Micron
Annual Report 2018

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-K(Mark One) xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended August 30, 2018ORoTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from toCommission file number 1-10658Micron Technology, Inc.(Exact name of registrant as specified in its charter)Delaware75-1618004(State or other jurisdiction of incorporation or organization)(IRS Employer Identification No.)8000 S. Federal Way, Boise, Idaho83716-9632(Address of principal executive offices)(Zip Code)Registrant's telephone number, including area code(208) 368-4000Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, par value $0.10 per shareNASDAQ Global Select MarketCommon Stock Purchase Rights Securities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes T No ¨Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ¨ No TIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes T No ¨Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted andposted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit andpost such files). Yes T No ¨Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, tothe best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growthcompany. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.Large Accelerated Filer xAccelerated Filer oNon-Accelerated Filer oSmaller Reporting Company oEmerging Growth Company oIf an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financialaccounting standards provided pursuant to Section 13(a) of the Exchange Act. oIndicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No xThe aggregate market value of the voting stock held by non-affiliates of the registrant, based upon the closing price of such stock on March 1, 2018, as reported by the NASDAQGlobal Select Market, was approximately $45.0 billion. Shares of common stock held by each executive officer and director and by each person who owns 5% or more of theoutstanding common stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determinationfor other purposes.The number of outstanding shares of the registrant's common stock as of October 8, 2018 was 1,134,255,375.DOCUMENTS INCORPORATED BY REFERENCE: Portions of the Proxy Statement for the registrant's Fiscal 2018 Annual Meeting of Shareholders to be held onJanuary 16, 2019 are incorporated by reference into Part II and Part III of this Annual Report on Form 10-K. Forward-Looking StatementsThis Form 10-K contains trend information and other forward-looking statements that involve a number of risks and uncertainties. Forward-lookingstatements include, but are not limited to, statements such as those made regarding controller development; increasing sales of DDR4, 3D NAND, 3DXPointTM memory, and client and cloud SSDs; growth in our production of, and the market for, NAND products; our production of DRAM products; ourjoint research and development arrangements with Intel; the need to obtain additional patent licenses or renew existing license agreements; the entry intoadditional sales or licenses of intellectual property and partnering agreements; debt incurred to finance our capital investments; and cash expenditures forproperty, plant, and equipment. Our actual results could differ materially from our historical results and those discussed in the forward-lookingstatements. Factors that could cause actual results to differ materially include, but are not limited to, those identified in "Item 1A. Risk Factors." All periodreferences are to our fiscal periods unless otherwise indicated.Definitions of Commonly Used TermsAs used herein, "we," "our," "us," and similar terms include Micron Technology, Inc. and our consolidated subsidiaries, unless the context indicatesotherwise. Abbreviations, terms, or acronyms are commonly used or found in multiple locations throughout this report and include the following:Term Definition Term Definition2021 MSAC Term Loan Variable Rate MSAC Senior Secured Term Loan due2021 Micron Micron Technology, Inc. (Parent Company)2021 MSTW Term Loan Variable Rate MSTW Senior Secured Term Loan due2021 MLC Multi-Level Cell (two bits per cell)2022 Notes 5.88% Senior Notes due 2022 MMJ Micron Memory Japan, Inc.2022 Term Loan B Senior Secured Term Loan B due 2022 MMJ Companies MAI and MMJ2023 Notes 5.25% Senior Notes due 2023 MMJ Group MMJ and its subsidiaries2023 Secured Notes 7.50% Senior Secured Notes due 2023 MMT Micron Memory Taiwan Co., Ltd.2024 Notes 5.25% Senior Notes due 2024 MSP Micron Semiconductor Products, Inc.2025 Notes 5.50% Senior Notes due 2025 MSTW Micron Semiconductor Taiwan Co., Ltd.2026 Notes 5.63% Senior Notes due 2026 MTTW Micron Technology Taiwan, Inc.2032C Notes 2.38% Convertible Senior Notes due 2032 Nanya Nanya Technology Corporation2032D Notes 3.13% Convertible Senior Notes due 2032 OEM Original Equipment Manufacturer2033 Notes 2033E and 2033F Notes Qimonda Qimonda AG2033E Notes 1.63% Convertible Senior Notes due 2033 QLC Quad-Level Cell (four bits per cell)2033F Notes 2.13% Convertible Senior Notes due 2033 R&D Research and Development2043G Notes 3.00% Convertible Senior Notes due 2043 SG&A Selling, General, and AdministrationIMFT IM Flash Technologies, LLC SLC Single-Level Cell (one bit per cell)Inotera Inotera Memories, Inc. SSD Solid-State DriveIntel Intel Corporation Tera Probe Tera Probe, Inc.LPDRAM Mobile Low-Power DRAM TLC Triple-Level Cell (three bits per cell)MAI Micron Akita, Inc. VIE Variable Interest EntityMCP Multi-Chip Package Micron, Crucial, Ballistix, any associated logos, and all other Micron trademarks are the property of Micron. 3D XPoint is a trademark of Intel or itssubsidiaries in the United States and/or other countries. Other product names or trademarks that are not owned by Micron are for identification purposes onlyand may be the registered or unregistered trademarks of their respective owners.PART I ITEM 1. BUSINESSOverviewMicron Technology, Inc., including its consolidated subsidiaries, is an industry leader in innovative memory and storage solutions. Through our globalbrands – Micron®, Crucial®, and Ballistix® – our broad portfolio of high-performance memory and storage technologies, including DRAM, NAND, NORFlash and 3D XPoint memory, is transforming how the world uses information to enrich life. Backed by 40 years of technology leadership, our memory andstorage solutions enable disruptive trends, including artificial intelligence, machine learning, and autonomous vehicles, in key market segments like cloud,data center, networking, and mobile.We manufacture our products at our worldwide, wholly-owned and joint venture facilities. In recent years, we have increased our manufacturing scaleand product diversity through strategic acquisitions, expansion, and various partnering arrangements.We make significant investments to develop proprietary product and process technology, which is implemented in our manufacturing facilities. Wegenerally increase the density per wafer and reduce manufacturing costs of each generation of product through advancements in product and processtechnology, such as our leading-edge line-width process technology and 3D NAND architecture. We continue to introduce new generations of products thatoffer improved performance characteristics, including higher data transfer rates, reduced package size, lower power consumption, improved read/writereliability, and increased memory density. Storage products incorporating NAND, a controller, and firmware constitute a significant and increasing portion ofour sales. We generally develop firmware and expect to introduce proprietary controllers into our SSDs in the first half of 2019. Development of advancedtechnologies enables us to diversify our product portfolio toward a richer mix of differentiated, high-value solutions and to target high-growth markets.We market our products through our internal sales force, independent sales representatives, distributors, and e-tailers, primarily to original equipmentmanufacturers and retailers located around the world. We face intense competition in the semiconductor memory and storage markets and, in order to remaincompetitive, we must continuously develop and implement new products and technologies and decrease manufacturing costs. Our success is largelydependent on market acceptance of our diversified portfolio of semiconductor-based memory and storage solutions, efficient utilization of our manufacturinginfrastructure, successful ongoing development and integration of advanced product and process technology, return-driven capital spending, and successfulR&D investments.ProductsOur product portfolio of memory and storage solutions, advanced solutions, and storage platforms are based on our high-performance semiconductormemory and storage technologies, including DRAM, NAND, 3D XPoint memory, and other technologies. We sell our products into various markets throughour four business units (which are also our reportable segments) in various forms, including wafers, components, modules, SSDs and in MCPs that combineDRAM, NAND, and/or NOR with a controller and firmware. We are relentlessly focused on evolving our product portfolio to a richer mix of high-valuesolutions and cultivating deeper relationships with customers. Our position as a developer and manufacturer of DRAM, NAND, NOR and other emergingmemory technologies uniquely enables us to collaborate with our customers to ensure our technology and engineering roadmaps deliver critical features. Wecontinuously introduce new products on our advanced technologies, delivering performance, quality, and cost advantages to our customers.Compute and Networking Business UnitCNBU includes memory products and solutions sold into cloud server, enterprise, client, graphics, and networking markets. CNBU reported revenue of$15.25 billion in 2018, $8.62 billion in 2017, and $4.53 billion in 2016. In 2018, we significantly increased our production of DRAM using 1Xnmtechnology and continued to focus on developing our 1Ynm technology. In 2018, we achieved volume production of our 8Gb GDDR6 memory, whichdelivers significant performance improvements over our GDDR5 design, and enables bandwidth-intensive applications in our core CNBU markets in avariety of applications such as artificial intelligence and networking.1Cloud Server: The cloud server market was CNBU's fastest growing market in 2018, particularly in datacenters, with significant increases in DRAMcontent per server. The cloud server market has been driven, in part, by intelligent edge devices capable of artificial intelligence and augmented reality thatstore and access data in the cloud. Artificial intelligence servers require significantly increasing quantities of DRAM and as the number and capabilities ofthese intelligent edge devices increase, more data is stored, processed, and accessed in the cloud, creating a virtuous cycle between the cloud and edgedevices. We anticipate continued growth of our 1Xnm portfolio with the continued ramp of our second-generation 1Xnm 8Gb DDR4 products, which werevalidated with key partners and customers in 2018.Enterprise: Similar to the cloud server market, the enterprise market is experiencing strong demand growth from intelligent edge devices that requirerapid data analysis and storage in enterprise and cloud servers to enable machine learning, training, and inferencing. Our enterprise RDIMM DRAM memorymodules provide the high performance, reliability, and integrity requirements for such applications. In 2018, we qualified our 32GB non-volatile module("NVDIMM") at key OEMs and also began shipping in volume our 128GB through-silicon via-based ("TSV") RDIMMS.Client: In 2018, we achieved significant production and sales to the client market from our 1Xnm technology. Our products sold to the client marketsupport both PC unit growth, driven primarily by corporate replacement cycles from upgraded operating systems, as well as increases in content per unit.Additionally, our products sold to the client market are incorporated into gaming and ultra-thin notebooks.Graphics: Our GDDR5/5x DRAM graphics products are incorporated into applications providing virtual reality, augmented reality, and crypto-miningtechnology. In 2018, we benefitted from strong demand for graphics memory in gaming console applications, as well as a higher attach-rate of graphicsDRAM products in performance and enthusiast graphics cards. In 2018, we migrated and scaled production of our 8Gb GDDR5 to our 1Xnm DRAMtechnology, which augmented production of our GDDR5/5x DRAM memory on our 20nm line-width technology. We remained focused on execution oftechnology transitions and achieved volume production of our 8Gb GDDR6 DRAM for the graphics and crypto-mining markets in 2018.Networking: The networking memory market is characterized by long life-cycle DRAM products, and accordingly, a significant portion of our sales tothe networking market consisted of products manufactured on our legacy 30nm and 25nm-series DRAM technology. In 2018, we accelerated a shift fromDDR3 to DDR4 DRAM and began sales of 4Gb DDR4 DRAM into emerging 5G applications.Mobile Business UnitMBU includes memory products sold into smartphone and other mobile-device markets and includes discrete DRAM, discrete NAND, and managedNAND. MBU managed NAND includes eMMC and universal flash storage ("UFS") solutions, which each combine high-capacity NAND with a high-speedcontroller and firmware in a small ball-grid array, and eMCP products, which combine an eMMC/UFS solution with LPDRAM. MBU reported revenue of$6.58 billion in 2018, $4.42 billion in 2017, and $2.57 billion in 2016. In 2018, we announced new 64-layer, second-generation 3D NAND storage products,which support the high-speed UFS 2.1 standard and eMMC 5.1 standard. These new mobile solutions are based on our industry-leading TLC 3D NANDtechnology, empowering smartphone makers to enhance the user experience with next-generation mobile features such as artificial intelligence, virtualreality, and facial recognition. Our 1Xnm LPDRAM solutions provide power efficiency, particularly critical to our mobile customers, and our 1Ynm 12GbLPDDR4 solutions, the highest capacity LPDRAM monolithic die available in the industry, provide both power efficiency and higher capacity to our mobilecustomers.Smartphone: In 2018, we achieved product qualification of our 1Xnm LPDDR4 DRAM with major mobile phone OEMs. Our LPDRAM offers low-power,high-performance solutions to perform in extreme environments demanded by high-end smartphones. High-end smartphones incorporate higher levels ofNAND and LPDRAM that enable features such as larger 4K displays, multiple high-resolution cameras, and 4K high-dynamic range video recording.Additionally, our smartphone products are utilized by OEMs to enable artificial intelligence, augmented reality, and life-like virtual reality capabilities intohigh-end phones, including facial and voice recognition, real-time translation, fast image search, and scene detection. In 2018, our managed NAND productsachieved strong growth, including our new 128GB NAND plus 4GB DRAM MCP and our first high-performance UFS managed NAND products introduced inthe fourth quarter of 2018.2Storage Business UnitSBU includes SSDs and component-level solutions sold into enterprise and cloud, client, and consumer storage markets as well as other discrete storageproducts sold in component and wafer forms to the removable storage markets. SBU sales also include "non-trade" products consisting of productsmanufactured and sold to Intel through IMFT under a long-term supply agreement at prices approximating cost, which included 3D XPoint memory andNAND products. SBU reported revenue of $5.02 billion in 2018, $4.51 billion in 2017, and $3.26 billion in 2016. In 2018, we continued to ramp our 64-layer 3D NAND technology and achieved bit output crossover relative to 32-layer in the second half of 2018. In 2018, we also extended our leadershipposition in 3D NAND technology by delivering the industry's first commercially available QLC 3D NAND technology. Leveraging our 64-layer structure, thenew QLC NAND technology achieves 1 terabit ("Tb") density per die, which has a 33% higher array density as compared to TLC, enabling new operatingpoints for density and cost in the enterprise, cloud, and client-storage markets. In 2018, we advanced development of our third-generation 96-tier 3D NANDstructure, providing a 50 percent increase in layers. Both the 64-layer QLC and 96-layer TLC 3D NAND technologies utilize CMOS under the array ("CuA")technology to reduce die sizes and deliver improved performance when compared to competitive approaches. By leveraging four planes versus two, our newNAND flash memory can write and read more cells in parallel, which delivers faster throughput and higher bandwidth at the system level.SSDs: SSD storage products incorporate NAND, a controller, and firmware and offer benefits over HDDs of a smaller form factor, faster read and writespeeds, and solid-state architecture. SSDs offer significant performance and features, including speed, reliability, and lower power consumption. We offer SSDsolutions utilizing our NAND technology to the enterprise and cloud, client, and consumer markets.Enterprise and Cloud SSDs: SBU sales to the enterprise and cloud SSD markets in 2018 consisted primarily of our flagship SATA 5100 and 5200series SSDs. In 2018, our SATA 5200 series SSD achieved qualification at enterprise server OEMs, cloud service providers, and enterprise customers. Similarto trends in the memory market, the enterprise and cloud storage markets have been driven by intelligent edge devices capable of artificial intelligence,augmented reality, and other features that store, access, and analyze data in the cloud. Artificial intelligence servers require significantly higher SSD capacity,and our 64-layer QLC NAND technology provides cost-optimized storage solutions, providing significantly lower total cost of ownership for read-intensivecloud workloads. Our 5200 series SATA SSDs, which deliver best-in-class performance and capacity, are based on the same proven architecture as our 5100series. We shipped our first 5200 series SATA SSDs in the third quarter of 2018 and received broad acceptance in the enterprise and cloud SSD markets. Byleveraging our advanced CuA NAND in enterprise and cloud SSDs, we deliver low cost, high density, high performance storage solutions.Client SSDs: SBU sales to the client SSD market in 2018 consisted primarily of our 1100 series 3D NAND SATA Client SSD, which is targeted forleading personal computer OEMs as a replacement to HDDs. Our client SSDs, used in notebooks, desktops, workstations, and related consumer applications,deliver high performance, power efficiency, security, and capacity to our customers. In the first half of 2019, we expect to introduce our 2200 series 3D NANDPCIe client SSD incorporating our internally-developed controller, enabling us to offer additional differentiated storage solutions for our client customers.Consumer SSDs: SBU sales to the consumer SSD market in 2018 consisted primarily of our Crucial-branded MX500 SATA SSD, utilizing our 64-layer TLC 3D NAND. Similar to the client SSD market, our consumer SSD solutions are replacing HDDs as end-users seek the higher performance, powersavings, and reliability of our SSDs.Components and Wafers: SBU sales of components and wafers in 2018 consisted primarily of our 32-layer TLC NAND technology and our 64-layerTLC and QLC NAND technology. We continue to transition our business from a storage components supplier to a storage solutions provider with a richermix of high-value solutions such as SSDs and mobile managed NAND. As a result, SBU sales of products in component and wafer form declined in 2018 ascompared to 2017.3D XPoint memory: 3D XPoint memory has 10 times the chip density of DRAM, 1,000 times the endurance capability of NAND, and is 1,000 timesfaster than NAND. These specifications create a significant value opportunity for 3D XPoint memory in solutions between DRAM and NAND in the memoryand storage hierarchy. Trends in machine learning, big data analytics, and artificial intelligence are driving demand for the features offered by 3D XPointmemory. We are collaborating with our customers to develop 3D XPoint memory products and expect to sample such products in late calendar 2019.3Embedded Business UnitEBU includes memory and storage products sold into automotive, industrial, and consumer markets and includes discrete DRAM, discrete NAND,managed NAND, and NOR. EBU reported revenue of $3.48 billion in 2018, $2.70 billion in 2017, and $1.94 billion in 2016. The embedded market ischaracterized by long life-cycle DRAM and NAND products manufactured on our mature process technologies. Our embedded products enable edge devicesto store, connect, and share information in the growing internet of things ("IoT") and are utilized in a diverse set of applications in the automotive, industrial,and consumer markets.Automotive: Our DDR3 DRAM and eMMC managed NAND automotive memory and storage products enable connected, large display infotainmentsystems and higher definition 4K displays and support improved voice and gesture control in automotive applications. Our comprehensive and expandingportfolio of DRAM, NAND, and NOR solutions to the automotive market, as well as our extensive customer support network, also support advancements inautonomous driving and automated driver assistance systems, which require high reliability and high performance memory and storage. Industrial: Our industrial products, featuring SLC and MLC NAND, NOR, DDR3 DRAM, and MCP managed NAND, enable applications in the growingindustrial IoT market, including factory automation, transportation, and surveillance. In 2018, we announced availability of our 128GB and 256GB densityof edge storage microSD card solutions and collaboration with several leading video surveillance solution providers to promote surveillance-grade edgestorage, utilizing our 64-layer TLC 3D NAND technology. This newly released solution enables greater capacity in a smaller space, delivering up to 30 daysof surveillance video storage in the camera.Consumer: Our DDR3 DRAM, SLC NAND, and eMCP managed NAND products sold into the consumer market are used in a diverse set of consumerproducts, including service provider and set-top boxes, digital still and video cameras, home networking, ultra-high definition televisions, and many moreapplications. Our embedded memory and storage solutions enable edge devices in the consumer products market to store, connect, and share information inthe IoT.ManufacturingWe manufacture our products at our worldwide, wholly-owned and joint venture facilities located in Taiwan, Singapore, the United States, Japan, andChina and also utilize subcontractors to perform certain manufacturing processes. Nearly all of our products are manufactured on 300mm wafers in facilitiesthat generally operate 24 hours per day, seven days per week. Semiconductor manufacturing is extremely capital intensive, requiring large investments insophisticated facilities and equipment. A significant portion of our semiconductor equipment is generally replaced every five to seven years withincreasingly advanced equipment. Our DRAM, NAND, 3D XPoint memory, and NOR Flash products share a number of common manufacturing processes,enabling us to leverage much of our product and process technology and manufacturing infrastructure across these product lines.Our process for manufacturing semiconductor products is complex and involves a number of precise steps, including wafer fabrication, assembly, andtest. Efficient production of semiconductor products requires utilization of advanced semiconductor manufacturing techniques and effective deployment ofthese techniques across multiple facilities. The primary determinants of manufacturing cost are process line-width, 3D non-volatile layers, NAND cell levels,process complexity, including number of mask layers and fabrication steps, and manufacturing yield. Other factors that contribute to manufacturing costs arethe cost and sophistication of manufacturing equipment, equipment utilization, process complexity, cost of raw materials, labor productivity, package type,cleanliness of our manufacturing environment, and utilization of subcontractors to perform certain manufacturing processes. We continuously enhance ourproduction processes, increasing bits per wafer and transitioning to higher density products. In 2018, we significantly increased our volume production of1Xnm process node DRAM and expect to achieve bit crossover by the end of the first quarter of 2019. In 2018, we continued to ramp our 64-layer 3D NANDtechnology and achieved bit output crossover relative to 32-layer in the second half of 2018.Wafer fabrication occurs in a highly-controlled clean environment to minimize dust and other yield and quality-limiting contaminants. Despite stringentmanufacturing controls, individual circuits may be nonfunctional or wafers may need to be scrapped due to equipment errors, minute impurities in materials,defects in photomasks, circuit design marginalities or defects, and air particle defects. Success of our manufacturing operations depends largely onminimizing defects to maximize yield of high-quality circuits. In this regard, we employ rigorous quality controls throughout the manufacturing, screening,and testing processes. We are able to recover certain devices by testing and grading them to their highest level of functionality.4We sell semiconductor products in both packaged and unpackaged (i.e., "bare die") forms. Our packaged products include memory modules, SSDs, andmanaged NAND including MCPs and eMMCs. We assemble many products in-house and, in some cases, outsource assembly services for certain memorymodules, SSDs, and MCPs.We test our products at various stages in the manufacturing process, conduct numerous quality control inspections throughout the entire productionflow, and perform high temperature burn-in on finished products. In addition, we use our proprietary AMBYX™ line of intelligent test and burn-in systems toperform simultaneous circuit tests of semiconductor die during the burn-in process, capturing quality and reliability data and reducing testing time and cost.In recent years, we have produced an increasingly broad portfolio of products and system solutions, which enhances our ability to allocate resources toour most profitable products but also increases the complexity of our manufacturing and supply chain operations. Although our product lines generally usesimilar manufacturing processes, our cost efficiency can be affected by frequent conversions to new products, the allocation of manufacturing capacity tomore complex, smaller-volume products, and the reallocation of manufacturing capacity across various product lines.Arrangements with IntelIMFTSince 2006, we have owned 51% of IMFT, a joint venture between us and Intel. IMFT is governed by a Board of Managers, for which the number ofmanagers appointed by each member varies based on the members' respective ownership interests. IMFT manufactures semiconductor products exclusivelyfor its members under a long-term supply agreement at prices approximating cost. In the first quarter of 2018, IMFT discontinued production of NAND andsubsequent to that time has been entirely focused on 3D XPoint memory production. IMFT sales to Intel were $507 million, $438 million, and $457 millionin 2018, 2017, and 2016, respectively.The IMFT joint venture agreement extends through 2024 and includes certain buy-sell rights. At any time through December 2018, Intel can put to us,and from January 2019 through December 2021, we can call from Intel, Intel's interest in IMFT, in either case, for a price that approximates Intel's interest inthe net book value of IMFT plus member debt at the time of the closing. If Intel exercises its put right, we can elect to set the closing date of the transactionany time between six months and two years following such election by Intel and we can elect to receive financing of the purchase price from Intel for one totwo years from the closing date. If we exercise our call right, Intel can elect to set the closing date of the transaction to be any time between six months andone year following such election. Following the closing date resulting from exercise of either the put or the call, we will continue to supply to Intel for aperiod of one year between 50% and 100%, at Intel's choice, of Intel's immediately preceding six-month period pre-closing volumes of IMFT products for thefirst six-month period following the closing and between 0% and 100%, at Intel's choice, of Intel's first six-month period following the closing volumes ofIMFT products for the second six-month period following the closing, at a margin that varies depending on whether the put or call was exercised.IMFT's capital requirements are generally determined based on an annual plan approved by the members, and capital contributions to IMFT arerequested as needed. Capital requests are made to the members in proportion to their then-current ownership interest. Members may elect to not contributetheir proportional share, and in such event, the contributing member may elect to contribute any amount of the capital request, either in the form of an equitycontribution or member debt financing. In 2018, Intel provided debt financing of $1.01 billion to IMFT pursuant to the terms of the IMFT joint ventureagreement. Under the supply agreement, the members have rights and obligations to the capacity of IMFT in proportion to their investment, includingmember debt financing. Any capital contribution or member debt financing results in a proportionate adjustment to the sharing of output on an eight-monthlag. Members pay their proportionate share of fixed costs associated with IMFT's capacity.R&D ArrangementsWe have agreements to jointly develop NAND and 3D XPoint technologies with Intel. We continue to jointly develop NAND technologies with Intelthrough the third generation of 3D NAND, which is expected to be completed in the second half of 2019. In the second quarter of 2018, we and Intel agreedto independently develop subsequent generations of 3D NAND in order to better optimize the technology and products for our respective business needs. Wecontinue to jointly develop 3D XPoint technologies with Intel through the second generation of 3D XPoint technology, which is expected to be completedin the second half of 2019. To better optimize 3D XPoint technology for our product roadmap and maximize the benefits for our5customers and shareholders, in the fourth quarter of 2018, we announced that we will no longer jointly develop with Intel subsequent generations of 3DXPoint technology. As a result of the above actions, we expect reimbursements under our cost-sharing agreements to decrease in early fiscal 2019.Supply Chain, Materials, and Use of Third-Party Service ProvidersOur supply chain and operations are dependent on the availability of materials that meet exacting standards and the use of third parties to provide uswith components and services. We generally have multiple sources of supply for our raw materials and services. However, only a limited number of suppliersare capable of delivering certain raw materials and services that meet our standards and, in some cases, materials, components, or services are provided by asingle supplier. Various factors could reduce the availability of raw materials or components such as chemicals, silicon wafers, gases, photoresist, controllers,substrates, lead frames, printed circuit boards, targets, and reticle glass blanks. Shortages or increases in lead times may occur from time to time in the future.Our manufacturing processes are also dependent on our relationships with third-party manufacturers of controllers used in a number of our products and withoutsourced semiconductor assembly and test providers, contract manufacturers, logistic carriers, and other service providers. Certain raw materials areprimarily available in certain countries, including rare earth minerals available primarily from China, and trade disputes or other political or economicconditions may limit our availability to obtain such raw materials. We and/or our suppliers and service providers could be affected by tariffs, embargoes orother trade restrictions, as well as laws and regulations enacted in response to concerns regarding climate change, conflict minerals, and responsible sourcingpractices, which could limit the supply of our raw materials and/or increase the cost. In addition, disruptions in transportation lines could delay our receipt ofraw materials. Lead times for the supply of raw materials have been extended in the past. The disruption of our supply of raw materials, components, services,or the extension of our lead times could have a material adverse effect on our business, results of operations, or financial condition. We monitor and managesupply-chain activities to mitigate risks associated with raw materials and service providers.Marketing and CustomersWe continue to transform how we interact with our customers from transactional opportunistic sales of standardized memory components tocollaborative relationships where we work with our customers to understand their unique opportunities and challenges. We engage with our customers earlyin the product life-cycle to identify and design features and performance characteristics into our products that our customers need in their end products, andthen manufacture products that better anticipate and fit their changing needs. By collaborating with our customers on their design needs in a changing endmarket, we differentiate our memory and storage solutions, which provides greater value to our customers.Our semiconductor memory and storage products are offered under our Micron, Crucial, and Ballistix brand names and through private labels. We marketour semiconductor memory and storage products primarily through our own direct sales force and maintain sales or representative offices in our primarymarkets around the world. We sell our Crucial-branded products through a web-based customer direct sales channel as well as through channel anddistribution partners. Our products are also offered through independent sales representatives, distributors, and e-tailers. Our independent salesrepresentatives obtain orders subject to final acceptance by us, and we make shipments against the orders directly to our customers. Our distributors carry ourproducts in inventory and typically sell a variety of other semiconductor products, including competitors' products. We maintain inventory at locations inclose proximity to certain key customers to facilitate rapid delivery of products. Many of our customers require a thorough review or qualification ofsemiconductor products, which may take several months.In each of the last three years, approximately one-half of our total net sales were to our top ten customers. For other information regarding ourconcentrations and customers, see "Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – CertainConcentrations."6BacklogBecause of volatile industry conditions, customers are generally reluctant to enter into long-term, fixed-price contracts. Accordingly, new order volumesfor our memory and storage products may fluctuate significantly. We typically accept orders with acknowledgment that the terms may be adjusted to reflectmarket conditions at the date of shipment. For these reasons, we do not believe that our order backlog as of any particular date is a reliable indicator of actualsales for any succeeding period.Product WarrantyBecause the design and manufacturing process for semiconductor products is highly complex, it is possible that we may produce products that do notcomply with applicable specifications, contain defects, or are otherwise incompatible with end uses. In accordance with industry practice, we generallyprovide a limited warranty that our products are in compliance with applicable specifications existing at the time of delivery and will operate to thosespecifications during a stated warranty period. Under our standard terms and conditions of sale, liability for certain failures of product during a statedwarranty period is usually limited to repair or replacement of defective items or return of, or a credit with respect to, amounts paid for such items. Undercertain circumstances, we provide more extensive limited warranty coverage than that provided under our standard terms and conditions.CompetitionWe face intense competition in the semiconductor memory and storage markets from a number of companies, including Intel; Samsung Electronics Co.,Ltd.; SK Hynix Inc.; Toshiba Memory Corporation; and Western Digital Corporation. Some of our competitors are large corporations or conglomerates thatmay have greater resources to invest in technology, capitalize on growth opportunities, and withstand downturns in the semiconductor markets in which wecompete. Consolidation of industry competitors could put us at a competitive disadvantage. In addition, some governments have provided and may continueto provide significant assistance, financial or otherwise, to some of our competitors or to new entrants and may intervene in support of national industriesand/or competitors. In particular, we face the threat of increasing competition as a result of significant investment in the semiconductor industry by theChinese government and various state-owned or affiliated entities that is intended to advance China's stated national policy objectives. In addition, theChinese government may restrict us from participating in the China market or may prevent us from competing effectively with Chinese companies.Our competitors generally seek to increase silicon capacity, improve yields, and reduce die size in their product designs which may result in significantincreases in worldwide supply and downward pressure on prices. Increases in worldwide supply of semiconductor memory and storage also result fromfabrication capacity expansions, either by way of new facilities, increased capacity utilization, or reallocation of other semiconductor production tosemiconductor memory and storage production. Our competitors may increase capital expenditures resulting in future increases in worldwide supply. We andsome of our competitors have plans to ramp, or are constructing or ramping, production at new fabrication facilities. Increases in worldwide supply ofsemiconductor memory and storage, if not accompanied by commensurate increases in demand, would lead to declines in average selling prices for ourproducts and would adversely affect our business, results of operations, and financial condition. If competitors are more successful at developing orimplementing new product or process technology, their products could have cost or performance advantages.Certain of our memory and storage products are manufactured to industry standard specifications and, as such, have similar performance characteristics tothose of our competitors. For these products, the principal competitive factors are generally price and performance characteristics including: operating speed,power consumption, reliability, compatibility, size, and form factors.7Research and DevelopmentOur process technology R&D efforts are focused primarily on development of process technology that enables continuous improvement to coststructures and performance enhancements for our future products. We are also focused on developing new fundamentally different memory structures,materials, and packages, which are designed to facilitate our transition to next generation products. Additional process technology R&D efforts focus on theenablement of advanced computing, storage, and mobile memory architectures, the investigation of new opportunities that leverage our core semiconductorexpertise, and the development of new manufacturing materials. Product design and development efforts include our high density DDR4 and DDR5 DRAMand LPDRAM products as well as high density and mobile 3D NAND (including TLC and QLC technologies), 3D XPoint memory, SSDs (including firmwareand controllers), managed NAND, specialty memory, and other memory technologies and systems.To compete in the semiconductor memory and storage markets, we must continue to develop technologically advanced products and processes. Webelieve that expansion of our semiconductor product offerings is necessary to meet expected market demand for specific memory and storage products andsolutions. Our process, design, and package development efforts occur at multiple locations across the world, with our largest R&D center located in Boise,Idaho and other R&D centers in Japan, China, Italy, Singapore, Taiwan, and other sites in the United States.R&D expenses vary primarily with the number of development wafers processed, the cost of advanced equipment dedicated to new product and processdevelopment, and personnel costs. Because of the lead times necessary to manufacture our products, we typically begin to process wafers before completionof performance and reliability testing. Development of a product is deemed complete when it is qualified through reviews and tests for performance andreliability. R&D expenses can vary significantly depending on the timing of product qualification.Our R&D expenses were $2.14 billion, $1.82 billion, and $1.62 billion for 2018, 2017, and 2016, respectively. We share the cost of certain product andprocess development activities under development agreements with partners, including agreements to jointly develop NAND and 3D XPoint technologieswith Intel. These R&D expenses reflect net reductions of $201 million, $213 million, and $205 million for 2018, 2017, and 2016, respectively, as a result ofreimbursements under our cost-sharing arrangements with development partners.Geographic InformationSee "Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Geographic Information."Patents and LicensesWe are a recognized leader in per capita and quality of patents issued. As of August 30, 2018, we owned approximately 13,750 active U.S. patents and5,000 active foreign patents. In addition, we have thousands of U.S. and foreign patent applications pending. Our patents have various terms expiringthrough 2038.From time to time, we sell and/or license our technology to other parties and continue to pursue opportunities to monetize our investment in ourintellectual property through partnering and other arrangements. We have also jointly developed memory and storage product and process technology withthird parties on a limited basis.We have a number of patent and intellectual property license agreements and have, from time to time, licensed or sold our intellectual property to thirdparties. Some of these license agreements require us to make one-time or periodic payments while others have resulted in us receiving payments. We mayneed to obtain additional licenses or renew existing license agreements in the future, and we may enter into additional sales or licenses of intellectualproperty and partnering arrangements. We are unable to predict whether these license agreements can be obtained or renewed on terms acceptable to us.8EmployeesAs of August 30, 2018, we had approximately 36,000 employees.Environmental ComplianceWe approach environmental stewardship and sustainability proactively to ensure we meet all government regulations regarding raw materials,discharges, emissions, and solid wastes from our manufacturing processes. Our wafer fabrication facilities continued to conform to the requirements of theInternational Organization for Standardization ("ISO") 14001 environmental management systems standard to ensure we are continuously improving ourperformance. As part of the ISO 14001 framework, we meet requirements in environmental policy, compliance, planning, management, structure andresponsibility, training, communication, document control, operational control, emergency preparedness and response, record keeping, and managementreview. While we have not experienced any material adverse effects to our operations from environmental regulations, changes in the regulations couldnecessitate additional capital expenditures, modification of our operations, or other compliance actions.Directors and Executive Officers of the RegistrantOur executive officers are appointed annually by our Board of Directors (the "Board") and our directors are elected annually by our shareholders. Anydirectors appointed by the Board to fill vacancies on the Board serve until the next election by our shareholders. All officers and directors serve until theirsuccessors are duly chosen or elected and qualified, except in the case of earlier death, resignation, or removal.As of August 30, 2018, the following executive officers and directors were subject to the reporting requirements of Section 16(a) of the Securities ExchangeAct of 1934, as amended.Name Age Officer/DirectorSince PositionApril S. Arnzen 47 2015 Senior Vice President, Human ResourcesManish Bhatia 46 2018 Executive Vice President, Global OperationsScott J. DeBoer 52 2007 Executive Vice President, Technology DevelopmentSanjay Mehrotra 60 2017 President and Chief Executive Officer, DirectorJoel L. Poppen 54 2013 Senior Vice President, Legal Affairs, General Counsel, and Corporate SecretarySumit Sadana 49 2017 Executive Vice President and Chief Business OfficerSteven L. Thorsen, Jr. 53 2012 Senior Vice President, Worldwide SalesDavid A. Zinsner 49 2018 Senior Vice President and Chief Financial OfficerRobert L. Bailey 61 2007 DirectorRichard M. Beyer 69 2013 DirectorPatrick J. Byrne 57 2011 DirectorMercedes Johnson 64 2005 DirectorLawrence N. Mondry 58 2005 DirectorRobert E. Switz 71 2006 Chairman of the Board of DirectorsApril S. Arnzen joined us in December 1996 and has served in various leadership positions since that time. Ms. Arnzen was named Senior Vice President,Human Resources in June 2017. Ms. Arnzen holds a BS in Human Resource Management and Marketing from the University of Idaho, and is a graduate ofthe Stanford Graduate School of Business Executive Program.Manish Bhatia joined us in October 2017 as our Executive Vice President of Global Operations. From May 2016 to October 2017, Mr. Bhatia served asthe Executive Vice President of Silicon Operations at Western Digital Corporation. From March 2010 to May 2016, Mr. Bhatia held several executive roles atSanDisk Corporation including Executive Vice President of Worldwide Operations when it was acquired by Western Digital in May 2016. Mr. Bhatia holds aBS and MS in Mechanical Engineering and an MBA, each from the Massachusetts Institute of Technology.9Scott J. DeBoer joined us in February 1995 and has served in various leadership positions since that time. Dr. DeBoer was named Executive VicePresident, Technology Development in June 2017. Dr. DeBoer holds a PhD in Electrical Engineering and an MS in Physics from Iowa State University. Hecompleted his undergraduate degree at Hastings College.Sanjay Mehrotra joined us in May 2017 as our President, Chief Executive Officer, and Director. Mr. Mehrotra co-founded and led SanDisk Corporationas a start-up in 1988 until its eventual sale in May 2016, serving as its President and Chief Executive Officer from January 2011 to May 2016, and as amember of its Board of Directors from July 2010 to May 2016. Mr. Mehrotra served as a member of the Board of Directors for Cavium, Inc. from July 2009until July 2018 and for Western Digital Corp. from May 2016 to February 2017. Mr. Mehrotra holds a BS and an MS in Electrical Engineering and ComputerScience from the University of California, Berkeley and is a graduate of the Stanford Graduate School of Business Executive Program.Joel L. Poppen joined us in October 1995 and has held various leadership positions since that time. Mr. Poppen was named Senior Vice President, LegalAffairs, General Counsel, and Corporate Secretary in June 2017. Mr. Poppen holds a BS in Electrical Engineering from the University of Illinois and a JDfrom the Duke University School of Law.Sumit Sadana joined us in June 2017 as our Executive Vice President and Chief Business Officer. From April 2010 to May 2016, Mr. Sadana served invarious roles at SanDisk Corporation, including Executive Vice President, Chief Strategy Officer, and General Manager, Enterprise Solutions when it wasacquired by Western Digital in May 2016. Mr. Sadana currently serves on the Board of Directors of Silicon Laboratories, Inc. Mr. Sadana holds a B.Tech. inElectrical Engineering from the Indian Institute of Technology, Kharagpur, India and an MS in Electrical Engineering from Stanford University.David A. Zinsner joined us in February 2018 as our Senior Vice President and Chief Financial Officer. From April 2017 to February 2018, Mr. Zinsnerserved as the President and Chief Operating Officer of Affirmed Networks. From January 2009 to April 2017, Mr. Zinsner served as the Senior Vice Presidentof Finance and Chief Financial Officer of Analog Devices. From July 2005 to January 2009, Mr. Zinsner served as the Senior Vice President and ChiefFinancial Officer of Intersil Corporation. Mr. Zinsner holds an MBA, Finance and Accounting from Vanderbilt University and a BS in Industrial Managementfrom Carnegie Mellon University.Steven L. Thorsen, Jr. joined us in September 1988 and has served in various leadership positions since that time. Mr. Thorsen was named Senior VicePresident, Worldwide Sales in June 2017. Mr. Thorsen holds a BA in Business Administration from Washington State University. On September 20, 2018, Mr.Thorsen announced his intention to retire from Micron in early November 2018. Mr. Thorsen served as our Senior Vice President, Worldwide Sales throughSeptember 30, 2018.Robert L. Bailey was Chief Executive Officer of Blue Willow Systems, Inc. from August 2017 until August 2018. Blue Willow is a software as a serviceresident safety platform for senior living facilities. Mr. Bailey was the Chairman of the Board of Directors of PMC-Sierra, Inc. from 2005 until May 2011 andalso served as PMC's Chairman from February 2000 until February 2003. Mr. Bailey served as a director of PMC from October 1996 to May 2011. He alsoserved as the Chief Executive Officer of PMC from July 1997 until May 2008. Within the past five years, Mr. Bailey also served on the Board of Directors ofEntropic Communications. Mr. Bailey holds a BS in Electrical Engineering from the University of Bridgeport and an MBA from the University of Dallas.Richard M. Beyer was Chairman and Chief Executive Officer of Freescale Semiconductor, Inc. from 2008 through June 2012 and served as a director withFreescale until April 2013. Prior to Freescale, Mr. Beyer was President, Chief Executive Officer and a director of Intersil Corporation from 2002 to 2008. Healso has previously served in executive management roles at FVC.com, VLSI Technology, and National Semiconductor Corporation. Within the past fiveyears, Mr. Beyer served