise deal with such WIP Product as Micron deems appropriate.
(d) Micron
will supply to the Joint Venture Company those Products finished before the
Effective Date or finished after the Effective Date from WIP Product, in each
case upon the terms and conditions of the Boise Supply Agreement; provided, however, that
unless Micron and the Joint Venture Company agree to amend the following date,
Micron will not deliver to the Joint Venture Company or finish manufacturing any
WIP Products after December 4, 2008 and further provided that the
price of WIP Products shall be as set forth in Section 3.03.
Section
2.03 Amended Surviving
Obligations. Notwithstanding anything to the contrary in the
Boise Supply Agreement:
(a) All
Purchase Orders placed under the Boise Supply Agreement are hereby terminated
except to the extent such Purchase Orders pertain to the Products Shipped by
Micron to the Joint Venture Company as a result of those activities contemplated
under Section 2.02. The Joint Venture Company and Micron each remain
bounded to fulfill their respective obligations with respect to such Purchase
Orders in accordance with the applicable terms of the Boise Supply Agreement as
may be amended by this Agreement.
(b) Section
IV of Schedule 2.6 of the Boise Supply Agreement is not
applicable. Micron retains ownership of all Additional Equipment free
and clear of all liens, encumbrances and obligations with respect thereto to the
Joint Venture Company.
(c) Sections
III and IV of Schedule 4.6 of the Boise Supply Agreement are not applicable, and
no calculations thereunder will be made. To the extent that any
calculation thereunder would have required or would require Micron to make any
payment(s) to the Joint Venture Company, such payments are fully discharged and
Micron is forever released from making them.
(d) All
masks, reticles, probe cards and other materials in the possession of Micron
used to manufacture Products under the Boise Supply Agreement, whether
originally purchased by Micron or provided to Micron by the Joint Venture
Company, shall be and remain owned solely by Micron.
Section
2.04 Board of
Managers. Intel and Micron shall cause the Board of Managers
and the Manufacturing Committee and Planning Subcommittee to promptly revise the
Initial Business
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Plan,
Ramp Plan, Operating Plan, Performance Criteria, Products (as each of the
foregoing terms is defined in the Boise Supply Agreement) and other operating
parameters of the Joint Venture Company if and as necessary for the Joint
Venture Company to fulfill its obligations to Micron and Intel under their
respective Supply Agreement in recognition that the Joint Venture Company no
longer has the right to purchase Products made by Micron in its Boise Fab (other
than those Products that are the subject of Section 2.02 above).
Section
2.05 Demand
Forecasts. Intel and Micron shall each promptly revise their
respective Demand Forecasts (as defined in the Supply Agreements) made to the
Joint Venture Company under their respective Supply Agreement if and as
necessary for the Joint Venture Company to fulfill its obligations to Micron and
Intel under their respective Supply Agreement in recognition that the Joint
Venture Company no longer has the right to purchase Products made by Micron in
its Boise Fab (other than those Products that are the subject of Section
2.02).
ARTICLE
III.
TERMINATION
CONSIDERATION
Section
3.01 Capital
Contributions.
(a) On or
before November 10, 2008, Intel shall make a capital contribution to the Joint
Venture Company in the amount of Twenty Three Million Seven Hundred Thousand
Dollars and Three Cents ($23,700,000.03).
(b) On or
before November 10, 2008, Micron shall make a capital contribution to the Joint
Venture Company in the amount of Twenty Four Million Six Hundred Sixty-Seven
Thousand Three Hundred and Forty-Seven United States Dollars
($24,667,347.00).
Section
3.02 Termination
Payment. On or before November 10, 2008, the Joint Venture
Company shall pay to Micron a termination fee in the amount of Forty Eight
Million Three Hundred Sixty-Seven Thousand Three Hundred Forty-Seven United
States Dollars and Three Cents ($48,367,347.03).
Section
3.03 Disposition of WIP
Product.
(a) The price
of the WIP Product Shipped to the Joint Venture Company pursuant to Section 2.02
shall be Micron’s actual costs, as such costs are calculated pursuant to Section
II of Schedule 4.6 of the Boise Supply Agreement, but without any adjustments
pursuant to Section III of Schedule 4.6 or otherwise.
