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General Partnership Agreement Dated As Of October 23, 1995

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ARTICLE] 5 [MULTIPLIER] 1


CONFIDENTIAL TREATMENT REQUESTED
[*] Denotes information for which confidential
treatment has been requested. Confidential portions
omitted have been filed separately with the Commission.


GENERAL PARTNERSHIP AGREEMENT (this "Agreement"), dated as of _____ __, 1996, between ATOR Corp., a New York corporation (the "AT&T Partner"), and Ciror, Inc., a California corporation (the "Cirrus Partner"). The AT&T Partner and the Cirrus Partner are sometimes referred to herein as the "Partners" or individually as a "Partner."


WHEREAS, the parties hereto desire to enter into a cooperative arrangement with respect to the expansion and operation of certain wafer fabrication facilities for the purpose of processing silicon wafers; and


WHEREAS, the parties hereto consider it mutually beneficial to establish a partnership (the "Partnership") and the parties hereto are parties to a Joint Venture Formation Agreement, dated as of October __,1995 (the "Joint Venture Agreement").


NOW, THEREFORE, in consideration of the foregoing and the mutual covenants, representations, warranties and agreements hereinafter set forth, and intending to be legally bound hereby, the parties hereto agree, subject to the conditions contained herein, as follows:


ARTICLE I


DEFINITIONS


1.01. Definitions. For the purpose hereof, the following terms will have the following meanings:


"Additional Capital Contributions" will have the meaning set forth in Section 3.05 hereof.


"Adjusted Capital Account Deficit" means, with respect to any Partner, the deficit balance, if any, in the Capital Account (as hereinafter defined) of such Partner as of the end of the relevant Fiscal Year (as hereinafter defined), after giving effect to the following adjustments:


(a) credit to such Capital Account any amounts
which such Partner is obligated to restore pursuant to
any provision of this Agreement or is deemed to be
obligated to restore pursuant to the penultimate
sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5) of
the Regulations (as hereinafter defined); and


(b) debit to such Capital Account the items
described in Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6) of the
Regulations.


The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Regulations and will be interpreted consistently therewith.


"Affiliate" means any Person, directly or indirectly controlled by, controlling or under common control with (as hereinafter defined) another Person (as hereinafter defined); "controlled by, controlling or under common control with" means the power to direct the management and policies of a Person, whether through the ownership of voting securities, by agreement or otherwise.


"Board of Governors" will have the meaning set forth in Section 6.01 hereof.


"Capital Account" means, with respect to each Partner, the account maintained for each Partner on the books of account for the Partnership in accordance with the provisions of Section 3.02 hereof (which Capital Account will be adjusted as otherwise required by Section 1.704-1(b) of the Regulations).


"Chairman of the Board of Governors" has the meaning set forth in Section 7.01 hereof.


"Code" means the United States Internal Revenue Code of 1986, codified at Title 26 of the United States Code, as amended from time to time (or any corresponding provisions of succeeding law).


"Depreciation" means for each Fiscal Year (as hereinafter defined) of the Partnership, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such Fiscal Year, except that if the Gross Asset Value (as hereinafter defined) of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such Fiscal Year, Depreciation will be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such Fiscal Year bears to such beginning adjusted tax basis; provided, however, that if the adjusted basis for federal income tax purposes of an asset at the beginning of such Fiscal Year is zero, Depreciation will be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Partners.


"Extended Term" will have the meaning set forth in Article XI hereof.


"Fiscal Year" means (i) the period commencing on the effective date of this Agreement and ending on December 31, (ii) any subsequent twelve (12) month period commencing on January 1, and (iii) any portion of the period described in the immediately preceding clause (ii) for which the Partnership is required to allocate Profits (as hereinafter defined), Losses (as hereinafter defined) and other items of Partnership income, gain, loss, deduction or credit pursuant to Article VIII hereof.


"GPL" will have the meaning set forth in Section 2.01 hereof.


"Governor" or "Governors" will have the meaning set forth in Section 6.02 hereof.