on the Board of Directors of Microsemi Corporation, Analog Devices, Inc., and Freescale. He currently serves on the Board ofDirectors of Dialog Semiconductor. Mr. Beyer served three years as an officer in the United States Marine Corps. He holds a BA and an MA in Russian fromGeorgetown University and an MBA in Marketing and International Business from Columbia University Graduate School of Business. Mr. Beyer is the Chairof the Board of Directors' Governance and Sustainability Committee.Patrick J. Byrne has served as Senior Vice President of Fortive Corporation since July 2016, when Danaher Corporation completed the separation of itsTest & Measurement and Industrial Technologies segments. Mr. Byrne was President of Tektronix, a subsidiary of Danaher, from July 2014 to July 2016.Previously, he was Vice President of Strategy and Business Development and Chief Technical Officer of Danaher from November 2012 to July 2014. Danaherdesigns, manufactures, and markets innovative products and services to professional, medical, industrial, and commercial customers. Mr. Byrne served asDirector, President and Chief Executive Officer of Intermec, Inc. from 2007 to May 2012. Within the past five years, Mr. Byrne10served on the Board of Directors of Flow International. Mr. Byrne holds a BS in Electrical Engineering from the University of California, Berkeley and an MSin Electrical Engineering from Stanford University.Mercedes Johnson was the Senior Vice President and Chief Financial Officer of Avago Technologies Limited, a supplier of analog interface componentsfor communications, industrial, and consumer applications, from December 2005 to August 2008. She also served as the Senior Vice President, Finance ofLam Research Corporation from June 2004 to January 2005 and as Lam's Chief Financial Officer from May 1997 to May 2004. Ms. Johnson holds a degree inAccounting from the University of Buenos Aires and currently serves on the Board of Directors for Juniper Networks, Inc., Teradyne, Inc., and Synopsys, Inc.She also served on the Board of Directors for Intersil Corporation from August 2005 to February 2017. Ms. Johnson is the Chair of the Board of Directors'Audit Committee and Finance Committee.Lawrence N. Mondry has been the President and Chief Executive Officer of Stream Gas & Electric, Ltd., a provider of energy, mobile, and protectiveservices, since February 2016. Mr. Mondry was the Chief Executive Officer of Apollo Brands, a consumer products portfolio company, from February 2014 toFebruary 2015. Mr. Mondry was the Chief Executive Officer of Flexi Compras Corporation, a rent-to-own retailer, from June 2013 to February 2014. Mr.Mondry was the President and Chief Executive Officer of CSK Auto Corporation, a specialty retailer of automotive aftermarket parts, from August 2007 toJuly 2008. Prior to his appointment at CSK, Mr. Mondry served as the Chief Executive Officer of CompUSA Inc. from November 2003 to May 2006. Mr.Mondry is the Chair of the Board of Directors' Compensation Committee.Robert E. Switz was the Chairman, President, and Chief Executive Officer of ADC Telecommunications, Inc., a supplier of network infrastructureproducts and services, from August 2003 until December 2010, when Tyco Electronics Ltd. acquired ADC. Mr. Switz joined ADC in 1994 and throughout hiscareer there held numerous leadership positions. Within the past five years, Mr. Switz served on the Board of Directors of GT Advanced Technologies Inc.,Broadcom Corporation, Cyan, Inc., Pulse Electronics Corporation, Leap Wireless International, Inc., and Gigamon, Inc. Mr. Switz currently serves on theBoard of Directors for Marvell Technology Group Ltd. and FireEye, Inc. Mr. Switz holds an MBA from the University of Bridgeport and a BS in BusinessAdministration from Quinnipiac University. Mr. Switz was appointed Chairman of the Board of Directors in 2012.There are no family relationships between any of our directors or executive officers.Available InformationMicron, a Delaware corporation, was incorporated in 1978. Our executive offices are located at 8000 South Federal Way, Boise, Idaho 83716-9632 andour telephone number is (208) 368-4000. Information about us is available at our website, www.micron.com. Also available on our website are our: CorporateGovernance Guidelines, Governance and Sustainability Committee Charter, Compensation Committee Charter, Audit Committee Charter, FinanceCommittee Charter, and Code of Business Conduct and Ethics. Any amendments or waivers of our Code of Business Conduct and Ethics will also be postedon our website within four business days of the amendment or waiver. Copies of these documents are available to shareholders upon request. Informationcontained or referenced on our website is not incorporated by reference and does not form a part of this Annual Report on Form 10-K.We use our investor relations website http://investors.micron.com as a routine channel for distribution of important information, including news releases,analyst presentations, and financial information. Our filings are available free of charge on our website as soon as reasonably practicable after they areelectronically filed with, or furnished to, the U.S. Securities and Exchange Commission, including our annual and quarterly reports on Forms 10-K and 10-Qand current reports on Form 8-K, our proxy statements, and any amendments to those reports or statements. The Securities and Exchange Commission’s("SEC") website, www.sec.gov, contains reports, proxy and information statements, and other information regarding issuers that file electronically with theSEC. Materials filed or furnished by us with the SEC are also available at the SEC's Public Reference Room at 100 F Street, NE, Washington, D.C.20549. Information on the operation of the Public Reference Room is available by calling (800) SEC-0330. The content on any website referred to in thisForm 10-K is not incorporated by reference in this Form 10-K unless expressly noted.11ITEM 1A. RISK FACTORSIn addition to the factors discussed elsewhere in this Form 10-K, the following are important factors, the order of which is not necessarily indicative ofthe level of risk that each poses to us, which could cause actual results or events to differ materially from those contained in any forward-looking statementsmade by us. Our operations could also be affected by other factors that are presently unknown to us or not considered significant. Any of the factors belowcould have a material adverse effect on our business, results of operations, financial condition, or stock price.We have experienced volatility in average selling prices for our semiconductor memory and storage products which may adversely affect our business.We have experienced significant volatility in our average selling prices, including dramatic declines, as noted in the table below, and may continue toexperience such volatility in the future. In some prior periods, average selling prices for our products have been below our manufacturing costs and we mayexperience such circumstances in the future. Decreases in average selling prices for our products that decline faster than our costs could have a materialadverse effect on our business, results of operations, or financial condition. DRAM Trade NAND (percentage change in average selling prices)2018 from 2017 37 % (11)%2017 from 2016 19 % (9)%2016 from 2015 (35)% (20)%2015 from 2014 (11)% (17)%2014 from 2013 6 % (23)%We may be unable to maintain or improve gross margins.Our gross margins are dependent in part upon continuing decreases in per gigabit manufacturing costs achieved through improvements in ourmanufacturing processes and product designs, including, but not limited to, process line-width, additional 3D memory layers, additional bits per cell (i.e., celllevels), architecture, number of mask layers, number of fabrication steps, and yield. In future periods, we may be unable to reduce our per gigabitmanufacturing costs at sufficient levels to maintain or improve gross margins. Factors that may limit our ability to reduce costs include, but are not limited to,strategic product diversification decisions affecting product mix, the increasing complexity of manufacturing processes, difficulties in transitioning tosmaller line-width process technologies, 3D memory layers, NAND cell levels, process complexity including number of mask layers and fabrication steps,manufacturing yield, technological barriers, changes in process technologies, and new products that may require relatively larger die sizes. Per gigabitmanufacturing costs may also be affected by a broader product portfolio, which may have smaller production quantities and shorter product lifecycles. Ourinability to maintain or improve gross margins could have a material adverse effect on our business, results of operations, or financial condition.The semiconductor memory and storage markets are highly competitive.We face intense competition in the semiconductor memory and storage markets from a number of companies, including Intel; Samsung Electronics Co.,Ltd.; SK Hynix Inc.; Toshiba Memory Corporation; and Western Digital Corporation. Some of our competitors are large corporations or conglomerates thatmay have greater resources to invest in technology, capitalize on growth opportunities, and withstand downturns in the semiconductor markets in which wecompete. Consolidation of industry competitors could put us at a competitive disadvantage. In addition, some governments have provided, and maycontinue to provide, significant assistance, financial or otherwise, to some of our competitors or to new entrants and may intervene in support of nationalindustries and/or competitors. In particular, we face the threat of increasing competition as a result of significant investment in the semiconductor industry bythe Chinese government and various state-owned or affiliated entities that is intended to advance China's stated national policy objectives. In addition, theChinese government may restrict us from participating in the China market or may prevent us from competing effectively with Chinese companies.Our competitors generally seek to increase silicon capacity, improve yields, and reduce die size in their product designs which may result in significantincreases in worldwide supply and downward pressure on prices. Increases in worldwide supply of semiconductor memory and storage also result fromfabrication capacity expansions, either by way of new facilities, increased capacity utilization, or reallocation of other semiconductor production tosemiconductor memory and storage production. Our competitors may increase capital expenditures resulting in future increases in worldwide supply. We andsome12of our competitors have plans to ramp, or are constructing or ramping, production at new fabrication facilities. Increases in worldwide supply ofsemiconductor memory and storage, if not accompanied by commensurate increases in demand, would lead to further declines in average selling prices forour products and would materially adversely affect our business, results of operations, or financial condition. If competitors are more successful at developingor implementing new product or process technology, their products could have cost or performance advantages.The competitive nature of our industry could have a material adverse effect on our business, results of operations, or financial condition.We may be unable to generate sufficient cash flows or obtain access to external financing necessary to fund our operations, make scheduled debtpayments, and make adequate capital investments.Our cash flows from operations depend primarily on the volume of semiconductor memory and storage products sold, average selling prices, andmanufacturing costs. To develop new product and process technology, support future growth, achieve operating efficiencies, and maintain product quality,we must make significant capital investments in manufacturing technology, capital equipment, facilities, R&D, and product and process technology. Weestimate that net cash expenditures in 2019 for property, plant, and equipment will be approximately $10.5 billion plus or minus 5%, which reflects the offsetof amounts we expect to be funded by our partners. Investments in capital expenditures, net of amounts funded by our partners, were $8.20 billion for 2018.As a result of the corporate reorganization proceedings of MMJ initiated in 2012, and for so long as such proceedings are continuing, MMJ is prohibitedfrom paying dividends, including any cash dividends, to us and such proceedings require that excess earnings be used in MMJ's business or to fund the MMJcreditor payments. In addition, pursuant to an order of the Tokyo District Court, MMJ cannot make loans or advances, other than certain ordinary courseadvances, to us without the consent of the Tokyo District Court and may, under certain circumstances, be subject to approval of the legal trustee. As a result,the assets of MMJ are not available for use by us in our other operations. Furthermore, certain uses of the assets of MMJ, including certain capitalexpenditures of MMJ, may require consent of MMJ's trustees and/or the Tokyo District Court.In the past we have utilized external sources of financing when needed. As a result of our debt levels, expected debt amortization, and general economicconditions, it may be difficult for us to obtain financing on terms acceptable to us. There can be no assurance that we will be able to generate sufficient cashflows, use cash held by MMJ to fund its capital expenditures, access capital markets or find other sources of financing to fund our operations, make debtpayments, and make adequate capital investments to remain competitive in terms of technology development and cost efficiency. Our inability to do any ofthe foregoing could have a material adverse effect on our business, results of operations, or financial condition.Our future success depends on our ability to develop and produce competitive new memory and storage technologies.Our key semiconductor memory and storage products and technologies face technological barriers to continue to meet long-term customer needs. Thesebarriers include potential limitations on stacking additional 3D memory layers, increasing bits per cell (i.e., cell levels), meeting higher density requirements,and improving power consumption and reliability. We may face technological barriers to continue to shrink our products at our current or historical rate,which has generally reduced per-unit cost. We have invested and expect to continue to invest in R&D for new and existing products, which involvessignificant risk and uncertainties. We may be unable to recover our investment in R&D or otherwise realize the economic benefits of reducing die size orincreasing memory and storage densities. Our competitors are working to develop new memory and storage technologies that may offer performance and/orcost advantages to existing technologies and render existing technologies obsolete. Accordingly, our future success may depend on our ability to developand produce viable and competitive new memory and storage technologies. There can be no assurance of the following:•that we will be successful in developing competitive new semiconductor memory and storage technologies;•that we will be able to cost-effectively manufacture new products;•that we will be able to successfully market these technologies; and•that margins generated from sales of these products will allow us to recover costs of development efforts.We develop and produce advanced memory technologies, including 3D XPoint memory, a new class of non-volatile technology. There is no assurancethat our efforts to develop and market new product technologies will be successful. Unsuccessful efforts to develop new semiconductor memory and storagetechnologies could have a material adverse effect on our business, results of operations, or financial condition.13New product and market development may be unsuccessful.We are developing new products, including system-level memory and storage products and solutions, which complement our traditional products orleverage their underlying design or process technology. We have made significant investments in product and process technology and anticipate expendingsignificant resources for new semiconductor product and system-level solution development over the next several years. Additionally, we are increasinglydifferentiating our products and solutions to meet the specific demands of our customers, which increases our reliance on our customer's ability to accuratelyforecast the end-customer's needs and preferences. As a result, our product demand forecasts may be impacted significantly by the strategic actions of ourcustomers. In order to continue our success, we must develop, manufacture, and qualify the products our customers need at the time they need those products.The process to develop new products requires us to demonstrate advanced functionality and performance, often well in advance of a planned ramp ofproduction, in order to secure design wins with our customers. In addition, some of our components have long lead-times, requiring us to place orders severalmonths in advance of anticipated demand. Such long lead-times increase the risk of excess inventory or loss of sales in the event our forecasts varysubstantially from actual demand. There can be no assurance of the following:•that our product development efforts will be successful;•that we will be able to cost-effectively manufacture new products;•that we will be able to successfully market these products;•that we will be able to establish or maintain key relationships with customers with specific chip set or design requirements;•that we will be able to introduce new products into the market and qualify them with our customers on a timely basis; or•that margins generated from sales of these products will allow us to recover costs of development efforts.Our unsuccessful efforts to develop new products and solutions could have a material adverse effect on our business, results of operations, or financialcondition.Our joint ventures and strategic relationships involve numerous risks.We have entered into strategic relationships, including our joint development partnership and our IMFT joint venture with Intel, to develop newmanufacturing process technologies and products and to manufacture certain products. These joint ventures and strategic relationships are subject to variousrisks that could adversely affect the value of our investments and our results of operations, including the following: •diverging interests between us and our partners and disagreements on the following:◦ongoing or future development, manufacturing, or operational activities;◦the amount, timing, or nature of further investments; and◦commercial terms in our joint ventures or strategic relationships;•competition from our partners;•access by our partners to our proprietary product and process technology which they may use;•difficulties in transferring technology to joint ventures;•difficulties and delays in ramping production at joint ventures;•limited control over the operations of our joint ventures;•inability of our partners to meet their commitments to us or our joint ventures;•differences in participation on funding capital investments in our joint ventures due to differing business models or long-term business goals;•inadequate cash flows to fund increased capital requirements of our joint ventures;•difficulties or delays in collecting amounts due to us from our joint ventures and partners;•disputes with partners regarding the terms of arrangements or that terms of such arrangements are unfavorable; and•changes in tax, legal, or regulatory requirements that necessitate changes in the agreements with our partners.Our joint ventures and strategic relationships, if unsuccessful, could have a material adverse effect on our business, results of operations, or financialcondition.A significant concentration of our net sales is to a select number of customers.In each of the last three years, approximately one-half of our total net sales were to our top ten customers. A disruption in our relationship with any ofthese customers could adversely affect our business. We could experience fluctuations in our customer base or the mix of revenue by customer as markets andstrategies evolve. In addition, any consolidation of our14customers could reduce the number of customers to whom our products could be sold. Our inability to meet our customers' requirements or to qualify ourproducts with them could adversely impact our sales. The loss of one or more of our major customers or any significant reduction in orders from, or a shift inproduct mix by, these customers could have a material adverse effect on our business, results of operations, or financial condition.Increases in sales of system solutions may increase our dependency upon specific customers and our costs to develop and qualify our system solutions.Our development of system-level memory and storage products is dependent, in part, upon successfully identifying and meeting our customers'specifications for those products. Developing and manufacturing system-level products with specifications unique to a customer increases our reliance uponthat customer for purchasing our products in sufficient volume, quantity, and in a timely manner. If we fail to identify or develop products on a timely basis,or at all, that comply with our customers' specifications or achieve design wins with our customers, we may experience a significant adverse impact on oursales and margins. Even if our products meet customer specifications, our sales of system-level solutions are dependent upon our customers choosing ourproducts over those of our competitors and purchasing our products at sufficient volumes and prices. Our competitors' products may be less costly, providebetter performance, or include additional features when compared to our products. Our long-term ability to sell system-level memory and storage products isreliant upon our customers' ability to create, market, and sell their products containing our system-level solutions at sufficient volumes and prices in a timelymanner. If we fail to successfully develop and market system-level products, our business, results of operations, or financial condition may be materiallyadversely affected.Even if we are successful in selling system-level solutions to our customers in sufficient volume, we may be unable to generate sufficient profit if our per-unit manufacturing costs exceed our per-unit selling prices. Manufacturing system-level solutions to customer specifications requires a longer developmentcycle, as compared to discrete products, to design, test, and qualify, which may increase our costs. Additionally, some of our system solutions are increasinglydependent on sophisticated firmware that may require significant customization to meet customer specifications, which increases our costs and time tomarket. Additionally, we may need to update our firmware or develop new firmware as a result of new product introductions or changes in customerspecifications and/or industry standards, which increases our costs. System complexities and extended warranties for system-level products could alsoincrease our warranty costs. Our failure to cost-effectively manufacture system-level solutions and/or firmware in a timely manner, may result in reduceddemand for our system-level products, and could have a material adverse effect on our business, results of operations, or financial condition.Products that fail to meet specifications, are defective, or that are otherwise incompatible with end uses could impose significant costs on us.Products that do not meet specifications or that contain, or are perceived by our customers to contain, defects or that are otherwise incompatible with enduses could impose significant costs on us or otherwise materially adversely affect our business, results of operations, or financial condition. From time totime, we experience problems with nonconforming, defective, or incompatible products after we have shipped such products. In recent periods, we havefurther diversified and expanded our product offerings, which could potentially increase the chance that one or more of our products could fail to meetspecifications in a particular application. As a result, we could be adversely affected in several ways, including the following:•we may be required or agree to compensate customers for costs incurred or damages caused by defective or incompatible products and to replaceproducts;•we could incur a decrease in revenue or adjustment to pricing commensurate with the reimbursement of such costs or alleged damages; and•we may encounter adverse publicity, which could cause a decrease in sales of our products or harm our relationships with existing or potentialcustomers.Any of the foregoing items could have a material adverse effect on our business, results of operations, or financial condition.Debt obligations could adversely affect our financial condition.We have incurred in the past, and expect to incur in the future, debt to finance our capital investments, business acquisitions, and restructuring of ourcapital structure. As of August 30, 2018, we had debt with a carrying value of $4.64 billion and may borrow up to an additional $2.00 billion under anundrawn revolving credit facility. In addition, as of August 30, 2018, the conversion value in excess of principal of our convertible notes was $1.85 billion,based on the trading price of our common stock of $52.76 per share on such date.15Our debt obligations could adversely impact us. For example, these obligations could:•require us to use a large portion of our cash flow to pay principal and interest on debt, which will reduce the amount of cash flow available to fundworking capital, capital expenditures, acquisitions, R&D expenditures, and other business activities;•require us to use cash and/or issue shares of our common stock to settle any conversion obligations of our convertible notes;•result in certain of our debt instruments being accelerated to be immediately due and payable or being deemed to be in default if certain terms ofdefault are triggered, such as applicable cross payment default and/or cross-acceleration provisions;•adversely impact our credit rating, which could increase future borrowing costs;•limit our future ability to raise funds for capital expenditures, strategic acquisitions or business opportunities, R&D, and other general corporaterequirements;•restrict our ability to incur specified indebtedness, create or incur certain liens, and enter into sale-leaseback financing transactions;•increase our vulnerability to adverse economic and semiconductor memory and storage industry conditions;•increase our exposure to interest rate risk from variable rate indebtedness;•continue to dilute our earnings per share as a result of the conversion provisions in our convertible notes; and•require us to continue to pay cash amounts substantially in excess of the principal amounts upon settlement of our convertible notes to minimizedilution of our earnings per share.Our ability to meet our payment obligations under our debt instruments depends on our ability to generate significant cash flows in the future. This, tosome extent, is subject to market, economic, financial, competitive, legislative, and regulatory factors as well as other factors that are beyond our control.There can be no assurance that our business will generate cash flow from operations, or that additional capital will be available to us, in amounts sufficient toenable us to meet our debt payment obligations and to fund other liquidity needs. Additionally, events and circumstances may occur which would cause usto not be able to satisfy applicable draw-down conditions and utilize our revolving credit facility. If we are unable to generate sufficient cash flows to serviceour debt payment obligations, we may need to refinance or restructure our debt, sell assets, reduce or delay capital investments, or seek to raise additionalcapital. If we are unable to implement one or more of these alternatives, we may be unable to meet our debt payment obligations, which could have a materialadverse effect on our business, results of operations, or financial condition.We may be unable to protect our intellectual property or retain key employees who are knowledgeable of and develop our intellectual property.We maintain a system of controls over our intellectual property, including U.S. and foreign patents, trademarks, copyrights, trade secrets, licensingarrangements, confidentiality procedures, non-disclosure agreements with employees, consultants, and vendors, and a general system of internal controls.Despite our system of controls over our intellectual property, it may be possible for our current or future competitors to obtain, copy, use, or disclose, illegallyor otherwise, our product and process technology or other proprietary information. The laws of some foreign countries may not protect our intellectualproperty to the same degree as do U.S. laws and our confidentiality, non-disclosure, and non-compete agreements may be unenforceable or difficult andcostly to enforce.Additionally, our ability to maintain and develop intellectual property is dependent upon our ability to attract, develop, and retain highly skilledemployees. Global competition for such skilled employees in our industry is intense. Due to the volatile nature of our industry and our operating results, adecline in our operating results and/or stock price may adversely affect our ability to retain key employees whose compensation is dependent, in part, uponthe market price of our common stock, achieving certain performance metrics, levels of company profitability, or other financial or company-wideperformance. If our competitors or future entrants into our industry are successful in hiring our employees, they may directly benefit from the knowledgethese employees gained while they were under our employment.Our inability to protect our intellectual property or retain key employees who are knowledgeable of and develop our intellectual property could have amaterial adverse effect on our business, results of operations, or financial condition.16Claims that our products or manufacturing processes infringe or otherwise violate the intellectual property rights of others, or failure to obtain orrenew license agreements covering such intellectual property, could materially adversely affect our business, results of operations, or financialcondition.As is typical in the semiconductor and other high technology industries, from time to time others have asserted, and may in the future assert, that ourproducts or manufacturing processes infringe upon, misappropriate, misuse, or otherwise violate their intellectual property rights. We are unable to predictthe outcome of these assertions made against us. Any of these types of claims, regardless of the merits, could subject us to significant costs to defend orresolve such claims and may consume a substantial portion of management's time and attention. As a result of these claims, we may be required to:•pay significant monetary damages, fines, royalties, or penalties;•enter into license or settlement agreements covering such intellectual property rights;•make material changes to or redesign our products and/or manufacturing processes; and/or•cease manufacturing, having made, selling, offering for sale, importing, marketing, or using products and/or manufacturing processes in certainjurisdictions.We may not be able to take any of the actions described above on commercially reasonable terms and any of the foregoing results could have a materialadverse effect on our business, results of operations, or financial condition. (See "Part II – Item 8. Financial Statements and Supplementary Data – Notes toConsolidated Financial Statements – Contingencies.")We have a number of intellectual property license agreements. Some of these license agreements require us to make one-time or periodic payments. Wemay need to obtain additional licenses or renew existing license agreements in the future. We are unable to predict whether these license agreements can beobtained or renewed on terms acceptable to us. The failure to obtain or renew licenses as necessary could have a material adverse effect on our business,results of operations, or financial condition.We have been served with complaints in Chinese courts alleging patent infringement.We have been served with complaints in Chinese courts alleging that we infringe certain Chinese patents by manufacturing and selling certain productsin China. The complaints seek orders requiring us to destroy inventory of the accused products and equipment for manufacturing the accused products inChina, to stop manufacturing, using, selling, and offering for sale the accused products in China, and to pay damages plus court fees.We are unable to predict the outcome of these assertions of infringement made against us and therefore cannot estimate the range of possible loss. Adetermination that our products or manufacturing processes infringe the intellectual property rights of others or entering into a license agreement coveringsuch intellectual property could result in significant liability and/or require us to make material changes to our operations in China, products, and/ormanufacturing processes. Any of the foregoing could have a material adverse effect on our business, results of operations, or financial condition. (See "Part II– Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Contingencies.")Litigation could have a material adverse effect on our business, results of operations, or financial condition.From time to time we are subject to various legal proceedings and claims that arise out of the ordinary conduct of our business or otherwise, bothdomestically and internationally. Any claim, with or without merit, could result in significant legal fees that could negatively impact our financial results,disrupt our operations, and require significant attention from our management. We could be subject to litigation or arbitration disputes arising from ourrelationships with vendors or customers, supply agreements, or contractual obligations with our subcontractors or business partners. We may also beassociated with and subject to litigation arising from the actions of our subcontractors or business partners. We may also be subject to litigation as a result ofindemnities we issue, primarily with our customers, the terms of our product warranties, and from product liability claims. As we continue to focus ondeveloping system solutions with manufacturers of consumer products, including autonomous driving, augmented reality, and others, we may be exposed togreater potential for personal liability claims against us as a result of consumers' use of those products. There can be no assurance that we are adequatelyinsured to protect against all claims and potential liabilities, and we may elect to self-insure with respect to certain matters. Exposures to various litigationcould lead to significant costs and expenses as we defend claims, are required to pay damage awards, or enter into settlement agreements, any of which couldhave a material adverse effect on our business, results of operations, or financial condition.17If our manufacturing process is disrupted, our business, results of operations, or financial condition could be materially adversely affected.We and our subcontractors manufacture products using highly complex processes that require technologically advanced equipment and continuousmodification to improve yields and performance. Difficulties in the manufacturing process or the effects from a shift in product mix can reduce yields ordisrupt production and may increase our per gigabit manufacturing costs. We and our subcontractors maintain operations and continuously implement newproduct and process technology at manufacturing facilities, which are widely dispersed in multiple locations in several countries including the United States,Singapore, Taiwan, Japan, Malaysia, and China. Additionally, our control over operations at IMFT is limited by our agreements with Intel. From time to time,there have been disruptions in the manufacturing process as a result of power outages, improperly functioning equipment, disruptions in supply of rawmaterials or components, equipment failures, earthquakes, or other environmental events. If production is disrupted for any reason, manufacturing yields maybe adversely affected or we may be unable to meet our customers' requirements and they may purchase products from other suppliers. This could result in asignificant increase in manufacturing costs, loss of revenues, or damage to customer relationships, any of which could have a material adverse effect on ourbusiness, results of operations, or financial condition.Increases in tariffs or other trade restrictions or taxes on our products or equipment and supplies could have an adverse impact on our operations.In 2018, 88% of our sales were to customers located outside the United States. We also purchase a significant portion of equipment and supplies fromsuppliers outside the United States. Additionally, a significant portion of our facilities are located outside the United States, including Taiwan, Singapore,Japan, and China. The United States and other countries have levied tariffs and taxes on certain goods. General trade tensions between the U.S. and Chinahave been escalating in 2018, with three rounds of U.S. tariffs on Chinese goods taking effect in July, August, and September 2018, each followed by a roundof retaliatory Chinese tariffs on U.S. goods. Some of our products are included in these announced tariffs. Higher duties on existing tariffs and further roundsof tariffs have been announced or threatened by U.S. and Chinese leaders. If the U.S. were to impose additional tariffs on components that we or our supplierssource from China, our cost for such components would increase. We may also incur increases in manufacturing costs due to our efforts to mitigate the impactof tariffs on our customers and our operations. Further changes in trade policy, tariffs, additional taxes, restrictions on exports or other trade barriers, orrestrictions on supplies, equipment, and raw materials including rare earth minerals, may limit our ability to produce products, increase our selling and/ormanufacturing costs, decrease margins, reduce the competitiveness of our products, or inhibit our ability to sell products or purchase necessary equipmentand supplies, which could have a material adverse effect on our business, results of operations, or financial conditions.We must attract, retain, and motivate highly skilled employees.To remain competitive, we must attract, retain, and motivate executives and other highly skilled employees. Hiring and retaining qualified executives,engineers, technical staff, and sales representatives are critical to our business, and competition for experienced employees in our industry can be intense. Ourinability to attract and retain key employees may inhibit our ability to expand our business operations. Additionally, changes to immigration policies in thenumerous countries in which we operate, including the United States, may limit our ability to hire and/or retain talent in specific locations. If our totalcompensation programs and workplace culture cease to be viewed as competitive, our ability to attract, retain, and motivate employees could be weakened,which could have a material adverse effect on our business, results of operations, or financial condition.The acquisition of our ownership interest in Inotera from Qimonda has been challenged by the administrator of the insolvency proceedings forQimonda.On January 20, 2011, Dr. Michael Jaffé, administrator for Qimonda's insolvency proceedings, filed suit against Micron and Micron Semiconductor B.V.,our Netherlands subsidiary ("Micron B.V."), in the District Court of Munich, Civil Chamber. The complaint seeks to void, under Section 133 of the GermanInsolvency Act, a share purchase agreement between Micron B.V. and Qimonda signed in fall 2008, pursuant to which Micron B.V. purchased substantiallyall of Qimonda's shares of Inotera (the "Inotera Shares"), representing approximately 18% of Inotera's outstanding shares as of August 30, 2018, and seeks anorder requiring us to re-transfer those shares to the Qimonda estate. The complaint also seeks, among other things, to recover damages for the alleged value ofthe joint venture relationship with Inotera and to terminate, under Sections 103 or 133 of the German Insolvency Code, a patent cross-license between us andQimonda entered into at the same time as the share purchase agreement.18Following a series of hearings with pleadings, arguments, and witnesses on behalf of the Qimonda estate, on March 13, 2014, the court issuedjudgments: (1) ordering Micron B.V. to pay approximately $1 million in respect of certain Inotera Shares sold in connection with the original share purchase;(2) ordering Micron B.V. to disclose certain information with respect to any Inotera Shares sold by it to third parties; (3) ordering Micron B.V. to disclose thebenefits derived by it from ownership of the Inotera Shares, including in particular, any profits distributed on the Inotera Shares and all other benefits; (4)denying Qimonda’s claims against Micron for any damages relating to the joint venture relationship with Inotera; and (5) determining that Qimonda'sobligations under the patent cross-license agreement are canceled. In addition, the Court issued interlocutory judgments ordering, among other things: (1)that Micron B.V. transfer to the Qimonda estate the Inotera Shares still owned by Micron B.V. and pay to the Qimonda estate compensation in an amount tobe specified for any Inotera Shares sold to third parties; and (2) that Micron B.V. pay the Qimonda estate as compensation an amount to be specified forbenefits derived by Micron B.V. from ownership of the Inotera Shares. The interlocutory judgments have no immediate, enforceable effect on us, and,accordingly, we expect to be able to continue to operate with full control of the Inotera Shares subject to further developments in the case. We have filed anotice of appeal, and the parties have submitted briefs to the appeals court.We are unable to predict the outcome of the matter and, therefore, cannot estimate the range of possible loss. The final resolution of this lawsuit couldresult in the loss of the Inotera Shares or monetary damages, unspecified damages based on the benefits derived by Micron B.V. from the ownership of theInotera Shares, and/or the termination of the patent cross-license, which could have a material adverse effect on our business, results of operations, orfinancial condition.Breaches of our security systems could expose us to losses.We maintain a system of controls over the physical security of our facilities. We also manage and store various proprietary information and sensitive orconfidential data relating to our operations. In addition, we process, store, and transmit large amounts of data relating to our customers and employees,including sensitive personal information. Unauthorized persons or employees may gain access to our facilities or network systems to steal trade secrets orother proprietary information, compromise confidential information, create system disruptions, or cause shutdowns. These parties may also be able to developand deploy viruses, worms, and other malicious software programs that disrupt our operations and create security vulnerabilities. Breaches of our physicalsecurity and attacks on our network systems could result in significant losses and damage our reputation with customers and suppliers and may expose us tolitigation if the confidential information of our customers, suppliers, or employees is compromised, which could have a material adverse effect on ourbusiness, results of operations, or financial condition.Changes in foreign currency exchange rates could materially adversely affect our business, results of operations, or financial condition.Across our global operations, significant transactions and balances are denominated in currencies other than the U.S. dollar (our reporting currency),primarily the euro, Singapore dollar, New Taiwan dollar, and yen. Although we hedge our primary exposures to changes in currency exchange rates from ourmonetary assets and liabilities, the effectiveness of these hedges is dependent upon our ability to accurately forecast our monetary assets and liabilities. Inaddition, a significant portion of our manufacturing costs are denominated in foreign currencies. Exchange rates for some of these currencies against the U.S.dollar, particularly the yen, have been volatile in recent periods. If these currencies strengthen against the U.S. dollar, our manufacturing costs couldsignificantly increase. Exchange rates for the U.S. dollar that adversely change against our foreign currency exposures could have a material adverse effect onour business, results of operations, or financial condition.We may make future acquisitions and/or alliances, which involve numerous risks.Acquisitions and the formation or operation of alliances, such as joint ventures and other partnering arrangements, involve numerous risks, including thefollowing:•integrating the operations, technologies, and products of acquired or newly formed entities into our operations;•increasing capital expenditures to upgrade and maintain facilities;•increased debt levels;•the assumption of unknown or underestimated liabilities;•the use of cash to finance a transaction, which may reduce the availability of cash to fund working capital, capital expenditures, R&D expenditures,and other business activities;•diverting management's attention from daily operations;•managing larger or more complex operations and facilities and employees in separate and diverse geographic areas;•hiring and retaining key employees;19•requirements imposed by governmental authorities in connection with the regulatory review of a transaction, which may include, among otherthings, divestitures or restrictions on the conduct of our business or the acquired business;•inability to realize synergies or other expected benefits;•failure to maintain customer, vendor, and other relationships;•inadequacy or ineffectiveness of an acquired company's internal financial controls, disclosure controls and procedures, compliance programs, and/orenvironmental, health and safety, anti-corruption, human resource, or other policies or practices; and•impairment of acquired intangible assets, goodwill, or other assets as a result of changing business conditions, technological advancements, orworse-than-expected performance of the acquired business.In previous years, supply of memory and storage products has significantly exceeded customer demand resulting in significant declines in averageselling prices. The global memory and storage industry has experienced consolidation and may continue to consolidate. We engage, from time to time, indiscussions regarding potential acquisitions and similar opportunities. To the extent we are successful in completing any such transactions, we could besubject to some or all of the risks described above, including the risks pertaining to funding, assumption of liabilities, integration challenges, and increases indebt that may accompany such transactions. Acquisitions of, or alliances with, technology companies are inherently risky and may not be successful andcould have a material adverse effect on our business, results of operations, or financial condition.Our business, results of operations, or financial condition could be adversely affected by the limited availability and quality of materials, supplies, andcapital equipment, or the dependency on third-party service providers.Our supply chain and operations are dependent on the availability of materials that meet exacting standards and the use of third parties to provide uswith components and services. We generally have multiple sources of supply for our raw materials and services. However, only a limited number of suppliersare capable of delivering certain raw materials and services that meet our standards and, in some cases, materials, components, or services are provided by asingle supplier. Various factors could reduce the availability of raw materials or components such as chemicals, silicon wafers, gases, photoresist, controllers,substrates, lead frames, printed circuit boards, targets, and reticle glass blanks. Shortages or increases in lead times may occur from time to time in the future.Our manufacturing processes are also dependent on our relationships with third-party manufacturers of controllers used in a number of our products and withoutsourced semiconductor assembly and test providers, contract manufacturers, logistic carriers, and other service providers. Certain raw materials areprimarily available in certain countries, including rare earth minerals available primarily from China, and trade disputes or other political or economicconditions may limit our availability to obtain such raw materials. We and/or our suppliers and service providers could be affected by tariffs, embargoes orother trade restrictions, as well as laws and regulations enacted in response to concerns regarding climate change, conflict minerals, and responsible sourcingpractices, which could limit the supply of our raw materials and/or increase the cost. In addition, disruptions in transportation lines could delay our receipt ofraw materials. Lead times for the supply of raw materials have been extended in the past. The disruption of our supply of raw materials, components, services,or the extension of our lead times could have a material adverse effect on our business, results of operations, or financial condition.Our operations are dependent on our ability to procure advanced semiconductor manufacturing equipment that enables the transition to lower costmanufacturing processes. For certain key types of equipment, including photolithography tools, we are sometimes dependent on a single supplier. From timeto time, we have experienced difficulties in obtaining some equipment on a timely basis due to suppliers' limited capacity. Our inability to obtain equipmenton a timely basis could adversely affect our ability to transition to next generation manufacturing processes and reduce our costs. Delays in obtainingequipment could also impede our ability to ramp production at new facilities and could increase our overall costs of a ramp. Our inability to obtain advancedsemiconductor manufacturing equipment in a timely manner could have a material adverse effect on our business, results of operations, or financialcondition.A downturn in the worldwide economy may harm our business.Downturns in the worldwide economy