(b) Micron
will invoice the Joint Venture Company for (i) Micron’s actual costs incurred in
connection with all WIP Products Scrapped pursuant to Section 2.02 and (ii)
eighty per cent (80%) of Micron’s actual costs incurred in connection with M40
WIP Products not Scrapped and not Shipped to the Joint Venture Company, in both
cases (i) and (ii) as such costs are calculated pursuant to Section II of
Schedule 4.6 of the Boise Supply Agreement, but without any adjustments pursuant
to Section III of Schedule 4.6 or otherwise. Micron will provide such
invoices promptly after the end of each applicable fiscal month of Micron, and
the Joint Venture Company shall pay to Micron the amount of such invoice within
thirty (30) days of receipt of invoice. The Joint Venture Company
shall submit to Intel a copy of each such invoice,
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and Intel
shall pay to the Joint Venture Company the amount thereof within thirty (30)
days of Intel’s receipt of invoice.
Section
3.04 Payment
Method. The foregoing contributions and payments shall be made
by wire transfer in United States Dollars in immediately available funds to the
following bank accounts, as applicable:
If to
Micron:
Beneficiary: Micron
Technology, Inc.
Bank
Name: [***]
Bank
Address: Portland,
Oregon
[***]
[***]
[***]
If to the Joint Venture
Company:
Beneficiary: IM
Flash Technologies, LLC
[***]
Bank
Address: Portland,
Oregon
[***]
[***]
[***]
ARTICLE
IV.
AMENDMENTS TO JOINT VENTURE
DOCUMENTS
Section
4.01 Omnibus
Agreement. The last paragraph in the definition of “Operating
Metric Event” in the Omnibus Agreement is hereby deleted as of the Effective
Date.
Section
4.02 LLC Operating
Agreement. Section 12.5(c)(4) and the first sentence of
Section 13.14 in the LLC Operating Agreement are hereby deleted.
Section
4.03 Member Activities Letter
Agreement. In the Member Activities Letter
Agreement:
(a) The
phrase at the beginning of Section 1.1(A) which reads “Except as provided in
Section 1.1(B)(2)” is hereby revised to read “Except as provided in Section
1.1(B)(2) and 1.1(D)”.
(b) A new
Section 1.1(D) is inserted as follows:
“Notwithstanding
anything to the contrary in this or the other Joint Venture Documents, Micron
may Manufacture Restricted Products in the Boise Fab for sale or other
commercial disposition by Micron and its Affiliated Companies without any
restriction or any accounting to the Joint Venture Company, other Applicable
Joint Venture, Intel or Affiliated Company of Intel.”
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Section
4.04 Joint Venture
Document. This Agreement is a “Joint Venture
Document.”
Section
4.05 Supply Agreements. In
both the Supply Agreements, Schedule 4.8 is hereby amended to read as
follows:
“The
Parties agree that Price is the accumulation of: (i) the wafer cost for probed
wafers from any Facility and any other direct costs incurred by the Joint
Venture Company, including, but not limited to, amortization of the pre-paid
lease as set forth in the MTV Lease Agreement; (ii) the price the Joint Venture
Company pays for assembling and packaging probed wafers, (iii) the price the
Joint Venture Company pays for final testing of assembled and packaged units,
and (iv) the cost paid by the Joint Venture Company for finished goods
services. All costs shall be determined on a basis of accounting
mutually agreed by the Members. For avoidance of doubt, amortization
of the pre-paid lease as set forth in the MTV Lease Agreement shall be
calculated in accordance with Modified GAAP.”
Section
4.06 Ownership and Sharing
Interests. None of the Parties’ respective Interest, Economic
Interests, Percentage Interests or Sharing Interest (as such terms are defined
in the Joint Venture Documents, or the Omnibus Agreement) shall be affected by
the terms of this Agreement or by the performance of any obligations
hereunder.
Section
4.07 No Other
Amendments. Except as provided in this Article IV, no other
amendments to the Joint Venture Documents are intended by this
Agreement.
ARTICLE
V.
