Limited Liability Company Agreement

LIMITED LIABILITY COMPANY AGREEMENT


OF


WAFERTECH, LLC


A DELAWARE LIMITED LIABILITY COMPANY


DATED AS OF AUGUST 9, 1996


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EX 10.47


TABLE OF CONTENTS
Page


ARTICLE 1 DEFINITIONS AND RULES OF CONSTRUCTION.................. 1
1.1 DEFINITIONS............................................ 1
1.2 RULES OF CONSTRUCTION.................................. 9


ARTICLE 2 ORGANIZATIONAL MATTERS................................. 9
2.1 FORMATION OF COMPANY................................... 9
2.2 NAME................................................... 9
2.3 FICTITIOUS BUSINESS NAME STATEMENT; OTHER
CERTIFICATES........................................... 9
2.4 PRINCIPAL EXECUTIVE OFFICE; OTHER OFFICES.............. 9
2.5 AGENTS FOR SERVICE OF PROCESS.......................... 10
2.6 BUSINESS AND PURPOSE OF THE COMPANY.................... 10
2.7 TERM OF THE COMPANY.................................... 11
2.8 INITIAL MEMBERS; STATUS OF MEMBERS..................... 11
2.9 LIABILITY OF MEMBERS................................... 11
2.10 COMPETITION; CONFLICT OF INTEREST...................... 11
2.11 BUSINESS PLAN.......................................... 12
2.12 MEMBER INTELLECTUAL PROPERTY........................... 12
2.13 FORMATION AUTHORIZATION................................ 13
2.14 REIMBURSEMENT OF TSMC EXPENSES......................... 13


ARTICLE 3 CAPITAL CONTRIBUTIONS.................................. 14
3.1 INITIAL CAPITAL CONTRIBUTIONS.......................... 14
3.2 ADDITIONAL CAPITAL CONTRIBUTION........................ 15
3.3 CONSEQUENCES OF FAILURE TO CONTRIBUTE.................. 15
3.4 CAPITAL ACCOUNTS....................................... 19
3.5 TRANSACTIONS BETWEEN MEMBERS AND THE
COMPANY; COMPANY LOANS AND GUARANTEES.................. 20
3.6 RIGHTS WITH RESPECT TO CAPITAL......................... 22


ARTICLE 4 DISTRIBUTIONS.......................................... 22
4.1 CASH AVAILABLE FOR DISTRIBUTION........................ 22
4.2 TAX DISTRIBUTIONS...................................... 23
4.3 AMOUNTS WITHHELD....................................... 23


ARTICLE 5 ALLOCATION OF PROFITS AND LOSSES....................... 23
5.1 ALLOCATION OF NET PROFIT AND LOSS...................... 23
5.2 RESIDUAL ALLOCATIONS................................... 24
5.3 OTHER ALLOCATION RULES................................. 24
5.4 TAX ALLOCATIONS........................................ 24


(i)


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ARTICLE 6 MANAGEMENT OF THE COMPANY................................... 24
6.1 MANAGEMENT BY DIRECTORS..................................... 24
6.2 NUMBER AND DESIGNATION OF DIRECTORS; OBSERVER
OF THIRD PARTY INVESTORS.................................... 25
6.3 MEETINGS OF DIRECTORS....................................... 25
6.4 POWERS OF DIRECTORS......................................... 26
6.5 ANNUAL INFORMATIONAL MEETING OF MEMBERS..................... 28
6.6 COMPENSATION COMMITTEE...................................... 28
6.7 EXPENSE REIMBURSEMENT....................................... 28
6.8 INSURANCE................................................... 29
6.9 OFFICERS.................................................... 29
6.10 MEMBER CONSENTS............................................. 31
6.11 BEST INTEREST OF THE COMPANY................................ 31


ARTICLE 7 MEMBER REPRESENTATIONS AND WARRANTIES....................... 31
7.1 NATURE OF MEMBER'S INTEREST................................. 31
7.2 MEMBER REPRESENTATIONS AND WARRANTIES....................... 31


ARTICLE 8 RESTRICTIONS ON TRANSFER; PREEMPTIVE RIGHT;
ADMISSION OF NEW MEMBERS; RIGHT OF FIRST
REFUSAL..................................................... 33
8.1 RESTRICTIONS ON TRANSFER.................................... 33
8.2 GENERAL TRANSFER PROVISIONS................................. 34
8.3 PREEMPTIVE RIGHTS........................................... 35
8.4 ADMISSION OF NEW MEMBERS.................................... 36
8.5 RIGHT OF FIRST REFUSAL...................................... 37
8.6 SPECIAL TRANSFER PROVISION.................................. 38
8.7 SPECIAL RIGHT OF MANAGING MEMBERS OTHER THAN
TSMC TO PURCHASE............................................ 38