have harmed our business in the past and future downturns could also adversely affect our business. Adverseeconomic conditions affect demand for devices that incorporate our products, such as personal computers, mobile devices, SSDs, and servers. Reduceddemand for these products could result in significant decreases in our average selling prices and product sales. A deterioration of current conditions inworldwide credit markets could limit our ability to obtain external financing to fund our operations and capital expenditures. In addition, we may experiencelosses on our holdings of cash and investments due to failures of financial institutions and other parties. Difficult economic conditions may also result in ahigher rate of losses on our accounts receivables due to credit defaults. As a result, a downturn in the worldwide economy could have a material adverse effecton our business, results of operations, or financial condition.20Our results of operations could be affected by natural disasters and other events in the locations in which we or our customers or suppliers operate.We have manufacturing and other operations in locations subject to natural occurrences such as severe weather and geological events, includingearthquakes or tsunamis, that could disrupt operations or result in construction delays. In addition, our suppliers and customers also have operations in suchlocations. A natural disaster, fire, explosion, or other event that results in a prolonged disruption to our operations, or the operations of our customers orsuppliers, could have a material adverse effect on our business, results of operations, or financial condition.Our incentives from various governments are conditional upon achieving or maintaining certain performance obligations and are subject to reduction,termination, or clawback.We have received, and may in the future continue to receive, benefits and incentives from national, state, and local governments in various regions of theworld designed to encourage us to establish, maintain, or increase investment, workforce, or production in those regions. These incentives may take variousforms, including grants, loan subsidies, and tax arrangements, and typically require us to perform or maintain certain levels of investment, capital spending,employment, technology deployment, or research and development activities to qualify for such incentives. We cannot guarantee that we will successfullyachieve performance obligations required to qualify for these incentives or that the granting agencies will provide such funding. These incentivearrangements typically provide the granting agencies with rights to audit our performance with the terms and obligations. Such audits could result inmodifications to, or termination of, the applicable incentive program. The incentives we receive could be subject to reduction, termination, or clawback, andany decrease or clawback of government incentives could have a material adverse effect on our business, results of operations, or financial condition.A change in tax laws in key jurisdictions could materially increase our tax expense.We are subject to income taxes in the U.S. and many foreign jurisdictions. Changes to income tax laws and regulations in any of the jurisdictions inwhich we operate, or in the interpretation of such laws, could significantly increase our effective tax rate and ultimately reduce our cash flow from operatingactivities and otherwise have a material adverse effect on our financial condition. For example, as a result of the Tax Cuts and Jobs Act (the "Tax Act")enacted on December 22, 2017 by the United States, our effective tax rate may increase to the low teens percentage in 2019, depending on the amount andgeographic mix of our taxable income. Additionally, various levels of government are increasingly focused on tax reform and other legislative action toincrease tax revenue. Further changes in the tax laws of foreign jurisdictions could arise as a result of the base erosion and profit shifting project undertakenby the Organization for Economic Co-operation and Development, which represents a coalition of member countries and recommended changes to numerouslong-standing tax principles. If adopted by countries, such changes, as well as changes in U.S. federal and state tax laws or in taxing jurisdictions'administrative interpretations, decisions, policies, and positions, could have a material adverse effect on our business, results of operations, or financialcondition.We may incur additional tax expense or become subject to additional tax exposure.We operate in a number of locations outside the United States, including Singapore, where we have tax incentive arrangements that are conditional, inpart, upon meeting certain business operations and employment thresholds. Our domestic and international taxes are dependent upon the geographic mix ofour earnings among these jurisdictions. Our provision for income taxes and cash tax liabilities in the future could be adversely affected by numerous factors,including challenges by tax authorities to our tax positions and intercompany transfer pricing agreements, failure to meet performance obligations withrespect to tax incentive agreements, and changes in tax laws and regulations. Additionally, we file income tax returns with the U.S. federal government,various U.S. states, and various other jurisdictions throughout the world and certain tax returns may remain open to examination for several years. The resultsof audits and examinations of previously filed tax returns and continuing assessments of our tax exposures may have an adverse effect on our provision forincome taxes and cash tax liability. The foregoing items could have a material adverse effect on our business, results of operations, or financial condition.We may incur additional restructuring charges in future periods.From time to time, we have, and may in the future, enter into restructure initiatives in order to, among other items, streamline our operations, respond tochanges in business conditions, our markets or product offerings, or to centralize certain key functions. We may not realize expected savings or other benefitsfrom our restructure activities and may incur additional restructure charges or other losses in future periods associated with other initiatives. In connectionwith any restructure initiatives, we could incur restructure charges, loss of production output, loss of key personnel, disruptions in our operations,21and difficulties in the timely delivery of products, which could have a material adverse effect on our business, results of operations, or financial condition.We face risks associated with our international sales and operations that could materially adversely affect our business, results of operations, orfinancial condition.A substantial majority of our consolidated net sales are to customers outside the United States. In addition, a substantial portion of our manufacturingoperations are located outside the United States. In particular, a significant portion of our manufacturing operations are concentrated in Singapore, Taiwan,Japan, and China. Our international sales and operations are subject to a variety of risks, including:•export and import duties, changes to import and export regulations, customs regulations and processes, and restrictions on the transfer of funds;•compliance with U.S. and international laws involving international operations, including the Foreign Corrupt Practices Act of 1977, as amended,export and import laws, and similar rules and regulations;•theft of intellectual property;•political and economic instability;•problems with the transportation or delivery of products;•issues arising from cultural or language differences and labor unrest;•longer payment cycles and greater difficulty in collecting accounts receivable;•compliance with trade, technical standards, and other laws in a variety of jurisdictions;•contractual and regulatory limitations on the ability to maintain flexibility with staffing levels;•disruptions to manufacturing operations as a result of actions imposed by foreign governments;•changes in economic policies of foreign governments; and•difficulties in staffing and managing international operations.Many of our customers, suppliers, and vendors operate internationally and are also subject to the foregoing risks. If we or our customers, suppliers, orvendors are impacted by these risks, it could have a material adverse effect on our business, results of operations, or financial condition.Compliance with customer requirements and regulations regarding the use of conflict minerals could limit the supply and increase the cost of certainmetals used in manufacturing our products.Increased focus on environmental protection and social responsibility initiatives led to the passage of Section 1502 of the Dodd-Frank Wall StreetReform and Consumer Protection Act of 2010 (the "Dodd-Frank Act") and its implementing SEC regulations. The Dodd-Frank Act imposes supply chaindiligence and disclosure requirements for certain manufacturers of products containing specific minerals that may originate in or near the DemocraticRepublic of the Congo (the "DRC") and finance or benefit local armed groups. These "conflict minerals" are commonly found in materials used in themanufacture of semiconductors. The implementation of these regulations may limit the sourcing and availability of some of these materials. This in turn mayaffect our ability to obtain materials necessary for the manufacture of our products in sufficient quantities and may affect related material pricing. Some of ourcustomers may elect to disqualify us as a supplier or reduce purchases from us if we are unable to verify that our products are DRC conflict free. In addition,many of our customers have or are planning to adopt responsible sourcing programs with requirements that our broader in terms of minerals and geographiesthan DRC conflict minerals programs. Our inability to comply with requirements regarding the use of conflict and other minerals could have a materialadverse effect on our business, results of operations, or financial condition.22We and others are subject to a variety of laws and regulations that may result in additional costs and liabilities.The manufacturing of our products requires the use of facilities, equipment, and materials that are subject to a broad array of laws and regulations innumerous jurisdictions in which we operate. Additionally, we are subject to a variety of other laws and regulations relative to the construction, maintenance,and operations of our facilities. Any of these laws or regulations could cause us to incur additional direct costs, as well as increased indirect costs related toour relationships with our customers and suppliers, and otherwise harm our operations and financial condition. Any failure to comply with these laws orregulations could adversely impact our reputation and our financial results. Additionally, we engage various third parties to represent us or otherwise act onour behalf and we partner with other companies in our joint ventures, all of whom are also subject to a broad array of laws and regulations. Our engagementwith these third parties and our ownership in these joint ventures may also expose us to risks associated with their respective compliance with these laws andregulations. As a result of these items, we could experience the following:•suspension of production;•remediation costs;•alteration of our manufacturing processes;•regulatory penalties, fines, and legal liabilities; and•reputational challenges.Our failure, or the failure of our third-party agents or joint ventures, to comply with these laws and regulations could have a material adverse effect on ourbusiness, results of operations, or financial condition.We are subject to counterparty default risks.We have numerous arrangements with financial institutions that subject us to counterparty default risks, including cash deposits, investments, cappedcall contracts on our common stock, and derivative instruments. As a result, we are subject to the risk that the counterparty to one or more of thesearrangements will default on its performance obligations. A counterparty may not comply with their contractual commitments which could then lead to theirdefaulting on their obligations with little or no notice to us, which could limit our ability to take action to mitigate our exposure. Additionally, our ability tomitigate our exposures may be constrained by the terms of our contractual arrangements or because market conditions prevent us from taking effective action.If one of our counterparties becomes insolvent or files for bankruptcy, our ability to recover any losses suffered as a result of that counterparty's default maybe limited by the liquidity of the counterparty or the applicable laws governing the bankruptcy proceedings. In the event of such default, we could incursignificant losses, which could have a material adverse effect on our business, results of operations, or financial condition.The operations of MMJ are subject to continued oversight by the Tokyo District Court during the pendency of the corporate reorganizationproceedings.Because MMJ's plan of reorganization provides for ongoing payments to creditors following the closing of our acquisition of MMJ, the reorganizationproceedings in Japan (the "Japan Proceedings") are continuing and MMJ remains subject to the oversight of the Tokyo District Court and of the trustees(including a trustee designated by us, who we refer to as the business trustee, and a trustee designated by the Tokyo District Court, who we refer to as the legaltrustee), pending completion of the reorganization proceedings. The business trustee is responsible for overseeing the operation of the business of MMJ,other than oversight in relation to acts that need to be carried out in connection with the Japan Proceedings, which are the responsibility of the legal trustee.MMJ's reorganization proceedings in Japan, and oversight of the Tokyo District Court, will continue until the final creditor payment is made under MMJ'splan of reorganization, which is scheduled to occur in December 2019, but may occur on a later date to the extent any claims of creditors remain unfixed onthe final scheduled installment payment date. MMJ may petition the Tokyo District Court for an early termination of the reorganization proceedings oncetwo-thirds of all payments under the plan of reorganization are made. Although such early terminations are customarily granted, there can be no assurancethat the Tokyo District Court will grant any such petition in this particular case.During the pendency of the reorganization proceedings in Japan, MMJ is obligated to provide periodic financial reports to the Tokyo District Court andmay be required to obtain the consent of the Tokyo District Court prior to taking a number of significant actions relating to its businesses, includingtransferring or disposing of, or acquiring, certain material assets, incurring or guaranteeing material indebtedness, settling material disputes, or entering intocertain material agreements. The consent of the legal trustee may also be required for matters that would likely have a material impact on the operations orassets of MMJ or for transfers of material assets, to the extent the matters or transfers would reasonably be expected to materially and adversely affectexecution of MMJ's plan of reorganization. Accordingly, during the pendency of the reorganization proceedings in Japan, our ability to operate MMJ as partof our global business or to cause MMJ to take certain actions that we deem23advisable for its business could be adversely affected if the Tokyo District Court or the legal trustee is unwilling to consent to various actions that we maywish to take with respect to MMJ.The operations of MMJ being subject to the continued oversight by the Tokyo District Court during the pendency of the corporate reorganizationproceedings could have a material adverse effect on our business, results of operations, or financial condition.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESOur corporate headquarters are located in Boise, Idaho. The following is a summary of our principal facilities as of August 30, 2018:Location Principal OperationsTaiwan Wafer fabrication, component assembly and test, module assembly and testSingapore R&D, wafer fabrication, component assembly and test, module assembly and testUnited States R&D, wafer fabrication, reticle manufacturingJapan R&D and wafer fabricationChina Component assembly and test, module assembly and testMalaysia Component assemblyWe own or lease a number of other facilities in locations throughout the world that are used for design, R&D, and sales and marketing activities.Substantially all of our manufacturing capacity is fully utilized. Certain of our properties are collateral to secured borrowing arrangements. (See "Part II – Item8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Debt.")We believe that our existing facilities are suitable and adequate for our present purposes. We do not identify or allocate assets by operating segment,other than goodwill. (See "Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – GeographicInformation.")ITEM 3. LEGAL PROCEEDINGSSee "Part II – Financial Information – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements –Contingencies" and "Item 1A. Risk Factors" for a discussion of other legal proceedings.Reorganization Proceedings of the MMJ CompaniesIn 2013, we completed the acquisition of Elpida Memory, Inc., now known as MMJ, a Japanese corporation, pursuant to the terms and conditions of anAgreement on Support for Reorganization Companies (as amended, the "Sponsor Agreement") that we entered into in 2012 with the trustees of the MMJCompanies' pending corporate reorganization proceedings under the Corporate Reorganization Act of Japan. Under the Sponsor Agreement, we agreed toprovide certain support for the reorganization of the MMJ Companies and the trustees agreed to prepare and seek approval from the Tokyo District Court andthe MMJ Companies' creditors of plan of reorganization consistent with such support.The plan of reorganization provides for payments by the MMJ Companies to their secured and unsecured creditors in an aggregate amount of 200 billionyen, less certain expenses of the reorganization proceedings and certain other items. The plan of reorganization also provided for the investment by uspursuant to the Sponsor Agreement of 60 billion yen paid at closing in cash into MMJ in exchange for 100% ownership of MMJ's equity and the use of suchinvestment to fund the initial installment payment by the MMJ Companies to their creditors of 60 billion yen, subject to reduction for certain items specifiedin the Sponsor Agreement and plan of reorganization.24Under MMJ's plan of reorganization, secured creditors will recover 100% of the amount of their fixed claims and unsecured creditors will recover at least17.4% of the amount of their fixed claims. The actual recovery of unsecured creditors will be higher, however, based in part on events and circumstancesoccurring following the plan approval. The remaining portion of the unsecured claims will be discharged, without payment, over the period that payments aremade pursuant to the plan of reorganization. The secured creditors will be paid in full on or before the sixth installment payment date, while the unsecuredcreditors will be paid in seven installments. The unsecured creditors of MAI were scheduled to be paid in seven installments; however, in connection with oursale of MAI in 2017, the remaining MAI creditor obligation was paid in full and MAI's reorganization proceedings were closed.Because MMJ's plan of reorganization provides for ongoing payments to creditors following the closing of the MMJ acquisition, the reorganizationproceedings in Japan are continuing and MMJ remains subject to the oversight of the Tokyo District Court and of the trustees (including a trustee designatedby us, who we refer to as the business trustee, and a trustee designated by the Tokyo District Court, who we refer to as the legal trustee), pending completionof the reorganization proceedings. The business trustee is responsible for overseeing the operation of the businesses of the MMJ Companies, other thanoversight in relation to acts that need to be carried out in connection with the Japan Proceedings, which are the responsibility of the legal trustee. MMJ'sreorganization proceedings in Japan, and oversight of the Tokyo District Court, will continue until the final creditor payment is made under MMJ's plan ofreorganization, which is scheduled to occur in December 2019, but may occur on a later date to the extent any claims of creditors remain unfixed on the finalscheduled installment payment date. MMJ may petition the Tokyo District Court for an early termination of the reorganization proceedings once two-thirdsof all payments under the plan of reorganization are made. Although such early terminations are customarily granted, there can be no assurance that theTokyo District Court will grant any such petition in this particular case.During the pendency of the reorganization proceedings in Japan, MMJ is obligated to provide periodic financial reports to the Tokyo District Court andmay be required to obtain the consent of the Tokyo District Court prior to taking a number of significant actions relating to its businesses, includingtransferring or disposing of, or acquiring, certain material assets, incurring or guaranteeing material indebtedness, settling material disputes, or entering intocertain material agreements. The consent of the legal trustee may also be required for matters that would likely have a material impact on the operations orassets of MMJ or for transfers of material assets, to the extent the matters or transfers would reasonably be expected to materially and adversely affectexecution of MMJ's plan of reorganization. Accordingly, during the pendency of the reorganization proceedings in Japan, our ability to effectively integrateMMJ as part of our global operations or to cause MMJ to take certain actions that we deem advisable for its businesses could be adversely affected if theTokyo District Court or the legal trustee is unwilling to consent to various actions that we may wish to take with respect to MMJ.ITEM 4. MINE SAFETY DISCLOSURESNot Applicable.25PART IIITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, ANDISSUER PURCHASES OF EQUITY SECURITIESMarket for Common StockOur common stock is listed on the NASDAQ Global Select Market and trades under the symbol "MU." The following table represents the high and lowclosing prices for our common stock as reported by NASDAQ for each quarter of 2018 and 2017: Fourth Quarter Third Quarter Second Quarter First Quarter2018 High $61.39 $62.62 $48.81 $49.68Low 47.10 45.89 39.40 32.07 2017 High $32.50 $30.77 $24.79 $20.13Low 27.49 25.15 18.61 16.62Holders of RecordAs of October 8, 2018, there were 2,062 shareholders of record of our common stock.DividendsWe have not declared or paid cash dividends since 1996 and do not intend to pay cash dividends for the foreseeable future. As a result of the Japan Proceedings, for so long as such proceedings continue, MMJ is subject to certain restrictions on dividends, loans, and advances.Our ability to access IMFT's cash and other assets through dividends, loans, or advances, including to finance our other operations, is subject to agreement byIntel.Equity Compensation Plan InformationThe information required by this item is incorporated by reference from the information to be included in our 2018 Proxy Statement under the sectionentitled "Equity Compensation Plan Information," which will be filed with the Securities and Exchange Commission within 120 days after August 30, 2018.Issuer Purchase of Equity SecuritiesCommon Stock Repurchase Authorization: In May 2018, we announced that our Board of Directors had authorized the discretionary repurchase of up to$10 billion of our outstanding common stock beginning in 2019. We may purchase shares on a discretionary basis through open-market purchases, blocktrades, privately-negotiated transactions, derivative transactions, and/or pursuant to a Rule 10b5-1 trading plan, subject to market conditions and ourongoing determination of the best use of available cash. The repurchase authorization does not obligate us to acquire any common stock.26Period (a) Totalnumber ofsharespurchased (b) Averageprice paid pershare (c) Total number of shares(or units) purchased as partof publicly announcedplans or programs (d) Maximum number (orapproximate dollar value) of shares(or units) that may yet be purchasedunder publicly announced plans orprogramsJune 1, 2018–July 5, 2018 — $— July 6, 2018–August 2, 2018 — — August 3, 2018–August 30, 2018 — — — $10,000,000,000 For information on repurchases of our common stock subsequent to August 30, 2018, see "Item 8. Financial Statements and Supplementary Data – Notesto Consolidated Financial Statements – Equity – Micron Shareholders' Equity."Shares of common stock withheld as payment of withholding taxes and exercise prices in connection with the vesting or exercise of equity awards arealso treated as common stock repurchases. Those withheld shares of common stock are not considered common stock repurchases under an authorizedcommon stock repurchase plan and accordingly are excluded from the amounts in the table above.Performance GraphThe following graph illustrates a five-year comparison of cumulative total returns for our common stock, the S&P 500 Composite Index, and thePhiladelphia Semiconductor Index (SOX) from August 31, 2013, through August 31, 2018. We operate on a 52 or 53 week fiscal year which ends on theThursday closest to August 31. Accordingly, the last day of our fiscal year varies. For consistent presentation and comparison to the industry indices shownherein, we have calculated our stock performance graph assuming an August 31 year end.Note: Management cautions that the stock price performance information shown in the graph above may not be indicative of current stock price levels orfuture stock price performance.The performance graph above assumes $100 was invested on August 31, 2013 in common stock of Micron Technology, Inc., the S&P 500 CompositeIndex, and the Philadelphia Semiconductor Index (SOX). Any dividends paid during the period presented were assumed to be reinvested. The performancewas plotted using the following data: 2013 2014 2015 2016 2017 2018Micron Technology, Inc. $100 $240 $121 $122 $236 $387S&P 500 Composite Index 100 125 126 142 165 197Philadelphia Semiconductor Index (SOX) 100 143 139 186 263 33627ITEM 6. SELECTED FINANCIAL DATA 2018 2017 2016 2015 2014 (in millions except per share amounts)Net sales $30,391 $20,322 $12,399 $16,192 $16,358Gross margin 17,891 8,436 2,505 5,215 5,437Operating income 14,994 5,868 168 2,998 3,087Net income (loss) 14,138 5,090 (275) 2,899 3,079Net income (loss) attributable to Micron 14,135 5,089 (276) 2,899 3,045Diluted earnings (loss) per share 11.51 4.41 (0.27) 2.47 2.54 Cash and short-term investments 6,802 5,428 4,398 3,521 4,534Total current assets 16,039 12,457 9,495 8,596 10,245Property, plant, and equipment 23,672 19,431 14,686 10,554 8,682Total assets 43,376 35,336 27,540 24,143 22,416Total current liabilities 5,754 5,334 4,835 3,905 4,791Long-term debt 3,777 9,872 9,154 6,252 4,893Redeemable convertible notes 3 21 — 49 68Redeemable noncontrolling interest 97 — — — —Total Micron shareholders’ equity 32,294 18,621 12,080 12,302 10,760Noncontrolling interests in subsidiaries 870 849 848 937 802Total equity 33,164 19,47012,92813,23911,562In December 2016, we acquired the 67% remaining interest in Inotera and began consolidating Inotera's operating results. In the periods presented abovethrough December 2016, Inotera sold DRAM products exclusively to us through supply agreements. The cash paid for the Inotera Acquisition was funded, inpart, with a term loan of 80 billion New Taiwan dollars and $986 million from the sale of 58 million shares of our common stock. (See Item 8. FinancialStatements and Supplementary Data – Notes to Consolidated Financial Statements – Acquisition of Inotera."ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONSThis discussion should be read in conjunction with the consolidated financial statements and accompanying notes for the year ended August 30, 2018.All period references are to our fiscal periods unless otherwise indicated. Our fiscal year is the 52 or 53-week period ending on the Thursday closest toAugust 31. Our fiscal 2018, 2017, and 2016 each contain 52 weeks. All production data includes the production of IMFT and Inotera. All tabular dollaramounts are in millions, except per share amounts.For an overview of our business, see "Part I – Item 1. Business – Overview."28Results of OperationsConsolidated ResultsFor the year ended 2018 2017 2016Net sales $30,391 100 % $20,322 100 % $12,399 100 %Cost of goods sold 12,500 41 % 11,886 58 % 9,894 80 %Gross margin 17,891 59 % 8,436 42 % 2,505 20 % Selling, general, and administrative 813 3 % 743 4 % 659 5 %Research and development 2,141 7 % 1,824 9 % 1,617 13 %Other operating (income) expense, net (57) — % 1 — % 61 — %Operating income 14,994 49 % 5,868 29 % 168 1 % Interest income (expense), net (222) (1)% (560) (3)% (395) (3)%Other non-operating income (expense), net (465) (2)% (112) (1)% (54) — %Income tax provision (168) (1)% (114) (1)% (19) — %Equity in net income (loss) of equity method investees (1) — % 8 — % 25 — %Net income attributable to noncontrolling interests (3) — % (1) — % (1) — %Net income (loss) attributable to Micron $14,135 47 % $5,089 25 % $(276) (2)%Total Net SalesTotal net sales for 2018 increased 50% as compared to 2017. Higher sales in 2018 for both DRAM and NAND products as compared to 2017 were drivenby strong execution in delivering high-value products featuring our 1Xnm DRAM and 64-layer 3D NAND technologies combined with strong demand forproducts across our primary markets. Sales of DRAM products for 2018 increased 64% from 2017 primarily due to an increase in average selling prices ofapproximately 35% and an increase in sales volumes of approximately 20% as a result of strong market conditions, particularly for cloud, enterprise, mobile,and graphics markets, combined with increased sales into high-value markets. Sales of trade NAND products for 2018 increased 26% from 2017 despitedeclines in average selling prices primarily due to an increase in sales volumes of approximately 40% driven by increases in sales of high-value SSD andmobile managed NAND products enabled by strong demand and our execution in delivering 3D NAND products.Total net sales for 2017 increased 64% as compared to 2016 due to strong conditions across our primary markets, particularly for enterprise, mobile,client, and SSD storage. Sales of DRAM products for 2017 increased 80% from 2016 due to an increase in sales volumes of approximately 50% and anincrease in average selling prices of approximately 20% as a result of the strong market conditions. Sales of trade NAND products for 2017 increasedapproximately 50% as compared to 2016 due to an increase in sales volumes of approximately 65% resulting from strong market demand for our 3D NANDproducts, which was partially offset by declines in average selling prices. Increases in DRAM and NAND sales volumes for 2017 as compared 2016 wereenabled by higher manufacturing output due to improvements in product and process technology and solid execution. Increases in sales volumes for NANDproducts for 2017 were also enabled by key customer qualifications of new products.Overall Gross MarginOur overall gross margin percentage increased to 59% for 2018 from 42% for 2017 primarily due to favorable market conditions across key marketscombined with strong execution in delivering products featuring advanced technologies, including 1Xnm DRAM and 64-layer 3D NAND, enablingmanufacturing cost reductions. For 2018 as compared to 2017, pricing for DRAM products increased while manufacturing costs declined and, for NANDproducts, manufacturing cost reductions outpaced declines in average selling prices.Our overall gross margin percentage increased to 42% for 2017 from 20% for 2016 primarily due to strong markets that drove favorable pricingconditions and solid execution in manufacturing cost reductions from improvements in product and process technology. For 2017 as compared to 2016,pricing for DRAM products increased while manufacturing costs declined29and, for NAND products, manufacturing cost reductions outpaced declines in selling prices. We periodically assess the estimated useful lives of our property,plant, and equipment. In the fourth quarter of 2016, we identified factors such as the lengthening period of time between DRAM product technology nodetransitions, an increased re-use rate of equipment, and industry trends. As a result, we revised the estimated useful lives of equipment in our DRAM waferfabrication facilities from five to seven years in the fourth quarter of 2016. The effect of the revision was not material for 2016 and reduced depreciationexpense at the time by approximately $100 million per quarter.From January 2013 through December 2015, we purchased all of Inotera's DRAM output under supply agreements at prices reflecting discounts frommarket prices for our comparable components. After December 2015 through December 6, 2016, the date we acquired the remaining interest in Inotera, theprice for DRAM products we purchased from Inotera was based on a formula that equally shared margin between Inotera and us. Under these agreements, wepurchased $504 million and $1.43 billion of DRAM products from Inotera in 2017 and 2016, respectively, which represented 9% of our aggregate DRAMgigabit production for 2017 and 30% for 2016.Net Sales by Business UnitFor the year ended 2018 2017 2016CNBU $15,252 50% $8,624 42% $4,529 37%MBU 6,579 22% 4,424 22% 2,569 21%SBU 5,022 17% 4,514 22% 3,262 26%EBU 3,479 11% 2,695 13% 1,939 16%All Other 59 —% 65 —% 100 1% $30,391 $20,322 $12,399 Percentages are of total net sales but may not total 100% due to rounding.CNBU sales for 2018 increased 77% as compared to 2017 due to strong market conditions and demand in key markets, including cloud server, client,enterprise server markets, and graphics markets, which drove increases in pricing and sales volumes. Sales into cloud and graphics markets more than doubledin 2018 as compared to 2017. MBU sales for 2018, which were comprised primarily of mobile LPDRAM and managed NAND products, increased 49% ascompared to 2017 primarily due to customer qualifications for LPDRAM and managed NAND products, which combined with higher memory content insmartphones to drive improvements in DRAM pricing and increases in sales volumes. SBU sales of trade NAND products for 2018 increased 13% ascompared to 2017 driven by higher sales of SSD storage products, which increased by 72%, partially offset by declines in SBU NAND component sales froma strategic reallocation of supply from component sales to SSD and mobile managed NAND products. Increases in SBU sales volumes for 2018 resulting fromstrong demand for cloud and enterprise SSD markets more than offset declines in selling prices. SBU sales also include "non-trade" products consisting ofproducts manufactured and sold to Intel through IMFT under a long-term supply agreement at prices approximating cost, which included 3D XPoint memoryand NAND products, aggregating $541 million, $553 million, and $501 million, for 2018, 2017, and 2016, respectively. EBU sales for 2018 increased 29%as compared to 2017 primarily due to strong demand across EBU's primary markets including consumer, industrial multimarkets, and automotive. EBU saleswere comprised of products incorporating DRAM, NAND, and NOR Flash in decreasing order of revenue.CNBU sales for 2017 increased 90% as compared to 2016 due to increases in average selling prices due to strong demand across key markets, growth inthe cloud market driven by significant increases in DRAM content per server, and increases in sales of our GDDR5 and GDDR5X products into the graphicsmarket driven by strong demand from the gaming industry. MBU sales for 2017 increased 72% as compared to 2016 primarily due to significant increases insales volumes, driven by customer qualifications for LPDRAM and managed NAND products, combined with higher memory content in smartphones andgrowth in sales of eMCP products. MBU sales growth in 2017 was partially offset by declines in average selling prices for trade NAND products. SBU sales oftrade NAND products for 2017 increased 41% as compared to 2016 primarily due to increases in sales volumes from strong demand, particularly forcomponent NAND and client and cloud SSD storage products, partially offset by declines in average selling prices. SBU sales of SSD storage productsincreased by 137% for 2017 as compared to 2016 primarily as a result of the launch of new SSD products incorporating our TLC 3D NAND technology. EBUsales for 2017 increased 39% as compared to 2016 primarily due to strong demand and higher sales volumes for DRAM and eMCP in consumer markets andDRAM and eMMC products in the automotive markets.30Operating Income (Loss) by Business UnitFor the year ended 2018 2017 2016CNBU $9,773 64% $3,755 44% $(25) (1)%MBU 3,033 46% 927 21% 97 4 %SBU 964 19% 552 12% (123) (4)%EBU 1,473 42% 975 36% 473 24 %All Other — —% 23 35% 28 28 % $15,243 $6,232 $450 Percentages reflect operating income (loss) as a percentage of net sales for each business unit.CNBU operating income for 2018 improved from 2017 primarily due to improved pricing and higher sales volumes resulting from strong demand for ourproducts combined with manufacturing cost reductions. MBU operating income for 2018 improved from 2017 primarily due to increases in pricing and salesvolumes for LPDRAM products, higher sales of high-value managed NAND products, and manufacturing cost reductions. SBU operating income for 2018improved from 2017 primarily due to manufacturing cost reductions enabled by our execution in transitioning to 64-layer TLC 3D NAND products andimprovements in product mix. SBU operating income for 2018 was adversely impacted by higher costs associated with IMFT's production of 3D XPointmemory products at less than full capacity. EBU operating income for 2018 increased as compared to 2017 as a result of increases in average selling prices,manufacturing cost reductions, and increases in sales volumes, partially offset by higher R&D costs.CNBU operating margin for 2017 improved from 2016 primarily due to improved pricing from strong market conditions, manufacturing cost reductions,and product mix. MBU operating income for 2017 improved from 2016 primarily due to manufacturing cost reductions and higher sales volumes, partiallyoffset by higher R&D costs and declines in average selling prices for trade NAND products. SBU operating margin for 2017 improved from 2016 primarilydue to manufacturing cost reductions, partially offset by declines in average selling prices. EBU operating income for 2017 increased as compared to 2016 asa result of manufacturing cost reductions, which outpaced declines in average selling prices, and increases in sales volumes.Operating Expenses and OtherSelling, General, and AdministrativeSG&A expenses for 2018 were 9% higher than 2017 primarily due to increases in legal costs, technical and consulting fees, and employee compensation.SG&A expenses for 2017 were 13% higher than 2016 primarily due to increases in employee compensation as well as transaction costs related to the InoteraAcquisition.Research and DevelopmentR&D expenses vary primarily with the number of development wafers processed, the cost of advanced equipment dedicated to new product and processdevelopment, and personnel costs. Because of the lead times necessary to manufacture our products, we typically begin to process wafers before completionof performance and reliability testing. Development of a product is deemed complete when it is qualified through reviews and tests for performance andreliability. R&D expenses can vary significantly depending on the timing of product qualification.R&D expenses for 2018 were 17% higher than 2017 primarily due to increases in employee compensation, volumes of development and pre-qualification wafers, and depreciation expense as a result of increases in capital spending. R&D expenses for 2017 were 13% higher than 2016 primarily dueto higher volumes of development and pre-qualification wafers and increases in employee compensation, partially offset by lower engineering and otherprofessional services costs.We share the cost of certain product and process development activities under development agreements with partners, including agreements to jointlydevelop NAND and 3D XPoint technologies with Intel. We continue to jointly develop NAND technologies with Intel through the third generation of 3DNAND, which is expected to be completed in the second half of 2019. In the second quarter of 2018, we and Intel agreed to independently developsubsequent generations of 3D NAND in order to better optimize the technology and products for our respective business needs. We continue to jointlydevelop 3D XPoint technologies with Intel through the second generation of 3D XPoint technology, which is expected to be completed in the second half of2019. To better optimize 3D XPoint technology for our product roadmap and maximize the benefits for our customers and shareholders, in the fourth quarterof 2018, we announced that we will no longer jointly develop with Intel31subsequent generations of 3D XPoint technology. As a result of the above actions, we expect reimbursements under our cost-sharing agreements to decreasein early fiscal 2019. Our R&D expenses were reduced by reimbursements under these development partner arrangements by $201 million, $213 million, and$205 million for 2018, 2017, and 2016, respectively.Income TaxesOn December 22, 2017, the United States enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "Tax Act")which lowered the U.S. corporate income tax rate from 35% to 21% and significantly affects how income from foreign operations is taxed in the UnitedStates. Our U.S. statutory federal rate was 25.7% for 2018 (based on the 35% corporate rate through December 31, 2017 and 21% from that date through theend of fiscal year 2018) and will be 21% beginning in 2019. The Tax Act imposed a one-time transition tax in 2018 on accumulated foreign income (the"Repatriation Tax"); provided a U.S. federal tax exemption on foreign earnings distributed to the United States after January 1, 2018; and beginning in 2019,created a new minimum tax on certain foreign earnings in excess of a deemed return on tangible assets (the "Foreign Minimum Tax"). The Tax Act allows usto elect to pay any Repatriation Tax due in eight annual, interest-free payments in increasing amounts beginning in December 2018. In connection with theprovisions of the Tax Act, we made an accounting policy election to treat the Foreign Minimum Tax provision as a period cost in the period the tax isincurred.SEC Staff Accounting Bulletin No. 118 ("SAB 118") allows the use of provisional amounts (reasonable estimates) if our analyses of the impacts of theTax Act have not been completed when our financial statements are issued. The provisional amounts below for 2018 represent reasonable estimates of theeffects of the Tax Act for which our analysis is not yet complete. As we complete our analysis of the Tax Act, including collecting, preparing, and analyzingnecessary information, performing and refining calculations, and obtaining additional guidance from the IRS, U.S. Treasury Department, FASB, or otherstandard setting and regulatory bodies on the Tax Act, we may record adjustments to the provisional amounts, which may be material. In accordance withSAB 118, our accounting for the tax effects of the Tax Act will be completed during the measurement period, which should not extend beyond one year fromthe enactment date. At August 30, 2018, there were no provisions for which we were unable to record a reasonable estimate of the impact.Our income tax (provision) benefit consisted of the following:For the year ended 2018 2017 2016Provisional estimate for the Repatriation Tax, net of adjustments related to uncertain taxpositions $(1,030) $— $—Remeasurement of deferred tax assets and liabilities reflecting lower U.S. corporate taxrates (133) — —Provisional estimate for the release of the valuation allowance on the net deferred taxassets of our U.S. operations 1,337 — —Utilization of and other changes in net deferred tax assets of MMJ, MMT, and MTTW (68) 54 (114)U.S. valuation allowance release resulting from business acquisition — — 41Other income tax (provision) benefit (274) (168) 54 $(168) $(114) $(19) Effective tax rate 1.2% 2.2% (6.8)%Our income taxes reflect various impacts of the Tax Act, including the remeasurement of deferred tax assets and liabilities at the lower U.S. corporate rateof 25.7% for 2018 and 21% for subsequent years and provisional estimates for the Repatriation Tax and the release of a substantial portion of the valuationallowance on the net deferred tax assets of our U.S. operations. Our income tax rates also include operations outside the United States, including Singapore,where we have tax incentive arrangements that further decrease our effective tax rates. Beginning in 2019, our effective tax rate may increase to the low teenspercentage depending on the amount and geographic mix of taxable income. Income taxes for 2018, 2017, and 2016 included tax benefits of $1 million, $28million, and $58 million, respectively, related to the favorable resolution of certain tax matters, which were previously reserved as uncertain tax positions.During 2018, we reassessed our capital structure, including our Board of Directors' authorization to repurchase up to $10 billion of our outstandingcommon stock beginning in 2019, the future cash needs of our global operations, and the effects of the Tax Act. As a result of this reassessment, we deemed aportion of our foreign earnings to be no longer indefinitely reinvested. As a result of the Repatriation Tax, substantially all of our accumulated foreignearnings prior to December 31, 201732were subject to U.S. federal taxation. Although these earnings have been subject to U.S. federal income tax under the Repatriation Tax, the repatriation to theUnited States of all or a portion of these earnings would potentially be subject to foreign withholding and state income tax. As of August 30, 2018, we had adeferred tax liability of $82 million associated with our undistributed earnings.We operate in a number of tax jurisdictions outside the Unites States, including Singapore, where we have tax incentive arrangements, which expire inwhole or in part at various dates through 2031, that are conditional, in part, upon meeting certain business operations and employment thresholds. The effectof tax incentive arrangements reduced our tax provision by $1.96 billion (benefiting our diluted earnings per share by $1.59) for 2018, by $742 million($0.64 per diluted share) for 2017, and were not material in 2016.