"Gross Asset Value" means, with respect to any asset, the asset's adjusted basis for federal income tax purposes, except as follows:


(a) The initial Gross Asset Value of any asset
contributed by a Partner to the Partnership will be the
gross fair market value of such asset, as determined by
the Partners;


(b) The Gross Asset Values of all Partnership
assets will be adjusted to equal their respective gross
fair market values, as determined by the Partners, as of
the following times: (i) the acquisition of an additional
Partnership interest by any new or existing Partner in
exchange for more than a de minimis Capital Contribution;
(ii) the distribution by the Partnership to a Partner of
more than a de minimis amount of Partnership property as
consideration for a Partnership interest; and (iii) the
liquidation of the Partnership within the meaning of
Section 1.704-1(b)(2)(ii)(g) of the Regulations;
provided, however, that, except as otherwise provided
herein, adjustments pursuant to the immediately preceding
clauses (i) and (ii) will be made only if the Partners
reasonably determine that such adjustments are necessary
or appropriate to reflect the relative economic interests
of the Partners in the Partnership;


(c) The Gross Asset Value of any Partnership asset
distributed to any Partner will be adjusted to equal the
gross fair market value of such asset on the date of
distribution as determined by the Partners;


(d) The Gross Asset Values of Partnership assets
will be increased (or decreased) to reflect any
adjustments to the adjusted basis of such assets pursuant
to Section 734(b) or Section 743(b) of the Code, but only
to the extent that such adjustments are taken into
account in determining Capital Accounts pursuant to
Section 1.704-1(b)(2)(iv)(m) of the Regulations and
Section 7.04 hereof; provided, however, that Gross Asset
Values will not be adjusted pursuant to this paragraph
(d) to the extent the Partners determine that an
adjustment pursuant to paragraph (b) hereof is necessary
or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this
paragraph (d); and


(e) If the Gross Asset Value of an asset has been
determined or adjusted pursuant to the immediately
preceding subparagraph (a), (b) or (d), such Gross Asset
Value will thereafter be adjusted by the Depreciation
taken into account with respect to such asset for
purposes of computing Profits and Losses (as hereinafter
defined).


"Hedge/Swap Transaction" means any transaction which is a rate hedge/swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, interest rate option, forward foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross- currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of any of the foregoing) or any combination of the foregoing.


"IRS" means the United States Internal Revenue Service.


"Initial Capital" will have the meaning set forth in Section 3.01 hereof.


"Land" will have the meaning set forth in the Lease.


"Nonrecourse Deductions" has the meaning set forth in Section 1.704-2(b)(1) of the Regulations. The amount of Nonrecourse Deductions for a Fiscal Year of the Partnership will be determined according to the provisions of Section 1.704-2(c) of the Regulations.


"Nonrecourse Liability" has the meaning set forth in Section 1.704-2(b)(3) of the Regulations.


"Partner Nonrecourse Debt" has the meaning set forth in Section 1.704-2(b)(4) of the Regulations.


"Partner Nonrecourse Debt Minimum Gain" means an amount, with respect to each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Section 1.704-2(i)(3) of the Regulations.


"Partner Nonrecourse Deductions" has the meaning set forth in Sections 1.704-2(i)(1) and 1.704-2(i)(2) of the Regulations.


"Partnership Minimum Gain" has the meaning set forth in Sections 1.704-2(b)(2) and 1.704-2(d) of the Regulations.


"Percentage Interests" means the respective interests of the Partners as shown on Schedule A attached hereto.


"Premises" will have the meaning set forth in the Lease.