ARTICLE 9 BOOKS, RECORDS, REPORTS AND BANK ACCOUNTS................... 39
9.1 MAINTENANCE OF BOOKS AND RECORDS............................ 39
9.2 INSPECTION RIGHTS........................................... 40
9.3 RIGHTS TO RECEIVE COPIES OF DOCUMENTS....................... 40
9.4 BANK ACCOUNTS............................................... 40
9.5 TAX MATTERS HANDLED BY TAX MATTERS PARTNER.................. 40
9.6 FEDERAL INCOME TAX ELECTIONS MADE BY TAX
MATTERS PARTNER............................................. 41
9.7 OBLIGATIONS OF MEMBERS TO REPORT ALLOCATIONS................ 41


ARTICLE 10 EVENT OF DEFAULT; TERMINATION OF MEMBERSHIP................. 42
10.1 EVENT OF DEFAULT............................................ 42
10.2 TERMINATION OF MEMBER....................................... 43
10.3 PURCHASE RIGHT.............................................. 43
10.4 NOTICE OF INTENT TO PURCHASE................................ 44
10.5 ELECTION TO PURCHASE LESS THAN ALL OF THE
TERMINATED MEMBER'S INTEREST............................. 44


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10.6 PAYMENT OF PURCHASE PRICE................................ 45
10.7 CLOSING OF PURCHASE OF TERMINATED MEMBER'S
INTEREST................................................. 45


ARTICLE 11 TERMINATION AND DISSOLUTION.............................. 45
11.1 TERMINATION.............................................. 45
11.2 DISSOLUTION.............................................. 46
11.3 WINDING UP............................................... 46
11.4 DISTRIBUTION OF ASSETS................................... 47
11.5 TIME FOR WINDING UP...................................... 48
11.6 FINAL ACCOUNTING; CERTIFICATES OF CANCELLATION........... 48


ARTICLE 12 EXECUTIVE INCENTIVE PLAN................................. 48
12.1 AUTHORIZATION OF EXECUTIVE COMPENSATION.................. 48
12.2 ADMISSION OF PARTICIPANTS................................ 48


ARTICLE 13 TSMC LAND OPTION; NEW VENTURE RIGHTS..................... 49
13.1 LAND OPTION.............................................. 49
13.2 NEW FAB VENTURE RIGHT OF FIRST REFUSAL................... 49
13.3 FURTHER ASSURANCES....................................... 49


ARTICLE 14 CHANGE OR CONVERSION TO A GENERAL
CORPORATION.............................................. 49
14.1 MERGER OR CONSOLIDATION TO A GENERAL
CORPORATION.............................................. 49
14.2 REGISTRATION RIGHTS...................................... 50
14.3 VOTING ARRANGEMENTS...................................... 50
14.4 OPTIONS.................................................. 50


ARTICLE 15 STANDARD OF CARE; INDEMNIFICATION........................ 51
15.1 STANDARD OF CARE......................................... 51
15.2 INDEMNIFICATION OF DIRECTORS, OFFICERS,
EMPLOYEES AND AGENTS..................................... 51
15.3 EXPENSES................................................. 51
15.4 INDEMNIFICATION RIGHTS NON-EXCLUSIVE..................... 51
15.5 ERRORS AND OMISSIONS INSURANCE........................... 52
15.6 ASSETS OF THE COMPANY.................................... 52


ARTICLE 16 AMENDMENTS............................................... 52
16.1 AMENDMENT, ETC. OF LIMITED LIABILITY COMPANY
AGREEMENT................................................ 52
16.2 AMENDMENT, ETC. OF CERTIFICATE OF FORMATION.............. 52


ARTICLE 17 CONDITIONS PRECEDENT....................................... 52
17.1 CONDITIONS TO MEMBERS' PERFORMANCE......................... 52
17.2 CONDITIONS TO TSMC'S PERFORMANCE........................... 53
17.3 CONDITIONS TO ADI'S PERFORMANCE............................ 53
17.4 CONDITIONS TO ALTERA'S PERFORMANCE......................... 53


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17.5 CONDITIONS TO ISSI'S PERFORMANCE........................... 54
17.6 CONDITIONS TO THE THIRD PARTY INVESTORS'
PERFORMANCE................................................ 54