(See "Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Income Taxes.")OtherNet interest expense decreased 60% for 2018 as compared to 2017 due to decreases in debt obligations and increases in interest income. Net interestexpense increased 42% for 2017 as compared to 2016 primarily due to increases in debt obligations, including our borrowings of 80 billion New Taiwandollars in December 2016 in connection with our acquisition of Inotera and $1.25 billion from the issuance of our 2023 Secured Notes in April 2016.Further discussion of other operating and non-operating income and expenses can be found in the following notes contained in "Item 8. FinancialStatements and Supplementary Data – Notes to Consolidated Financial Statements":•Equity Plans•Research and Development•Other Operating Income (Expense), Net•Other Non-Operating Income (Expense), NetLiquidity and Capital ResourcesOur primary sources of liquidity are cash generated from operations and financing obtained from capital markets and financial institutions. Cashgenerated from operations is highly dependent on selling prices for our products, which can vary significantly from period to period. We are continuouslyevaluating alternatives for efficiently funding our capital expenditures and ongoing operations. We expect, from time to time, to engage in a variety offinancing transactions for such purposes, including the issuance of securities. We have an undrawn revolving credit facility that expires in July 2023 andprovides for borrowings of up to $2.00 billion. We expect that our cash and investments, cash flows from operations, and available financing will besufficient to meet our requirements at least through the next 12 months.To develop new product and process technology, support future growth, achieve operating efficiencies, and maintain product quality, we must continueto invest in manufacturing technologies, facilities and equipment, and R&D. We estimate that capital expenditures in 2019 for property, plant, andequipment, net of partner contributions, to be $10.5 billion plus or minus 5%, focused on technology transitions and product enablement. The actualamounts for 2019 will vary depending on market conditions. As of August 30, 2018, we had commitments of approximately $1.8 billion for the acquisitionof property, plant, and equipment, substantially all of which is expected to be paid within one year.In May 2018, we announced that our Board of Directors had authorized the discretionary repurchase of up to $10 billion of our outstanding commonstock beginning in 2019. We may purchase shares on a discretionary basis through open-market purchases, block trades, privately-negotiated transactions,derivative transactions, and/or pursuant to a Rule 10b5-1 trading plan, subject to market conditions and our ongoing determination of the best use ofavailable cash. The repurchase authorization does not obligate us to acquire any common stock.From August 31, 2018 through October 12, 2018, we repurchased an aggregate of $1.65 billion of our common stock under an accelerated sharerepurchase ("ASR") agreement, a Rule 10b5-1plan, and through open market repurchases. Pursuant to the ASR, we entered into an agreement with a financialinstitution to purchase $1.00 billion of our common stock in the first quarter of fiscal 2019. The number of shares ultimately purchased will be calculated bydividing $1.00 billion by a volume-weighted average price of our common stock from September 5, 2018 through as late as November 29, 2018 (the33"Measurement Period"), subject to an agreed-upon discount. On September 5, 2018, we paid $1.00 billion to the financial institution and received an initialinstallment of 14 million shares, with the final share amount to be determined as of the end of the Measurement Period.See "Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Equity."Cash and marketable investments totaled $7.28 billion and $6.05 billion as of August 30, 2018 and August 31, 2017, respectively. Our investmentsconsist primarily of money market funds and liquid investment-grade, fixed-income securities, diversified among industries and individual issuers. Tomitigate credit risk, we invest through high-credit-quality financial institutions and by policy generally limit the concentration of credit exposure byrestricting the amount of investments with any single obligor. As of August 30, 2018, $3.08 billion of our cash and marketable investments was held by ourforeign subsidiaries.Limitations on the Use of Cash and InvestmentsMMJ Group: Cash and marketable investments as of August 30, 2018 included $1.67 billion held by the MMJ Group. As a result of the corporatereorganization proceedings of MMJ initiated in March 2012, and for so long as such proceedings are continuing, the MMJ Group is prohibited from payingdividends to us. In addition, pursuant to an order of the Tokyo District Court, the MMJ Group cannot make loans or advances, other than certain ordinarycourse advances, to us without the consent of the Tokyo District Court and may, under certain circumstances, be subject to the approval of the legal trustee.As a result, the assets of the MMJ Group are not available for use by us in our other operations. Furthermore, certain uses of the assets of the MMJ Group,including investments in certain capital expenditures, may require consent of MMJ's trustees and/or the Tokyo District Court.IMFT: Cash and marketable investments included $91 million held by IMFT as of August 30, 2018. Our ability to access funds held by IMFT to financeour other operations is subject to agreement by Intel and contractual limitations. Amounts held by IMFT are not anticipated to be available to finance ourother operations.Indefinitely Reinvested: As of August 30, 2018, $1.71 billion of cash and marketable investments, including substantially all of the amounts held byMMJ, was held by foreign subsidiaries whose earnings were considered to be indefinitely reinvested. Determination of the amount of unrecognized deferredtax liabilities related to investments in these foreign subsidiaries is not practicable.Cash FlowsFor the year ended 2018 2017 2016Net cash provided by operating activities $17,400 $8,153 $3,168Net cash provided by (used for) investing activities (8,216) (7,537) (3,044)Net cash provided by (used for) financing activities (7,776) 349 1,745Effect of changes in currency exchange rates on cash, cash equivalents, and restrictedcash (37) (12) 19Net increase (decrease) in cash, cash equivalents, and restricted cash $1,371 $953 $1,888Operating Activities: For 2018, cash provided by operating activities was due primarily to cash generated by our operations and the effect of workingcapital adjustments, which included a $1.73 billion increase in receivables due to a higher level of net sales.For 2017, cash provided by operating activities was due primarily to cash generated by our operations and the effect of working capital adjustments,which included a $1.65 billion increase in receivables due to a higher level of net sales, $361 million of payments attributed to intercompany balances inconnection with the Inotera Acquisition, and a $564 million increase in accounts payable and accrued expenses.For 2016, cash provided by operating activities was due primarily to cash generated by our operations and the effect of working capital adjustments,which included a $465 million decrease in receivables due to a lower level of net sales, offset by an increase of $549 million in inventories.34Investing Activities: For 2018, net cash used for investing activities consisted primarily of $7.99 billion of expenditures for property, plant, andequipment (net of partner contributions), partially offset by $164 million of net inflows from sales, maturities, and purchases of available-for-sale securities.For 2017, net cash used for investing activities consisted primarily of $4.73 billion of expenditures for property, plant, and equipment (net of partnercontributions), $2.63 billion of net cash paid for the Inotera Acquisition (net of $361 million of payments attributed to intercompany balances with Inoteraincluded in operating activities), and $269 million of net outflows from sales, maturities, and purchases of available-for-sale securities.For 2016, net cash used for investing activities consisted primarily of $5.75 billion of expenditures for property, plant, and equipment (net of partnercontributions) and $148 million for the acquisition of Tidal Systems, Ltd., partially offset by $2.66 billion of net inflows from sales, maturities, and purchasesof available-for-sale securities.Financing Activities: For 2018, net cash used for financing activities consisted primarily of cash payments to reduce our debt, including $9.42 billion toprepay or repurchase debt and settle conversions of notes and $774 million for scheduled repayment of other notes and capital leases. Cash used for financingactivities was partially offset by net proceeds of $1.36 billion from the issuance of 34 million shares of our common stock for $41.00 per share in a publicoffering and $1.01 billion of proceeds from IMFT Member Debt.For 2017, net cash provided by financing activities consisted primarily of $2.48 billion of net proceeds from the 2021 MSTW Term Loan, and $795million of net proceeds from the 2021 MSAC Term Loan, partially offset by $1.63 billion to repurchase notes, repayments of $381 million of capital leaseobligations, repayments of $550 million of other debt and convertible notes, and payments of $519 million on equipment purchase contracts.For 2016, net cash provided by financing activities consisted primarily of $2.20 billion of proceeds from issuance of notes and $765 million fromequipment sale-leaseback financing transactions, partially offset by repurchase of $870 million of debt and $125 million for the open-market repurchase of 7million shares of our common stock.See "Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Debt."Potential Settlement Obligations of Convertible NotesSince the closing price of our common stock exceeded 130% of the conversion price per share of all our convertible notes for at least 20 trading days inthe 30 trading day period ended on September 30, 2018, holders may convert these notes through the calendar quarter ended December 31, 2018. Thefollowing table summarizes the potential settlements that we could be required to make for the calendar quarter ending December 31, 2018 if all holdersconverted their notes. The amounts in the table below are based on our closing share price of $52.76 as of August 30, 2018. Settlement Option If Settled With Minimum CashRequired If Settled EntirelyWith Cash Principal Amount Amount in Excess ofPrincipal UnderlyingShares Cash Remainder inShares 2032D Notes Cash and/or shares Cash and/or shares 14 $— 14 $7582033F Notes Cash Cash and/or shares 10 239 5 5152043G Notes Cash and/or shares Cash and/or shares 35 — 35 1,843 59 $239 54 $3,116As of August 30, 2018, convertible notes in the table above included an aggregate of $165 million for the settlement obligation (including principal andamounts in excess of principal) for conversions of 2033F Notes that will settle in cash in the first quarter of 2019.35Contractual Obligations Payments Due by PeriodAs of August 30, 2018 Total Less than 1 year 1-3 years 3-5 years More than 5yearsNotes payable(1)(2) $4,705 $592 $609 $853 $2,651Capital lease obligations(2) 965 339 331 108 187Operating leases(3) 616 37 93 95 391Purchase obligations(4) 3,350 2,892 385 17 56Other long-term liabilities(5) 596 375 192 10 19Total $10,232 $4,235 $1,610 $1,083 $3,304(1) Amounts include MMJ Creditor Payments, convertible notes, and other notes.(2) Amounts include principal and interest.(3) Amounts include contractually obligated minimum lease payments for operating leases having an initial noncancelable term in excess of one year.(4) Purchase obligations include all commitments to purchase goods or services of either a fixed or minimum quantity that meet any of the followingcriteria: (1) they are noncancelable, (2) we would incur a penalty if the agreement was canceled, or (3) we must make specified minimum paymentseven if we do not take delivery of the contracted products or services. If the obligation to purchase goods or services is noncancelable, the entirevalue of the contract was included in the above table. If the obligation is cancelable, but we would incur a penalty if canceled, only the dollaramount of the penalty was included as a purchase obligation. Contracted minimum amounts specified in any take-or-pay contracts were included inthe above table as they represent the portion of each contract that is a firm commitment.(5) Amounts represent future cash payments to satisfy other long-term liabilities recorded on our consolidated balance sheet, including $375 millionfor the current portion of these long-term liabilities. We are unable to reliably estimate the timing of future certain payments related to uncertaintax positions and deferred tax liabilities; therefore, the amount has been excluded from the preceding table. However, other noncurrent liabilitiesrecorded on our consolidated balance sheet included these uncertain tax positions and deferred tax liabilities.The timing of payment amounts of the obligations discussed above is based on current information. Any redemptions, repurchases, or conversions ofdebt could impact the amount and timing of our cash payments.Off-Balance Sheet ArrangementsWe have capped calls which are intended to reduce the effect of potential dilution, see "Item 8. Financial Statements and Supplementary Data – Notes toConsolidated Financial Statements – Equity – Micron Shareholders' Equity – Outstanding Capped Calls."We have an ASR agreement with a financial institution to purchase $1.00 billion of our common stock in the first quarter of fiscal 2019. See "Item 8.Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Equity – Micron Shareholders' Equity – Common StockRepurchase Authorization – Accelerated Share Repurchase."Critical Accounting EstimatesThe preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and judgmentsthat affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. Estimates and judgments are based on historical experience,forecasted events, and various other assumptions that we believe to be reasonable under the circumstances. Estimates and judgments may vary under differentassumptions or conditions. We evaluate our estimates and judgments on an ongoing basis. Our management believes the accounting policies below arecritical in the portrayal of our financial condition and results of operations and require management's most difficult, subjective, or complex judgments.Business acquisitions: Accounting for acquisitions requires us to estimate the fair value of consideration paid and the individual assets and liabilitiesacquired, which involves a number of judgments, assumptions, and estimates that could materially affect the amount and timing of costs recognized insubsequent periods. Accounting for acquisitions can also involve significant judgment to determine when control of the acquired entity is transferred. Wetypically obtain independent third party36valuation studies to assist in determining fair values, including assistance in determining future cash flows, discount rates, and comparable market values.Items involving significant assumptions, estimates, and judgments include the following:•Debt, including discount rate and timing of payments;•Deferred tax assets, including projections of future taxable income and tax rates;•Fair value of consideration paid or transferred;•Intangible assets, including valuation methodology, estimations of future revenue and costs, profit allocation rates attributable to the acquiredtechnology, and discount rates;•Inventory, including estimated future selling prices, timing of product sales, and completion costs for work in process; and•Property, plant, and equipment, including determination of values in a continued-use model.Consolidation: We have interests in entities that are VIEs. Determining whether to consolidate a VIE requires judgment in assessing whether an entity isa VIE and if we are the entity's primary beneficiary. If we are the primary beneficiary of a VIE, we are required to consolidate it. To determine if we are theprimary beneficiary, we evaluate whether we have the power to direct the activities that most significantly impact the VIE's economic performance and theobligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. Our evaluation includes identificationof significant activities and an assessment of our ability to direct those activities based on governance provisions and arrangements to provide or receiveproduct and process technology, product supply, operations services, equity funding, financing, and other applicable agreements and circumstances. Ourassessments of whether we are the primary beneficiary of our VIEs require significant assumptions and judgments.Contingencies: We are subject to the possibility of losses from various contingencies. Significant judgment is necessary to estimate the probability andamount of a loss, if any, from such contingencies. An accrual is made when it is probable that a liability has been incurred or an asset has been impaired andthe amount of loss can be reasonably estimated. We accrue a liability and charge operations for the estimated costs of adjudication or settlement of assertedand unasserted claims existing as of the balance sheet date. In accounting for the resolution of contingencies, significant judgment may be necessary toestimate amounts pertaining to periods prior to the resolution that are charged to operations in the period of resolution and amounts related to future periods.Goodwill and intangible assets: We test goodwill for impairment in the fourth quarter of our fiscal year, or more frequently if indicators of an impairmentexist, to determine whether it is more likely than not that the fair value of the reporting unit with goodwill is less than its carrying value. For reporting unitsfor which this assessment concludes that it is more likely than not that the fair value is more than its carrying value, goodwill is considered not impaired andwe are not required to perform the goodwill impairment test. Qualitative factors considered in this assessment include industry and market considerations,overall financial performance, and other relevant events and factors affecting the fair value of the reporting unit. For reporting units for which this assessmentconcludes that it is more likely than not that the fair value is below the carrying value, goodwill is tested for impairment by determining the fair value of eachreporting unit and comparing it to the carrying value of the net assets assigned to the reporting unit. If the fair value of the reporting unit exceeds its carryingvalue, goodwill is considered not impaired. If the carrying value of the reporting unit exceeds its fair value, then we would record an impairment loss up tothe difference between the carrying value and implied fair value.Determining when to test for impairment, the reporting units, the assets and liabilities of the reporting unit, and the fair value of the reporting unitrequires significant judgment and involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rates,forecasted manufacturing costs, and other expenses and are developed as part of our long-range planning process. The same estimates are used in businessplanning, forecasting, and capital budgeting as part of our long-term manufacturing capacity analysis. We test the reasonableness of the output of our long-range planning process by calculating an implied value per share and comparing that to current stock prices, analysts' consensus pricing, and management'sexpectations. These estimates and assumptions are used to calculate projected future cash flows for the reporting unit, which are discounted using a risk-adjusted rate to estimate a fair value. The discount rate requires determination of appropriate market comparables. We base fair value estimates onassumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Actual future results may differ from those estimates.We test other identified intangible assets with definite useful lives when events and circumstances indicate the carrying value may not be recoverable bycomparing the carrying amount to the sum of undiscounted cash flows expected to be generated by the asset. We test intangible assets with indefinite livesannually for impairment using a fair value method such as discounted cash flows. Estimating fair values involves significant assumptions, including futuresales prices, sales volumes, costs, and discount rates.37Income taxes: We are required to estimate our provision for income taxes and amounts ultimately payable or recoverable in numerous tax jurisdictionsaround the world. These estimates involve significant judgment and interpretations of regulations and are inherently complex. Resolution of income taxtreatments in individual jurisdictions may not be known for many years after completion of the applicable fiscal year. We are also required to evaluate therealizability of our deferred tax assets on an ongoing basis in accordance with U.S. GAAP, which requires the assessment of our performance and otherrelevant factors. Realization of deferred tax assets is dependent on our ability to generate future taxable income. In recent periods, our results of operationshave benefitted from increases in the amount of deferred taxes we expect to realize, primarily from the levels of capital spending and increases in the amountof taxable income we expect to realize in Japan and the United States. Our income tax provision or benefit is dependent, in part, on our ability to forecastfuture taxable income in these and other jurisdictions. Such forecasts are inherently difficult and involve significant judgments including, among others,projecting future average selling prices and sales volumes, manufacturing and overhead costs, levels of capital spending, and other factors that significantlyimpact our analyses of the amount of net deferred tax assets that are more likely than not to be realized.Inventories: Inventories are stated at the lower of average cost or net realizable value. Cost includes depreciation, labor, material, and overhead costs,including product and process technology costs. Determining net realizable value of inventories involves significant judgments, including projecting futureaverage selling prices, sales volumes, and costs to complete products in work in process inventories. To project average selling prices and sales volumes, wereview recent sales volumes, existing customer orders, current contract prices, industry analyses of supply and demand, seasonal factors, general economictrends, and other information. When these analyses reflect estimated net realizable values below our manufacturing costs, we record a charge to cost of goodssold in advance of when inventories are actually sold. Differences in forecasted average selling prices used in calculating lower of cost or net realizable valueadjustments can result in significant changes in the estimated net realizable value of product inventories and accordingly the amount of write-downrecorded. For example, a 5% variance in the estimated selling prices would have changed the estimated net realizable value of our inventory byapproximately $577 million as of August 30, 2018. Due to the volatile nature of the semiconductor memory and storage markets, actual selling prices andvolumes often vary significantly from projected prices and volumes; as a result, the timing of when product costs are charged to operations can varysignificantly.U.S. GAAP provides for products to be grouped into categories in order to compare costs to net realizable values. The amount of any inventory write-down can vary significantly depending on the determination of inventory categories. We review the major characteristics of product type and markets indetermining the unit of account for which we perform the lower of average cost or net realizable value analysis and categorize inventories primarily asmemory (including DRAM, NAND, and other memory).Property, plant, and equipment: We review the carrying value of property, plant, and equipment for impairment when events and circumstances indicatethat the carrying value of an asset or group of assets may not be recoverable from the estimated future cash flows expected to result from its use and/ordisposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to the amount bywhich the carrying value exceeds the estimated fair value of the assets. The estimate of future cash flows involves numerous assumptions which requiresignificant judgment by us, including, but not limited to, future use of the assets for our operations versus sale or disposal of the assets, future selling pricesfor our products and future production and sales volumes. In addition, significant judgment is required in determining the groups of assets for whichimpairment tests are separately performed.We periodically assess the estimated useful lives of our property, plant, and equipment. We revised the estimated useful lives of equipment in our DRAMwafer fabrication facilities from five to seven years in the fourth quarter of 2016. The effect of the revision was not material for 2016 and reduced depreciationexpense at the time by approximately $100 million per quarter. (See "Item 8. Financial Statements and Supplementary Data – Notes to ConsolidatedFinancial Statements – Significant Accounting Policies.")Research and development: Costs related to the conceptual formulation and design of products and processes are expensed as R&D asincurred. Determining when product development is complete requires significant judgment by us. We deem development of a product complete once theproduct has been thoroughly reviewed and tested for performance and reliability. Subsequent to product qualification, product costs are included in cost ofgoods sold.Stock-based compensation: Stock-based compensation is estimated at the grant date based on the fair value of the award and is recognized as expenseusing the straight-line amortization method over the requisite service period. For performance-based stock awards, the expense recognized is dependent onour assessment of the likelihood of the performance measure being38achieved. We utilize forecasts of future performance to assess these probabilities and this assessment requires significant judgment.Determining the appropriate fair-value model and calculating the fair value of stock-based awards at the grant date requires significant judgment,including estimating stock price volatility and expected option life. We develop these estimates based on historical data and market information which canchange significantly over time. A small change in the estimates used can result in a relatively large change in the estimated valuation. We use the Black-Scholes option valuation model to value employee stock options and awards granted under our employee stock purchase plan ("ESPP"). We estimate stockprice volatility based on an average of historical volatility and the implied volatility derived from traded options on our stock.Recently Issued Accounting StandardsSee "Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Recently Issued Accounting Standards."ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKInterest Rate RiskWe are exposed to interest rate risk related to our indebtedness and our investment portfolio. As of August 30, 2018 and August 31, 2017, we had fixed-rate debt of $3.1 billion and $5.7 billion, respectively, and as a result, the fair value of our debt fluctuates with changes in market interest rates. We estimatethat, as of August 30, 2018 and August 31, 2017, a decrease in market interest rates of 1% would increase the fair value of our fixed-rate debt byapproximately $79 million and $273 million, respectively. As of August 30, 2018 and August 31, 2017, we had variable-rate debt of $725 million and $4.2billion, respectively. As of August 30, 2018 and August 31, 2017, a 1% increase in the interest rates of our variable-rate debt would result in an increase inannual interest expense of approximately $7 million and $43 million, respectively.Foreign Currency Exchange Rate RiskThe information in this section should be read in conjunction with the information related to changes in the currency exchange rates in "Part I – Item 1A.Risk Factors." Changes in currency exchange rates could materially adversely affect our results of operations or financial condition.The functional currency for all of our operations is the U.S. dollar. The substantial majority of our sales are transacted in the U.S. dollar; however,significant amounts of our debt, operating expenditures, and capital purchases are incurred in or exposed to other currencies, primarily the euro, New Taiwandollar, Singapore dollar, and yen. We have established currency risk management programs for our monetary assets and liabilities denominated in foreigncurrencies to hedge against fluctuations in the fair value and volatility of future cash flows caused by changes in currency exchange rates. We generallyutilize currency forward contracts in these hedging programs, which reduce, but do not always entirely eliminate, the impact of currency exchange ratemovements. We do not use derivative financial instruments for trading or speculative purposes.Based on monetary assets and liabilities denominated in foreign currencies, we estimate that a 10% adverse change in exchange rates versus the U.S.dollar would result in losses of approximately $78 million as of August 30, 2018 and $391 million as of August 31, 2017. We hedge our exposure to changesin currency exchange rates by utilizing a rolling hedge strategy for our primary currency exposures with currency forward contracts that generally maturewithin nine months. The effectiveness of our hedges is dependent, among other factors, upon our ability to accurately forecast our monetary assets andliabilities. To hedge the exposure of changes in cash flows from changes in currency exchange rates for certain capital expenditures, we may utilize currencyforward contracts that generally mature within 12 months. (See "Item 8. Financial Statements and Supplementary Data – Notes to Consolidated FinancialStatements – Derivative Instruments.")39ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAIndex to Consolidated Financial Statements Page Consolidated Financial Statements as of August 30, 2018 and August 31, 2017 and for the fiscal years ended August 30, 2018, August 31,2017, and September 1, 2016 Consolidated Statements of Operations 41 Consolidated Statements of Comprehensive Income (Loss) 42 Consolidated Balance Sheets 43 Consolidated Statements of Changes in Equity 44 Consolidated Statements of Cash Flows 45 Notes to Consolidated Financial Statements 46 Report of Independent Registered Public Accounting Firm 8040MICRON TECHNOLOGY, INC.CONSOLIDATED STATEMENTS OF OPERATIONS(in millions except per share amounts)For the year ended August 30, 2018 August 31, 2017 September 1, 2016Net sales $30,391 $20,322 $12,399Cost of goods sold 12,500 11,886 9,894Gross margin 17,891 8,436 2,505 Selling, general, and administrative 813 743 659Research and development 2,141 1,824 1,617Other operating (income) expense, net (57) 1 61Operating income 14,994 5,868 168 Interest income 120 41 42Interest expense (342) (601) (437)Other non-operating income (expense), net (465) (112) (54) 14,307 5,196 (281) Income tax provision (168) (114) (19)Equity in net income (loss) of equity method investees (1) 8 25Net income (loss) 14,138 5,090 (275) Net income attributable to noncontrolling interests (3) (1) (1)Net income (loss) attributable to Micron $14,135 $5,089 $(276) Earnings (loss) per share Basic $12.27 $4.67 $(0.27)Diluted 11.51 4.41 (0.27) Number of shares used in per share calculations Basic 1,152 1,089 1,036Diluted 1,229 1,154 1,036See accompanying notes to consolidated financial statements.41MICRON TECHNOLOGY, INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)(in millions)For the year ended August 30, 2018 August 31, 2017 September 1, 2016Net income (loss) $14,138 $5,090 $(275) Other comprehensive income (loss), net of tax Gains (losses) on derivative instruments (15) 15 7Pension liability adjustments (3) 1 (9)Unrealized gains (losses) on investments (2) — 3Foreign currency translation adjustments 1 48 (49)Other comprehensive income (loss) (19) 64 (48)Total comprehensive income (loss) 14,119 5,154 (323)Comprehensive (income) attributable to noncontrolling interests (3) (1) (1)Comprehensive income (loss) attributable to Micron $14,116 $5,153 $(324)See accompanying notes to consolidated financial statements.42MICRON TECHNOLOGY, INC.CONSOLIDATED BALANCE SHEETS(in millions except par value amounts)As of August 30, 2018 August 31, 2017Assets Cash and equivalents $6,506 $5,109Short-term investments 296 319Receivables 5,478 3,759Inventories 3,595 3,123Other current assets 164 147Total current assets 16,039 12,457Long-term marketable investments 473 617Property, plant, and equipment 23,672 19,431Intangible assets 331 387Deferred tax assets 1,022 766Goodwill 1,228 1,228Other noncurrent assets 611 450Total assets $43,376 $35,336 Liabilities and equity Accounts payable and accrued expenses $4,611 $3,664Deferred income 284 408Current debt 859 1,262Total current liabilities 5,754 5,334Long-term debt 3,777 9,872Other noncurrent liabilities 581 639Total liabilities 10,112 15,845 Commitments and contingencies Redeemable convertible notes 3 21Redeemable noncontrolling interest 97 — Micron shareholders' equity Common stock, $0.10 par value, 3,000 shares authorized, 1,170 shares issued and 1,161 outstanding (1,116shares issued and 1,112 outstanding as of August 31, 2017) 117 112Additional capital 8,201 8,287Retained earnings 24,395 10,260Treasury stock, 9 shares held (4 shares as of August 31, 2017) (429) (67)Accumulated other comprehensive income 10 29Total Micron shareholders' equity 32,294 18,621Noncontrolling interests in subsidiaries 870 849Total equity 33,164 19,470Total liabilities and equity $43,376 $35,336See accompanying notes to consolidated financial statements.43MICRON TECHNOLOGY, INC.CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY(in millions) Micron Shareholders Common Stock AdditionalCapital RetainedEarnings TreasuryStock Accumulated OtherComprehensiveIncome (Loss) Total MicronShareholders'Equity NoncontrollingInterests inSubsidiaries Total Equity Numberof Shares Amount Balance at September 3, 2015 1,084 $108 $7,474 $5,588 $(881) $13 $12,302 $937 $13,239Net income (loss) (276) (276) 1 (275)Other comprehensive income (loss), net (48) (48) — (48)Stock issued under stock plans 11 1 47 48 48Stock-based compensation expense 191 191 191Contributions from noncontrollinginterests — 37 37Distributions to noncontrolling interests — (34) (34)Acquisitions of noncontrolling interests — (93) (93)Repurchase and retirement of stock (1) — (10) (13) (23) (23)Repurchase of treasury stock (125) (125) (125)Settlement of capped calls 23 (23) — —Reclassification of redeemableconvertible notes, net 49 49 49Conversion and repurchase ofconvertible notes (38) (38) (38)Balance at September 1, 2016 1,094 $109 $7,736 $5,299 $(1,029) $(35) $12,080 $848 $12,928Net income 5,089 5,089 1 5,090Other comprehensive income (loss), net 64 64 — 64Stock issued under stock plans 20 3 139 142 142Stock-based compensation expense 217 (2) 215 215Repurchase and retirement of stock (2) — (13) (22) (35) (35)Stock issued to Nanya for InoteraAcquisition 4 — 70 (104) 1,029 995 995Settlement of capped calls 192 (67) 125 125Reclassification of redeemableconvertible notes, net (21) (21) (21)Conversion and repurchase ofconvertible notes (33) (33) (33)Balance at August 31, 2017 1,116 $112 $8,287 $10,260 $(67) $29 $18,621 $849 $19,470Net income 14,135 14,135 3 14,138Other comprehensive income (loss), net (19) (19) — (19)Stock issued in public offering 34 3 1,363 1,366 1,366Stock issued under stock plans 22 2 287 289 289Stock-based compensation expense 198 198 198Contributions from noncontrollinginterests — 18 18Repurchase and retirement of stock (2) — (71) (71) (71)Settlement of capped calls 429 (429) — —Reclassification of redeemableconvertible notes, net 18 18 18Conversion and repurchase ofconvertible notes (2,310) 67 (2,243) (2,243)Balance at August 30, 2018 1,170 $117 $8,201 $24,395 $(429) $10 $32,294 $870 $33,164See accompanying notes to consolidated financial statements.44MICRON TECHNOLOGY, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(in millions)For the year ended August 30, 2018 August 31, 2017 September 1, 2016Cash flows from operating activities Net income (loss) $14,138 $5,090 $(275)Adjustments to reconcile net income (loss) to net cash provided by operating activities Depreciation expense and amortization of intangible assets 4,759 3,861 2,980Amortization of debt discount and other costs 101 125 126Loss on debt prepayments, repurchases, and conversions 385 99 4Stock-based compensation 198 215 191Gain on remeasurement of previously-held equity interest in Inotera — (71) —Change in operating assets and liabilities Receivables (1,734) (1,651) 465Inventories (472) 50 (549)Accounts payable and accrued expenses 549 564 272Payments attributed to intercompany balances with Inotera — (361) —Deferred income taxes, net (265) (22) (15)Other (259) 254 (31)Net cash provided by operating activities 17,400 8,153 3,168 Cash flows from investing activities Expenditures for property, plant, and equipment (8,879) (4,734) (5,817)Purchases of available-for-sale securities (760) (1,239) (1,026)Payments to settle hedging activities (185) (274) (152)Acquisition of Inotera — (2,634) —Proceeds from sales of available-for-sale securities 604 776 2,314Proceeds from government incentives 355 21 16Proceeds from maturities of available-for-sale securities 320 194 1,376Proceeds from settlement of hedging activities 163 184 335Other 166 169 (90)Net cash provided by (used for) investing activities (8,216) (7,537) (3,044) Cash flows from financing activities Repayments of debt (10,194) (2,558) (870)Payments on equipment purchase contracts (206) (519) (46)Proceeds from issuance of stock 1,655 142 48Proceeds from issuance of debt 1,009 3,311 2,199Proceeds from equipment sale-leaseback transactions — — 765Other (40) (27) (351)Net cash provided by (used for) financing activities (7,776) 349 1,745 Effect of changes in currency exchange rates on cash, cash equivalents, and restrictedcash (37) (12) 19 Net increase in cash, cash equivalents, and restricted cash 1,371 953 1,888Cash, cash equivalents, and restricted cash at beginning of period 5,216 4,263 2,375Cash, cash equivalents, and restricted cash at end of period $6,587 $5,216 $4,263 Supplemental disclosures Income taxes paid, net $(226) $(99) $(90)Interest paid, net of amounts capitalized (312) (468) (267)Noncash investing and financing activity Equipment acquisitions on contracts payable and capital leases 84 813 993See accompanying notes to consolidated financial statements.45MICRON TECHNOLOGY, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(All tabular amounts in millions except per share amounts)Significant Accounting PoliciesBasis of Presentation: Micron Technology, Inc., including its consolidated subsidiaries, is an industry leader in innovative memory and storagesolutions. Through our global brands – Micron, Crucial, and Ballistix – our broad portfolio of high-performance memory and storage technologies, includingDRAM, NAND, NOR Flash, and 3D XPoint memory, is transforming how the world uses information to enrich life. Backed by 40 years of technologyleadership, our memory and storage solutions enable disruptive trends, including artificial intelligence, machine learning, and autonomous vehicles, in keymarket segments like cloud, data center, networking, and mobile. The accompanying consolidated financial statements include the accounts of Micron andour consolidated subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America. Certainreclassifications have been made to prior period amounts to conform to current period presentation.Our fiscal year is the 52 or 53-week period ending on the Thursday closest to August 31. Fiscal years 2018, 2017, and 2016 each contained 52 weeks. Allperiod references are to our fiscal periods unless otherwise indicated.Derivative and Hedging Instruments: We use derivative instruments to manage our exposure to changes in currency exchange rates from (1) ourmonetary assets and liabilities denominated in currencies other than the U.S. dollar and (2) forecasted cash flows for certain capital expenditures. Derivativeinstruments are measured at their fair values and recognized as either assets or liabilities. The accounting for changes in the fair value of derivativeinstruments is based on the intended use of the derivative and the resulting designation. For derivative instruments that are not designated for hedgeaccounting, gains or losses from changes in fair values are recognized in other non-operating income (expense).For derivative instruments designated as cash flow hedges, the effective portion of the realized and unrealized gains or losses on derivatives is includedas a component of accumulated other comprehensive income. Amounts in accumulated other comprehensive income are reclassified into earnings in the sameline items and in the same periods in which the underlying transactions affect earnings. For the periods presented prior to the second quarter of 2018, theineffective and excluded portion of the realized and unrealized gain or loss was included in other non-operating income (expense). As a result of adoptingAccounting Standards Update ("ASU") 2017-12, beginning in the second quarter of 2018, such amounts are included in the same line item in which theunderlying transactions affect earnings.For derivative forward contracts designated as fair value hedges, hedge effectiveness is determined by the change in the fair value of the undiscountedspot rate of the forward contract. The changes in fair values of hedge instruments attributed to changes in undiscounted spot rates are recognized in othernon-operating income (expense). The time value associated with hedge instruments is excluded from the assessment of the effectiveness of hedges and isrecognized on a straight-line basis over the life of hedges to other non-operating income (expense).We enter into master netting arrangements with our counterparties to mitigate credit risk in derivative hedge transactions. These master nettingarrangements allow us and our counterparties to net settle amounts owed to each other. Derivative assets and liabilities that can be net settled with eachcounterparty have been presented in our consolidated balance sheet on a net basis.Financial Instruments: Cash equivalents include highly liquid short-term investments with original maturities to us of three months or less that arereadily convertible to known amounts of cash. Other investments with remaining maturities of less than one year are included in short-term investments.Investments with remaining maturities greater than one year are included in long-term marketable investments. The carrying value of investment securitiessold is determined using the specific identification method.Functional Currency: The U.S. dollar is the functional currency for us and all of our consolidated subsidiaries.Goodwill and Non-Amortizing Intangible Assets: We perform an annual impairment assessment for goodwill and non-amortizing intangible assets inthe fourth quarter of our fiscal year.46Government Incentives: We receive incentives from governmental entities related to expenses, assets, and other activities. Our government incentivesmay require that we meet or maintain specified spending levels and other operational metrics and may be subject to reimbursement if such conditions are notmet or maintained. Government incentives are recorded in the financial statements in accordance with their purpose: as a reduction of expenses, a reductionof asset costs, or other income. Incentives related to specific operating activities are offset against the related expense in the period the expense is incurred.Incentives related to the acquisition or construction of fixed assets are recognized as a reduction in the carrying amounts of the related assets and reducedepreciation expense over the useful lives of the assets. Other incentives are recognized as other operating income. Government incentives received prior tobeing earned are recognized in current or noncurrent deferred income, whereas government incentives earned prior to being received are recognized incurrent or noncurrent receivables. Cash received from government incentives related to operating expenses are included as an operating activity in thestatement of cash flows, whereas cash received from incentives related to the acquisition of property, plant, and equipment are included as an investingactivity.Inventories: Inventories are stated at the lower of average cost or net realizable value. Cost includes depreciation, labor, material, and overhead costs,including product and process technology costs. Determining net realizable value of inventories involves numerous judgments, including projecting futureaverage selling prices, sales volumes, and costs to complete products in work in process inventories. When net realizable value is below cost, we record acharge to cost of goods sold to write down inventories to their estimated net realizable value in advance of when inventories are actually sold. We review themajor characteristics of product type and markets in determining the unit of account for which we perform the lower of average cost or net realizable valueanalysis and categorize inventories primarily as memory (including DRAM, NAND, and other memory). We remove amounts from inventory and charge suchamounts to cost of goods sold on an average cost basis.Product and Process Technology: Costs incurred to (1) acquire product and process technology, (2) patent technology, and (3) maintain patenttechnology, are capitalized and amortized on a straight-line basis over periods ranging up to 12.5 years. We capitalize a portion of the costs incurred topatent technology based on historical data of patents issued as a percent of patents we file. Capitalized product and process technology costs are amortizedover the shorter of (1) the estimated useful life of the technology, (2) the patent term, or (3) the term of the technology agreement. Fully-amortized assets areremoved from product and process technology and accumulated amortization.Product Warranty: We generally provide a limited warranty that our products are in compliance with applicable specifications existing at the time ofdelivery. Under our standard terms and conditions of sale, liability for certain failures of product during a stated warranty period is usually limited to repair orreplacement of defective items or return of, or a credit with respect to, amounts paid for such items. Under certain circumstances, we provide more extensivelimited warranty coverage than that provided under our standard terms and conditions. Our warranty obligations are not material.Property, Plant, and Equipment: Property, plant, and equipment is stated at cost and depreciated using the straight-line method over estimated usefullives of generally 10 to 30 years for buildings, 5 to 7 years for equipment, and 3 to 5 years for software. Assets held for sale are carried at the lower of cost orestimated fair value and are included in other noncurrent assets. When property, plant, or equipment is retired or otherwise disposed, the net book value isremoved and we recognize any gain or loss in results of operations.We capitalize interest on borrowings during the period of time we carry out the activities necessary to bring assets to the condition of their intended useand location. Capitalized interest becomes part of the cost of assets.We periodically assess the estimated useful lives of our property, plant, and equipment. In the fourth quarter of 2016, we revised the estimated usefullives of equipment in our DRAM wafer fabrication facilities from five to seven years as a result of the lengthening period of time between DRAM producttechnology node transitions, an increased re-use rate of equipment, and industry trends. The effect of the revision reduced depreciation expense at the time byapproximately $100 million per quarter.Research and Development: Costs related to the conceptual formulation and design of products and processes are charged to R&D expense asincurred. Development of a product is deemed complete when it is qualified through reviews and tests for performance and reliability. Subsequent to productqualification, product costs are included in cost of goods sold. Product design and other R&D costs for certain technologies may be shared with adevelopment partner. Amounts receivable from cost-sharing arrangements are reflected as a reduction of R&D expense.Revenue Recognition: We recognize product or license revenue when persuasive evidence that a sales arrangement exists, delivery has occurred, theprice is fixed or determinable, and collectibility is reasonably assured, which is generally at the time47of shipment to our customers. If we are unable to reasonably estimate returns or the price is not fixed or determinable, sales made under agreements allowingrights of return or price protection are deferred until customers have resold the product.Stock-based Compensation: Stock-based compensation is measured at the grant date, based on the fair value of the award, and recognized as expenseunder the straight-line attribution method over the requisite service period. We account for forfeitures as they occur. We issue new shares upon the exercise ofstock options or conversion of share units.Treasury Stock: Treasury stock is carried at cost. When we retire our treasury stock, any excess of the repurchase price paid over par value is allocatedbetween additional capital and retained earnings.Use of Estimates: The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in theUnited States of America requires our management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses,and related disclosures. Estimates and judgments are based on historical experience, forecasted events, and various other assumptions that we believe to bereasonable under the circumstances. Estimates and judgments may differ under different assumptions or conditions. We evaluate our estimates and judgmentson an ongoing basis. Actual results could differ from estimates.Variable Interest EntitiesWe have interests in entities that are VIEs. If we are the primary beneficiary of a VIE, we are required to consolidate it. To determine if we are the primarybeneficiary, we evaluate whether we have the power to direct the activities that most significantly impact the VIE's economic performance and the obligationto absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. Our evaluation includes identification ofsignificant activities and an assessment of our ability to direct those activities based on governance provisions and arrangements to provide or receiveproduct and process technology, product supply, operations services, equity funding, financing, and other applicable agreements and circumstances. Ourassessments of whether we are the primary beneficiary of our VIEs require significant assumptions and judgments.Unconsolidated VIEsPTI Xi'an: Powertech Technology Inc. Xi'an ("PTI Xi'an") is a wholly-owned subsidiary of Powertech Technology Inc. ("PTI") and was created to provideassembly services to us at our manufacturing site in Xi'an, China. We do not have an equity interest in PTI Xi'an. PTI Xi'an is a VIE because of the terms of itsservice agreement with us and its dependency on PTI to finance its operations. We have determined that we do not have the power to direct the activities ofPTI Xi'an that most significantly impact its economic performance, primarily because we have no governance rights. Therefore, we do not consolidate PTIXi'an. In connection with our assembly services with PTI, we had capital lease obligations and net property, plant, and equipment of $63 million and $63million, respectively, as of August 30, 2018 and $80 million and $76 million, respectively, as of August 31, 2017.Consolidated VIEIMFT: IMFT is a VIE because all of its costs are passed to us and its other member, Intel, through product purchase agreements and because IMFT isdependent upon us or Intel for additional cash requirements. The primary activities of IMFT are driven by the constant introduction of product and processtechnology. Because we perform a significant majority of the technology development, we have the power to direct its key activities. We consolidate IMFTbecause we have the power to direct the activities of IMFT that most significantly impact its economic performance and because we have the obligation toabsorb losses and the right to receive benefits from IMFT that could potentially be significant to it. (See "Equity – Noncontrolling Interests in Subsidiaries –IMFT" note.)Recently Issued Accounting StandardsIn October 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-16 – Intra-Entity Transfers Other Than Inventory, whichrequires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This ASU willbe effective for us in the first quarter of 2019 and requires modified retrospective adoption. We do not anticipate the adoption of this ASU will have amaterial impact to our financial statements.48In June 2016, the FASB issued ASU 2016-13 – Measurement of Credit Losses on Financial Instruments, which requires a financial asset (or a group offinancial assets) measured on the basis of amortized cost to be presented at the net amount expected to be collected. This ASU requires that the incomestatement reflect the measurement of credit losses for newly recognized financial assets as well as the expected increases or decreases of expected credit lossesthat have taken place during the period. This ASU requires that credit losses of debt securities designated as available-for-sale be recorded through anallowance for credit losses and limits the credit loss to the amount by which fair value is below amortized cost. This ASU will be effective for us in the firstquarter of 2021 with adoption permitted as early as the first quarter of 2020. This ASU requires modified retrospective adoption, with prospective adoptionfor debt securities for which an other-than-temporary impairment had been recognized before the effective date. We