MISCELLANEOUS
Section
5.01 Notices. All
notices and other communications hereunder shall be in writing and shall be
deemed given upon (a) transmitter’s confirmation of a receipt of a
facsimile transmission, (b) confirmed delivery by a standard overnight carrier
or when delivered by hand, (c) the expiration of five (5) Business Days after
the day when mailed in the United States by certified or registered mail,
postage prepaid, or (d) delivery in person, addressed at the following addresses
(or at such other address for a Party as shall be specified by like
notice):
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If
to Intel:
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with a copy
to:
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Intel
Corporation
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Attention: NPG
General Manager
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
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Intel
Corporation
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Mail
Stop SC4-203
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Attention: General
Counsel
Facsimile: (▇▇▇)
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If
to Micron :
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Micron
Technology, Inc.
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Mail
Stop ▇-▇▇▇
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Attention: General
Counsel
Facsimile: (▇▇▇)
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If to the Joint
Venture Company
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IM
Flash Technologies, LLC
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Attention: ▇▇▇▇▇
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Facsimile: (▇▇▇)
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Section
5.02 Waiver. The
failure at any time of a Party to require performance by another Party of any
responsibility or obligation required by this Agreement shall in no way affect a
Party’s right to require such performance at any time thereafter, nor shall the
waiver by a Party of a breach of any provision of this Agreement by another
Party constitute a waiver of any other breach of the same or any other provision
nor constitute a waiver of the responsibility or obligation itself.
Section
5.03 Assignment. This
Agreement shall be binding upon and inure to the benefit of the successors and
assigns of each Party hereto. Except as permitted by the Omnibus
Agreement or Joint Venture Documents, neither this Agreement nor any right or
obligation hereunder may be assigned or delegated by either Party in whole or in
part to any other Person, without the prior written consent of the non-assigning
Party.
Section
5.04 Third Party
Rights. Nothing in this Agreement, whether express or implied,
is intended or shall be construed to confer, directly or indirectly, upon or
give to any Person, other than the Parties hereto, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any covenant, condition
or other provision contained herein.
Section
5.05 Choice of
Law. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Delaware, USA, without
giving effect to the principles of conflict of laws thereof.
Section
5.06 Jurisdiction;
Venue. Any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this
Agreement shall be brought in a state or federal court located in Delaware, and
each of the Parties to this Agreement hereby consents and submits to the
exclusive jurisdiction of such courts (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives, to the
fullest extent permitted by Applicable Law, any objection which it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
in any such court or that any such suit, action or proceeding which is brought
in any such court has been brought in an inconvenient forum. Process
in any such suit, action or proceeding may be served on any Party anywhere in
the world, whether within or without the jurisdiction of any such
court.
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Section
5.07 Headings. The
headings of the Articles and Sections in this Agreement are provided for
convenience of reference only and shall not be deemed to constitute a part
hereof.
Section
5.08 Entire
Agreement. This Agreement and, for so long as any applicable
terms of the Omnibus Agreement and Joint Venture Documents remain in effect, the
applicable term(s) of the Omnibus Agreement and Joint Venture Documents,
constitute the entire agreement of the Parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
oral and written, between the Parties hereto with respect to the subject matter
hereof.
Section
5.09 Severability. Should
any provision of this Agreement be deemed in contradiction with the laws of any
jurisdiction in which it is to be performed or unenforceable for any reason,
such provision shall be deemed null and void, but this Agreement shall remain in
full force in all other respects. Should any provision of this
Agreement be or become ineffective because of changes in Applicable Laws or
interpretations thereof, or should this Agreement fail to include a provision
that is required as a matter of law, the validity of the other provisions of
this Agreement shall not be affected thereby. If such circumstances
arise, the Parties hereto shall negotiate in good faith appropriate
modifications to this Agreement to reflect those changes that are required by
Applicable Law.
Section
5.10 Counterparts. This
Agreement may be executed in several counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument.
[Signature
page follows]
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IN
WITNESS WHEREOF, this Agreement has been executed and
delivered as of the Effective Date.
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INTEL
CORPORATION
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By:
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/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name:
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Title:
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Senior Vice
President
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MICRON
TECHNOLOGY, INC.
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By:
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/s/ D. ▇▇▇▇
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Name:
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D. ▇▇▇▇
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Title:
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President and
COO
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IM
FLASH TECHNOLOGIES, LLC
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By:
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/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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Name:
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▇▇▇▇▇
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Title
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Executive Officer
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This is
the signature page for the Boise Supply Termination and Amendment Agreement
entered into by and among Intel Corporation, Micron Technology, Inc., and IM
Flash Technology, LLC