"Profits and Losses" means, for each Fiscal Year, an amount equal to the Partnership's taxable income or loss for such Fiscal Year, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code will be included in taxable income or loss), with the following adjustments:


(a) Any income of the Partnership that is exempt
from federal income tax and not otherwise taken into
account in computing Profits or Losses pursuant to this
definition will be added to such taxable income or loss;


(b) Any expenditures of the Partnership described
in Section 705(a)(2)(B) of the Code or treated as Code
Section 705(a)(2)(B) expenditures pursuant to Section
1.704-1(b)(iv)(i) of the Regulations, and not otherwise
taken into account in computing Profits and Losses
pursuant to this definition, will be subtracted from such
taxable income or loss;


(c) In the event the Gross Asset Value of any
Partnership asset is adjusted pursuant to paragraph (b)
or (c) of the definition of "Gross Asset Value", the
amount of such adjustment will be taken into account as
gain or loss from the disposition of such asset for
purposes of computing Profits or Losses;


(d) Gain or loss resulting from any disposition of
property with respect to which gain or loss is recognized
for federal income tax purposes will be computed by
reference to the Gross Asset Value of the property
disposed of, notwithstanding that the adjusted tax basis
of such property differs from its Gross Asset Value;


(e) In lieu of the depreciation, amortization, and
other cost recovery deductions taken into account in
computing such taxable income or loss, there will be
taken into account Depreciation for such Fiscal Year or
other period;


(f) To the extent an adjustment to the adjusted tax
basis of any Partnership asset pursuant to Section 734(b)
or Section 743(b) of the Code is required pursuant to
Section 1.704-1(b)(2)(iv)(m)(4) of the Regulations to be
taken into account in determining Capital Accounts as a
result of a distribution other than in liquidation of a
Partner's interest in the Partnership, the amount of such
adjustment will be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if
the adjustment decreases the basis of the asset) from the
disposition of the asset and will be taken into account
for purposes of computing Profits or Losses; and


(g) Notwithstanding any other provision of this
definition, any items which are specially allocated
pursuant to Section 8.02 hereof will not be taken into
account in computing Profits and Losses.


The amounts of the items of Partnership income, gain, loss, or deduction available to be specially allocated pursuant to Section 8.02 hereof will be determined by applying rules analogous to those set forth in the immediately preceding subparagraphs (a) through (f).


"Purchasing Partner or Partners" will have the meaning set forth in Section 5.03 hereof.


"Regulations" means Income Tax Regulations, including Temporary Regulations, promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).


"Regulatory Allocation" will have the meaning set forth in Section 8.02 hereof.


"Schedule of Authorizations" will have the meaning set forth in Section 7.07 hereof.


"Selling Partner" will have the meaning set forth in Section 5.03 hereof.


"Tax Matters Partner" will have the meaning set forth in Section 10.03 hereof.


1.02. Capitalized Terms. Capitalized terms used but not defined herein will have the respective meanings assigned to them in the Joint Venture Agreement.


ARTICLE II


FORMATION


2.01. Formation. The Partners hereby form the Partnership pursuant to the provisions of the General Partnership Law of the State of New York (the "GPL") and upon the terms and subject to the conditions of this Agreement. The rights and liabilities of the Partners will be, except as herein otherwise expressly provided, as provided in the GPL. Neither Partner will have the power or authority to bind the other Partner except as specifically provided in this Agreement. Neither the Partnership (in the case of either Partner) nor any Partner (in the case of any other Partner) will be responsible or liable for any activity, liability, indebtedness or obligation of any Partner incurred prior to the execution of this Agreement or following the termination of this Agreement, except as to the joint responsibilities, liabilities, indebtedness and obligations incurred after the date hereof, and only pursuant to, and as limited by, the terms of the Joint Venture Agreement or the Material Agreements.


2.02. Name. The name of the Partnership will be "[AT&T/Cirrus]".


ARTICLE III


CAPITAL


3.01. Initial Capital. (a) The initial capital (the "Initial Capital") of the Partnership will be the sums of cash or the agreed fair market value of the property (or combination of cash and property) contributed to the Partnership by the Partners in such amounts or value as are set out opposite the name of each of the Partners on Schedule A attached hereto and incorporated herein by this reference.