are evaluating the timing and effects ofour adoption of this ASU on our financial statements.In February 2016, the FASB issued ASU 2016-02 – Leases, which amends a number of aspects of lease accounting, including requiring lessees torecognize operating leases with a term greater than one year on their balance sheet as a right-of- use asset and corresponding liability, measured at the presentvalue of the lease payments. This ASU, as amended, will be effective for us in the first quarter of 2020 with early adoption permitted and allows for either amodified retrospective adoption or a retrospective adoption by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in theperiod of adoption. The adoption of this ASU will result in an increase to our consolidated balance sheets for these right-of-use assets and correspondingliabilities. We are evaluating the timing and other effects of our adoption of this ASU on our financial statements.In January 2016, the FASB issued ASU 2016-01 – Recognition and Measurement of Financial Assets and Financial Liabilities, which providesguidance for the recognition, measurement, presentation, and disclosure of financial assets and liabilities. This ASU will be effective for us in the first quarterof 2019 and requires modified retrospective adoption, with prospective adoption for amendments related to equity securities without readily determinablefair values. Our assets and liabilities subject to this standard are not material.In May 2014, the FASB issued ASU 2014-09 – Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognitionguidance under generally accepted accounting principles in the United States. The core principal of this ASU, as amended, is that an entity should recognizerevenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled inexchange for those goods or services. This ASU also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cashflows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain orfulfill a contract. This ASU is effective for us in the first quarter of 2019 and we expect to elect the modified retrospective adoption method.As a result of the adoption of this ASU, we will recognize revenue from sales of products to our distributors (which generally have agreements allowingrights of return or price protection) at the time control transfers to our distributors, which is generally earlier than recognizing revenue only upon resale byour distributors under existing revenue recognition guidance. Revenue recognized upon resale by our distributors under these arrangements was 19%, 20%,and 25% of our consolidated revenue for the 2018, 2017, and 2016, respectively. As of August 30, 2018, deferred income related to our distributor sales was$232 million. Upon adoption of this ASU, amounts deferred related to our sales to distributors, net of estimated price adjustments, will be recognized as anincrease to retained earnings, net of taxes. We will also reclassify certain allowances from accounts receivable to accounts payable and accrued expenses inconnection with new presentation requirements of this ASU. The tax effects of the adoption of this ASU will be recorded primarily as a reduction of netdeferred tax assets.Acquisition of InoteraThrough December 6, 2016, we held a 33% ownership interest in Inotera, now known as MTTW, Nanya and certain of its affiliates held a 32% ownershipinterest, and the remaining ownership interest was publicly held. On December 6, 2016, we acquired the 67% remaining interest in Inotera not owned by us(the "Inotera Acquisition") and began consolidating Inotera's operating results. The cash paid for the Inotera Acquisition was funded, in part, with proceedsfrom the 2021 MSTW Term Loan and the sale of the Micron Shares (as defined below) to Nanya. Inotera manufactures DRAM products at its 300mm waferfabrication facility in Taoyuan City, Taiwan, and previously sold such products exclusively to us through supply agreements. SG&A expenses for 2017 and2016 included transaction costs of $13 million and $3 million, respectively, incurred in connection with the Inotera Acquisition.49In connection with the Inotera Acquisition, we revalued our previously-held 33% equity interest to its fair value. In determining the fair value, we usedvarious valuation techniques, including the share price of Inotera prior to the announcement of the Inotera Acquisition and discounted cash flow projectionsusing inputs including discount rate and terminal growth rate (Level 3). As a result, we recognized a non-operating gain of $71 million in 2017.In connection with the Inotera Acquisition, we sold 58 million shares of our common stock to Nanya (the "Micron Shares") and received cash proceeds of$986 million. Because the sale of the Micron Shares to Nanya was contemporaneous with, and contingent upon, the closing of the Inotera Acquisition, theissuance of the Micron Shares was treated in purchase accounting as a non-cash exchange for a portion of the shares of Inotera held by Nanya. The MicronShares were issued in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended, and were subject to certainrestrictions on transfers at the time of sale. To reflect the lack of transferability, the fair value of the Micron Shares (based on the trading price of our commonstock on the acquisition date) was reduced by a discount of $81 million, based on the implied volatility derived from traded options on our stock and on theduration of the lack of transferability (Level 2).The allocation of purchase price to assets acquired and liabilities assumed of Inotera was as follows:Consideration Cash paid for Inotera Acquisition $4,099Less cash received from sale of Micron Shares (986)Net cash paid for Inotera Acquisition 3,113Fair value of our previously-held equity interest in Inotera 1,441Fair value of Micron Shares exchanged for Inotera shares 995Other 3Payments attributed to intercompany balances with Inotera (361) $5,191 Assets acquired and liabilities assumed Cash and equivalents $118Inventories 285Other current assets 27Property, plant, and equipment 3,722Deferred tax assets 82Goodwill 1,124Other noncurrent assets 130Accounts payable and accrued expenses (232)Debt (56)Other noncurrent liabilities (9) $5,191The Inotera Acquisition enhances our flexibility to drive new technology, optimize the deployment of capital, and adapt our product offerings tochanges in market conditions. As a result of these synergies, we allocated goodwill of $829 million, $198 million, and $97 million to CNBU, MBU, andEBU, respectively. Goodwill resulting from the Inotera Acquisition is not deductible for Taiwan corporate income tax purposes; however, it is deductible forTaiwan surtax purposes.50Unaudited Pro Forma Financial InformationThe following unaudited pro forma financial information presents the combined results of operations as if the Inotera Acquisition had occurred onSeptember 4, 2015. The pro forma financial information includes the accounting effects of the business combination, including adjustments for depreciationof property, plant, and equipment, interest expense, elimination of intercompany activities, and revaluation of inventories. The unaudited pro forma financialinformation below is not necessarily indicative of either future results of operations or results that might have been achieved had the Inotera Acquisitionoccurred on September 4, 2015. Year ended August 31, 2017 September 1, 2016Net sales $20,317 $12,341Net income (loss) 5,172 (543)Net income (loss) attributable to Micron 5,171 (544)Earnings (loss) per share Basic 4.68 (0.50)Diluted 4.42 (0.50) The unaudited pro forma financial information for 2017 includes our results for the year ended August 31, 2017 (which includes the results of Inoterasince our acquisition of Inotera on December 6, 2016), the results of Inotera for the three months ended November 30, 2016, and the adjustments describedabove. The pro forma information for 2016 includes our results for the year ended September 1, 2016, the results of Inotera for the twelve months endedAugust 31, 2016, and the adjustments described above.Technology Transfer and License Agreements with NanyaEffective December 6, 2016, the terms of technology transfer and license agreements provided Nanya with options to require us to transfer to Nanyacertain technology for Nanya's use and deliverables related to the next DRAM process node generation after our 20nm process node (the "1X Process Node")and the next DRAM process node generation after the 1X Process Node (the "1Y Process Node"). Nanya's option for the 1X Process Node expired unexercised.If Nanya exercises its right for the 1Y Process Node, Nanya would pay us royalties for a license to the transferred 1Y Process Node technology based onrevenues from products utilizing the technology, subject to specified caps, and we would also receive an equity interest in Nanya upon the achievement ofcertain milestones.51Cash and InvestmentsCash and equivalents and the fair values of our available-for-sale investments, which approximated amortized costs, were as follows:As of 2018 2017 Cash andEquivalents Short-termInvestments Long-termMarketableInvestments(1) Total FairValue Cash andEquivalents Short-termInvestments Long-termMarketableInvestments(1) Total FairValueCash $3,223 $— $— $3,223 $2,237 $— $— $2,237Level 1(2) Money market funds 2,443 — — 2,443 2,332 — — 2,332Level 2(3) Corporate bonds 3 172 272 447 — 193 315 508Certificates of deposit 806 11 2 819 483 24 3 510Government securities 5 63 103 171 1 90 126 217Asset-backedsecurities — 34 96 130 — 2 173 175Commercial paper 26 16 — 42 56 10 — 66 6,506 $296 $473 $7,275 5,109 $319 $617 $6,045Restricted cash(4) 81 107 Cash, cash equivalents,and restricted cash $6,587 $5,216 (1) The maturities of long-term marketable securities range from one to four years.(2) The fair value of Level 1 securities is measured based on quoted prices in active markets for identical assets.(3) The fair value of Level 2 securities is measured using information obtained from pricing services, which obtain quoted market prices for similarinstruments, non-binding market consensus prices that are corroborated by observable market data, or various other methodologies, to determinethe appropriate value at the measurement date. We perform supplemental analysis to validate information obtained from these pricing services. Noadjustments were made to the fair values indicated by such pricing information as of August 30, 2018 or August 31, 2017.(4) Restricted cash is included in other noncurrent assets and included balances related to the MMJ Creditor Payments. The restrictions on the MMJCreditor Payments lapse upon approval by the trustees and/or Tokyo District Court. Restricted cash as of August 31, 2017 also included interestreserve balances related to our 2021 MSTW Term Loan, which were released in 2018 in connection with our prepayment of the 2021 MSTW TermLoan. (See "Debt" note.)Gross realized gains and losses from sales of available-for-sale securities were not material for any period presented. As of August 30, 2018, there were noavailable-for-sale securities that had been in a loss position for longer than 12 months.ReceivablesAs of 2018 2017Trade receivables $5,056 $3,490Income and other taxes 161 100Other 261 169 $5,478 $3,75952InventoriesAs of 2018 2017Finished goods $815 $856Work in process 2,357 1,968Raw materials and supplies 423 299 $3,595 $3,123Property, Plant, and EquipmentAs of 2018 2017Land $345 $345Buildings (includes $483 and $475, respectively, under capital leases) 8,680 7,958Equipment(1) (includes $1,336 and $1,331, respectively, under capital leases) 38,249 32,187Construction in progress(2) 1,162 499Software 655 544 49,091 41,533Accumulated depreciation (includes $868 and $626, respectively, under capital leases) (25,419) (22,102) $23,672 $19,431(1) Included costs related to equipment not placed into service of $1.73 billion and $994 million, as of August 30, 2018 and August 31, 2017,respectively.(2) Included building-related construction and tool installation costs for assets not placed into service.Depreciation expense was $4.66 billion, $3.76 billion, and $2.86 billion for 2018, 2017, and 2016, respectively. As of August 30, 2018, productionequipment, buildings, and land with an aggregate carrying value of $2.33 billion were pledged as collateral under various notes payable. Interest capitalizedas part of the cost of property, plant, and equipment was $44 million, $7 million, and $43 million for 2018, 2017, and 2016, respectively.Equity Method InvestmentsEquity in net income (loss) of equity method investees, net of tax, included the following:For the year ended 2018 2017 2016Inotera $— $9 $32Tera Probe — (3) (11)Other (1) 2 4 $(1) $8 $25InoteraWe held a 33% interest in Inotera, a Taiwan DRAM memory company, through December 6, 2016, at which time we acquired the remaining 67% interestin Inotera. From January 2013 through December 2015, we purchased all of Inotera's DRAM output under supply agreements at prices reflecting discountsfrom market prices for our comparable components. After December 2015 and until our acquisition of the remaining interest in Inotera, the price for DRAMproducts purchased by us was based on a formula that equally shared margin between Inotera and us. Under these agreements, we purchased $504 million and$1.43 billion of DRAM products in 2017 through the date of our acquisition and 2016, respectively. In 2016, we manufactured and sold specializedequipment to Inotera and recognized net sales of $55 million and margin of $16 million.53Tera ProbeIn 2017, we sold our 40% interest in Tera Probe, which provided semiconductor wafer testing and probe services to us, in a transaction that included thesale of our assembly and test facility located in Akita, Japan. In 2017 and 2016, we recorded impairment charges of $16 million and $25 million,respectively, within equity in net income (loss) of equity method investees to write down the carrying value of our investment in Tera Probe to its fair valuebased on its trading price (Level 1). We incurred manufacturing costs for services performed by Tera Probe of $47 million and $70 million in 2017 throughthe date of sale and 2016, respectively.Intangible Assets and GoodwillAs of 2018 2017 GrossAmount AccumulatedAmortization GrossAmount AccumulatedAmortizationAmortizing assets Product and process technology $567 $(344) $756 $(477)Non-amortizing assets In-process R&D 108 — 108 — Total intangible assets $675 $(344) $864 $(477) Goodwill $1,228 $1,228 In 2018, 2017, and 2016, we capitalized $48 million, $29 million, and $30 million, respectively, for product and process technology with weighted-average useful lives of 10 years, 11 years, and 10 years, respectively. Expected amortization expense is $55 million for 2019, $38 million for 2020, $33million for 2021, $23 million for 2022, and $17 million for 2023.In 2016, we acquired Tidal Systems, Ltd., a developer of PCIe NAND Flash storage controllers, to enhance our NAND Flash controller technology for$148 million. In connection therewith, we recognized $108 million of in-process R&D; $81 million of goodwill, which was derived from expected costreductions and other synergies and was assigned to SBU; and $41 million of deferred tax liabilities; which, in aggregate, represented substantially all of thepurchase price. The in-process R&D was valued using a replacement cost approach, which included inputs of reproduction cost, including developer's profit,and opportunity cost. We expect to begin amortizing the in-process R&D in 2019 and will amortize it over its estimated useful life. The goodwill is notdeductible for tax purposes.Accounts Payable and Accrued ExpensesAs of 2018 2017Accounts payable $1,692 $1,333Property, plant, and equipment payables 1,238 1,018Salaries, wages, and benefits 841 603Income and other taxes 402 163Customer advances 207 197Other 231 350 $4,611 $3,66454DebtAs of 2018 2017 Net Carrying Amount Net Carrying AmountInstrument StatedRate EffectiveRate Principal Current Long-Term Total(1) Principal Current Long-Term Total(1)IMFT MemberDebt N/A N/A $1,009 $— $1,009 $1,009 $— $— $— $—Capital leaseobligations N/A 3.86% 845 310 535 845 1,190 357 833 1,190MMJ CreditorPayments N/A 9.76% 520 309 183 492 695 $157 474 6312022 TermLoan B 3.83% 4.24% 735 5 720 725 743 5 725 7302025 Notes 5.50% 5.56% 519 — 515 515 519 — 515 5152032D Notes(2) 3.13% 6.33% 143 — 132 132 177 — 159 1592033F Notes(2)(3) 2.13% 4.93% 107 235 — 235 297 278 — 2782043G Notes(2)(4) 3.00% 6.76% 1,019 — 682 682 1,025 — 671 6712021 MSAC TermLoan 4.42% 4.65% — — — — 800 99 697 7962021 MSTW TermLoan 2.85% 3.01% — — — — 2,652 — 2,640 2,6402023 Notes 5.25% 5.43% — — — — 1,000 — 991 9912023 SecuredNotes 7.50% 7.69% — — — — 1,250 — 1,238 1,2382024 Notes 5.25% 5.38% — — — — 550 — 546 5462026 Notes 5.63% 5.73% — — — — 129 — 128 1282032C Notes 2.38% 5.95% — — — — 223 — 211 2112033E Notes 1.63% 1.63% — — — — 173 202 — 202Other notes 2.50% 2.50% 1 — 1 1 216 164 44 208 $4,898 $859 $3,777 $4,636 $11,639 $1,262 $9,872 $11,134(1) Net carrying amount is the principal amount less unamortized debt discount and issuance costs. In addition, the net carrying amount as ofAugust 30, 2018 and August 31, 2017 included $132 million and $31 million, respectively, of derivative debt liabilities recognized as a result of ourelection to settle entirely in cash converted notes with an aggregate principal amount of $35 million and $16 million, respectively.(2) Since the closing price of our common stock exceeded 130% of the conversion price per share for at least 20 trading days in the 30 trading dayperiod ended on June 30, 2018, these notes are convertible by the holders through the calendar quarter ended September 30, 2018. Additionally,the closing price of our common stock also exceeded the thresholds for the calendar quarter ended September 30, 2018; therefore, these notes areconvertible by the holders at any time through December 31, 2018.(3) Current debt as of August 30, 2018 included an aggregate of $165 million for the settlement obligation (including principal and amounts in excessof principal) for conversions of our 2033F Notes that will settle in cash in the first quarter of 2019. The remainder of the 2033F Notes wereclassified as current as of August 30, 2018 because the terms of these notes require us to pay cash for the principal amount of any converted notesand holders of these notes had the right to convert their notes as of that date.(4) The 2043G Notes outstanding as of August 30, 2018 have an original principal amount of $815 million that accretes up to $911 million through theexpected term in November 2028 and $1.02 billion at maturity in 2043.Our convertible and other senior notes are unsecured obligations that rank equally in right of payment with all of our other existing and future unsecuredindebtedness, and are effectively subordinated to all of our other existing and future secured indebtedness, to the extent of the value of the assets securingsuch indebtedness. As of August 30, 2018, Micron had $1.56 billion of unsecured debt (net of unamortized discount and debt issuance costs), including all ofits convertible notes and the 2025 Notes, that was structurally subordinated to all liabilities of its subsidiaries, including trade payables. The terms of ourindebtedness generally contain cross payment default and cross acceleration provisions. Micron guarantees certain debt obligations of its subsidiaries, butdoes not guarantee the MMJ Creditor Payments. Micron's guarantees of its subsidiary debt55obligations are unsecured obligations ranking equally in right of payment with all of Micron's other existing and future unsecured indebtedness.IMFT Member DebtIn 2018, Intel provided debt financing ("IMFT Member Debt") of $1.01 billion to IMFT pursuant to the terms of the IMFT joint venture agreement. IMFTMember Debt is non-interest bearing, matures upon the completion of an auction and sale of assets of IMFT prior to the dissolution, liquidation, or otherwind-up of IMFT, and is convertible, at the election of Intel, in whole or in part, into a capital contribution to IMFT. Additionally, to the extent IMFTdistributes cash to its members under the terms of the IMFT joint venture agreement, Intel may, at its option, designate any portion of the distribution to be arepayment of the IMFT Member Debt. In the event Intel exercises its right to put its interest in IMFT to us, or if we exercise our right to call from Intel itsinterest in IMFT, any IMFT Member Debt outstanding at the time of the closing of the put or call transaction will transfer to Micron. (See "Equity –Noncontrolling Interest in Subsidiaries – IMFT" note.)Capital Lease ObligationsIn 2018, we recorded capital lease obligations aggregating $20 million at a weighted-average effective interest rate of 4.6%, with a weighted-averageexpected term of five years. In 2017, we recorded capital lease obligations aggregating $220 million.MMJ Creditor PaymentsUnder the MMJ Companies' corporate reorganization proceedings, which set forth the treatment of the MMJ Companies' pre-petition creditors and theirclaims, the MMJ Companies were required to pay 200 billion yen, less certain expenses of the reorganization proceedings and other items, to their securedand unsecured creditors in seven annual installment payments (the "MMJ Creditor Payments"). The MMJ Creditor Payments do not provide for interest and,as a result of our acquisition of the MMJ Companies in 2013, we recorded the MMJ Creditor Payments at fair value. The fair-value discount is accreted tointerest expense over the term of the installment payments.Under the MMJ Companies' corporate reorganization proceedings, the secured creditors of MMJ will recover 100% of the amount of their fixed claims insix annual installment payments through October 2018 and the unsecured creditors will recover at least 17.4% of the amount of their fixed claims in sevenannual installment payments through December 2019. The remaining portion of the unsecured claims of the creditors of MMJ not recovered pursuant to thecorporate reorganization proceedings will be discharged, without payment, through December 2019. The following table presents the remaining amounts ofMMJ Creditor Payments (stated in Japanese yen and U.S. dollars) and the amount of unamortized discount as of August 30, 2018:2019 ¥36,392 $3262020 21,720 194 58,112 520Less unamortized discount (3,186) (28) ¥54,926 $492Pursuant to the terms of an Agreement on Support for Reorganization Companies that we executed in 2012 with the trustees of the MMJ Companies'pending corporate reorganization proceedings, we entered into a series of agreements with the MMJ Companies, including supply agreements, research anddevelopment services agreements, and general services agreements, which are intended to generate operating cash flows to meet the requirements of the MMJCompanies' businesses, including the funding of the MMJ Creditor Payments.2022 Senior Secured Term Loan BIn April 2016, we issued $750 million in principal amount of 2022 Term Loan B notes due April 2022. The 2022 Term Loan B provides for periodicrepricing of the interest rates and, as of August 30, 2018, the 2022 Term Loan B generally bears interest at LIBOR plus 1.75%. We may elect to convertoutstanding term loan interest to other variable-rate indexes. Principal payments are due quarterly in an amount equal to 0.25% of the initial aggregateprincipal amount with the balance due at maturity and may be prepaid without penalty. Interest is payable at least quarterly.56The 2022 Term Loan B is collateralized by substantially all of the assets of Micron and MSP, a subsidiary of Micron, subject to certain permitted lienson such assets. Included in our consolidated balance sheet as of August 30, 2018 were $8.32 billion of assets which collateralize these notes. The 2022 TermLoan B is structurally subordinated to the indebtedness and other liabilities of all of Micron's subsidiaries that do not guarantee these debt obligations and isguaranteed by MSP.The 2022 Term Loan B contains covenants that, among other things, limit, in certain circumstances, the ability of Micron and/or its domestic restrictedsubsidiaries to (1) create or incur certain liens and enter into sale-leaseback financing transactions; (2) in the case of domestic restricted subsidiaries, create,assume, incur, or guarantee additional indebtedness; and (3) in the case of Micron, consolidate or merge with or into, or sell, assign, convey, transfer, lease, orotherwise dispose of all or substantially all of its assets to another entity. These covenants are subject to a number of limitations, exceptions, andqualifications.2025 NotesThe 2025 unsecured notes contain covenants that, among other things, limit, in certain circumstances, our ability and/or the ability of our domesticrestricted subsidiaries (which are generally subsidiaries in the U.S. in which we own at least 80% of the voting stock) to (1) create or incur certain liens andenter into sale and lease-back transactions, (2) create, assume, incur, or guarantee certain additional secured indebtedness and unsecured indebtedness of ourdomestic restricted subsidiaries, and (3) consolidate with or merge with or into, or convey, transfer or lease all or substantially all of our assets, to anotherentity. These covenants are subject to a number of limitations, exceptions, and qualifications.Cash Redemption at Our Option: Prior to August 1, 2019, we may redeem the 2025 Notes, in whole or in part, at a price equal to the principal amount ofthe 2025 Notes to be redeemed plus a make-whole premium as described in the indenture governing the 2025 Notes, together with accrued and unpaidinterest. On or after August 1, 2019, we may redeem the 2025 Notes, in whole or in part, at prices above the principal amount that decline over time, asspecified in the indenture, together with accrued and unpaid interest. Convertible Senior Notes Holder PutDate(1) MaturityDate ConversionPrice Per Share ConversionPrice Per ShareThreshold(2) UnderlyingShares ofCommon Stock ConversionValue in Excessof Principal(3) PrincipalSettlementOption(4)2032D Notes May 2021 May 2032 $9.98 $12.97 14 $615 Cash and/or shares2033F Notes(5) Feb 2020 Feb 2033 10.93 14.21 10 408 Cash2043G Notes Nov 2028 Nov 2043 29.16 37.91 35 824 Cash and/or shares 59 $1,847 (1) Debt discount and debt issuance costs are amortized through the earliest holder put date.(2) Represents 130% of the conversion price per share. If the trading price of our common stock exceeds such threshold for a specified period, holdersmay convert such notes during a specified period. See "Conversion Rights" below.(3) Based on the trading price of our common stock of $52.76 as of August 30, 2018.(4) It is our current intent to settle in cash the principal amount of our convertible notes upon conversion. As a result, only the amounts payable inexcess of the principal amounts upon conversion of our convertible notes are considered in diluted earnings per share under the treasury stockmethod. For each of our convertible notes, we may elect to settle any amounts in excess of the principal in cash, shares of our common stock, or acombination thereof.(5) Holders may put their notes to us on February 15, 2023.Conversion Rights: Holders of our convertible notes may convert their notes under the following circumstances: (1) if the notes are called forredemption; (2) during any calendar quarter if the closing price of our common stock for at least 20 trading days in the 30 consecutive trading days ending onthe last trading day of the preceding calendar quarter is more than 130% of the conversion price (see "Conversion Price Per Share Threshold" in the tableabove); (3) if the trading price of the notes is less than 98% of the product of the closing price of our common stock and the conversion rate of the notesduring the periods specified in the indentures; (4) if specified distributions or corporate events occur, as set forth in the indenture for the notes; or (5) duringthe last three months prior to the maturity date of the notes. For the calendar quarter ended September 30, 2018, the closing price of our common stockexceeded 130% of the conversion price for each series of our convertible notes; therefore, those notes are convertible by the holders through December 31,2018.57In August 2018, holders of our 2033F Notes with an aggregate principal amount of $35 million converted their notes, which were settled in cash the firstquarter of 2019. As a result of our election to settle all amounts due upon conversion in cash for these notes, such settlement obligations became derivativedebt liabilities in 2018 subject to mark-to-market accounting treatment based on the volume-weighted-average price of our common stock over a period of20 consecutive trading days. Accordingly, at the dates of our elections to settle the conversions in cash, we reclassified the fair values of the equitycomponents of each of the converted notes from additional capital to derivative debt liabilities within current debt in our consolidated balance sheet. The netcarrying amount for 2018 included $132 million for the fair values of the derivative debt liabilities as of August 30, 2018. The 20 consecutive trading dayperiod ended in the first quarter of 2019, and we settled the conversion for $153 million in cash.Cash Redemption at Our Option: We may redeem our convertible notes under the circumstances listed in the table below. The redemption price for thenotes will equal the principal amount at maturity, or the accreted principal amount in the case of the 2043G Notes redeemed on or after November 20, 2018,plus accrued and unpaid interest. Conditional RedemptionPeriodat Our Option(1) Unconditional RedemptionPeriodat Our Option Redemption Period RequiringMake-Whole2032D Notes On or after May 1, 2017 On or after May 4, 2021 Prior to May 4, 2021(2)2033F Notes N/A On or after Feb 20, 2020 N/A2043G Notes Prior to Nov 20, 2018 On or after Nov 20, 2018 Prior to Nov 20, 2018(3)(1) We may redeem for cash on or after the applicable dates if the volume weighted average price of our common stock has been at least 130% of theconversion price for at least 20 trading days during any 30 consecutive trading day period.(2) If we redeem prior to the applicable date, we will pay a make-whole premium in cash equal to the present value of the remaining scheduled interestpayments from the redemption date to May 4, 2021.(3) If we redeem prior to the applicable date, we will be required to pay a make-whole premium only if, as a result of our redemption notice, holdersconvert their notes. The make-whole premium will be based on the price of our common stock and the conversion date, as set forth in the indenture,and is payable at our election in cash and/or shares.Cash Repurchase at the Option of the Holders: We may be required by the holders of our convertible notes to repurchase for cash all or a portion of thenotes on the "Holder Put Date" listed in the table above. The repurchase price would equal the principal amount, or the accreted principal amount in the caseof the 2043G Notes, plus accrued and unpaid interest. Also, upon a change in control or a termination of trading, as defined in the respective indentures,holders of our convertible notes may require us to repurchase for cash all or a portion of their notes.Other: Interest expense for our convertible notes consisted of contractual interest of $44 million, $51 million, and $51 million for 2018, 2017, and 2016,respectively, and amortization of discount and issuance costs of $32 million, $37 million, and $36 million for 2018, 2017, and 2016, respectively. As ofAugust 30, 2018 and August 31, 2017, the carrying amounts of the equity components of our convertible notes, which are included in additional capital inthe accompanying consolidated balance sheets, were $208 million and $287 million, respectively.Available Revolving Credit FacilityOn August 9, 2018, we terminated our undrawn revolving credit facility scheduled to expire in February 2020, under which we were able draw up to thelesser of $750 million or 80% of the net outstanding balance of certain trade receivables.On July 3, 2018, we entered into a revolving credit facility that expires in July 2023, under which we can draw up to $2.00 billion. Borrowings under thefacility will generally bear interest, at a rate equal to LIBOR plus 1.25% to 2.00%, depending on our corporate credit ratings or leverage ratio. Any amountsdrawn are collateralized by substantially all of the assets of Micron and MSP, a subsidiary of Micron, subject to certain permitted liens. Additionally, anyamounts drawn are pari passu with the 2022 Term Loan B and are structurally subordinated to the indebtedness and other liabilities of all of Micron'ssubsidiaries that do not guarantee these debt obligations, and is guaranteed by MSP. As of August 30, 2018, there were no outstanding amounts drawn underthis facility. We may suspend the security interest in the collateral under the facility upon achieving specified credit ratings and repayment of the 2022 TermLoan B; however, the security interest will be automatically reinstated upon a decline in our corporate credit rating.Under the terms of the revolving credit agreement, we must maintain a ratio calculated as of the last day of each fiscal quarter of total indebtedness toadjusted EBITDA not to exceed 2.75 to 1.00. We must also maintain a ratio of adjusted EBITDA to net interest expense of not less than 3.50 to 1.00. Thefacility contains other covenants that, among other things,58limit, in certain circumstances, our ability and/or the ability of our restricted subsidiaries to (1) create or incur certain liens and enter into sale and lease-backtransactions, (2) create, assume, incur, or guarantee certain additional secured indebtedness and unsecured indebtedness of our restricted subsidiaries, and (3)consolidate with or merge with or into, or convey, transfer, lease, or otherwise dispose of all or substantially all of our assets, to another entity. Thesecovenants are subject to a number of limitations, exceptions, and qualifications.Debt Prepayments, Repurchases, and ConversionsDuring 2018, we prepaid, repurchased, and settled conversions of debt with an aggregate principal amount of $6.96 billion. When we receive a notice ofconversion for any of our convertible notes and elect to settle in cash any amount of the conversion obligation in excess of the principal amount, the cashsettlement obligations become derivative debt liabilities subject to mark-to-market accounting treatment based on the volume-weighted-average price of ourcommon stock over a period of 20 consecutive trading days. Accordingly, at the date of our election to settle a conversion in cash, we reclassify the fair valueof the equity component of the converted notes from additional capital to derivative debt liability within current debt in our consolidated balance sheet.The following table presents the effects of prepayments, repurchases, and conversions of debt in 2018: Decrease inPrincipal Increase(Decrease) inCarrying Value Decrease in Cash Decrease inEquity Gain (Loss)Prepayments and repurchases 2021 MSAC Term Loan $(730) $(727) $(730) $— $(3)2021 MSTW Term Loan (2,625) (2,616) (2,625) — (10)2023 Notes (1,000) (991) (1,046) — (55)2023 Secured Notes (1,250) (1,238) (1,373) — (135)2024 Notes (550) (546) (572) — (25)2026 Notes (129) (129) (139) — (11)2033F Notes (66) (63) (316) (252) (1)Other Notes (46) (44) (46) — (2)Settled conversions 2032C Notes (223) (216) (1,230) (965) (50)2032D Notes (34) (31) (182) (145) (6)2033E Notes(1) (173) (203) (552) (297) (52)2033F Notes (124) (118) (596) (462) (16)2043G Notes (6) (4) (13) (5) (4)Conversions not settled 2033F Notes(2) — 132 — (117) (15) $(6,956) $(6,794) $(9,420) $(2,243) $(385)(1) Settlement included issuance of 4 million shares of our treasury stock in addition to payment of cash.(2) As of August 30, 2018, an aggregate of $35 million principal amount of our 2033F Notes (with a carrying value of $165 million) had converted butnot settled. These notes settled in the first quarter of 2019 for $153 million in cash.In 2017, we repurchased $631 million of principal amount of our 2025 Notes (carrying value of $625 million), repurchased $321 million of principalamount of our 2026 Notes (carrying value of $318 million), and redeemed $600 million principal amount of our 2022 Notes (carrying value of $592 million)for an aggregate of $1.63 billion in cash. In connection with the transactions, we recognized aggregate non-operating losses of $94 million in 2017.In 2016, we repurchased $57 million of principal amount of our 2033E Notes (carrying value of $54 million) for $94 million in cash. The liability andequity components of the repurchased notes had previously been stated separately within debt and equity in our consolidated balance sheet. As a result, therepurchase decreased the carrying value of debt by $54 million and equity by $38 million.59Maturities of Notes Payable and Future Minimum Lease PaymentsAs of August 30, 2018, maturities of notes payable (including the MMJ Creditor Payments) and future minimum lease payments under capital leaseobligations were as follows: Notes Payable Capital LeaseObligations2019 $501 $3392020 274 2312021 151 1002022 713 662023 — 422024 and thereafter 2,439 187Unamortized discounts and interest, respectively (287) (120) $3,791 $845CommitmentsAs of August 30, 2018, we had commitments of approximately $1.8 billion for the acquisition of property, plant, and equipment. We lease certainfacilities and equipment under operating leases, for which expense was $63 million, $52 million, and $46 million for 2018, 2017, and 2016,respectively. Minimum future operating lease commitments as of August 30, 2018 were as follows:2019 $372020 432021 502022 502023 452024 and thereafter 391 $616ContingenciesWe have accrued a liability and charged operations for the estimated costs of adjudication or settlement of various asserted and unasserted claimsexisting as of the balance sheet date, including those described below. We are currently a party to other legal actions arising from the normal course ofbusiness, none of which is expected to have a material adverse effect on our business, results of operations, or financial condition.Patent MattersAs is typical in the semiconductor and other high-tech industries, from time to time, others have asserted, and may in the future assert, that our productsor manufacturing processes infringe upon their intellectual property rights.On November 21, 2014, Elm 3DS Innovations, LLC ("Elm") filed a patent infringement action against Micron, MSP, and Micron Consumer ProductsGroup, Inc. in the U.S. District Court for the District of Delaware. On March 27, 2015, Elm filed an amended complaint against the same entities. Theamended complaint alleges that unspecified semiconductor products of ours that incorporate multiple stacked die infringe 13 U.S. patents and seeksdamages, attorneys' fees, and costs.On December 15, 2014, Innovative Memory Solutions, Inc. ("IMS") filed a patent infringement action against Micron in the U.S. District Court for theDistrict of Delaware. The complaint alleges that a variety of our NAND products infringe eight U.S. patents and seeks damages, attorneys' fees, and costs. OnJuly 23, 2018, IMS served a patent infringement complaint on Micron Semiconductor (Deutschland) GmbH and Micron Europe Limited alleging thatproducts including our SSDs infringe a European patent. The complaint seeks unspecified damages and an order forbidding Micron Semiconductor(Deutschland) GmbH and Micron Europe Limited from offering to sell, using, and importing the accused products. On August 31, 2018,60Micron was served with a complaint filed by IMS in Shenzhen Intermediate People's Court in Guangdong Province, China. The complaint alleges that certainof our NAND flash products infringe a Chinese patent. The complaint seeks an order requiring Micron to stop manufacturing, using, selling, and offering forsale the accused products in China, and to pay damages of 1 million Chinese yuan plus expenses.On June 24, 2016, the President and Fellows of Harvard University filed a patent infringement action against Micron in the U.S. District Court for theDistrict of Massachusetts. The complaint alleged that a variety of our DRAM products infringed two U.S. patents and sought damages, injunctive relief, andother unspecified relief. On March 1, 2018, we executed a settlement agreement resolving this litigation. The settlement amount did not have a material effecton our business, results of operations, or financial condition.On March 19, 2018, Micron Semiconductor (Xi’an) Co., Ltd. ("MXA") was served with a patent infringement complaint filed by Fujian Jinhua IntegratedCircuit Co., Ltd. ("Jinhua") in the Fuzhou Intermediate People’s Court in Fujian Province, China (the "Fuzhou Court"). On April 3, 2018, MicronSemiconductor (Shanghai) Co. Ltd. ("MSS") was served with the same complaint. The complaint alleges that MXA and MSS infringe a Chinese patent bymanufacturing and selling certain Crucial DDR4 DRAM modules. The complaint seeks an order requiring MXA and MSS to destroy inventory of the accusedproducts and equipment for manufacturing the accused products in China, to stop manufacturing, using, selling, and offering for sale the accused products inChina, and to pay damages of 98 million Chinese yuan plus court fees incurred.On March 21, 2018, MXA was served with a patent infringement complaint filed by United Microelectronics Corporation ("UMC") in the FuzhouCourt. On April 3, 2018, MSS was served with the same complaint. The complaint alleges that MXA and MSS infringe a Chinese patent by manufacturingand selling certain Crucial DDR4 DRAM modules. The complaint seeks an order requiring MXA and MSS to destroy inventory of the accused products andequipment for manufacturing the accused products in China, to stop manufacturing, using, selling, and offering for sale the accused products in China, and topay damages of 90 million Chinese yuan plus court fees incurred.On April 3, 2018, MSS was served with another patent infringement complaint filed by Jinhua and two additional complaints filed by UMC in theFuzhou Court. The three additional complaints allege that MSS infringes three Chinese patents by manufacturing and selling certain Crucial MX300 SSDsand certain GDDR5 memory chips. The two complaints filed by UMC each seek an order requiring MSS to destroy inventory of the accused products andequipment for manufacturing the accused products in China, to stop manufacturing, using, selling, and offering for sale the accused products in China, and topay damages of 90 million Chinese yuan plus court fees incurred. The complaint filed by Jinhua seeks an order requiring MSS to destroy inventory of theaccused products and equipment for manufacturing the accused products in China, to stop manufacturing, using, selling, and offering for sale the accusedproducts in China, and to pay damages of 98 million Chinese yuan plus court fees incurred. On October 9, 2018, UMC withdrew its complaint that allegedMSS infringed a Chinese patent by manufacturing and selling certain GDDR5 memory chips.On July 5, 2018, MXA and MSS were notified that the Fuzhou Court granted a preliminary injunction against those entities that enjoins them frommanufacturing, selling, or importing certain Crucial and Ballistic-branded DRAM modules and solid-state drives in China. The affected products make upslightly more than 1% of our annualized revenues. We are complying with the ruling and have requested the Fuzhou Court to reconsider or stay its decision.Among other things, the above lawsuits pertain to substantially all of our DRAM, NAND, and other memory and storage products we manufacture, whichaccount for a significant portion of our net sales.We are unable to predict the outcome of assertions of infringement made against us and therefore cannot estimate the range of possible loss. Adetermination that our products or manufacturing processes infringe the intellectual property rights of others or entering into a license agreement coveringsuch intellectual property could result in significant liability and/or require us to make material changes to our products and/or manufacturing processes. Anyof the foregoing could have a material adverse effect on our business, results of operations, or financial condition.61QimondaOn January 20, 2011, Dr. Michael Jaffé, administrator for Qimonda's insolvency proceedings, filed suit against Micron and Micron Semiconductor B.V.,our Netherlands subsidiary ("Micron B.V."), in the District Court of Munich, Civil Chamber. The complaint seeks to void, under Section 133 of the GermanInsolvency Act, a share purchase agreement between Micron B.V. and Qimonda signed in fall 2008, pursuant to which Micron B.V. purchased substantiallyall of Qimonda's shares of Inotera (the "Inotera Shares"), representing approximately 18% of Inotera's outstanding shares as of August 30, 2018, and seeks anorder requiring us to re-transfer those shares to the Qimonda estate. The complaint also seeks, among other things, to recover damages for the alleged value ofthe joint venture relationship with Inotera and to terminate, under Sections 103 or 133 of the German Insolvency Code, a patent cross-license between us andQimonda entered into at the same time as the share purchase agreement.Following a series of hearings with pleadings, arguments, and witnesses on behalf of the Qimonda estate, on March 13, 2014, the court issuedjudgments: (1) ordering Micron B.V. to pay approximately $1 million in respect of certain Inotera Shares sold in connection with the original share purchase;(2) ordering Micron B.V. to disclose certain information with respect to any Inotera Shares sold by it to third parties; (3) ordering Micron B.V. to disclose thebenefits derived by it from ownership of the Inotera Shares, including in particular, any profits distributed on the Inotera Shares and all other benefits; (4)denying Qimonda's claims against Micron for any damages relating to the joint venture relationship with Inotera; and (5) determining that Qimonda'sobligations under the patent cross-license agreement are canceled. In addition, the court issued interlocutory judgments ordering, among other things: (1)that Micron B.V. transfer to the Qimonda estate the Inotera Shares still owned by Micron B.V. and pay to the Qimonda estate compensation in an amount tobe specified for any Inotera Shares sold to third parties; and (2) that Micron B.V. pay the Qimonda estate as compensation an amount to be specified forbenefits derived by Micron B.V. from ownership of the Inotera Shares. The interlocutory judgments have no immediate, enforceable effect on us, and,accordingly, we expect to be able to continue to operate with full control of the Inotera Shares subject to further developments in the case. We have filed anotice of appeal, and the parties have submitted briefs to the appeals court.We are unable to predict the outcome of the matter and therefore cannot estimate the range of possible loss. The final resolution of this lawsuit couldresult in the loss of the Inotera Shares or monetary damages, unspecified damages based on the benefits derived by Micron B.V. from the ownership of theInotera Shares, and/or the termination of the patent cross-license, which could have a material adverse effect on our business, results of operation, or financialcondition.Antitrust MattersOn April 27, 2018, a purported class-action lawsuit was filed against Micron and other DRAM suppliers in the U.S. District Court for the NorthernDistrict of California asserting claims based on alleged price-fixing of DRAM products during the period from June 1, 2016 to February 1, 2018. Similar caseswere subsequently filed in federal court in the United States, as well as in Canadian courts in Quebec, Montreal and Toronto, Ontario. The complaints seektreble monetary damages, costs, interest, attorneys' fees, and other injunctive and equitable relief. We are unable to predict the outcome of these matters andtherefore cannot estimate the range of possible loss. The final resolution of these matters could result in significant liability and could have a material adverseeffect on our business, results of operations, or financial condition.On May 15, 2018, the Chinese State Administration for Market Regulation ("SAMR") notified Micron that it was investigating potential collusionamong DRAM suppliers in China. On May 31, 2018, SAMR made unannounced visits to our sales offices in Beijing, Shanghai, and Shenzhen to seek certaininformation as part of its investigation. We are cooperating with SAMR in its investigation.OtherOn December 5, 2017, Micron filed a complaint against UMC and Jinhua in the U.S. District Court for the Northern District of California. The complaintalleges that UMC and Jinhua violated the Defend Trade Secrets Act, the civil provisions of the Racketeer Influenced and Corrupt Organizations Act, andCalifornia's Uniform Trade Secrets Act by misappropriating Micron's trade secrets and other misconduct. Micron's complaint seeks damages, restitution,disgorgement of profits, injunctive relief, and other appropriate relief.62In the normal course of business, we are a party to a variety of agreements pursuant to which we may be obligated to indemnify the other party. It is notpossible to predict the maximum potential amount of future payments under these types of agreements due to the conditional nature of our obligations andthe unique facts and circumstances involved in each particular agreement. Historically, our payments under these types of agreements have not had a materialadverse effect on our business, results of operations, or financial condition.Redeemable Convertible NotesUnder the terms of the indentures governing our 2033 Notes, upon conversion, we would be required to pay cash equal to the lesser of (1) the aggregateprincipal amount or (2) the conversion value of the notes being converted. To the extent the conversion value exceeds the principal amount, we could paycash, shares of common stock, or a combination thereof, at our option, for the amount of such excess. The closing price of our common stock met thethreshold for conversion and our 2033 Notes were convertible by their holders as of August 30, 2018 and August 31, 2017. As a result, the balance of thesenotes was classified as current debt and the difference between the principal amount and the carrying value was classified as redeemable convertible notes inthe accompanying consolidated balance sheet.Redeemable Noncontrolling InterestRedeemable noncontrolling interest reflects 100,000 preferred shares authorized and issued by Micron Semiconductor Asia Operations Pte. Ltd., asubsidiary of Micron, in August 2018 for proceeds, net of issuance related costs, of $97 million, which are redeemable by the holders after August 29, 2028.The preferred shareholders are entitled to a cumulative