ARTICLE 18 CONFIDENTIALITY............................................ 54
18.1 EXCHANGE OF INFORMATION AND NONDISCLOSURE.................. 55
18.2 CONFIDENTIALITY AGREEMENTS FOR VISITORS AND
EMPLOYEES.................................................. 55
18.3 THIRD PARTY REQUEST FOR INFORMATION........................ 55
18.4 REPORTING LOSS, THEFT OR MISAPPROPRIATION.................. 55
18.5 BREACH OF CONFIDENTIALITY.................................. 56


ARTICLE 19 ANCILLARY AGREEMENTS....................................... 56
19.1 EXECUTION AND DELIVERY..................................... 56
19.2 TERMINATION OF MANUFACTURING AGREEMENT;
FUTURE PURCHASE AGREEMENT.................................. 56


ARTICLE 20 DISPUTE RESOLUTION; ARBITRATION............................ 56
20.1 NEGOTIATION BETWEEN EXECUTIVES............................. 56
20.2 MEDIATION.................................................. 57
20.3 CLAIMS SUBJECT TO ARBITRATION.............................. 57


ARTICLE 21 LIMITATION ON DAMAGES; CONTRACTUAL LIMITATIONS
PERIOD..................................................... 59
21.1 LIMITATION ON DAMAGES...................................... 59
21.2 CONTRACTUAL LIMITATIONS PERIOD............................. 60


ARTICLE 22 FORCE MAJEURE.............................................. 60
22.1 FORCE MAJEURE.............................................. 60
22.2 NOTIFICATION............................................... 61
22.3 RESPONSE TO FORCE MAJEURE.................................. 61
22.4 LIMITATIONS ON APPLICABILITY OF FORCE MAJEURE.............. 61


ARTICLE 23 GENERAL PROVISIONS......................................... 61
23.1 SEVERABILITY............................................... 61
23.2 NEUTRAL INTERPRETATION; WAIVER............................. 61
23.3 NOTICES.................................................... 62
23.4 TIME OF THE ESSENCE........................................ 62
23.5 GOVERNING LAW.............................................. 62
23.6 ENTIRE AGREEMENT........................................... 62
23.7 WAIVER..................................................... 62
23.8 COOPERATION................................................ 62
23.9 COUNTERPARTS............................................... 62
23.10 EXHIBITS AND SCHEDULES..................................... 62
23.11 ATTORNEYS' FEES............................................ 63
23.12 DATE OF PERFORMANCE........................................ 63


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23.13 SURVIVAL.............................................. 63
23.14 SURVIVAL OF RIGHTS.................................... 63
23.15 THIRD-PARTY BENEFICIARIES............................. 63
23.16 PARTITION............................................. 63
23.17 GOVERNING LANGUAGE OF AGREEMENT....................... 63
23.18 CONSENT TO JURISDICTION AND SERVICE OF PROCESS........ 64
23.19 LIQUIDATED DAMAGES.................................... 64
23.20 AUTHORIZED REPRESENTATIVES............................ 64
23.21 REMEDIES CUMULATIVE, CONCURRENT AND NON-
EXCLUSIVE............................................. 65
23.22 WAIVER OF CONFLICT OF INTEREST........................ 65
23.23 AMENDMENT AND RESTATEMENT............................. 65


(v)
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LIMITED LIABILITY COMPANY AGREEMENT 7
LIST OF EXHIBITS


Exhibit A - Capital Contributions


Exhibit B - Certificate of Formation


Exhibit C - Confidentiality Agreements


(1) Visitor Confidentiality Agreement
(2) Employee Invention Assignment and Confidentiality
Agreement


Exhibit D - Description of Real Property


Exhibit E - Possible Future Restructuring


Exhibit F - Future Purchase Agreement


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LIMITED LIABILITY COMPANY AGREEMENT 8
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT


OF


WAFERTECH, LLC


THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT is dated as of August 9, 1996, by and among TSMC Development, Inc., a Delaware corporation ("TSMC"), Analog Devices, Inc., a Massachusetts corporation ("ADI"), Altera Corporation, a California corporation ("Altera"), Integrated Silicon Solutions, Inc., a Delaware corporation ("ISSI") and each of the other Persons identified on the signature page hereof as a Member (as hereinafter defined) hereunder ("Third Party Investors").