3.02. Capital Accounts. A Capital Account will be established for each Partner.


(a) To each Partner's Capital Account there will be credited such Partner's capital contributions, such Partner's distributive share of Profits and any items in the nature of income or gain which are specially allocated pursuant to Section 8.02 hereof, and the amount of any Partnership liabilities assumed by such Partner or which are secured by any Property distributed to such Partner;


(b) To each Partner's Capital Account there will be debited the amounts of cash and the Gross Asset Value of any Property distributed to such Partner pursuant to any provision of this Agreement, such Partner's distributive share of Losses and any items in the nature of expenses or losses which are specially allocated pursuant to Section 8.02 hereof and the amount of any liabilities of such Partner assumed by the Partnership or which are secured by any Property contributed by such Partner to the Partnership;


(c) In the event any Partnership interest is transferred in accordance with the terms of this Agreement, the transferee will succeed to the Capital Account of the transferor to the extent it relates to the transferred Partnership interest;


(d) In determining the amount of any liability for purposes of paragraphs (a) and (b) hereof, there will be taken into account Section 752(c) of the Code and any other applicable provisions of the Code and Regulations; and


(e) The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Section 1.704-1(b) of the Regulations, and will be interpreted and applied in a manner consistent with such Regulations. In the event the Partners will determine that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto (including, without limitation, debits or credits relating to liabilities that are secured by contributed or distributed Property or which are assumed by the Partnership or one or more of the Partners), are computed in order to comply with such Regulations, the Partners may make such modification, provided that it is not likely to have a material effect on the amounts distributable to any Partner pursuant to Section 9.02 of the Agreement upon the dissolution of the Partnership. The Partners also will (i) make any adjustments that are necessary or appropriate to maintain equality between the Capital Accounts of the Partners and the amount of Partnership capital reflected on the Partnership's balance sheet, as computed for book purposes in accordance with Section 1.704-1(b)(2)(iv)(g) of the Regulations, and (ii) make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Section 1.704-1(b) of the Regulations.


3.03. Admissions of New Partners. New Partners may be admitted to the Partnership as partners in the Partnership with the unanimous written consent of the existing Partners. A new Partner must agree to be bound by the terms and provisions of this Agreement, as amended. Upon admission, a new Partner will have all rights and duties of a Partner of the Partnership.


3.04. Interest. No interest will be paid or credited to the Partners on their Capital Accounts or upon any undistributed profits left on deposit with the Partnership.


3.05. Additional Capital Contributions. (a) Except as otherwise provided in this Section 3.05, no Partner will be required to make additional capital contributions ("Additional Capital Contributions") to the Partnership. However, the Partners authorize the Partnership to receive additional capital contributions from the Partners and the Partnership may solicit Additional Capital Contributions from the Partners, in an amount and in such proportions from the Partners as is authorized by the unanimous vote of the Partners. The Partners acknowledge and agree that they will vote in favor of such solicitation and receipt of Additional Capital Contributions to the extent of the capital requirements specified in the Annual Plan.


(b) Notwithstanding the provisions of paragraph (a) of this Section 3.05, upon receipt of at least five (5) business days written notice from the Board of Governors, [*] will make Additional Capital Contributions from time to time [ * ] , up to an aggregate amount equal to the lesser of: (i)[*]; or (ii)[*].


ARTICLE IV


PARTNERS


4.01. Matters Requiring the Consent of the Partners; Restrictions on Actions by the Partners. (a) Matters Requiring the Consent of the Partners. No action may be taken by or on behalf of the Partnership in connection with any of the following matters without the prior written consent of each Partner:


(i) approval of the initial Annual Plan;


(ii) any amendments, waivers or other changes to this Agreement;


(iii) changes to the composition of the Board of Governors (i.e., the number of Governors to be nominated by each Partner);


(iv) a change in fiscal year of the Partnership;


(v) the incurrence of any indebtedness that increases the total indebtedness of the Partnership above the level existing at the end of the prior fiscal year, excluding indebtedness for short-term trade financing, unless included in the Annual Plan;


(vi) the winding up, dissolution or liquidation of the Partnership in a manner other than as contemplated by the terms of this Agreement;


(vii) the extension of the term of the Partnership's existence beyond its initial or any extended term;


(viii) the merger, reorganization, consolidation of the Partnership or other form of business combination with respect to the Partnership;


(ix) any change in the objects or purposes of the Partnership or the scope of its activities;