fixed dividend of 7.75% per annum, which is reflected in net income attributable to noncontrollinginterests, and a liquidation preference senior to the entity's common shares. We have the right to reacquire the preferred shares during the period beginningAugust 31, 2020 through August 29, 2026.EquityMicron Shareholders' EquityCommon Stock Repurchase Authorization: In May 2018, we announced that our Board of Directors had authorized the discretionary repurchase of up to$10 billion of our outstanding common stock beginning in 2019. We may purchase shares on a discretionary basis through open-market purchases, blocktrades, privately-negotiated transactions, derivative transactions, and/or pursuant to a Rule 10b5-1 trading plan, subject to market conditions and ourongoing determination of the best use of available cash. The repurchase authorization does not obligate us to acquire any common stock.Accelerated Share Repurchase: On August 10, 2018, we entered into an accelerated share repurchase ("ASR") agreement with a financial institution topurchase $1.00 billion of our common stock under our common stock repurchase authorization. The number of shares purchased will be calculated bydividing $1.00 billion by a volume-weighted average price of our common stock from September 5, 2018 through as late as November 29, 2018 (the"Measurement Period"), subject to an agreed-upon discount. On September 5, 2018, we paid $1.00 billion to the financial institution and received an initialinstallment of 14 million shares, equal to $750 million divided by the closing price of our common stock on September 4, 2018. Based on the final number ofshares purchased at the end of the Measurement Period, we will either receive an incremental number of shares, or settle any amount owed to the financialinstitution in either cash or shares, at our option. In the first quarter of 2019, we recorded the initial shares as treasury stock. The second installment is treatedas an equity-linked contract indexed to our stock and therefore qualifies for equity accounting.Other Repurchases: From August 31, 2018 through October 12, 2018, we repurchased an aggregate of 15 million shares of our common stock for anaggregate of $653 million under a Rule 10b5-1 plan and through open market repurchases.Common Stock Issuance: In October 2017, we issued 34 million shares of our common stock for $41.00 per share in a public offering, for net proceeds of$1.36 billion, net of underwriting fees and other offering costs.63Treasury Stock: In connection with the Inotera Acquisition, we sold 58 million shares of our common stock to Nanya for $986 million in cash, of which54 million shares were issued from treasury stock. As a result, in 2017, treasury stock decreased by $1.03 billion while retained earnings decreased by $104million for the difference between the carrying value of the treasury stock and its $925 million fair value.Outstanding Capped Calls: In connection with our 2033F Notes, we entered into the 2033F Capped Calls, which cover, subject to anti-dilutionadjustments similar to those contained in the 2033F Notes, 27 million shares of common stock and are intended to reduce the effect of potential dilution. The2033F Capped Calls have an initial strike price of $10.93, subject to certain adjustments, which equals the conversion price of the 2033 Notes, a cap price of$14.51, and provide for our receipt of cash or shares, at our election, from our counterparties if the trading price of our stock is above the strike prices on theexpiration dates. The 2033F Capped Calls expire on various dates between January 2020 and February 2020. As of August 30, 2018, the dollar value of cashor shares that we would receive from our 2033F Capped Calls upon their expiration dates range from $0, if the trading price of our stock is below the strikeprices at expiration, to $98 million, if the trading price of our stock is at or above the cap prices. Settlement of the capped calls prior to the expiration datesmay be for an amount less than the maximum value at expiration.Expiration of Capped Calls: In 2018, we share-settled certain capped calls upon their expirations, and received 9 million shares, equal to a value of $429million. In 2017, we cash-settled and share-settled certain capped calls upon their expirations, and received $125 million in cash and 4 million shares, equalto a value of $67 million and in 2016, we share-settled certain capped calls upon their expirations and received 2 million shares of our stock, equal to a valueof $23 million. The amounts received upon settlement were based on volume-weighted-average trading prices of our stock at the expiration dates. The sharesreceived in all periods were recorded as treasury stock.Accumulated Other Comprehensive Income: Changes in accumulated other comprehensive by component for the year ended August 30, 2018 were asfollows: CumulativeForeign CurrencyTranslationAdjustments Gains (Losses) onDerivativeInstruments Pension LiabilityAdjustments Unrealized Gains(Losses) onInvestments TotalAs of August 31, 2017 $(1) $17 $13 $— $29Other comprehensive income 1 (17) (3) (3) (22)Amount reclassified out of accumulated othercomprehensive income — (1) (1) — (2)Tax effects — 3 1 1 5Other comprehensive income 1 (15) (3) (2) (19)As of August 30, 2018 $— $2 $10 $(2) $10Noncontrolling Interests in SubsidiariesAs of 2018 2017 Balance Percentage Balance PercentageIMFT $853 49% $832 49%Other 17 Various 17 Various $870 $849 64IMFT: Since 2006, we have owned 51% of IMFT, a joint venture between us and Intel. IMFT is governed by a Board of Managers, for which the numberof managers appointed by each member varies based on the members' respective ownership interests. IMFT manufactures semiconductor products exclusivelyfor its members under a long-term supply agreement at prices approximating cost. In the first quarter of 2018, IMFT discontinued production of NAND andsubsequent to that time has been entirely focused on 3D XPoint memory production. Through our IMFT joint venture, we continue to jointly develop 3DXPoint technologies with Intel through the second generation of 3D XPoint technology, which is expected to be completed in the second half of 2019. Tobetter optimize the 3D XPoint technology for our product roadmap and maximize the benefits for our customers and shareholders, in the fourth quarter of2018, we announced that we will no longer jointly develop with Intel subsequent generations of 3D XPoint technology. IMFT will continue to manufacturememory based on 3D XPoint technology at the fabrication facility in Lehi, Utah for its members. IMFT sales to Intel were $507 million, $438 million, and$457 million for 2018, 2017, and 2016, respectively.The IMFT joint venture agreement extends through 2024 and includes certain buy-sell rights. At any time through December 2018, Intel can put to us,and from January 2019 through December 2021, we can call from Intel, Intel's interest in IMFT, in either case, for a price that approximates Intel's interest inthe net book value of IMFT plus member debt at the time of the closing. If Intel exercises its put right, we can elect to set the closing date of the transactionany time between six months and two years following such election by Intel and we can elect to receive financing of the purchase price from Intel for one totwo years from the closing date. If we exercise our call right, Intel can elect to set the closing date of the transaction to be any time between six months andone year following such election. Following the closing date resulting from exercise of either the put or the call, we will continue to supply to Intel for aperiod of one year between 50% and 100%, at Intel's choice, of Intel's immediately preceding six-month period pre-closing volumes of IMFT products for thefirst six-month period following the closing and between 0% and 100%, at Intel's choice, of Intel's first six-month period following the closing volumes ofIMFT products for the second six-month period following the closing, at a margin that varies depending on whether the put or call was exercised.IMFT's capital requirements are generally determined based on an annual plan approved by the members, and capital contributions to IMFT arerequested as needed. Capital requests are made to the members in proportion to their then-current ownership interest. Members may elect to not contributetheir proportional share, and in such event, the contributing member may elect to contribute any amount of the capital request, either in the form of an equitycontribution or member debt financing. Under the supply agreement, the members have rights and obligations to the capacity of IMFT in proportion to theirinvestment, including member debt financing. Any capital contribution or member debt financing results in a proportionate adjustment to the sharing ofoutput on an eight-month lag. Members pay their proportionate share of fixed costs associated with IMFT's capacity.Creditors of IMFT have recourse only to IMFT's assets and do not have recourse to any other of our assets. The following table presents the assets andliabilities of IMFT included in our consolidated balance sheets:65As of 2018 2017Assets Cash and equivalents $91 $87Receivables 126 81Inventories 114 128Other current assets 8 7Total current assets 339 303Property, plant, and equipment 2,641 1,852Other noncurrent assets 45 49Total assets $3,025 $2,204 Liabilities Accounts payable and accrued expenses $138 $299Deferred income 9 6Current debt 20 19Total current liabilities 167 324Long-term debt 1,064 75Other noncurrent liabilities 74 88Total liabilities $1,305 $487Amounts exclude intercompany balances that were eliminated in our consolidated balance sheets.In 2016, IMFT distributed $36 million and $34 million to us and Intel, respectively, and we and Intel contributed $38 million and $37 million,respectively, to IMFT.Fair Value MeasurementsAll of our marketable debt and equity investments were classified as available-for-sale and carried at fair value. Amounts reported as cash andequivalents, receivables, and accounts payable and accrued expenses approximate fair value. The estimated fair value and carrying value of our outstandingdebt instruments (excluding the carrying value of equity and mezzanine equity components of our convertible notes) were as follows:As of 2018 2017 FairValue CarryingValue FairValue CarryingValueConvertible notes $3,124 $1,049 $3,901 $1,521Notes and MMJ Creditor Payments2,798 2,742 8,793 8,423The fair values of our convertible notes were determined based on Level 2 inputs, including the trading price of our convertible notes when available,our stock price, and interest rates based on similar debt issued by parties with credit ratings similar to ours. The fair values of our other debt instruments wereestimated based on Level 2 inputs, including discounted cash flows, the trading price of our notes, when available, and interest rates based on similar debtissued by parties with credit ratings similar to ours.66Derivative Instruments Gross NotionalAmount(1) Fair Value ofCurrent Assets(2) CurrentLiabilities(3) NoncurrentAssets(4)As of August 30, 2018 Derivative instruments with hedge accounting designation Cash flow currency hedges $538 $— $(13) $— Derivative instruments without hedge accounting designation Non-designated currency hedges 1,919 14 (10) —Convertible notes settlement obligation(5) — (167) — 14 (177) — $14 $(190) $— As of August 31, 2017 Derivative instruments with hedge accounting designation Cash flow currency hedges $456 $17 $— $— Derivative instruments without hedge accounting designation Non-designated currency hedges 4,847 34 (5) 1Convertible notes settlement obligation(5) — (47) — 34 (52) 1 $51 $(52) $1(1) Notional amounts of currency hedge contracts in U.S. dollars.(2) Included in receivables – other.(3) Included in accounts payable and accrued expenses – other for forward contracts and in current debt for convertible notes settlement obligations.(4) Included in other noncurrent assets.(5) Notional amounts of convertible notes settlement obligations as of August 30, 2018 and August 31, 2017 were 3 million and 2 million shares of ourcommon stock, respectively.Derivative Instruments with Hedge Accounting DesignationWe utilize currency forward contracts that generally mature within 12 months to hedge our exposure to changes in currency exchange rates. Currencyforward contracts are measured at fair value based on market-based observable inputs including currency exchange spot and forward rates, interest rates, andcredit-risk spreads (Level 2). We do not use derivative instruments for speculative purposes.Cash Flow Hedges: We utilize cash flow hedges for our exposure from changes in currency exchange rates for certain capital expenditures. Forderivative instruments designated as cash flow hedges, the effective portion of the realized and unrealized gains or losses on derivatives is included as acomponent of accumulated other comprehensive income. Amounts in accumulated other comprehensive income are reclassified into earnings in the sameline items and in the same periods in which the underlying transactions affect earnings. For the periods presented prior to the second quarter of 2018, theineffective and excluded portion of the realized and unrealized gain or loss was included in other non-operating income (expense). As a result of adoptingASU 2017-12, beginning in the second quarter of 2018, the excluded portion of such amounts is included in the same line item in which the underlyingtransactions affect earnings and the ineffective portion of the realized and unrealized gains or losses on derivatives is included as a component ofaccumulated other comprehensive income.We recognized losses of $17 million and gains of $15 million and $10 million for 2018, 2017, and 2016, respectively, in accumulated othercomprehensive income from the effective portion of cash flow hedges. Neither the amount excluded from hedge effectiveness nor the reclassifications fromaccumulated other comprehensive income to earnings were material in 2018,672017, or 2016. The amounts from cash flow hedges included in accumulated other comprehensive income that are expected to be reclassified into earnings inthe next 12 months were also not material.Fair Value Hedges: We utilize fair value hedges for our exposure from changes in currency exchange rates for certain monetary assets and liabilities. Forderivative forward contracts designated as fair value hedges, hedge effectiveness is determined by the change in the fair value of the undiscounted spot rateof the forward contract. The changes in fair values of hedge instruments attributed to changes in undiscounted spot rates are recognized in other non-operating income (expense). The time value associated with hedge instruments is excluded from the assessment of the effectiveness of hedges and isrecognized on a straight-line basis over the life of hedges to other non-operating income (expense). Amounts recorded to other comprehensive income (loss)for 2018 were not material. The effects of fair value hedges on our consolidated statements of operations were as follows: OtherNon-OperatingIncome (Expense)For the year ended 2018Gain (loss) on remeasurement of hedged assets and liabilities $(25)Gain (loss) on derivatives designated as hedging instruments 25Amortization of amounts excluded from hedge effectiveness (32) $(32)Derivative Instruments without Hedge Accounting DesignationCurrency Derivatives: Except for certain assets and liabilities hedged using fair value hedges, we generally utilize a rolling hedge strategy with currencyforward contracts that mature within nine months to hedge our exposures of monetary assets and liabilities from changes in currency exchange rates. At theend of each reporting period, monetary assets and liabilities denominated in currencies other than the U.S. dollar are remeasured into U.S. dollars and theassociated outstanding forward contracts are marked to market. Currency forward contracts are valued at fair values based on the middle of bid and ask pricesof dealers or exchange quotations (Level 2). Realized and unrealized gains and losses on derivative instruments without hedge accounting designation aswell as the changes in the underlying monetary assets and liabilities from changes in currency exchange rates are included in other non-operating income(expense). For derivative instruments without hedge accounting designation, we recognized losses of $38 million and $45 million, and gains of $185 millionfor 2018, 2017, and 2016, respectively.Convertible Notes Settlement Obligations: For settlement obligations associated with our convertible notes subject to mark-to-market accountingtreatment, the fair values of the underlying derivative settlement obligations were initially determined using the Black-Scholes option valuation model(Level 2), which requires inputs of stock price, expected stock-price volatility, estimated option life, risk-free interest rate, and dividend rate. The subsequentmeasurement amounts were based on the volume-weighted-average trading price of our common stock (Level 2). (See "Debt" note.) We recognized losses of$124 million for 2018 in other non-operating income (expense), net for the changes in fair value of the derivative settlement obligations. Recognized gainsand losses for 2017 and 2016 were not material.Derivative Counterparty Credit Risk and Master Netting ArrangementsOur derivative instruments expose us to credit risk to the extent counterparties may be unable to meet the terms of the contracts. Our maximum exposureto loss due to credit risk if counterparties fail completely to perform according to the terms of the contracts would generally equal the fair value of assets forthese contracts as listed in the tables above. We seek to mitigate such risk by limiting our counterparties to major financial institutions and by spreading riskacross multiple financial institutions. As of August 30, 2018 and August 31, 2017, amounts netted under our master netting arrangements were not material.Equity PlansAs of August 30, 2018, 125 million shares of our common stock were available for future awards under our equity plans, including 33 million sharesapproved for issuance under our employee stock purchase plan ("ESPP").68Stock OptionsOur stock options are generally exercisable in increments of either one-fourth or one-third per year beginning one year from the date of grant. Stockoptions issued after February 2014 expire eight years from the date of grant. Options issued prior to February 2014 expire six years from the date of grant.Option activity for 2018 is summarized as follows: Number of Shares Weighted-AverageExercise Price PerShare Weighted-AverageRemainingContractual Life(In Years) Aggregate IntrinsicValueOutstanding as of August 31, 2017 33 $19.32 Granted 2 43.30 Exercised (16) 17.82 Canceled or expired (1) 22.67 Outstanding as of August 30, 2018 18 23.38 4.8 $527 Exercisable as of August 30, 2018 8 $21.66 3.2 $233Unvested as of August 30, 2018 10 24.61 6.0 294The total intrinsic value was $446 million, $198 million, and $52 million for options exercised in 2018, 2017, and 2016, respectively.Stock options granted and assumptions used in the Black-Scholes option valuation model were as follows:For the year ended 2018 2017 2016Stock options granted 2 8 8Weighted-average grant-date fair value per share $18.65 $8.68 $6.94Average expected life in years 5.5 5.5 5.5Weighted-average expected volatility 44% 46% 47%Weighted-average risk-free interest rate 2.2% 1.8% 1.7%Expected dividend yield 0.0% 0.0% 0.0%Stock price volatility was based on an average of historical volatility and the implied volatility derived from traded options on our stock. The expectedlives of options granted were based, in part, on historical experience and on the terms and conditions of the options. The risk-free interest rates utilized werebased on the U.S. Treasury yield in effect at each grant date.Restricted Stock and Restricted Stock Units ("Restricted Stock Awards")As of August 30, 2018, there were 15 million shares of Restricted Stock Awards outstanding, of which 13 million contained only service conditions. Forservice-based Restricted Stock Awards, restrictions generally lapse in one-fourth or one-third increments during each year of employment after the grant date.Restrictions lapse on Restricted Stock granted in 2018 with performance or market conditions over a three year period if conditions are met. At the end of theperformance period, the number of actual shares to be awarded will vary between 0% and 200% of target amounts, depending upon the achievementlevel. Restricted Stock Awards activity for 2018 is summarized as follows: Number of Shares Weighted-AverageGrant Date FairValue Per ShareOutstanding as of August 31, 2017 19 $19.78Granted 4 42.48Restrictions lapsed (6) 21.70Canceled (2) 21.93Outstanding as of August 30, 2018 15 25.1869For the year ended 2018 2017 2016Restricted stock award shares granted 4 8 10Weighted-average grant-date fair value per share $42.48 $18.77 $15.40Aggregate vesting-date fair value of shares vested $259 $115 $71Employee Stock Purchase PlanOur ESPP permits eligible employees to purchase shares of our common stock through payroll deductions of up to 10% of their eligible compensation,subject to certain limitations. The purchase price of the shares under the ESPP equals 85% of the lower of the fair market value of our common stock on eitherthe first or last day of each six-month offering period. Our ESPP was offered to substantially all employees beginning in August 2018. Compensation expenseis calculated as of the beginning of the offering period as the fair value of the employees' purchase rights utilizing the Black-Scholes option valuation modeland is recognized over the offering period. Assumptions used in the Black-Scholes option valuation model for the offering period beginning August 1, 2018were as follows:Weighted-average grant-date fair value per share$14.55Average expected life in years0.5Weighted-average expected volatility43%Weighted-average risk-free interest rate2.2%Expected dividend yield0.0%Stock-based Compensation ExpenseFor the year ended 2018 2017 2016Stock-based compensation expense by caption Cost of goods sold $83 $88 $76Selling, general, and administrative 61 75 66Research and development 54 52 49 $198 $215 $191 Stock-based compensation expense by type of award Stock options $55 $71 $79Restricted stock awards 140 144 112ESPP 3 — — $198 $215 $191The income tax benefit related to share-based compensation was $158 million, $97 million and $41 million for 2018, 2017 and 2016, respectively. Theincome tax benefits related to share-based compensation for the periods presented prior to the second quarter of 2018 were offset by an increase in the U.S.valuation allowance. Stock-based compensation expense of $19 million and $20 million was capitalized and remained in inventory as of August 30, 2018and August 31, 2017, respectively. As of August 30, 2018, $316 million of total unrecognized compensation costs for unvested awards, before the effect ofany future forfeitures, was expected to be recognized through the fourth quarter of 2022, resulting in a weighted-average period of 1.3 years.70Employee Benefit PlansWe have employee retirement plans at our U.S. and international sites. Details of the more significant plans are discussed as follows:Employee Savings Plan for U.S. EmployeesWe have a 401(k) retirement plan under which U.S. employees may contribute up to 75% of their eligible pay (subject to Internal Revenue Service("IRS") annual contribution limits) to various savings alternatives, none of which include direct investment in our stock. We match in cash eligiblecontributions from employees up to 5% of the employee's annual eligible earnings. Contribution expense for the 401(k) plan was $61 million, $52 million,and $54 million in 2018, 2017, and 2016, respectively.Retirement PlansWe have pension plans in various countries available to local employees which are generally government mandated. As of August 30, 2018, theprojected benefit obligations of our plans were $190 million and plan assets were $171 million. As of August 31, 2017, the projected benefit obligations ofour plans were $175 million and plan assets were $150 million. Pension expense was not material for 2018, 2017, or 2016.Research and DevelopmentWe share the cost of certain product and process development activities with development partners. Our R&D expenses were reduced by reimbursementsunder these arrangements by $201 million, $213 million, and $205 million for 2018, 2017, and 2016, respectively.We have agreements to jointly develop NAND and 3D XPoint technologies with Intel. We continue to jointly develop NAND technologies with Intelthrough the third generation of 3D NAND, which is expected to be completed in the second half of 2019. In the second quarter of 2018, we and Intel agreedto independently develop subsequent generations of 3D NAND in order to better optimize the technology and products for our respective business needs. Wecontinue to jointly develop 3D XPoint technologies with Intel through the second generation of 3D XPoint technology, which is expected to be completedin the second half of 2019. To better optimize 3D XPoint technology for our product roadmap and maximize the benefits for our customers and shareholders,in the fourth quarter of 2018, we announced that we will no longer jointly develop with Intel subsequent generations of 3D XPoint technology.Other Operating (Income) Expense, NetFor the year ended 2018 2017 2016(Gain) loss on disposition of property, plant, and equipment $(96) $(22) $(4)Restructure and asset impairments 28 18 67Other 11 5 (2) $(57) $1 $61Restructure and asset impairments in 2018 primarily consisted of costs incurred as a result of our continued emphasis to centralize certain key functions.In 2017, we recognized gains of $15 million related to our sale of assembly and test facility located in Akita, Japan and our 40% ownership interest in TeraProbe; assets associated with our 200mm fabrication facility in Singapore; and assets related to Lexar and also expect to recognize an additional gain ofapproximately $100 million in 2019 upon the completion of the sale of the Singapore facility. We also incurred charges of $33 million and $58 million in2017 and 2016, respectively, related to the elimination of certain projects and programs, workforce reductions in certain areas of our business, and other non-headcount related spending reductions.71Other Non-Operating Income (Expense), NetFor the year ended 2018 2017 2016Loss on debt prepayments, repurchases, and conversions $(385) $(100) $(4)Loss from changes in currency exchange rates (75) (74) (24)Gain on remeasurement of previously-held equity interest in Inotera — 71 —Other (5) (9) (26) $(465) $(112) $(54)In 2016, we recognized other non-operating expense of $30 million to write off indemnification receivables upon the resolution of uncertain taxpositions.Income TaxesOn December 22, 2017, the United States enacted tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "Tax Act") which lowered theU.S. corporate income tax rate from 35% to 21% and significantly affects how income from foreign operations is taxed in the United States. Our U.S. statutoryfederal rate was 25.7% for 2018 (based on the 35% corporate rate through December 31, 2017 and 21% from that date through the end of fiscal year 2018)and will be 21% beginning in 2019. The Tax Act imposed a one-time transition tax in 2018 on accumulated foreign income (the "Repatriation Tax");provided a U.S. federal tax exemption on foreign earnings distributed to the United States after January 1, 2018; and beginning in 2019, created a newminimum tax on certain foreign earnings in excess of a deemed return on tangible assets (the "Foreign Minimum Tax"). The Tax Act allows us to elect to payany Repatriation Tax due in eight annual, interest-free payments in increasing amounts beginning in December 2018. In connection with the provisions ofthe Tax Act, we made an accounting policy election to treat the Foreign Minimum Tax provision as a period cost in the period the tax is incurred.SEC Staff Accounting Bulletin No. 118 ("SAB 118") allows the use of provisional amounts (reasonable estimates) if our analyses of the impacts of theTax Act have not been completed when our financial statements are issued. The provisional amounts below for 2018 represent reasonable estimates of theeffects of the Tax Act for which our analysis is not yet complete. As we complete our analysis of the Tax Act, including collecting, preparing, and analyzingnecessary information, performing and refining calculations, and obtaining additional guidance from the IRS, U.S. Treasury Department, FASB, or otherstandard setting and regulatory bodies on the Tax Act, we may record adjustments to the provisional amounts, which may be material. In accordance withSAB 118, our accounting for the tax effects of the Tax Act will be completed during the measurement period, which should not extend beyond one year fromthe enactment date. At August 30, 2018, there were no provisions for which we were unable to record a reasonable estimate of the impact.72Our income tax (provision) benefit consisted of the following:For the year ended 2018 2017 2016Income (loss) before income taxes, net income (loss) attributable to noncontrollinginterests, and equity in net income (loss) of equity method investees U.S. $141 $(56) $72Foreign 14,166 5,252 (353) $14,307 $5,196 $(281) Income tax (provision) benefit Current U.S. federal $(54) $— $—State 1 (1) (1)Foreign (374) (152) (27) (427) (153) (28)Deferred U.S. federal 232 — 39State 101 — 2Foreign (74) 39 (32) 259 $39 9 Income tax (provision) benefit $(168) $(114) $(19)The table below reconciles our tax (provision) benefit based on the U.S. federal statutory rate to our effective rate:For the year ended 2018 2017 2016U.S. federal income tax (provision) benefit at statutory rate $(3,677) 25.7 % $(1,819) 35.0 % $98 35.0 %Foreign tax rate differential 2,572 (18.0)% 1,571 (30.2)% (300) (106.8)%Repatriation Tax related to the Tax Act (1,049) 7.3 % — — % — — %Remeasurement of deferred tax assets and liabilities related to theTax Act (179) 1.3 % — — % — — %Change in valuation allowance 2,079 (14.5)% 64 (1.2)% 63 22.4 %Change in unrecognized tax benefits 60 (0.4)% 12 (0.2)% 52 18.5 %Tax credits 90 (0.6)% 66 (1.3)% 48 17.1 %Other (64) 0.4 % (8) 0.1 % 20 7.0 %Income tax (provision) benefit $(168) 1.2 % $(114) 2.2 % $(19) (6.8)%Provisional estimates for 2018 in the table above included $1.34 billion of benefit for the release of the valuation allowance on the net deferred taxassets of our U.S. operations and $1.03 billion of provision for the Repatriation Tax, net of adjustments related to uncertain tax positions.We operate in a number of tax jurisdictions outside the United States, including Singapore, where we have tax incentive arrangements, which expire inwhole or in part at various dates through 2031, that are conditional, in part, upon meeting certain business operations and employment thresholds. The effectof tax incentive arrangements reduced our tax provision by $1.96 billion (benefiting our diluted earnings per share by $1.59) for 2018, by $742 million($0.64 per diluted share) for 2017, and were not material in 2016.Provision has been recognized for deferred taxes on undistributed earnings of non-U.S. subsidiaries to the extent that dividend payments from suchcompanies are expected to result in additional tax liabilities. As a result of the Repatriation Tax, substantially all of our accumulated foreign earnings prior toDecember 31, 2017 were subject to U.S. federal taxation. Although these earnings have been subject to U.S. federal income tax under the Repatriation Tax,the repatriation to the United States of all or a portion of these earnings would potentially be subject to foreign withholding and state income tax. As ofAugust 30, 2018, we had a deferred tax liability of $82 million associated with our undistributed earnings. As of August 30,732018, certain non-U.S. subsidiaries had cumulative undistributed earnings of $2.35 billion that were deemed to be indefinitely reinvested. Determination ofthe amount of unrecognized deferred tax liabilities related to investments in these foreign subsidiaries is not practicable.Deferred income taxes reflect the net tax effects of temporary differences between the bases of assets and liabilities for financial reporting and income taxpurposes as well as carryforwards. Deferred tax assets and liabilities consist of the following:As of 2018 2017Deferred tax assets Net operating loss and tax credit carryforwards $1,417 $3,426Accrued salaries, wages, and benefits 163 211Other accrued liabilities 35 59Other 80 86Gross deferred tax assets 1,695 3,782Less valuation allowance (228) (2,321)Deferred tax assets, net of valuation allowance 1,467 1,461 Deferred tax liabilities Debt discount (77) (145)Property, plant, and equipment (173) (300)Unremitted earnings on certain subsidiaries (82) (123)Product and process technology (62) (85)Other (54) (59)Deferred tax liabilities (448) (712) Net deferred tax assets $1,019 $749 Reported as Deferred tax assets $1,022 $766Deferred tax liabilities (included in other noncurrent liabilities) (3) (17)Net deferred tax assets $1,019 $749We assess positive and negative evidence for each jurisdiction to determine whether it is more likely than not that existing deferred tax assets will berealized. As of August 30, 2018 and August 31, 2017, we had a valuation allowance of $28 million and $1.52 billion, respectively, against U.S. net deferredtax assets, primarily related to net operating loss and tax credit carryforwards. Income taxes on U.S. operations for 2017 and 2016 were substantially offset bychanges in the valuation allowance. We had valuation allowances against net deferred tax assets, primarily related to net operating loss carryforwards, for oursubsidiaries in Japan and for our other foreign subsidiaries, of $192 million and $8 million, respectively, as of August 30, 2018, and $627 million and $172million, respectively, as of August 31, 2017. Changes in 2018 in the valuation allowance were due to the provisional estimate for the release of the valuationallowance in the U.S. as a result of the Tax Act, adjustments based on management's assessment of foreign net operating losses that are more likely than not tobe realized, and changes in foreign currency. As a result of internal restructuring during the year, we have concluded that the possibility of utilizing certain ofour net operating loss carryovers are now remote. As such, we have removed $119 million of deferred tax assets that were previously fully reserved with avaluation allowance.74As of August 30, 2018, our federal, state, and foreign net operating loss carryforward amounts and expiration periods, as reported to tax authorities, wereas follows:Year of Expiration U.S. Federal State Japan Taiwan Other Foreign Total2019 - 2023 $— $28 $1,782 $711 $2 $2,5232024 - 2028 — 136 536 3 — 6752029 - 2033 — 407 — — — 4072034 - 2038 10 84 — — — 94Indefinite — 1 — 622 38 661 $10 $656 $2,318 $1,336 $40 $4,360As of August 30, 2018, our federal and state tax credit carryforward amounts and expiration periods, as reported to tax authorities, were as follows:Year of Tax Credit Expiration U.S. Federal State Total2019 - 2023 $122 $63 $1852024 - 2028 44 46 902029 - 2033 69 90 1592034 - 2038 275 3 278Indefinite — 62 62 $510 $264 $774Below is a reconciliation of the beginning and ending amount of our unrecognized tax benefits:For the year ended 2018 2017 2016Beginning unrecognized tax benefits $327 $304 $351Increases due to the Inotera Acquisition — 54 —Increases related to tax positions taken in current year 68 15 5Foreign currency translation increases (decreases) to tax positions — 2 —Settlements with tax authorities (8) (47) (47)Expiration of statute of limitations — (1) (5)Decreases related to tax positions from prior years (126) — —Ending unrecognized tax benefits $261 $327 $304The changes in uncertain tax positions in 2018 are primarily related to the Tax Act and transfer pricing. In connection with the Inotera Acquisition in2017, we assumed $54 million of uncertain tax positions. The decreases to unrecognized tax benefits in 2017 and 2016 from settlements with tax authoritieswere primarily related to the favorable resolution of certain tax matters.As of August 30, 2018, we had $256 million of unrecognized tax benefits that would, if recognized, affect our effective tax rate. The amount accrued forinterest and penalties related to uncertain tax positions was not material for any period presented. The resolution of tax audits or expiration of statute oflimitations could also reduce our unrecognized tax benefits. Although the timing of final resolution is uncertain, the estimated potential reduction in ourunrecognized tax benefits in the next 12 months would not be material.We and our subsidiaries file income tax returns with the U.S. federal government, various U.S. states, and various foreign jurisdictions throughout theworld. Our U.S. federal and state tax returns remain open to examination for 2014 through 2018. In addition, tax returns that remain open to examination inJapan range from the years 2012 to 2018 and in Singapore and Taiwan from 2013 to 2018. We believe that adequate amounts of taxes and related interest andpenalties have been provided, and any adjustments as a result of examinations are not expected to materially adversely affect our business, results ofoperations, or financial condition.75Earnings Per ShareFor the year ended 2018 2017 2016Net income (loss) attributable to Micron – Basic and Diluted $14,135 $5,089 $(276) Weighted-average common shares outstanding – Basic 1,152 1,089 1,036Dilutive effect of equity plans and convertible notes 77 65 —Weighted-average common shares outstanding – Diluted 1,229 1,154 1,036 Earnings (loss) per share Basic $12.27 $4.67 $(0.27)Diluted 11.51 4.41 (0.27)Listed below are the potential common shares, as of the end of the periods shown, that could dilute basic earnings per share in the future that were notincluded in the computation of diluted earnings per share because to do so would have been antidilutive:For the year ended 2018 2017 2016Equity plans 3 21 60Convertible notes — 26 119Segment InformationSegment information reported herein is consistent with how it is reviewed and evaluated by our chief operating decision maker. We have the followingfour business units, which are our reportable segments:Compute and Networking Business Unit ("CNBU"): Includes memory products sold into cloud server, enterprise, client, graphics, and networking markets.Mobile Business Unit ("MBU"): Includes memory products sold into smartphone and other mobile-device markets.Storage Business Unit ("SBU"): Includes SSDs and component-level solutions sold into enterprise and cloud, client, and consumer SSD markets, otherdiscrete storage products sold in component and wafer forms to the removable storage markets, and sales of 3D XPoint memory.Embedded Business Unit ("EBU"): Includes memory and storage products sold into automotive, industrial, and consumer markets.Certain operating expenses directly associated with the activities of a specific segment are charged to that segment. Other indirect operating income andexpenses are generally allocated to segments based on their respective percentage of cost of goods sold or forecasted wafer production. We do not identify orreport internally our assets (other than goodwill) or capital expenditures by segment, nor do we allocate gains and losses from equity method investments,interest, other non-operating income or expense items, or taxes to segments. As of August 30, 2018 and August 31, 2017, CNBU, MBU, SBU, and EBU hadgoodwill of $832 million, $198 million, $101 million, and $97 million, respectively.76For the year ended 2018 2017 2016Net sales CNBU $15,252 $8,624 $4,529MBU 6,579 4,424 2,569SBU 5,022 4,514 3,262EBU 3,479 2,695 1,939All Other 59 65 100 $30,391 $20,322 $12,399 Operating income (loss) CNBU $9,773 $3,755 $(25)MBU 3,033 927 97SBU 964 552 (123)EBU 1,473 975 473All Other — 23 28 $15,243 $6,232 $450 Unallocated Stock-based compensation $(198) $(215) $(191)Restructure and asset impairments (28) (18) (67)Flow-through of Inotera inventory step up — (107) —Other (23) (24) (24) $(249) $(364) $(282) Operating income $14,994$5,868 $168Depreciation and amortization expense included in operating income was as follows:For the year ended 2018 2017 2016CNBU $1,755 $1,344 $1,141MBU 1,077 926 580SBU 1,295 1,083 844EBU 603 484 379All Other 18 13 20Unallocated 11 11 16 $4,759 $3,861 $2,980Product SalesFor the year ended 2018 2017 2016DRAM $21,232 $12,963 $7,207Trade NAND 7,843 6,228 4,138Non-Trade 554 553 501Other 762 578 553 $30,391 $20,322 $12,399Non-Trade consists primarily of NAND and 3D XPoint memory products manufactured and sold to Intel through IMFT under a long-term supplyagreement at prices approximating cost. Information regarding products that combine both NAND and DRAM components is reported within Trade NAND.Other includes sales of NOR and trade 3D XPoint memory products.77Certain ConcentrationsMarkets with concentrations of net sales were approximately as follows:For the year ended 2018 2017 2016Compute and graphics 25% 20% 20%Server 25% 15% 10%Mobile 20% 20% 20%SSDs and other storage 15% 20% 20%Automotive, industrial, medical, and other embedded 10% 15% 15%Sales to Kingston Technology Company, Inc. ("Kingston"), as a percentage of total net sales, were 10% for 2018 and 2017. Sales to Intel, including Non-Trade sales through IMFT, as a percentage of total net sales, were 14% for 2016 and no other customer exceeded 10% of our total net sales. Our sales toKingston were included in our CNBU, SBU, and MBU segments and substantially all of our sales to Intel were included in our SBU and CNBU segments.We generally have multiple sources of supply for our raw materials and production equipment; however, only a limited number of suppliers are capableof delivering certain raw materials and production equipment that meet our standards and, in some cases, materials or production equipment are provided bya single supplier.Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash, money market accounts, certificates ofdeposit, fixed-rate debt securities, trade receivables, share repurchase, capped call, and derivative contracts. We invest through high-credit-quality financialinstitutions and, by policy, generally limit the concentration of credit exposure by restricting investments with any single obligor and monitoring credit riskof bank counterparties on an ongoing basis. A concentration of credit risk may exist with respect to receivables of certain customers. We perform ongoingcredit evaluations of customers worldwide and generally do not require collateral from our customers. Historically, we have not experienced material losseson receivables. A concentration of risk may also exist with respect to our foreign currency hedges as the number of counterparties to our hedges is limited andthe notional amounts are relatively large. We seek to mitigate such risk by limiting our counterparties to major financial institutions and through enteringinto master netting arrangements. Share repurchase and capped call agreements expose us to credit risk to the extent the counterparties may be unable to meetthe terms of the agreements. We seek to mitigate such risk by limiting our counterparties to major financial institutions and by spreading the risk acrossseveral major financial institutions. In addition, the potential risk of loss with any one counterparty resulting from this type of credit risk is monitored on anongoing basis.Geographic InformationGeographic net sales based on customer ship-to location were as follows:For the year ended 2018 2017 2016China $17,357 $10,388 $5,301United States 3,624 2,763 1,925Taiwan 2,798 2,544 1,521Other Asia Pacific 2,559 1,808 1,610Europe 2,128 1,360 937Japan 1,254 1,025 831Other 671 434 274 $30,391 $20,322 $12,39978Net property, plant, and equipment by geographic area was as follows:As of 2018 2017Taiwan $7,640 $6,519Singapore 6,933 5,261United States 5,113 4,253Japan 3,451 2,827China 398 453Other 137 118 $23,672 $19,431Quarterly Financial Information (Unaudited)(in millions except per share amounts)2018 Fourth Quarter Third Quarter Second Quarter First QuarterNet sales $8,440 $7,797 $7,351 $6,803Gross margin 5,151 4,723 4,270 3,747Operating income 4,377 3,953 3,567 3,097Net income 4,326 3,823 3,311 2,678Net income attributable to Micron 4,325 3,823 3,309 2,678 Earnings per share Basic $3.73 $3.30 $2.86 $2.36Diluted 3.56 3.10 2.67 2.192017 Fourth Quarter Third Quarter Second Quarter First QuarterNet sales $6,138 $5,566 $4,648 $3,970Gross margin 3,112 2,609 1,704 1,011Operating income 2,502 1,963 1,044 359Net income 2,369 1,647 894 180Net income attributable to Micron 2,368 1,647 894 180 Earnings per share Basic $2.13 $1.49 $0.81 $0.17Diluted 1.99 1.40 0.77 0.1679Report of Independent Registered Public Accounting FirmTo the Shareholders and Board of Directors of Micron Technology, Inc.:Opinions on the Financial Statements and Internal Control over Financial ReportingWe have audited the accompanying consolidated balance sheets of Micron Technology, Inc. and its subsidiaries as of August 30, 2018 and August 31, 2017,and the related consolidated statements of operations, comprehensive income (loss), changes in equity and cash flows for each of the three years in the periodended August 30, 2018, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended August30, 2018 appearing under Item 15(a)(2) (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internalcontrol over financial reporting as of August 30, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by theCommittee of Sponsoring Organizations of the Treadway Commission (COSO).In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as ofAugust 30, 2018 and August 31, 2017, and the results of their operations and their cash flows for each of the three years in the period ended August 30, 2018in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all materialrespects, effective internal control over financial reporting as of August 30, 2018, based on criteria established in Internal Control - Integrated Framework(2013) issued by the COSO. Basis for OpinionsThe Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, andfor its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over FinancialReporting appearing under Item 9A. Our responsibility is to express opinions on the Company's consolidated financial statements and on the Company'sinternal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting OversightBoard (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and theapplicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internalcontrol over financial reporting was maintained in all material respects.Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financialstatements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis,evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles usedand significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internalcontrol over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weaknessexists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performingsuch other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.Definition and Limitations of Internal Control over Financial ReportingA company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal controlover financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.80Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate./s/ PricewaterhouseCoopers LLPSan Jose, CaliforniaOctober 15, 2018We have served as the Company's auditor since 1984.81ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIALDISCLOSURENone.ITEM 9A. CONTROLS AND PROCEDURESAn evaluation was carried out under the supervision and with the participation of our management, including our principal executive officer andprincipal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, the principal executiveofficer and principal financial officer concluded that those disclosure controls and procedures were effective to ensure that information required to bedisclosed by us in the reports that we file or submit under the Exchange Act are recorded, processed, summarized, and reported within the time periodsspecified in the Commission's rules and forms and that such information is accumulated and communicated to our management, including the principalexecutive officer and principal financial officer, to allow timely decision regarding disclosure.During the fourth quarter of 2018, there were no changes in our internal control over financial reporting that have materially affected, or are reasonablylikely to materially affect, our internal control over financial reporting.Management's Report on Internal Control over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financialreporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with accounting principles generally accepted in the United States of America. Our internal control over financial reportingincludes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately reflect the transactions anddispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations ofour management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, ordisposition of our assets that could have a material effect on our financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluationof effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control –Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, managementconcluded that our internal control over financial reporting was effective as of August 30, 2018. The effectiveness of our internal control over financialreporting as of August 30, 2018 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report,which is included in Part II, Item 8, of this Form 10-K.ITEM 9B. OTHER INFORMATIONNone.82PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCEITEM 11. EXECUTIVE COMPENSATIONITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATEDSTOCKHOLDER MATTERSITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESCertain information concerning our executive officers is included under the caption, "Directors and Executive Officers of the Registrant," in Part I, Item 1of this report. Other information required by Items 10, 11, 12, 13, and 14 will be contained in our Proxy Statement which will be filed with the Securities andExchange Commission within 120 days after August 30, 2018 and is incorporated herein by reference.83PART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a) The following documents are filed as part of this report:1.Financial Statements: See Index to Consolidated Financial Statements under Item 8.2.Financial Statement Schedule:Schedule II – Valuation and Qualifying AccountsCertain Financial Statement Schedules have been omitted since they are either not required, not applicable, or the information is otherwise included.3.Exhibits.84SCHEDULE IIVALUATION AND QUALIFYING ACCOUNTS(in millions)MICRON TECHNOLOGY, INC. Balance atBeginning ofYear BusinessAcquisitions Charged(Credited) toIncome TaxProvision CurrencyTranslationand Chargesto OtherAccounts Balance atEnd ofYearDeferred Tax Asset Valuation Allowance Year ended August 30, 2018$2,321 $— $(2,079) $(14) $228Year ended August 31, 20172,107 — (64) 278 2,321Year ended September 1, 20162,051 10 (63) 109 2,107Amounts charged to other accounts for the year ended August 31, 2017 includes $325 million as a result of the adoption of ASU 2016-09 –Improvements to Employee Share-Based Payment Accounting.853. Exhibits.ExhibitNumberDescription of ExhibitFiledHerewithFormPeriodEndingExhibit/AppendixFiling Date2.1*English Translation of Agreement on Support for Reorganization Companieswith Nobuaki Kobayashi and Yukio Sakamoto, the trustees of ElpidaMemory, Inc. and its wholly-owned subsidiary, Akita Elpida Memory, Inc.dated July 2, 2012 8-K/A 2.110/31/122.2*English Translation of Agreement Amending Agreement on Support forReorganization Companies, dated October 29, 2012, by and among MicronTechnology, Inc. and Nobuaki Kobayashi and Yukio Sakamoto, the trusteesof Elpida Memory, Inc. and Akita Elpida Memory, Inc. 8-K 2.310/31/122.3*English Translation of Agreement Amending Agreement on Support forReorganization Companies, dated July 31, 2013, by and among MicronTechnology, Inc. and Nobuaki Kobayashi and Yukio Sakamoto, the trusteesof Elpida Memory, Inc. and Akita Elpida Memory, Inc. 8-K 2.48/6/132.4English Translation of the Reorganization Plan of Elpida Memory, Inc. 8-K 2.58/6/132.52016 Share Swap Agreement, dated February 3, 2016 by and among MicronTechnology B.V., Micron Semiconductor Taiwan Co. Ltd. and InoteraMemories, Inc. 10-Q3/3/162.64/8/163.1Restated Certificate of Incorporation of the Registrant 8-K 99.21/26/153.2Bylaws of the Registrant, Amended and Restated 8-K 99.14/15/144.1Indenture dated as of April 18, 2012, by and between Micron Technology,Inc. and U.S. Bank National Association, as Trustee for 2.375% ConvertibleSenior Notes due 2032 8-K 4.14/18/124.2Indenture dated as of April 18, 2012, by and between Micron Technology,Inc. and U.S. Bank National Association, as Trustee for 3.125% ConvertibleSenior Notes due 2032 8-K 4.34/18/124.3Form of 2032C Note (included in Exhibit 4.1) 8-K 4.14/18/124.4Form of 2032D Note (included in Exhibit 4.2) 8-K 4.34/18/124.5Indenture, dated as of February 12, 2013, by and between MicronTechnology, Inc. and U.S. Bank National Association, as trustee 8-K 4.12/12/134.6Indenture, dated as of February 12, 2013, by and between MicronTechnology, Inc. and U.S. Bank National Association, as trustee 8-K 4.32/12/134.7Form of 2033E Note (included in Exhibit 4.5) 8-K 4.12/12/134.8Form of 2033F Note (included in Exhibit 4.6) 8-K 4.32/12/134.9Indenture, dated as of November 12, 2013, by and between MicronTechnology, Inc. & U.S. Bank National Association 8-K 4.111/18/134.10Form of New Note (included in Exhibit 4.9) 8-K 4.111/18/134.11Indenture dated as of December 16, 2013, by and among MicronSemiconductor Asia Pte., Ltd., Wells Fargo Bank, National Association, andExport-Import Bank of the United States 10-Q2/27/144.34/7/144.12Indenture, dated as of July 28, 2014, by and between Micron Technology, Inc.and U.S. Bank National Association, as Trustee 8-K 4.17/29/144.13Form of Note (included in Exhibit 4.12) 8-K 4.17/29/144.14Section 382 Rights Agreement, dated as of July 20, 2016 by and betweenMicron Technology, Inc. and Wells Fargo Bank, National Association, asrights agent 8-K 4.17/22/1686ExhibitNumberDescription of ExhibitFiledHerewithFormPeriodEndingExhibit/AppendixFiling Date10.1Micron Technology, Inc. Executive Officer Performance Incentive Plan DEF 14A B12/7/1710.22004 Equity Incentive Plan, as Amended and Restated 10-K9/1/1610.610/28/1610.32004 Equity Incentive Plan Forms of Agreement and Terms and Conditions 10-K9/1/1610.710/28/1610.4Amended and Restated 2007 Equity Incentive Plan 10-K9/1/1610.810/28/1610.52007 Equity Incentive Plan Forms of Agreement 10-K9/1/1610.910/28/1610.6Nonstatutory Stock Option Plan, as Amended 10-K9/1/1610.1010/28/1610.7Nonstatutory Stock Option Plan Form of Agreement and Terms andConditions 10-K9/1/1610.1110/28/1610.8Numonyx Holdings B.V. Equity Incentive Plan S-8 4.16/16/1010.9Numonyx Holdings B.V. Equity Incentive Plan Forms of Agreement S-8 4.26/16/1010.10*Patent License Agreement dated September 15, 2006, by and among ToshibaCorporation, Acclaim Innovations, LLC and Micron Technology, Inc. 10-Q11/30/0610.661/16/0710.11Form of Indemnification Agreement between the Registrant and its officersand directors 10-Q2/27/1410.34/7/1410.12*Master Agreement dated as of November 18, 2005, between MicronTechnology, Inc. and Intel Corporation 10-Q12/1/0510.1551/10/0610.13Form of Severance Agreement 8-K 99.211/1/0710.14Share Purchase Agreement by and among Micron Technology, Inc. as theBuyer Parent, Micron Semiconductor B.V., as the Buyer, Qimonda Ag as theSeller Parent and Qimonda Holding B.V., as the Seller Sub dated as ofOctober 11, 2008 10-Q12/4/0810.701/13/0910.15*2012 Master Agreement by and among Intel Corporation, Intel TechnologyAsia PTE LTD, Micron Technology, Inc., Micron Semiconductor Asia PTELTD, IM Flash Technologies, LLC and IM Flash Singapore, LLP datedFebruary 27, 2012 10-Q3/1/1210.1044/9/1210.16*Second Amended and Restated Limited Liability Company OperatingAgreement of IM Flash Technologies, LLC dated April 6, 2012, betweenMicron Technology, Inc. and Intel Corporation 10-Q5/31/1210.1087/9/1210.17*Amendment to the Master Agreement dated April 6, 2012, between IntelCorporation and Micron Technology, Inc. 10-Q5/31/1210.1097/9/1210.18*Amended and Restated Supply Agreement dated April 6, 2012, between IntelCorporation and IM Flash Technologies, LLC 10-Q5/31/1210.1107/9/1210.19*Amended and Restated Supply Agreement dated April 6, 2012, betweenMicron Technology, Inc. and IM Flash Technologies, LLC 10-Q5/31/1210.1117/9/1210.20*Product Supply Agreement dated April 6, 2012, among Micron Technology,Inc., Intel Corporation and Micron Semiconductor Asia Pte. Ltd. 10-Q5/31/1210.1127/9/1210.21*Wafer Supply Agreement dated April 6, 2012, among Micron Technology,Inc., Intel Corporation and Micron Semiconductor Asia Pte. Ltd. 10-Q5/31/1210.1137/9/1210.22Form of Capped Call Confirmation dated April 2012 8-K 10.14/18/1210.23*Supply Agreement, dated January 17, 2013, by and among MicronTechnology, Inc., Micron Semiconductor Asia Pte. Ltd. and Inotera Memories,Inc. 10-Q2/28/1310.1224/8/1387ExhibitNumberDescription of ExhibitFiledHerewithFormPeriodEndingExhibit/AppendixFiling Date10.24*Facilitation Agreement, dated January 17, 2013, by and among MicronSemiconductor B.V., Numonyx Holdings B.V., Micron Technology AsiaPacific, Inc., Nanya Technology Corporation and Inotera Memories, Inc. 10-Q2/28/1310.1244/8/1310.25Micron Guaranty Agreement, dated January 17, 2013, by Micron Technology,Inc. in favor of Nanya Technology Corporation 10-Q2/28/1310.1254/8/1310.26*Technology Transfer and License Option Agreement for 20NM Process Node,dated January 17, 2013, by and between Micron Technology, Inc. and NanyaTechnology Corporation 10-Q/A2/28/1310.1268/7/1310.27*Omnibus IP Agreement, dated January 17, 2013, by and between NanyaTechnology Corporation and Micron Technology, Inc. 10-Q2/28/1310.1274/8/1310.28*Second Amended and Restated Technology Transfer and License Agreementfor 68-50NM Process Nodes, dated January 17, 2013, by and between MicronTechnology, Inc. and Nanya Technology Corporation 10-Q/A2/28/1310.1288/7/1310.29*Third Amended and Restated Technology Transfer and License Agreement,dated January 17, 2013, by and between Micron Technology, Inc. and NanyaTechnology Corporation 10-Q2/28/1310.1294/8/1310.30*Omnibus IP Agreement, dated January 17, 2013, by and between MicronTechnology, Inc. and Inotera Memories, Inc. 10-Q2/28/1310.1304/8/1310.31*English Translation of Front-End Manufacturing Supply Agreement, datedJuly 31, 2013, by and between Micron Semiconductor Asia Pte. Ltd. andElpida Memory, Inc. 8-K/A 10.13910/2/1310.32*English Translation of Research and Development Engineering ServicesAgreement, dated July 31, 2013, by and between Micron Technology, Inc.and Elpida Memory, Inc. 8-K 10.1408/6/1310.33*English Translation of General Services Agreement, dated July 31, 2013, byand between Micron Semiconductor Asia Pte. Ltd. and Elpida Memory, Inc. 8-K/A 10.14110/2/1310.34Form of Capped Call Confirmation dated February 2013 8-K 10.12/12/1310.35Purchase Agreement, dated as of February 5, 2014, by and among MicronTechnology, Inc. and Morgan Stanley & Co. LLC, Goldman, Sachs & Co. andCredit Suisse Securities (USA) LLC, as representatives of the initial purchasers 8-K 10.12/7/1410.36Purchase Agreement, dated as of July 23, 2014, by and among MicronTechnology, Inc. and Morgan Stanley & Co LLC, Goldman, Sachs & Co. andCredit Suisse Securities (USA) LLC, as representatives of the initial purchasers 8-K 10.17/24/1410.37Registration Rights Agreement dated as of July 28, 2014, by and amongMicron Technology, Inc. and Morgan Stanley & Co. LLC, Goldman, Sachs &Co. and Credit Suisse Securities (USA) LLC, as representatives of the initialpurchasers 8-K 10.17/29/1410.38Facility Agreement, dated February 12, 2015, among Micron SemiconductorAsia Pte. Ltd., as borrower, certain financial institutions party thereto, and TheHongkong and Shanghai Banking Corporation Limited, as facility agent,security agent and account bank 10-Q3/5/1510.884/10/1510.39*2015 Supply Agreement, dated February 10, 2015, by and among MicronTechnology, Inc., Micron Semiconductor Asia Pte. Ltd. and Inotera Memories,Inc. 10-Q3/5/1510.904/10/1510.40*2016 Supply Agreement, dated February 10, 2015, by and among MicronTechnology, Inc., Micron Semiconductor Asia Pte. Ltd. and Inotera Memories,Inc. 10-Q3/5/1510.914/10/1510.41*Second Amended and Restated Supply Agreement, dated February 10, 2017,by and among Micron Technology, Inc., Intel Corporation and MicronSemiconductor Asia Pte. Ltd. 10-Q3/2/1710.493/28/1788ExhibitNumberDescription of ExhibitFiledHerewithFormPeriodEndingExhibit/AppendixFiling Date10.42*Amended and Restated Supplemental Wafer Supply Agreement, datedFebruary 10, 2017, by and among Micron Technology, Inc., Intel Corporationand Micron Semiconductor Asia Pte. Ltd. 10-Q3/2/1710.503/28/1710.43*Amended and Restated Wafer Supply Agreement No. 3 dated, February 10,2017, by and among Micron Technology, Intel Corporation and MicronSemiconductor Asia Pte. Ltd. 10-Q3/2/1710.513/28/1710.44*First Amendment to the Wafer Supply Agreement, dated September 1, 2015,by and among Micron Technology, Inc., Intel Corporation and MicronSemiconductor Asia Pte. Ltd. 10-K9/3/1510.5410/27/1510.45Purchase Agreement, dated as of April 27, 2015, by and among MicronTechnology, Inc. and Morgan Stanley & Co. LLC, Goldman, Sachs & Co. andCredit Suisse Securities (USA) LLC, as representatives of the initial purchasers 8-K 10.14/30/1510.46*2016 Technology Transfer and License Option Agreement for 1X ProcessNode dated as of February 3, 2016 by and between Micron Technology, Inc.and Nanya Technology Corporation 10-Q/A3/3/1610.569/8/1610.47*2016 Technology Transfer and License Option Agreement for 1Y ProcessNode dated as of February 3, 2016 by and between Micron Technology, Inc.and Nanya Technology Corporation 10-Q/A3/3/1610.579/8/1610.48Form of Voting and Support Agreement by and among Micron TechnologyB.V., Micron Semiconductor Taiwan Co. Ltd., and Nanya TechnologyCorporation and certain of its affiliates 10-Q3/3/1610.584/8/1610.492016 First Amendment to the Second Amended and Restated OperatingAgreement dated January 5, 2016 by and among Micron Technology, Inc. andIntel Corporation 10-Q3/3/1610.594/8/1610.50*Amendment to Technology Transfer and License Option Agreement for 1XProcess Node dated as of May 17, 2016 by and between Micron TechnologyInc. and Nanya Technology Corporation 10-Q6/2/1610.607/6/1610.51*Amendment to Technology Transfer and License Option Agreement for 1YProcess Node dated as of May 17, 2016 by and between Micron TechnologyInc. and Nanya Technology Corporation 10-Q6/2/1610.617/6/1610.52Credit Agreement, dated as of April 26, 2016, by and among MicronTechnology, Inc., as borrower, Morgan Stanley Senior Funding, Inc. asadministrative agent and collateral agent, and the other agents party theretoand each financial institution party from time to time thereto 8-K 10.24/26/1610.53Guarantee and Collateral Agreement, dated as of April 26, 2016, made byMicron Technology, Inc. and certain of its subsidiaries in favor of MorganStanley Senior Funding, Inc., as collateral agent 8-K 10.34/26/1610.54Deferred Compensation Plan 10-Q5/31/1810.646/22/1810.55First Amendment to the Credit Agreement, dated April 26, 2016, by andamong Micron Technology, Inc., as borrower, Morgan Stanley SeniorFunding, Inc. as administrative agent and collateral agent, and the otheragents party thereto and each financial institution party from time to timethereto 10-Q12/1/1610.651/9/1710.56English translation of Facility Agreement dated November 18, 2016, by andamong Micron Semiconductor Asia Capital II Pte. Ltd., certain financialinstitutions party thereto and DBS Bank Ltd., as Facility Agent, SecurityAgent and Account Bank 10-Q12/1/1610.661/9/1710.57Executive Agreement dated April 26, 2017 by and between MicronTechnology, Inc. and Sanjay Mehrotra 10-Q6/1/1710.676/30/1789ExhibitNumberDescription of ExhibitFiledHerewithFormPeriodEndingExhibit/AppendixFiling Date10.58Second Amendment to the Credit Agreement, dated April 26, 2016, by andamong Micron Technology, Inc., as borrower, Morgan Stanley SeniorFunding, Inc. as administrative agent and collateral agent, and the otheragents party thereto and each financial institution party from time to timethereto 10-Q6/1/1710.686/30/1710.59Severance Benefits for Sumit Sadana 10-Q11/30/1710.7012/20/1710.60Second Amendment to the Amended and Restated Severance Agreementeffective July 24, 2017 by and between Micron Technology, Inc. and D. MarkDurcan 10-K8/31/1710.7110/26/1710.61Form of Amendment to Executive/Severance Agreement 8-K 99.111/13/1710.62Third Amendment to the Credit Agreement, dated April 26, 2016, by andamong Micron Technology, Inc., as borrower, Morgan Stanley SeniorFunding, Inc., as administrative agent and collateral agent, and the otheragents party thereto and each financial institution party from time to timethereto 10-Q11/30/1710.7312/20/1710.63Severance Benefits for Manish Bhatia 10-Q11/30/1710.7412/20/1710.64Underwriting Agreement, dated as of October 11, 2017, by and betweenMicron Technology, Inc. and J.P. Morgan Securities LLC 8-K 1.110/16/1710.65Micron Technology, Inc. Employee Stock Purchase Plan DEF 14A A12/7/1710.66Severance Benefits for David A. Zinsner 10-Q3/1/1810.763/23/1810.67Fourth Amendment to the Credit Agreement, dated April 26, 2016, by andamong Micron Technology, Inc., as borrower, Morgan Stanley SeniorFunding, Inc., as administrative agent and collateral agent, and the otheragents party thereto and each financial institution party from time to timethereto 10-Q5/31/1810.776/22/1810.68Credit Agreement, dated as of July 3, 2018, by and among MicronTechnology, Inc., as borrower, JPMorgan Chase Bank, N.A., as administrativeagent and collateral agent, and the other agents party thereto and eachfinancial institution party from time to time theretoX 10.69Guarantee and Collateral Agreement, dated as of July 3, 2018, made byMicron Technology, Inc. and certain of its subsidiaries in favor of JPMorganChase Bank, N.A., as collateral agentX 21.1Subsidiaries of the RegistrantX 23.1Consent of Independent Registered Public Accounting FirmX 31.1Rule 13a-14(a) Certification of Chief Executive OfficerX 31.2Rule 13a-14(a) Certification of Chief Financial OfficerX 32.1Certification of Chief Executive Officer Pursuant to 18 U.S.C. 1350X 32.2Certification of Chief Financial Officer Pursuant to 18 U.S.C. 1350X 101.INSXBRL Instance DocumentX 101.SCHXBRL Taxonomy Extension Schema DocumentX 101.CALXBRL Taxonomy Extension Calculation Linkbase DocumentX 101.DEFXBRL Taxonomy Extension Definition Linkbase DocumentX 101.LABXBRL Taxonomy Extension Label Linkbase DocumentX 101.PREXBRL Taxonomy Extension Presentation Linkbase DocumentX * Portions of this exhibit have been omitted pursuant to a request for confidential treatment filed with the Commission.90ITEM 16. 10-K SUMMARYNone.91SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized, in the City of Boise, State of Idaho, on the 15th day of October 2018. Micron Technology, Inc. By:/s/ David A. Zinsner David A. ZinsnerSenior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons on behalf ofthe Registrant and in the capacities and on the dates indicated.SignatureTitleDate /s/ Sanjay MehrotraPresident andOctober 15, 2018(Sanjay Mehrotra)Chief Executive Officer and Director (Principal Executive Officer) /s/ David A. ZinsnerSenior Vice President andOctober 15, 2018(David A. Zinsner)Chief Financial Officer (Principal Financial and Accounting Officer) /s/ Robert L. BaileyDirectorOctober 15, 2018(Robert L. Bailey) /s/ Richard M. BeyerDirectorOctober 15, 2018(Richard M. Beyer) /s/ Patrick J. ByrneDirectorOctober 15, 2018(Patrick J. Byrne) /s/ Mercedes JohnsonDirectorOctober 15, 2018(Mercedes Johnson) /s/ Lawrence N. MondryDirectorOctober 15, 2018(Lawrence N. Mondry) /s/ Robert E. SwitzChairman of the BoardOctober 15, 2018(Robert E. Switz)Director 92EXHIBIT 10.68CREDIT AGREEMENTamongMICRON TECHNOLOGY, INC.,as BorrowerandTHE LENDERS PARTY HERETO,andJPMORGAN CHASE BANK, N.A.,as Administrative Agent and as Collateral AgentDated as of July 3, 2018JPMORGAN CHASE BANK, N.A.andHSBC SECURITIES (USA) INC.as Joint BookrunnersJPMORGAN CHASE BANK, N.A.,HSBC SECURITIES (USA) INC.,BNP PARIBAS SECURITIES CORP.,CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK,MIZUHO BANK, LTD.,DBS BANK, LTD.,OVERSEA-CHINESE BANKING CORPORATION LIMITED,CITIBANK, N.A.,INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED, NEW YORK BRANCH,andMUFG BANK, LTD.as Joint Lead ArrangersTABLE OF CONTENTS PageSECTION 1 DEFINITIONS11.1.Defined Terms11.2.Other Definitional Provisions241.3.Delivery of Notices24SECTION 2THE CREDITS242.1.Revolving Commitments242.2.Revolving Loans and Borrowing242.3.Requests for Revolving Borrowings252.4.Documentary Credits252.5.Funding of Borrowings282.6.RESERVED292.7.Termination and Reduction of Revolving Commitments292.8.Repayment of Loans; Evidence of Debt292.9.Interest Rates and Payment Dates302.10.Computation of Interest and Fees302.11.Inability to Determine Interest Rate302.12.RESERVED312.13.Prepayment of Loans312.14.RESERVED322.15.Conversion and Continuation Options322.16.Limitations on Eurodollar Tranches322.17.Pro Rata Treatment, etc.322.18.Requirements of Law332.19.Taxes342.20.Indemnity372.21.Change of Lending Office372.22.Fees372.23.RESERVED382.24.Nature of Fees382.25.Incremental Facilities382.26.Replacement of Lenders402.27.Extensions of Commitments412.28.Reserved422.29Defaulting Lenders42SECTION 3REPRESENTATIONS AND WARRANTIES433.1.Existence; Compliance with Law433.2.Power; Authorizations; Enforceable Obligations433.3.No Legal Bar433.4.Accuracy of Information433.5.No Material Adverse Effect433.6.Restricted Subsidiaries443.7.Title to Assets; Liens443.8.Intellectual Property44i3.9.Use of Proceeds443.10.Litigation443.11.Federal Reserve Regulations443.12.Solvency443.13.Taxes443.14.ERISA443.15.Environmental Matters; Hazardous Material453.16.Investment Company Act; Other Regulations453.17.Labor Matters453.18.Security Documents453.19.Anti-Corruption Laws and Sanctions453.20.EEA Financial Institutions453.21.Disclosure453.22.ERISA Event46SECTION 4 CONDITIONS PRECEDENT464.1.Conditions to the Closing Date464.2.Each Credit Event47SECTION 5AFFIMATIVE COVENANTS475.1.Financial Statements, etc475.2.Compliance Certificate; Reporting485.3.Maintenance of Existence485.4.Maintenance of Insurance 485.5.Use of Proceeds and Documentary Credits495.6.After-Acquired Collateral; Further Assurances495.7.Compliance with Laws505.8.Post-Closing Obligations505.9.Designation of Subsidiaries50SECTON 6NEGATIVE COVENANTS516.1.Limitation on Indebtedness secured by Liens and Restricted Subsidiary Indebtedness516.2.Limitation on Liens536.3.Merger, Consolidation, or Sale of Assets536.4.Limitation on Sale and Leaseback Transactions546.5.Anti-Corruption Laws and Sanctions556.6.Financial Covenants55SECTION 7EVENTS OF DEFAULT557.1.Events of Default 55SECTION 8THE AGENTS578.1.Appointment578.2.Delegation of Duties588.3.Exculpatory Provisions588.4.Reliance by the Administrative Agent588.5.Notice of Default588.6.Non-Reliance on the Agent and Other Lenders588.7.Indemnification598.8.Agent in Its Individual Capacity598.9Successor Administrative Agent59ii8.10.RESERVED598.11.Collateral Security598.12.Enforcement by the Administrative Agent and Collateral Agent608.13.Withholding Tax608.14.Certain ERISA Matters60SECTION 9MISCELLANEOUS619.1.Amendments and Waivers619.2.Notices639.3.No Waiver; Cumulative Remedies649.4.Survival of Representations and Warranties649.5.Payment of Expenses649.6.Successors and Assigns; Participations659.7.Adjustments; Setoff689.8.Counterparts689.9.Severability689.10.Integration699.11.GOVERNING LAW699.12.Submission To Jurisdiction; Waivers699.13.Acknowledgements699.14.Releases of Guarantees and Liens699.15.Confidentiality 719.16.WAIVERS OF JURY TRIAL729.17.Patriot Act729.18.No Fiduciary Duty729.19.Acknowledgement and Consent to Bail-In of EEA Financial Institutions739.20.Lien Sharing and Priority Confirmation73SCHEDULES Schedule 1.1 Revolving Commitment AmountsSchedule 3.6 Restricted SubsidiariesSchedule 3.18 UCC Filing JurisdictionsEXHIBITS Exhibit A-1 Form of Closing Certificate for the BorrowerExhibit A-2 Form of Closing Certificate for the GuarantorsExhibit B Form of Borrowing RequestExhibit C Form of Compliance CertificateExhibit D Form of Assignment and AcceptanceExhibit E Form of First Lien Intercreditor AgreementExhibit F-1 Form of United States Tax Compliance Certificate (For Non-U.S. Lenders That Are Not Partnerships For U.S.Federal Income Tax Purposes)Exhibit F-2 Form of United States Tax Compliance Certificate (For Non-U.S. Lenders That Are Partnerships For U.S.Federal Income Tax Purposes)Exhibit F-3 Form of United States Tax Compliance Certificate (For Non-U.S. Participants That Are Not Partnerships ForU.S. Federal Income Tax Purposes)Exhibit F-4 Form of United States Tax Compliance Certificate (For Non-U.S. Participants That Are Partnerships For U.S.Federal Income Tax Purposes)Exhibit G Form of Notice of Continuation/ConversionExhibit H Form of Acceptance and Prepayment NoticeiiiTHIS CREDIT AGREEMENT, dated as of July 3, 2018, among MICRON TECHNOLOGY, INC., a Delaware corporation (the “Borrower”),JPMORGAN CHASE BANK, N.A. (“JPMorgan”), as administrative agent (in such capacity and including any successors in such capacity, the“Administrative Agent” or the “Agent”) and as collateral agent (in such capacity and including any successors in such capacity, the “Collateral Agent”), theother agents party hereto and each of the financial institutions from time to time party hereto (collectively, the “Lenders”).W I T N E S S E T H:WHEREAS, the Borrower intends to use the Loans (as defined below) for general corporate purposes.NOW, THEREFORE, the parties hereto hereby agree as follows:SECTION 1Definitions1.1. Defined Terms. As used in this Agreement, the following terms shall have the meanings specified below:“Administrative Agent”: the meaning set forth in the preamble to this Agreement.“Affiliate”: as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, suchPerson. For purposes of this definition, “control” of a Person means the power, directly or indirectly, to direct or cause the direction of the management andpolicies of such Person whether through the ownership of voting securities, by contract or otherwise.“Agent”: the meaning set forth in the preamble to this Agreement.“Aggregate Domestic Priority Debt”: Aggregate Priority Debt that is Domestic Priority Debt.“Aggregate First Lien Debt”: as of the date of determination, the then aggregate outstanding amount, without duplication, of First Lien Debt,provided, in no event will the amount of any Indebtedness (including Guarantees of such Indebtedness) be required to be included in the calculation ofAggregate First Lien Debt more than once despite the fact more than one Person is liable with respect to such Indebtedness and despite the fact that suchIndebtedness is secured by the assets of more than one Person (for example, and for avoidance of doubt, in the case where more than one RestrictedSubsidiary has Guaranteed or otherwise become liable for such Indebtedness or in the case where there are Liens on assets of one or more of the Borrower andits Restricted Subsidiaries securing such Indebtedness or one or more Guarantees thereof, the amount of Indebtedness so Guaranteed or secured shall only beincluded once in the calculation of Aggregate First Lien Debt).“Aggregate Priority Debt”: the sum of the following as of the date of determination: (1) the then aggregate outstanding amount of the Indebtednessof the Borrower and its Restricted Subsidiaries, without duplication, secured by Liens not permitted under Section 6.1(a) or Section 6.1(d) (determined inaccordance with Section 6.1); (2) the then aggregate outstanding amount of all Restricted Subsidiary Debt, without duplication, and not permitted underSection 6.1(b) (including as a result of the exclusions set forth in clauses (1) through (5) of Section 6.1(b)) and Section 6.1(d)); provided that any suchRestricted Subsidiary Debt will be excluded from this clause (2) to the extent that such Restricted Subsidiary Debt (or the related Indebtedness) is included inclause (1) or (3) of this definition; and (3) the then existing Attributable Debt of the Borrower and its Restricted Subsidiaries in respect of sale and lease-backtransactions, without duplication, not permitted under Section 6.4(a); provided that any such Attributable Debt will be excluded from this clause (3) to theextent of indebtedness relating thereto is included in clause (1) or (2) of this definition, provided further, in no event will the amount of any Indebtedness(including Guarantees of such Indebtedness) be required to be included in the calculation of Aggregate Priority Debt more than once despite the fact morethan one Person is liable with respect to such Indebtedness and despite the fact that such Indebtedness is secured by the assets of more than one Person (forexample, and for avoidance of doubt, in the case where more than one Restricted Subsidiary has Guaranteed or otherwise become liable for such Indebtednessor in the case where there are Liens on assets of one or more of the Borrower and its Restricted Subsidiaries securing such Indebtedness or one or moreGuarantees thereof, the amount of Indebtedness so Guaranteed or secured shall only be included once in the calculation of Aggregate Priority Debt).1“Agreement”: this Credit Agreement, as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time totime.“ALTA”: American Land Title Association.“Anti-Corruption Laws”: means all laws, rules and regulations of any jurisdiction applicable to the Borrower or any of its Subsidiaries from time totime concerning or relating to bribery or corruption, including, without limitation, the Foreign Corrupt Practices Act of 1977, as amended.“Applicable Margin”:(a) with respect to the Revolving Loans, for any day, with respect to any Eurodollar Revolving Loan or any Base Rate Revolving Loan, as the casemay be, the applicable rate per annum set forth below under the caption “Eurodollar Spread” or “Base Rate Spread”, as the case may be, corresponding toeither (1) the applicable Corporate Ratings from the Rating Agencies or (2) the Borrower’s Total Leverage Ratio, whichever yields a lower pricing level,applicable on such date:Pricing Level: CorporateRatings: Total LeverageRatio EurodollarSpread ABRSpreadLevel 1 BBB-/Baa3 or higher Less than or equal to 0.5:1.00 1.25% 0.25%Level 2 BB+/Ba1 Greater than 0.5:1.00 but lessthan or equal to 1.25:1.00 1.50% 0.50%Level 3 BB/Ba2 Greater than 1.25.1.00 but lessthan or equal to 2.00:1.00 1.75% 0.75%Level 4 BB-/Ba3 or lower Greater than 2.00:1.00 2.00% 1.00%; provided that on or prior to October 27, 2018, Level 3 shall apply.For purposes of the foregoing, (i) if neither Moody’s nor S&P shall have in effect a Corporate Rating (regardless of whether Fitch then does), thepricing level shall be determined based on the Total Leverage Ratio, (ii) if the Corporate Ratings established by the relevant Rating Agencies shall fallwithin different Categories, the Applicable Margin shall be based on (1) if two Corporate Ratings are in effect, the lower of the two Corporate Ratings and ifthree Corporate Ratings are in effect, the Corporate Rating remaining after excluding the highest Corporate Rating and the lowest Corporate Rating or (2) theTotal Leverage Ratio, whichever yields a lower pricing level; and (iii) if the Corporate Ratings established by the relevant Rating Agencies shall be changed(other than as a result of a change in the rating system of any relevant Rating Agency), such change shall be effective as of the date on which it is firstannounced by the applicable rating agency, irrespective of when notice of such change shall have been furnished by the Borrower to the AdministrativeAgent.For the purposes of the foregoing, changes in the Total Leverage Ratio shall become effective on the date on which the Compliance Certificate isdelivered to the Administrative Agent pursuant to Section 5.2. If any Compliance Certificate referred to above is not delivered within the time periodspecified in Section 5.2, then the pricing level shall be determined based on the Corporate Rating.Each change in the Applicable Margin shall apply during the period commencing on the effective date of such change and ending on the dateimmediately preceding the effective date of the next Corporate Rating or Total Leverage Ratio change. If neither the Corporate Rating nor the TotalLeverage Ratio can be determined, then upon the request of the Required Revolving Lenders, Level 4 shall apply.(b) with respect to the Incremental Term Loans, such per annum rates as shall be agreed by the Borrower and the applicable Incremental Term LoanLenders as shown in the applicable Incremental Amendment.2“Approved Electronic Communication”: any notice, demand, communication, information, document or other material that any Loan Party providesto the Administrative Agent pursuant to any Loan Document or the transactions contemplated therein which is distributed to the Agent or to the Lenders bymeans of electronic communications pursuant to Section 9.2(b).“Approved Fund”: as defined in Section 9.6(b)(ii).“Arranger”: each of the Joint Lead Arrangers.“Assignee”: as defined in Section 9.6(b)(i).“Assignment and Acceptance”: an assignment and acceptance entered into by a Lender and an Assignee and accepted by the Administrative Agentto the extent required pursuant to Section 9.6, substantially in the form of Exhibit D hereto.“Attributable Debt”: in connection with a sale and lease-back transaction the lesser of: (1) the fair value of the assets subject to such transaction, asdetermined in good faith by a Responsible Officer of the Borrower; and (2) the present value of the minimum rental payments called for during the terms ofthe lease (including any period for which such lease has been extended), determined in accordance with GAAP, discounted at a rate that, at the inception ofthe lease, the lessee would have incurred to borrow over a similar term the funds necessary to purchase the leased assets.“Availability Period”: the period from and including the Closing Date to but excluding the earlier of the Revolving Maturity Date and the date oftermination of the Revolving Commitments.“Bail-In Action”: the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability ofan EEA Financial Institution.“Bail-In Legislation”: with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament andof the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-InLegislation Schedule.“Bankruptcy Code”: the United States Bankruptcy Code, codified as Title 11, U.S. Code §101-1330, as amended.“Base Rate”: for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such dayplus ½ of 1% and (c) Eurodollar Rate for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding BusinessDay) plus 1%. Any change in the Base Rate due to a change in the Prime Rate, the NYFRB Rate or the Eurodollar Rate shall be effective from and includingthe effective date of such change in the Prime Rate, the NYFRB Rate or the Eurodollar Rate, respectively. If the Base Rate is being used as an alternate rate ofinterest pursuant to Section 2.11 hereof, then the Base Rate shall be the greater of clauses (a) and (b) above and shall be determined without reference toclause (c) above. For the avoidance of doubt, if the Base Rate as so determined would be less than zero, such rate shall be deemed to be zero for purposes ofthis Agreement.“Base Rate Loans”: Loans the rate of interest applicable to which is based upon the Base Rate.“Base Rate Revolving Borrowing”: a Borrowing of Revolving Loans that are Base Rate Loans.“Beneficial Ownership Certification”: a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.“Beneficial Ownership Regulation”: 31 C.F.R. § 1010.230.“Benefit Plan”: any of (a) an “employee benefit plan” (as defined in Section 3(3) of ERISA) that is subject to Title I of ERISA, (b) a “plan” as definedin Section 4975 of the Code to which Section 4975 of the Code applies, and (c) any Person whose assets include (for purposes of the Plan Asset Regulationsor otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.3“Benefited Lender”: the meaning set forth in Section 9.7(a).“Board of Directors”: the board of directors of the Borrower or any committee thereof duly authorized to act on behalf of such board.“Board of Governors”: the Board of Governors of the Federal Reserve System of the United States or any Governmental Authority which succeeds tothe powers and functions thereof.“Boise Property”: all real property vested solely in the Borrower or a Guarantor at the location commonly known as 8000 S. Federal Way; Boise,Idaho 83716 together with all real property vested solely in the Borrower or a Guarantor adjoining, contiguous to, or in vicinity of the Boise Property.“Borrower”: the meaning set forth in the preamble to this Agreement.“Borrowing”: Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a singleInterest Period is in effect.“Borrowing Date”: the Business Day specified in a Borrowing Request as a date on which the Borrower requests the making of Loans hereunder.“Borrowing Request”: a request by the Borrower for a Borrowing in accordance with Section 2.3, which shall be substantially in the form of ExhibitB or any other form approved by the Administrative Agent.“Business Day”: any day other than a Legal Holiday.“Captive Insurance Subsidiary”: any Restricted Subsidiary of the Borrower that is subject to regulation as an insurance company (or any RestrictedSubsidiary thereof).“Capital Stock”: any and all shares of stock of a corporation, partnership interests or other equivalent interests (however designated, whether votingor non-voting) in such Person’s equity, entitling the holder to receive a share of the profits and losses, and a distribution of assets, after liabilities, of suchPerson.“CFC”: any controlled foreign corporation within the meaning of Section 957 of the Code.“Change of Control”: any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than the Borrower, itsSubsidiaries or any employee benefit plan of the Borrower or its Subsidiaries, has filed a Schedule 13D or Schedule TO (or any successor schedule, form orreport) pursuant to the Exchange Act disclosing that such person has become the direct or indirect “beneficial owner” (as such term is used in Rules 13d-3and 13d-5 under the Exchange Act) of more than 50% of the Voting Stock of the Borrower, unless such beneficial ownership (a) arises solely as a result of arevocable proxy delivered in response to a proxy or consent solicitation made pursuant to the applicable rules and regulations under the Exchange Act, and(b) is not also then reportable on Schedule 13D (or any successor schedule under the Exchange Act, except that for the purpose of this clause (1) a person willbe deemed to have beneficial ownership of all shares that such person has the right to acquire irrespective of whether that right is exercisable immediately oronly after the passage of time); provided, however, that a transaction will not be deemed to involve a Change of Control under this clause (1) if (a) theBorrower becomes a direct or indirect wholly owned subsidiary of a holding company, and (b) (i) the direct or indirect holders of the Voting Stock of suchholding company immediately following that transaction are substantially the same as the holders of the Borrower’s Voting Stock immediately prior to thattransaction or (ii) immediately following that transaction no “person” or “group” (other than a holding company satisfying the requirements of this sentence)is the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of such holding company.“Class”: when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are RevolvingLoans or Incremental Loans made with respect to the same Incremental Facility“Closing Date”: the date on which the conditions precedent set forth in Section 4.1 shall have been satisfied or waived, which date is July 3, 2018.4“Charges”: any charge, expense, cost, accrual or reserve of any kind.“Code”: the Internal Revenue Code of 1986, as amended from time to time.“Collateral”: all “Collateral” as defined in any Security Document and all of the other property and assets that are or are required under the termshereof or under the Security Documents to be subject to Liens in favor of the Collateral Agent for the benefit of the Secured Parties.“Collateral Agent”: the meaning set forth in the preamble to this Agreement.“Commitment”: with respect to any Lender, each Revolving Commitment or Incremental Commitment, if any, of such Lender.“Commitment Fee Percentage”: the applicable rate per annum set forth below under the caption “Commitment Fee Percentage” corresponding toeither (1) the Corporate Ratings from the Rating Agencies or (2) the Borrower’s Total Leverage Ratio, whichever yields a lower pricing level, applicable onsuch date:Pricing Level: CorporateRatings: Total LeverageRatio Commitment Fee PercentageLevel 1 BBB-/Baa3 or higher Less than or equal to 0.5:1.00 0.20%Level 2 BB+/Ba1 Greater than 0.5:1.00 but lessthan or equal to 1.25:1.00 0.25%Level 3 BB/Ba2 Greater than 1.25.1.00 but lessthan or equal to 2.00:1.00 0.30%Level 4 BB-/Ba3 or lower Greater than 2.00:1.00 0.35%; provided that on or prior to the last day of the Borrower’s fiscal quarter ending November 29, 2018, Level 2 shall apply.For purposes of the foregoing, (i) if neither Moody’s nor S&P shall have in effect a Corporate Rating (regardless of whether Fitch then does), thepricing level shall be determined based on the Total Leverage Ratio, (ii) if the Corporate Ratings established by the relevant Rating Agencies shall fallwithin different Categories, the Applicable Margin shall be based on (1) if two Corporate Ratings are in effect, the lower of the two Corporate Ratings and ifthree Corporate Ratings are in effect, the Corporate Rating remaining after excluding the highest Corporate Rating and the lowest Corporate Rating or (2) theTotal Leverage Ratio, whichever yields a lower pricing level; and (iii) if the Corporate Ratings established by the relevant Rating Agencies shall be changed(other than as a result of a change in the rating system of any relevant Rating Agency), such change shall be effective as of the date on which it is firstannounced by the applicable rating agency, irrespective of when notice of such change shall have been furnished by the Borrower to the AdministrativeAgent.For the purposes of the foregoing, changes in the Total Leverage Ratio shall become effective on the date on which the Compliance Certificate isdelivered to the Administrative Agent pursuant to Section 5.2. If any Compliance Certificate referred to above is not delivered within the time periodspecified in Section 5.2, then the pricing level shall be determined based on the Corporate Rating.Each change in the Commitment Fee Percentage shall apply during the period commencing on the effective date of such change and ending on thedate immediately preceding the effective date of the next Corporate Rating or Total Leverage Ratio change. If neither the Corporate Rating nor the TotalLeverage Ratio can be determined, then upon the request of the Required Revolving Lenders, Level 4 shall apply.5“Commonly Controlled Entity”: an entity, whether or not incorporated, that is under common control with the Borrower within the meaning ofSection 4001 of ERISA or is part of a controlled group that includes the Borrower and that is treated as a single employer under Section 414 of the Code.“Compliance Certificate”: a compliance certificate to be delivered pursuant to Section 5.2(a), substantially in the form of Exhibit C.“Consolidated EBITDA”: with respect to any Person for any Measurement Period, the sum of, without duplication, the amounts for such period,taken as a single accounting period, of (1) Consolidated Net Income; excluding (to the extent deducted or otherwise excluded in calculating ConsolidatedNet Income in such Measurement Period), the following amounts (or, to the extent attributable to a non-wholly owned consolidated entity, a portion of thefollowing amounts proportionate to the Borrower’s allocable interest in such entity): (2) Consolidated Non-cash Charges; (3)(A) extraordinary Charges and(B) unusual or nonrecurring Charges, in each case, to the extent not of a type described in clause (2), (4) Consolidated Interest Expense; (5) ConsolidatedIncome Tax Expense; (6) restructuring expenses and charges; (7) any expenses or charges related to any equity offering, Investment, recapitalization orincurrence of Indebtedness not prohibited under this Agreement (whether or not successful) or related to the entry into this Agreement; and (8) any charges,expenses or costs incurred in connection or associated with mergers, acquisitions or divestitures after the Closing Date.Consolidated EBITDA shall be calculated after giving effect on a pro forma basis for the applicable Measurement Period to any asset sales or otherdispositions or acquisitions, investment, mergers, consolidations and discontinued operations (as determined in accordance with GAAP) by such Person andits Consolidated Subsidiaries (1) that have occurred during such Measurement Period or at any time subsequent to the last day of such Measurement Periodand on or prior to the date of the transaction in respect of which Consolidated EBITDA is being determined and (2) that the Borrower determines in goodfaith are outside the ordinary course of business, in each case as if such asset sale or other disposition or acquisition, investment, merger, consolidation ordisposed operation occurred on the first day of such Measurement Period. For purposes of this definition, pro forma calculations shall be made in accordancewith Article 11 of Regulation S-X under the Securities Act; provided that such pro forma calculations may include operating expense reductions for suchperiod resulting from the transaction which is being given pro forma effect that are reasonably identifiable and factually supportable and have been realizedor for which the steps necessary for realization have been taken or have been identified and are reasonably expected to be taken within one year followingany such transaction (which operating expense reductions are reasonably expected to be sustainable); provided that, the Borrower shall not be required togive pro forma effect to any transaction that it does not in good faith deem material. Such pro forma calculations shall be made in good faith by a responsiblefinancial or accounting officer of the Borrower.“Consolidated Income Tax Expense”: with respect to any Person for any period, the provision for (or benefit of) federal, state, local and foreignincome taxes of such Person and its Consolidated Subsidiaries for such period as determined on a consolidated basis in accordance with GAAP, includingany penalties and interest related to such taxes or arising from any tax examinations, to the extent the same were deducted (or added back, in the case ofincome tax benefit) in computing Consolidated Net Income.“Consolidated Interest Expense”: with respect to any Person, for any period, (a) the sum of all interest expense (including imputed interest chargeswith respect to capital lease obligations) of such Person and its Consolidated Subsidiaries payable in cash for such period determined on a consolidated basisin accordance with GAAP but excluding (i) any non-cash interest expense attributable to the movement in the mark to market valuation of hedgingobligations or other derivative instruments pursuant to GAAP, amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses,(ii) any expensing of bridge, commitment and other financing fees, (iii) any annual administrative or other agency fees, (iv) any premiums, fees or othercharges incurred in connection with the refinancing, incurrence, purchase or redemption of Indebtedness, (v) any amortization of debt discounts, includingdiscounts on convertible notes, and (vi) amortization of other costs, including imputed interest charges on liabilities other than capital lease obligations andpremiums and discounts on investments, minus (b) interest income of such Person and its Consolidated Subsidiaries for such period determined on aconsolidated basis in accordance with GAAP.“Consolidated Net Income”: with respect to any Person, for any period, the consolidated net income (or loss) of such Person and its ConsolidatedSubsidiaries, after deduction of net income (or loss) attributable to non-controlling interests, for such period as determined in accordance with GAAP,adjusted, to the extent included in calculating such net income, by excluding, without duplication, the following (or, to the extent attributable to a non-6wholly owned consolidated entity, a portion of the following amounts proportionate to the Borrower’s allocable interest in such entity): (1) all extraordinary,unusual or nonrecurring gains or losses (net of fees and expense relating to the transaction giving rise thereto); (2) gains or losses in respect of any assetimpairments, write-offs or sales (net of fees and expenses relating to the transaction giving rise thereto); (3) any expenses, losses or charges incurred related tolower of cost or market write-downs for work in process or finished goods inventories; (4) any expenses, losses or charges incurred related to excess orobsolete inventories; (5) the net income (loss) from any disposed or discontinued operations or any net gains or losses on disposed or discontinuedoperations; (6) any gain or loss realized as a result of the cumulative effect of a change in accounting principles; (7) any net gains or losses attributable to theearly extinguishment or conversion of Indebtedness, derivative instruments, embedded derivatives or other similar obligations; (8) equity in net income(loss) of equity method investees; (9) gains, losses, income and expenses resulting from the application of fair value accounting to derivative instruments;and (10) gains or losses resulting from currency fluctuations. In addition, to the extent not already included in Consolidated Net Income of such Person andits Consolidated Subsidiaries, the amount of proceeds received from business interruption insurance and reimbursements of any expenses or charges that arecovered by indemnification or other reimbursement provisions in connection with any investment or sale, conveyance, transfer or disposition of assets notprohibited under this Agreement.“Consolidated Net Tangible Assets”: with respect to any Person, the total amount of assets of such Person and its Consolidated Subsidiaries afterdeducting therefrom (a) all current liabilities of such Person and its Consolidated Subsidiaries (excluding (i) the current portion of long-term debt and theportion of any convertible debt classified as “current” despite having a stated maturity more than 12 months from the date as of which the amount thereof isbeing computed and (ii) any liabilities which are by their terms renewable or extendible at the option of the obligor thereon to a date more than 12 monthsfrom the date as of which the amount thereof is being computed) and (b) all goodwill, trade names, trademarks, patents, unamortized debt discount andexpense and any other like intangibles of such Person and its Consolidated Subsidiaries, all as set forth on the consolidated balance sheet of such Person forthe most recently completed fiscal quarter for which financial statements have been filed with the SEC and computed in accordance with GAAP.“Consolidated Non-cash Charges”: with respect to any Person for any period determined on a consolidated basis in accordance with GAAP, theaggregate depreciation; amortization (including amortization of goodwill, other intangibles, deferred financing fees, debt issuance costs, commissions, feesand expenses); non-cash compensation expense incurred in connection with the issuance of Equity Interests to any director, officer, employee or consultantof such Person or any Consolidated Subsidiary; and other non-cash expenses of such Person and its Subsidiaries reducing Consolidated Net Income of suchPerson and its Consolidated Subsidiaries for such period (excluding any such charge which requires an accrual of or a reserve for cash charges for any futureperiod).“Consolidated Subsidiaries”: as of any date of determination and with respect to any Person, those Subsidiaries of that Person whose financial datais, in accordance with GAAP, reflected in that Person’s consolidated financial statements.“Contractual Obligation”: as to any Person, any provision of any security issued by such Person or of any agreement, instrument or otherundertaking to which such Person is a party or by which it or any of its property is bound.“Copyrights”: (i) all copyrights, database rights, design rights, mask works and works of authorship arising under the laws of the United States, anyother country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished, all registrations and recordingsthereof, and all applications in connection therewith, including, without limitation, all registrations, recordings and applications in the United StatesCopyright Office, and (ii) the right to obtain all renewals thereof.