WHEREAS, TSMC, ADI, ALTERA, ISSI and the Third Party Investors as of June 25, 1996 (the "Effective Date") formed a limited liability company organized under the laws of the State of Delaware in the United States of America, pursuant to that certain Limited Liability Company Agreement by and among TSMC, ADI, Altera, ISSI and the Third Party Investors, dated as of June 25, 1996 (the "Original Agreement"), the purpose of which is to construct a foundry which shall provide foundry services for the manufacture of IC wafers in accordance with the terms of this Agreement.


WHEREAS, solely for the convenience of each Member but without altering the rights or obligations of each Member thereunder, this Agreement amends and restates the Original Agreement.


NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth and other good and valuable consideration had and received, each of the parties hereto agrees as follows:


ARTICLE 1
DEFINITIONS AND RULES OF CONSTRUCTION


1.1 DEFINITIONS. In addition to the terms defined elsewhere in this Agreement, the following words and expressions shall have the meanings set forth below:


1.1.1 "AAA" means the American Arbitration Association.


1.1.2 "ACT" means the Delaware Limited Liability Company Act set forth in Title 6, Sections 18-101 through 18-1109 of the Delaware Code, as amended from time to time. Any reference to the Act shall automatically include a reference to any subsequent or successor limited liability company law in Delaware.


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1.1.3 "ADDITIONAL CAPITAL CONTRIBUTION" is defined in Section 3.2.


1.1.4 "ADVANCED PROCESS AGREEMENT" means that certain Advanced Process License Agreement dated as of April 10, 1996, between TSMC and TSMC International Investment Ltd., a British Virgin Islands corporation ("TSMC IIL"), whereby TSMC has been granted a license to certain future processes and know-how of TSMC IIL which Advanced Process Agreement has been assigned by TSMC to the Company as described in Section 3.1.1.


1.1.5 "AFFILIATE" means, when used with reference to a specified Person:


(i) With respect to any corporation, limited liability company, partnership or other business enterprise: (a) which owns or controls, directly or indirectly, fifty percent (50%) or more of the voting rights with respect to the election of directors or managers, or which has practical control directly or indirectly, of any party to this Agreement; (b) of which fifty percent (50%) or more of the voting rights with respect to the election of directors or managers is owned or controlled, directly or indirectly, by, or which is under the practical control directly or indirectly of, any party to this Agreement; or (c) of which fifty percent (50%) or more of the total voting rights with respect to the election of directors or managers is owned or controlled, directly or indirectly, by, or which is under the practical control directly or indirectly of, any corporation, limited liability company, partnership or other business enterprise qualifying under subsections (a) or (b) above; and


(ii) With respect to any natural person, any relative of such Person or such Person's spouse, whether by blood, marriage or adoption.


1.1.6 "AGREEMENT" means this Amended and Restated Limited Liability Company Agreement, including all Exhibits (which are hereby incorporated into and made a part of this Agreement by this reference), as originally executed and as amended from time to time, as the context requires.


1.1.7 "ANCILLARY AGREEMENTS" mean (i) the Confidentiality Agreements, (ii) the Manufacturing Agreement, (iii) the Technology License and Assistance Agreement, (iv) the Advanced Process Agreement, (v) the Assignments of each of the Manufacturing Agreement, the Technology License and Assistance Agreement and the Advanced Process Agreement, (vi) the Registration Rights Agreement, (vii) the Purchase Agreement, (viii) the TSMC Land Option and (ix) the Future Purchase Agreement.


1.1.8 "BOARD OF DIRECTORS" is defined in Section 6.1.


1.1.9 "BUSINESS DAY" means a day on which banking institutions are open for business in Seattle, Washington and San Jose, California other than a Saturday or Sunday.


1.1.10 "BUSINESS PLAN" is defined in Section 2.11.


1.1.11 "CAPITAL ACCOUNT" is defined in Section 3.4.


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1.1.12 "CAPITAL CONTRIBUTION" OR "INITIAL CAPITAL CONTRIBUTION" means the total amount of cash and the agreed fair market value (net of liabilities) of other property contributed to the Company by a particular Member, as contemplated in Section 3.1, and any subsequent contributions of cash and the agreed fair market value (net of liabilities) of any other property subsequently contributed to the Company by that Member. "TOTAL INITIAL CAPITAL CONTRIBUTION" means the sum of all "INITIAL CAPITAL CONTRIBUTIONS," as set forth on Exhibit A.


1.1.13 "CASH AVAILABLE FOR DISTRIBUTION" is defined in Section 4.1.2.