(x) the approval of any transactions between the Partnership and any Partners not specifically provided for in the Annual Plan;


(xi) with respect to the Partnership, (a) the acquisition of or investment in any corporation, partnership, or joint venture with any person, (b) the creation of any direct or indirect subsidiary of the Partnership, or (c) the acquisition or sale of assets in a single transaction or series of transactions (other than as set forth in the Preliminary Implementation Plan, the Implementation Plan or the Annual Plan);


(xii) with respect to the Partnership, (a) the voluntary commencement of any proceeding or the voluntary filing of any petition seeking relief under Title 11 of the United States Code, as amended from time to time, or any other Federal, state or foreign bankruptcy, insolvency, receivership or similar law, (b) the consent to the institution of, or the failure to contest in a timely and appropriate manner, any involuntary proceeding or any involuntary filing of any petition of the type described in the immediately preceding clause (a), (c) the application for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for it or for a substantial portion of its property or assets, (d) the filing of an answer admitting the material allegations of a petition filed against it in any such proceeding, (f) the making of a general assignment for the benefit of creditors, (g) the admission in writing of its inability to, or the failure generally, to pay its debts as they become due, or (h) the taking of any action for the purpose of effecting any of the foregoing;


(xiii) the admission of another partner to the Partnership; and


(xiv) any other matters with respect to which applicable law requires the approval of more than a majority vote of the Partners.


(b) Restrictions on Actions by the Partners. Neither Partner may without the prior written consent of the other Partner:


(i) confess a judgment against the Partnership;


(ii) except as otherwise provided by this Agreement, the Joint Venture Agreement or the Material Agreements, make any agreement on behalf of or otherwise purport to bind the other Partner or the Partnership;


(iii) do any act, or fail to take any act, in contravention of this Agreement, the Joint Venture Agreement or the Material Agreements;


(iv) except as contemplated by this Agreement, the Joint Venture Agreement, or the Material Agreements, dispose of the Business;


(v) assign the property of the Partnership in trust for creditors or on the assignee's promise to pay any indebtedness of the Partnership;


(vi) submit a Partnership claim or liability to arbitration or reference, except as contemplated by this Agreement, the Joint Venture Agreement, or the Material Agreements;


(vii) settle, waive, release or initiate any claim, demand, action, suit, or other proceeding by or against the Partnership; or


(viii) incur any indebtedness in connection with, or otherwise engage in, any Hedge/Swap Transaction; provided, however, if the AT&T Partner consents to incurring any indebtedness in connection with, or otherwise engaging in, a Hedge/Swap Transaction, the Partnership must also receive the written consent of the Treasurer of AT&T Corp., an Assistant Treasurer of AT&T Corp., or a Treasury Manager of AT&T Corp. designated by the Treasurer of AT&T Corp., prior to incurring any such indebtedness or engaging in any such Hedge/Swap Transaction; and further provided that if the Cirrus Partner consents to incurring any indebtedness in connection with, or otherwise engaging in, a Hedge/Swap Transaction, the Partnership must also receive such consents, if any, as may be required by applicable Cirrus financing policies then in existence, prior to incurring any such indebtedness or engaging in any such Hedge/Swap Transaction.


4.02. Actions by the Partners; Meetings; Quorum; Majority. Each Partner will designate one person who will be authorized to act on behalf of such Partner in connection with the consents or approvals required pursuant to Section 4.01, provided that all such acts on behalf of a Partner will be in writing. Each Partner will notify the other Partner or Partners of the identity of such person, or any replacement thereof, pursuant to the terms of Section 14.01 of the Joint Venture Agreement. Each Partner agrees to provide any consent or approval required under Section 4.01 hereof, or to indicate that such consent or approval will not be provided, within twenty (20) days of written request of the other Partner of the Partnership.


4.03. Other Ventures. The parties hereto acknowledge and agree that the Partners, or any of them, may engage in other flows. ====== any rights in and to any independent venture or activity or the income or profits derived therefrom.


ARTICLE V


TRANSFER OF PARTNERS' INTERESTS


5.01. Perso
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