1.1.14 "CERTIFICATE OF FORMATION" means the certificate to be filed with the Office of the Delaware Secretary of State for the purpose of forming the Company, attached hereto as Exhibit B.


1.1.15 "CODE" means the Internal Revenue Code of 1986, as amended (or any corresponding provision or provisions of any succeeding law).


1.1.16 "COMPANY" means WaferTech, LLC.


1.1.17 "COMPANY LOANS" means any loans or advances made by any Member to the Company as contemplated in Section 3.5.2.


1.1.18 "CONFIDENTIAL INFORMATION" means confidential or secret information, including information protected under the Confidentiality Agreements or confidential or secret information protected under any of the Ancillary Agreements, including but not limited to Trade and Industrial Secrets (as defined in the Technology License and Assistance Agreement) and Proprietary Information (as defined in the Manufacturing Agreement).


1.1.19 "CONFIDENTIALITY AGREEMENTS" mean that certain Member's Confidentiality Agreement dated May 25, 1996 executed by the Company and each Member and the Visitor Confidentiality Agreements executed by the Company and each Visitor (as provided in Article 18) substantially in the form attached hereto as Exhibit C(1).


1.1.20 "DEFAULTING MEMBER" means a Member who fails to make a Member's Second Part Capital Contribution or Third Part Capital Contribution hereunder or an Additional Capital Contribution under the circumstances described in Section 3.3.2.2, or otherwise breaches this Agreement in a manner that constitutes an Event of Default.


1.1.21 "DELAWARE CORPORATION" is defined in Section 14.1.


1.1.22 "DEPRECIATION" means, for each Fiscal Year, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable as determined for book purposes under GAAP.


1.1.23 "DILUTION EVENT" means an event resulting in reduction of a Member's Percentage Interest in the Company as contemplated in Section 3.3.2.1 or Section 3.5.4 of this


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3 11 Agreement if the Additional Capital Contribution or guaranteed debt which the Member did not provide or guarantee, as the case may be, was used for purposes other than the completion of the Foundry in accordance with the Business Plan.


1.1.24 "DIRECTOR" is defined in Section 6.2.1, and includes voting and non-voting Directors.


1.1.25 "DISSOLUTION DATE" shall mean the first date on which one of the events set forth in Section 11.2 shall occur.


1.1.26 "ECONOMIC INTEREST" means a Person's right to share in the Net Profit, Net Loss or similar items of, and to receive distributions from, the Company, but does not include any other rights of a Member including, without limitation, the right to vote or to participate in the management of the Company, or, except as provided in Sections 9.2 and 9.3, any right to information concerning the business and affairs of the Company.


1.1.27 "EVENT OF DEFAULT" is defined in Section 10.1.


1.1.28 "FISCAL YEAR" means each twelve (12) month period commencing January 1 and through and including December 31 and including as the first Fiscal Year, the period from the date of this Agreement to and including December 31, 1996.


1.1.29 "FORCE MAJEURE" means any one or more of the following: acts of war declared or undeclared, nationalization, expropriation, civil unrest or other public disturbance, fire, storm, floods, typhoon, tidal wave, hurricane, cyclone or other severe weather conditions, earthquake, or other Acts of God, legal restraints, governmental or like interference, judicial action, accidental damage to equipment, as well as any other cause outside the reasonable control of a Member. "Force Majeure" also includes the failure to obtain such license(s) and other approvals, including export licenses, as are required by United States law or other applicable law for the equipment, technical information, software, technology and Proven Products to be provided pursuant to the terms of this Agreement, the Technology License and Assistance Agreement or the Advanced Process Agreement.


1.1.30 "FUTURE PURCHASE AGREEMENT" is defined in Section 19.2.


1.1.31 "FOUNDRY" is defined in Section 2.6.1.


1.1.32 "GAAP" means generally accepted accounting principles in the United States of America.


1.1.33 "GOVERNMENTAL INTERVENTION" means (i) any action taken by any government or agency thereof, subsequent to the formation of the Company, which is material and adverse to any Member, or (ii) any recommendations by any government or agency thereof to the Members or any of them individually, requiring directly or indirectly, formally or informally, alteration or modification of any term or condition of this Agreement or of the Ancillary
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4 12 Agreements, or of the performance of the Members under this Agreement or the Ancillary Agreements in a manner which is material and adverse to one Member.


1.1.34 "IC" means integrated circuit.


1.1.35 "INCENTIVE PLAN" means any incentive plan approved by the Board of Directors and, wi ...