“Copyright Licenses”: any written agreement naming the Borrower or any Guarantor as a party, granting any right under any Copyright, including,without limitation, the grant of rights to reproduce, prepare derivative works based upon, perform, display, manufacture, distribute, exploit and sell materialsderived from any Copyright.“Corporate Rating”: the Borrower’s “corporate rating” or “corporate family rating” from S&P or Moody’s or Fitch, respectively, including anysuccessor term for such rating adopted by such rating agency.“DC Disbursement”: a payment made by an Issuing Bank pursuant to a Documentary Credit.7“DC Exposure”: at any time, the sum of (a) the aggregate undrawn and unexpired amount of all outstanding Documentary Credits at such time plus(b) the aggregate amount of all DC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time. The DC Exposure of anyRevolving Lender at any time shall be its Revolving Loan Percentage of the DC Exposure at such time.“DC Obligations”: at any time, an amount equal to the sum of (a) the aggregate then undrawn and unexpired amount of the then outstandingDocumentary Credits and (b) the aggregate amount of drawings under Documentary Credits that have not then been reimbursed pursuant to Section 2.4(c).“Debtor Relief Laws”: the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefitof creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicablejurisdictions from time to time in effect and affecting the rights of creditors generally.“Default”: any of the events specified in Section 7.1, whether or not any requirement for the giving of notice, the expiration of applicable cure orgrace periods, or both, has been satisfied.“Defaulting Lender”: means any Lender that (a) has failed to (i) fund all or any portion of its Loans within one Business Day of the date such Loanswere required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of suchLender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall bespecifically identified in writing) has not been satisfied, or (ii) pay to the Administrative Agent or any other Lender any other amount required to be paid byit hereunder within one Business Day of the date when due, (b) has notified the Borrower and the Administrative Agent in writing that it does not intend tocomply with its funding obligations hereunder (unless such writing relates to such Lender’s obligation to fund a Loan hereunder and states that such positionis based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall bespecifically identified in such writing) cannot be satisfied), (c) has failed, within two Business Days after written request by the Administrative Agent or theBorrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder(provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the AdministrativeAgent and the Borrower), or (d) has, or has a direct or indirect parent company that has, after the Closing Date, (i) become the subject to any bankruptcyevent, (ii) had appointed for it a receiver, liquidator, examiner, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similarPerson charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federalregulatory authority acting in such a capacity or (iii) become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solelyby virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authorityso long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from theenforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow ordisaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent in consultation with the Borrower that aLender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lendershall be deemed to be a Defaulting Lender (subject to Section 2.29(b)) upon delivery of written notice of such determination to the Borrower and eachLender.“Dollars” and “$”: dollars in lawful currency of the United States.“Documentary Credit”: any letter of credit or bank guarantee issued pursuant to this Agreement.“Domestic Priority Debt”: Priority Debt created or incurred by the Borrower or its Domestic Restricted Subsidiaries; provided that such DomesticPriority Debt shall not include any Priority Debt created or incurred through the issuance of debt securities or the incurrence of loans in the capital markets;provided further that such limitation shall not prohibit the incurrence of Indebtedness under asset-based, warehouse or other similar debt facilities utilized bythe Borrower and its Domestic Restricted Subsidiaries with the primary purpose of accessing efficient working capital.8“Domestic Restricted Subsidiary”: with respect to any Person, any Restricted Subsidiary of such Person that is organized or existing under the lawsof the United States, any state thereof or the District of Columbia other than any such Subsidiary that is a direct or indirect Subsidiary of one or more ForeignSubsidiaries of such Person.“EEA Financial Institution”: (a) any institution established in any EEA Member Country which is subject to the supervision of an EEA ResolutionAuthority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) anyinstitution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject toconsolidated supervision with its parent.“EEA Member Country”: any of the member states of the European Union, Iceland, Liechtenstein, and Norway.“EEA Resolution Authority”: any public administrative authority or any Person entrusted with public administrative authority of any EEA MemberCountry (including any delegee) having responsibility for the resolution of any EEA Financial Institution.“Engagement Letter”: that certain engagement letter dated May 21, 2018 among the Borrower and the Arrangers.“Environmental Laws”: any and all applicable foreign, federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes,decrees, legally binding requirements of any Governmental Authority or other Requirements of Law (including common law) regulating, relating to orimposing liability or standards of conduct concerning protection of the environment or of human health (to the extent related to exposure to Materials ofEnvironmental Concern), as now or may at any time hereafter be in effect.“Equity Interests”: all Capital Stock and all warrants or options with respect to, or other rights to purchase, Capital Stock, but excludingIndebtedness convertible into or exchangeable for equity.“ERISA”: the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issuedthereunder.“ERISA Event”: (a) any Reportable Event; (b) the existence with respect to any Plan of an “minimum funding deficiency” (as defined in Section 412of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of anapplication for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of anyliability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a planadministrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by theBorrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) thereceipt by the Borrower or any Commonly Controlled Entity of any notice, or the receipt by any Multiemployer Plan from the Borrower or any CommonlyControlled Entity of any notice, concerning the imposition of withdrawal liability under ERISA or a determination that a Multiemployer Plan is, or isexpected to be, insolvent, within the meaning of Title IV of ERISA.“EU Bail-In Legislation Schedule”: the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as ineffect from time to time.“Eurocurrency Reserve Requirements”: for any day as applied to a Eurodollar Loan, the aggregate (without duplication) of the maximum rates(expressed as a decimal fraction) of reserve requirements in effect on such day (including basic, supplemental, marginal and emergency reserves) under anyregulations of the Board of Governors or other Governmental Authority having jurisdiction with respect thereto dealing with reserve requirements prescribedfor eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board of Governors) maintained by a member bank of theFederal Reserve System.“Eurodollar Base Rate”: with respect to each day during each Interest Period pertaining to a Eurodollar Loan, the rate per annum equal to theLondon Interbank Offered Rate (“LIBOR”) (or a comparable or successor rate which rate is approved by the Administrative Agent), as published on theapplicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by the AdministrativeAgent9from time to time) at approximately 11:00 A.M. (London time) on the date that is two Business Days prior to the beginning of the relevant Interest Period fordeposits in Dollars for a period equal to such Interest Period; provided that, to the extent that an interest rate is not ascertainable pursuant to the foregoingprovisions of this definition, the “Eurodollar Base Rate” shall be the interest rate per annum determined by the Administrative Agent to be the average of therates per annum at which deposits in Dollars are offered for such relevant Interest Period to major banks in the London interbank market in London, Englandby the Administrative Agent at approximately 11:00 a.m. (London time) on the date that is two Business Days prior to the beginning of such Interest Period.“Eurodollar Loans”: Loans the rate of interest applicable to which is based upon the Eurodollar Rate.“Eurodollar Rate”: with respect to each day during each Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for such day inaccordance with the following formula (rounded upward to the nearest 1/100th of 1%):Eurodollar Base Rate1.00 - Eurocurrency ReserveRequirements; provided that in no event shall the Eurodollar Rate be less than 0.00%.“Eurodollar Revolving Borrowing”: a Borrowing of Revolving Loans that are Eurodollar Loans.“Event of Default”: any of the events specified in Section 7.1, provided that any requirement for the giving of notice, the lapse of time, or both, hasbeen satisfied.“Exchange Act”: the Securities Exchange Act of 1934, as amended, or any successor statute or statutes thereto.“Excluded Taxes”: those Taxes referenced in Section 2.19(a)(i) through 2.19(a)(v).“Excluded Subsidiary”: (a) any Subsidiary that is prohibited by any applicable law, rule or regulation or by any Contractual Obligation existing onthe Closing Date (or, if later, the date of the acquisition of such Subsidiary and not incurred in contemplation of such acquisition) from guaranteeing orproviding collateral for the Obligations (only to the extent such prohibition is applicable and not rendered ineffective) or would require a governmental(including regulatory) consent, approval, license or authorization in order to provide such guarantee, (b) any Foreign Subsidiary, FSHCO or Subsidiary of aForeign Subsidiary, (c) any Captive Insurance Subsidiary, (d) any not-for-profit subsidiary, (e) any Subsidiary that is not a wholly-owned Subsidiary, (f) anySubsidiary with respect to which the creation or perfection of a security interest in its assets or the Guarantee of the Obligations by it would reasonably beexpected to result in material adverse tax consequences to the Borrower or any of its Subsidiaries as reasonably determined by the Borrower in consultationwith Administrative Agent or the cost or other consequences (including any adverse tax consequences) of providing Collateral or guaranteeing theObligations shall be excessive in view of the benefits to be obtained by the Lenders therefrom as reasonably determined by the Administrative Agent and theBorrower and (g) any other Subsidiary of the Borrower designated by the Borrower as an Excluded Subsidiary subsequent to the Closing Date, until suchPerson ceases to be an Excluded Subsidiary of the Borrower in accordance with Section 5.9.“Excluded Subsidiary Threshold”: the meaning set forth in Section 5.9(b).“Extended Revolving Commitments”: the meaning set forth in Section 2.27(a).“Extension”: the meaning set forth in Section 2.27(a).“Extension Offer”: the meaning set forth in Section 2.27(a).“Fair Market Value”: the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress ornecessity of either party, determined in good faith by the chief financial officer of the Borrower (unless otherwise provided in this Agreement).10“FATCA”: Sections 1471 through 1474 of the Code as in existence on the date hereof (and any amended or successor version that is substantivelycomparable and not materially more onerous to comply with), any current or future Treasury regulations thereunder or published administrative guidanceimplementing such Sections, any agreement entered into pursuant to current Section 1471(b)(1) of the Code (or any amended or successor version describedabove) and any intergovernmental agreements (and related legislation or official administrative guidance) implementing the foregoing.“Federal Funds Effective Rate”: for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositaryinstitutions, as determined in such manner as the NYFRB shall set forth on its public website from time to time, and published on the next succeedingBusiness Day by the NYFRB as the effective federal funds rate, provided that if the Federal Funds Effective Rate as so determined would be less than zero,such rate shall be deemed to zero for the purposes of this Agreement.“Fees”: collectively, the fees pursuant to Engagement Letter and Section 2.22, the fees referred to in Section 9.5 and any other fees payable by anyLoan Party pursuant to this Agreement or any other Loan Document.“Financial Officer”: the Chief Financial Officer, Principal Accounting Officer, Controller or Treasurer of the Borrower.“First Lien”: a Lien granted by (i) a Security Document to the Collateral Agent or (ii) any other security agreement with respect to any other series ofFirst Lien Debt, in each case, for the benefit of the holders of First Lien Debt, at any time, upon any property of any Loan Party to secure Secured Obligations.“First Lien Debt”:(1) all Obligations; and(2) to the extent issued or outstanding, any other Indebtedness, including permitted refinancings of First Lien Debt, that are securedequally and ratably with the Obligations by a First Lien that was expressly permitted to be incurred and so secured under this Agreement;“First Lien Intercreditor Agreement”: the intercreditor agreement dated April 26, 2016 executed in connection with the Term Loan Credit Agreementor, after the termination of such intercreditor agreement, an intercreditor agreement substantially in the form attached as Exhibit E entered into in connectionwith any First Lien Debt that is subject to documentation separate from this Agreement.“Fitch”: Fitch, Inc. and any successor to its rating agency business.“Flood Insurance Laws”: collectively, (i) National Flood Insurance Reform Act of 1994 (which comprehensively revised the National FloodInsurance Act of 1968 and the Flood Disaster Protection Act of 1973) as now or hereafter in effect or any successor statute thereto, (ii) the Flood InsuranceReform Act of 2004 as now or hereafter in effect or any successor statute thereto and (iii) the Biggert-Waters Insurance Reform Act of 2012 as now or hereafterin effect or any successor statute thereto.“Foreign Subsidiary”: with respect to any Person, any Subsidiary of such Person other than one that is organized or existing under the laws of theUnited States, any state thereof or the District of Columbia.“FSHCO”: with respect to any Person, any Subsidiary substantially all the assets of which consist of Equity Interests of, and/or intercompany debtobligations owed or treated as owed by, one or more (i) CFCs and/or (ii) Subsidiaries described in this denition.“Funding Office”: the office of the Administrative Agent specified in Section 9.2(a) or such other office as may be specified from time to time by theAdministrative Agent as its funding office by written notice to the Borrower and the Lenders.“GAAP”: generally accepted accounting principles in the United States set forth in the statements and pronouncements of the Financial AccountingStandards Board or in such other statements by such other entity as11have been approved by a significant segment of the accounting profession, which are in effect as of the date of determination.“Governmental Authority”: the government of the United States or any other nation, or of any political subdivision thereof, whether state or local,and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatoryor administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the EuropeanCentral Bank).“Grantors”: any Person that pledges any Collateral under the Security Documents to secure any Secured Obligations.“Guarantee”: any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any other Person;provided that (1) obligations pursuant to commercial transactions on arm’s-length terms entered into in the ordinary courses of business that are not primarilyfor the purpose of guaranteeing any Indebtedness of another Person shall not constitute a Guarantee, and (2) for avoidance of doubt, an agreement orarrangement or series of related agreements or arrangements providing for or in connection with the purchase or sale of assets, securities, services or rights thatis entered into in connection with the business of the Company or any Subsidiary (including any consent or acknowledgement of assignment, including anyassignment of payment obligations, warranties, indemnities, performance guarantees and related obligations, and related waivers), shall not constitute aGuarantee, provided that payment obligations, warranties, indemnities, performance guarantees and related obligations provided for under such agreementsor arrangements are limited to payments for assets, securities, services and rights and other ancillary obligations customary in such transactions. The term“Guarantee” used as a verb has a corresponding meaning.“Guarantee and Collateral Agreement”: that certain Guarantee and Collateral Agreement, dated as of the date hereof, by and among the Borrowerand Grantors from time to time party thereto and the Collateral Agent.“Guarantee and Collateral Period”: the meaning set forth in Section 9.14.“Guarantee and Collateral Suspension Date”: any Business Day after the end of the fiscal quarter in which Closing Date occurs on which (I) (a) theBorrower has achieved a Corporate Rating equal to or higher than the following from at least two of the following three Ratings Agencies: (i) at least Ba1from Moody’s, (ii) at least BB+ from S&P and (iii) at least BB+ from Fitch, in each case, with a stable or better outlook, (b) there exists no Priority Debt orAttributable Debt then outstanding other than Priority Debt or Attributable Debt that would be permitted pursuant to Section 6.1(c)(2) or Section 6.4(a) if theBorrower and its Restricted Subsidiaries were deemed to have created, assumed, incurred, Guaranteed or otherwise be liable for such then outstanding PriorityDebt or Attributable Debt on such date, and (c) the Borrower has repaid all outstanding amounts under the Term Loan Credit Agreement and (II) theAdministrative Agent shall have received a certificate from a Responsible Officer of the Borrower certifying as to the satisfaction (or concurrent satisfaction)of the foregoing.“Guarantee and Collateral Suspension Period”: the meaning set forth in Section 9.14.“Guarantors”: any Restricted Subsidiary of the Borrower that is a party to the Guarantee and Collateral Agreement, and its successors and assigns, ineach case, until the Guarantee of such Person under the Guarantee and Collateral Agreement has been released in accordance with the provisions of thisAgreement or the Guarantee and Collateral Agreement.“Guaranty Reimbursement Obligations”: all obligations of the Loan Parties under Section 2 of the Guarantee and Collateral Agreement.“Incremental Amendment”: the meaning set forth in Section 2.25.“Incremental Commitment”: an Incremental Revolving Commitment or an Incremental Term Loan Commitment.“Incremental Facility”: an Incremental Revolving Facility or an Incremental Term Loan Facility.“Incremental Lender”: an Incremental Revolving Lender or an Incremental Term Loan Lender.12“Incremental Loans”: Loans made pursuant to Section 2.25.“Incremental Revolving Commitment”: with respect to any Lender, the commitment of such Lender, established pursuant to an IncrementalAmendment and Section 2.25, to make Revolving Loans hereunder, expressed as an amount representing the maximum aggregate amount of such Lender’sRevolving Extensions of Credit under such Incremental Amendment.“Incremental Revolving Facility”: an incremental portion of the Revolving Commitments established hereunder pursuant to an IncrementalAmendment providing for Incremental Revolving Commitments.“Incremental Revolving Lender”: a Lender with an Incremental Revolving Commitment.“Incremental Term Loan Commitment”: with respect to any Lender, the commitment of such Lender, established pursuant to an IncrementalAmendment and Section 2.25, to make Incremental Term Loans hereunder, expressed as an amount representing the maximum principal amount of theIncremental Term Loans to be made by such Lender.“Incremental Term Loan Facility”: an incremental term loan facility established hereunder pursuant to an Incremental Amendment providing forIncremental Term Loan Commitments.“Incremental Term Loan Maturity Date”: with respect to Incremental Term Loans, the scheduled date on which such Incremental Term Loans shallbecome due and payable in full hereunder, as specified in the applicable Incremental Amendment.“Incremental Term Loan Lender”: a Lender with an Incremental Term Loan Commitment or an outstanding Incremental Term Loan.“Incremental Term Loans”: Loans made by an Incremental Term Loan Lenders to the Borrower pursuant to Section 2.25. “Indebtedness”: indebtedness for borrowed money. For the avoidance of doubt, Indebtedness with respect to a Person only includes indebtednessfor the repayment of money provided to such Person, and does not include any other kind of indebtedness or obligation notwithstanding that such otherindebtedness or obligation may be evidenced by a note, bond, debenture or other similar instrument, may be in the nature of a financing transaction, or maybe an obligation that under GAAP is classified as “debt” or another type of liability, whether required to be reflected on the balance sheet of the obligor orotherwise.The amount of any Indebtedness outstanding as of any date will be:(1) the accreted value of the Indebtedness, in the case of any Indebtedness that does not require the current payment of interest;(2) the principal amount of the Indebtedness, in the case of any other Indebtedness;(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person (and not otherwise Guaranteed bythe specified Person), the lesser of: (a) the fair value (as determined in good faith by a Responsible Officer of the Borrower) of such assets at the dateof determination; and (b) the principal amount of the Indebtedness of the other Person;(4) in respect of any Indebtedness of another Person Guaranteed by the specified Person or one or more of such Persons, the lesser of:(a) the principal amount of such Indebtedness of such other Person and (b) the maximum amount of such Indebtedness payable under the Guaranteeor Guarantees (without duplication in the case of one or more Guarantees of the same Indebtedness by Restricted Subsidiaries); and(5) in the case of obligations under any sale and lease-back transaction that are included in any calculation of Indebtedness pursuant tothis Agreement (whether or not Indebtedness), an amount calculated in accordance with clause (2) of the definition of Attributable Debt.13In addition, accrual of interest and accretion or amortization of original issue discount will not be deemed to be an incurrence of Indebtedness forany purpose hereunder. For the avoidance of doubt, the inclusion of specific obligations in Section 6.1 or the definition of Permitted Liens or the inclusion ofAttributable Debt in any calculation of Indebtedness shall not create any implication that any such obligations constitute Indebtedness.“Indemnified Liabilities”: the meaning set forth in Section 9.5.“Indemnitee”: the meaning set forth in Section 9.5.“Insolvency”: with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA.“Insolvent”: pertaining to a condition of Insolvency.“Intellectual Property”: the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under UnitedStates, multinational or foreign laws or otherwise, including, without limitation, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, theTrademarks and the Trademark Licenses, trade secrets, and any transferable rights to sue at law or in equity for any infringement or other impairment thereof,including the right to receive all proceeds and damages therefrom.“Interest Coverage Ratio” as of the date of determination thereof, the ratio of Consolidated EBITDA of the Borrower for such Measurement Period toConsolidated Interest Expense of the Borrower for such Measurement Period.“Interest Payment Date”: (a) as to any Base Rate Loan, the last Business Day of each March, June, September and December to occur while such BaseRate Loan is outstanding and the final maturity date of such Base Rate Loan, (b) as to any Eurodollar Loan having an Interest Period of three months or less,the last day of such Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer than three months, each day that is three months, or a wholemultiple thereof, after the first day of such Interest Period and the last day of such Interest Period and (d) as to any Eurodollar Loan, the date of any repaymentor prepayment made in respect thereof.“Interest Period”: as to any Eurodollar Loan, each period commencing on the last day of the next preceding Interest Period applicable to suchEurodollar Loan and ending one, three or six (or, if agreed to by all relevant Lenders, twelve) months thereafter, as selected by the Borrower by irrevocablenotice to the Administrative Agent not later than 10:00 A.M., New York City time, on the date that is three (3) Business Days prior to the last day of the thencurrent Interest Period with respect thereto; provided that, all of the foregoing provisions relating to Interest Periods are subject to the following:(i) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to thenext succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which eventsuch Interest Period shall end on the immediately preceding Business Day;(ii) the Borrower may not select an Interest Period that would extend beyond the Revolving Maturity Date or an IncrementalTerm Loan Maturity Date, as applicable; and(iii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numericallycorresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month.“Investment”: any direct or indirect loan, advance (or other extension of credit) or capital contribution to (by means of any transfer of cash or otherproperty or assets to another Person or any other payments for property or services for the account or use of another Person) another Person, including,without limitation, the following: (1) the purchase or acquisition of any Capital Stock or other evidence of beneficial ownership in another Person; and(2) the purchase, acquisition or Guarantee of the Indebtedness or other liability of another Person.“Issuing Bank”: JPMorgan Chase Bank, N.A., HSBC Bank USA, National Association and each other Lender designated by the Borrower as an“Issuing Bank” hereunder that has agreed to such designation (and is14reasonably acceptable to the Administrative Agent), each in its capacity as the issuer of Documentary Credits hereunder, and its successors in such capacityas provided in Section 2.4(i). Any Issuing Bank may, in its discretion and with notice to the Borrower and the Administrative Agent, arrange for one or moreDocumentary Credits to be issued by Affiliates of such Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect toDocumentary Credits issued by such Affiliate.“JPMorgan”: the meaning set forth in the preamble to this Agreement.“Joint Lead Arrangers”: JPMorgan Chase Bank, N.A., HSBC Securities (USA) Inc., BNP Paribas Securities Corp., Crédit Agricole Corporate andInvestment Bank, Mizuho Bank, Ltd., DBS Bank, Ltd., Oversea-Chinese Banking Corporation Limited, Citibank, N.A., Industrial and Commercial Bank ofChina Limited, New York Branch and MUFG Bank, Ltd.“Joint Venture”: with respect to any Person, any partnership, corporation or other entity in which up to and including 50% of the Equity Interests isowned, directly or indirectly, by such Person and/or one or more of its Subsidiaries.“Legal Holiday”: a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a place of payment are authorized bylaw, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on thenext succeeding day that is not a Legal Holiday.“Lenders”: the meaning set forth in the preamble to this Agreement.“Lien”: any lien, security interest, mortgage, charge or similar encumbrance, provided, however, that in no event shall either (i) any legal orequitable encumbrances deemed to exist by reason of a negative pledge or (ii) an operating lease or a non-exclusive license be deemed to constitute a Lien.“Loan”: a loan made by a Lender to the Borrower pursuant to this Agreement.“Loan Documents”: this Agreement, the Security Documents, the First Lien Intercreditor Agreement and any joinder to such First Lien IntercreditorAgreement, any Incremental Amendment, and, after execution and delivery thereof pursuant to the terms of this Agreement, each Note, and any amendment,waiver, supplement or other modification to any of the foregoing.“Loan Parties”: the Borrower and the Guarantors.“Manassas Property”: all real property vested solely in the Borrower or a Guarantor at the location commonly known 9600 Godwin Drive; Manassas,Virginia 20110 together with all real property vested solely in the Borrower or a Guarantor adjoining, contiguous to, or in vicinity of the Manassas Property.“Material Adverse Effect”: a material adverse effect on (a) the business, financial condition, results of operations or properties of the Borrower and itsSubsidiaries taken as a whole, (b) the ability of the Loan Parties, taken as a whole, to perform their obligations under the Loan Documents, (c) the validity orenforceability of the Loan Documents taken as a whole or (d) the material rights and remedies available to, or conferred upon, the Lenders, the AdministrativeAgent and the Collateral Agent under the other Loan Documents, taken as a whole (it being understood that any event or condition described inSection 7.1(h) or (i) hereof that would not give rise to a Default or Event of Default thereunder shall not constitute a Material Adverse Effect under precedingclause (c) or (d)).“Material Subsidiary”: each Restricted Subsidiary that, as of the last day of the fiscal quarter of the Borrower most recently ended for which financialstatements are available, had total assets (based on book value after intercompany eliminations) as of the end of such quarter in excess of $200,000,000 orthat is designated by the Borrower as a “Material Subsidiary.”“Materials of Environmental Concern”: any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products, or asbestos, orpolychlorinated biphenyls or any other chemicals, substances, materials, wastes, pollutants or contaminants in any form, regulated under any EnvironmentalLaw.15“Maturity Date”: the Revolving Maturity Date or the Incremental Term Maturity Date.“Measurement Period”: at any date of determination, the most recently completed four fiscal quarters of the Borrower for which financial statementshave been filed with the SEC.“Minimum Extension Condition”: the meaning set forth in Section 2.27(b).“Moody’s”: Moody’s Investors Service, Inc. and any successor to its rating agency business.“Mortgaged Property”: collectively, the Boise Property and the Manassas Property and the other real properties of the Borrower or any Guarantor, asto which the Collateral Agent for the benefit of the Secured Parties is or shall be granted a Lien pursuant to the Mortgages.“Mortgages”: collectively, each of the mortgages, deeds of trust, deeds to secure debt and security deeds made by any Loan Party in favor of, or forthe benefit of, the Collateral Agent for the benefit of the Secured Parties referred to therein, as each may be amended, restated, supplemented or otherwisemodified from time to time; provided, however, in the event any Mortgaged Property is located in a jurisdiction which imposes mortgage recording taxes orsimilar fees, the applicable Mortgage shall not secure an amount in excess of 100% of the Fair Market Value of such Mortgaged Property.“Multiemployer Plan”: a Plan that is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.“Non-Excluded Taxes”: the meaning set forth in Section 2.19(a).“Notes”: the collective reference to any promissory note evidencing Loans.“NYFRB”: the Federal Reserve Bank of New York.“NYFRB Rate”: for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate ineffect on such day (or for any day that is not a Business Day, for the immediately preceding Business Day); provided that if none of such rates are publishedfor any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted at 11:00 a.m. on such day received by theAdministrative Agent from a federal funds broker of recognized standing selected by it; provided, further, that if any of the aforesaid rates as so determined beless than zero, such rate shall be deemed to be zero for purposes of this Agreement.“Obligations”: the unpaid principal of and interest on (including interest accruing after the maturity of the Loans and interest accruing after thefiling of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not aclaim for post-filing or post-petition interest is allowed in such proceeding) the Loans, DC Exposure and all other obligations and liabilities of the Borrowerto the Administrative Agent or to any Lender, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred,which may arise under, out of, or in connection with, this Agreement, any other Loan Document or any other document made, delivered or given inconnection herewith or therewith, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including all fees,charges and disbursements of counsel to the Administrative Agent or to any Lender that are required to be paid by the Borrower pursuant hereto) or otherwise.“Original Revolving Maturity Date”: means July 3, 2023.“Other Taxes”: all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes arising from any payment madehereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any otherLoan Document, except any such Taxes imposed with respect to an assignment (other than an assignment pursuant to Section 2.26 (Replacement of Lenders))as a result of the Administrative Agent, Lender or assignee having a present or former connection with the applicable taxing jurisdiction (other than any suchconnection arising solely from the Administrative Agent or such Lender or assignee having executed, delivered, become a party to, or performed itsobligations or received a payment under, or enforced, and/or engaged in any activities contemplated with respect to this Agreement or any other LoanDocument).16“Overnight Bank Funding Rate”: for any day, the rate comprised of both overnight federal funds and overnight Eurodollar borrowings by U.S.-managed banking offices of depository institutions, as such composite rate shall be determined by the NYFRB as set forth on its public website from time totime, and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate.“Pari Passu Lien Indebtedness”: Indebtedness secured by a Lien created or incurred in reliance on Section 6.1 and subject to the terms of a First LienIntercreditor Agreement.“Participant”: the meaning set forth in Section 9.6(c).“Participant Register”: the meaning set forth in Section 9.6(c)(ii).“Patents”: (i) all letters patent and patent rights of the United States, any other country or any political subdivision thereof, all reissues,reexaminations, and extensions thereof, (ii) all applications for letters patent of the United States or any other country and all divisionals, continuations andcontinuations-in-part thereof, and (iii) all rights to obtain any reissues or extensions of the foregoing.“Patent License”: all agreements, whether written or oral, providing for the grant by or to Borrower or any Guarantor of any right to make, havemade, manufacture, use, sell, offer to sell, have sold, import or export any invention covered in whole or in part by a Patent.“Patriot Act”: the USA Patriot Act, Title III of Pub. L. 107-56, signed into law on October 26, 2001, as amended.“PBGC”: the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor).“Permitted Liens”:(1) Liens existing as of the Closing Date or arising thereafter pursuant to related agreements existing as of the Closing Date (other thanLiens securing the Secured Obligations);(2) Liens securing the Obligations;(3) Liens on property given to secure all or any part of the payment of or financing of all or any part of the purchase price thereof, or thecost of development, operation, construction, alteration, repair or improvement of all or any part thereof; provided that such Liens shall be given (orgiven pursuant to firm commitment financing arrangements obtained within such period) within 18 months (or in the case of Liens securing anyIndebtedness supported by an export credit agency, 24 months) after the later of (i) the acquisition of such property and/or the completion of anysuch development, operation, construction, alteration, repair or improvement, whichever is later and (ii) the placing into commercial operation ofsuch property after the acquisition or completion of any such development, operation, construction, alteration, repair or improvement and shallattach solely to the property acquired, or constructed, altered or repaired and any improvements then or thereafter placed thereon and the capitalstock of any Person formed to acquire such property, and any proceeds thereof, accessions thereto and insurance proceeds thereof;(4) Liens existing on any property at the time of acquisition of such property or Liens existing on assets of a Person and its RestrictedSubsidiaries prior to the time such Person becomes a Restricted Subsidiary (or arising thereafter pursuant to contractual commitments entered intoprior to acquiring such property) (including acquisition through merger or consolidation) or at the time of such acquisition (or arising thereafterpursuant to contractual commitments entered into prior to such Person becoming a Restricted Subsidiary) by the Borrower or any RestrictedSubsidiary of the Borrower; provided that such Liens do not extend to other assets of the Borrower or its other Restricted Subsidiaries;(5) (a) Liens on the Equity Interests of any Person, including any Joint Venture, and its Restricted Subsidiaries which, when such Liensarise, concurrently becomes a Restricted Subsidiary or Liens on all or substantially all of the assets of such Person, including any Joint Venture, andits Subsidiaries arising in connection with the purchase or acquisition thereof or of an interest therein by the Borrower or a Subsidiary, including,without limitation, any such Liens on the Equity Interests in or the17assets of IM Flash Technologies, LLC or its Subsidiaries to secure obligations of the Borrower or any of its Subsidiaries with respect to all or aportion of the purchase price for the acquisition of any Equity Interests in or all or a portion of the assets of IM Flash Technologies, LLC and itsSubsidiaries not owned by the Borrower or its Subsidiaries as of the Closing Date, and (b) Liens on Equity Interests in any Joint Venture of theBorrower or any of its Subsidiaries, or in any Subsidiary of the Borrower that owns an Equity Interest in a Joint Venture to secure Indebtednesscontributed or advanced solely to that Joint Venture; provided that, in the case of each of the preceding clauses (a) and (b), such Liens do not extendto other assets of the Borrower or its other Restricted Subsidiaries;(6) Liens securing Indebtedness of up to 5.0% of Consolidated Net Tangible Assets to any strategic partner of the Borrower and/or one ormore of its Restricted Subsidiaries incurred in connection with joint technology efforts between such partner and the Borrower and/or one or more ofits Subsidiaries and/or the financing of manufacturing of products;(7) Liens in favor of the Borrower or a Restricted Subsidiary of the Borrower;(8) Liens imposed by law, such as carriers’, warehousemen’s and mechanic’s Liens and other similar Liens arising in the ordinary course ofbusiness, Liens in connection with legal proceedings and Liens arising solely by virtue of any statutory, common law or contractual provisionrelating to banker’s Liens, rights of set-off or similar rights and remedies as to securities accounts, deposit accounts or other funds maintained with acreditor depository institution;(9) Liens for taxes, assessments or other governmental charges not yet overdue for a period of more than 30 days or subject to penalties fornon-payment or which are being contested in good faith by appropriate proceedings and for which adequate reserves with respect thereto aremaintained on the books of the Borrower or the affected Restricted Subsidiary, as the case may be, in accordance with GAAP;(10) Liens to secure the performance of bids, trade or commercial contracts, government contracts, purchase, construction, sales andservicing contracts (including utility contracts), leases, statutory obligations, surety, stay, customs and appeal bonds, performance bonds and otherobligations of a like nature, in each case in the ordinary course of business, deposits as security for contested taxes, import or customs duties,liabilities to insurance carriers or for the payment of rent, and Liens to secure letters of credit, Guarantees, bonds or other sureties given inconnection with the foregoing obligations or in connection with workers’ compensation, unemployment insurance or other types of social securityor similar laws and regulations;(11) Liens in favor of any customer arising in respect of and not exceeding the amount of performance deposits and partial, progress,advance or other payments by the customer for goods produced or services rendered (or to be produced or rendered) to that customer andconsignment arrangements (whether as consignor or consignee) or similar arrangements for the sale or purchase of goods;(12) Liens upon specific items of inventory or other goods, documents of title and proceeds of any Person securing such Person’sobligation in respect of letters of credit or banker’s acceptances issued or created in the ordinary course of business for the account of such Person tofacilitate the purchase, shipment, or storage of such inventory or other goods;(13) Liens and deposits securing netting services, business credit card programs, overdraft protection and other treasury, depository andcash management services or incurred in connection with any automated clearing-house transfers of funds or other fund transfer or paymentprocessing services;(14) Liens on, and consisting of, deposits made by the Borrower to discharge or defease any other Indebtedness;(15) Liens on insurance policies and the proceeds thereof (i) incurred in connection with the financing of insurance premiums or (ii) withrespect to any Subsidiary that is not a Restricted Subsidiary to the extent of such Subsidiary’s interest as an insured under such policies;18(16) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection withthe importation of goods and Liens deemed to exist in connection with Investments in repurchase agreements;(17) Liens securing Indebtedness or other obligations in an aggregate amount, together with all other Indebtedness and other obligationssecured by Liens pursuant to this clause (17), not to exceed $100,000,000 at any one time outstanding; or(18) any extension, renewal, substitution or replacement (or successive extensions, renewals, substitutions or replacements), in whole or inpart, of any Lien referred to in this clause (18) or the preceding clauses (1) through (17), or any Liens that secure an extension, renewal, replacement,refinancing or refunding (including any successive extensions, renewals, replacements, refinancings or refundings) of any Indebtedness within 12months of the maturity, retirement or other repayment or prepayment of the Indebtedness (including any such repayment pursuant to amortizationobligations with respect to such Indebtedness) being extended, renewed, substituted, replaced, refinanced or refunded, which Indebtedness is or wassecured by a Lien referred to in this clause (18) or the preceding clauses (1) through (17).For the avoidance of doubt, the inclusion of specific Liens in the definition of Permitted Liens shall not create any implication that the obligations securedby such Liens constitute Indebtedness. Terms used in the foregoing definition of Permitted Liens that are defined in the UCC, including the terms accounts,consignee, consignment, consignor, deposit accounts, goods, inventory, securities accounts, security interest and proceeds shall have the meanings set forthin the UCC.“Person”: any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, joint venture,limited liability company, Governmental Authority or other entity of whatever nature.“Plan”: at a particular time, any employee benefit plan that is covered by ERISA and in respect of which the Borrower or a Commonly ControlledEntity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) ofERISA.“Plan Asset Regulations”: 29 CFR § 2510.3-101 et seq., as modified by Section 3(42) of ERISA, as amended from time to time.“Platform”: the meaning set forth in Section 9.2(b).“Prime Rate”: the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quotesuch rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected InterestRates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) orany similar release by the Federal Reserve Board (as determined by the Administrative Agent). Each change in the Prime Rate shall be effective from andincluding the date such change is publicly announced or quoted as being effective.“Principal Property”: with respect to any Person, all of such Person’s interests in any kind of property or asset (including the capital stock in andother securities of any other Person), except such as the Board of Directors by resolution determines in good faith (taking into account, among other things,the materiality of such property to the business, financial condition and earnings of the Borrower and its Consolidated Subsidiaries taken as a whole) not tobe material to the business of the Borrower and its Consolidated Subsidiaries, taken as a whole.“Priority Debt”: (i) Indebtedness of the Borrower or any Restricted Subsidiary (including Guarantees by the Borrower or any Restricted Subsidiary ofIndebtedness) that is secured by Liens on Principal Property or Collateral of the Borrower or any Restricted Subsidiary and that is not otherwise permittedpursuant to Section 6.1(a) or Section 6.1(d) and (ii) any Indebtedness of Restricted Subsidiaries that are not Guarantors that is not included in clause (i) of thisdefinition, and that is not otherwise permitted pursuant to Section 6.1(b) or Section 6.1(d).“PTE”: a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.19“Public Lender”: the meaning set forth in Section 9.15.“Qualified Acquisition”: any acquisition (directly or through the acquisition of equity interests) of all or substantially all or any significant portionof the assets of a Person, an operating unit, division or line of business, or other bulk purchase transaction not prohibited under this Agreement so long as (i)the consideration, which shall be cash consideration and/or other non-equity consideration (including any assumed liabilities), equals or exceeds$400,000,000 and (ii) that the Borrower notifies the Administrative Agent in writing at least five Business Days (or such shorter period as may be reasonablyacceptable to the Administrative Agent) prior to the consummation of such acquisition that such acquisition shall be a “Qualified Acquisition” for purposesof this Agreement along with a certificate signed by a Responsible Officer of the Borrower setting forth a calculation of (x) the Total Leverage Ratioimmediately prior to such Qualified Acquisition and (y) the Total Leverage Ratio after giving pro forma effect to such Qualified Acquisition; provided that ifthe Borrower publicly announces such Acquisition later than five Business Days prior to consummation of the Acquisition, the Borrower shall deliver suchnotice (and certificate, if applicable) on the date of announcement.“Rating Agencies”: each of Moody’s and S&P and if a Corporate Rating of the Borrower is in effect from Fitch, Fitch.“Register”: the meaning set forth in Section 9.6(b)(iv).“Regulation U”: Regulation U of the Board of Governors as in effect from time to time.“Related Persons”: with respect to any Indemnitee, any Affiliate of such Indemnitee and any officer, director, employee, representative or agent ofsuch Indemnitee or Affiliate thereof, in each case that has provided any services in connection with the transactions contemplated under this Agreement andthe other Loan Documents.“Reportable Event”: any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty (30) day notice period iswaived under any regulation promulgated by the PBGC.“Required Lenders”: at any time, Lenders holding more than 50% of the sum of (a) the aggregate unpaid principal amount of any Incremental TermLoans then outstanding and (b) the total Revolving Commitments then in effect or, if the Revolving Commitments have been terminated, the aggregateRevolving Credit Exposure then outstanding; provided that whenever there are one or more Defaulting Lenders, the portion of the Loans, RevolvingCommitments and Revolving Credit Exposure held or deemed held by each Defaulting Lender shall be excluded for purposes of making a determination ofRequired Lenders.“Required Revolving Lenders”: at any time, Lenders holding more than 50% of the total Revolving Commitments then in effect or, if the RevolvingCommitments have been terminated, the aggregate Revolving Credit Exposure then outstanding; provided that whenever there are one or more DefaultingLenders, the Revolving Commitments and Revolving Credit Exposure held or deemed held by each Defaulting Lender shall be excluded for purposes ofmaking a determination of Required Revolving Lenders.“Requirement of Law”: as to any Person, the certificate of incorporation and by laws or other organizational or governing documents of such Person,and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding uponsuch Person or any of its property or to which such Person or any of its property is subject.“Responsible Officer”: the chief executive officer, any president, any vice president, the chief financial officer, the treasurer, any assistant treasurer,the secretary or any assistant secretary of the Borrower.“Restricted Subsidiary”: each Subsidiary of the Borrower, (i) at least 80% of the Voting Stock of which is owned by the Borrower or one or moreSubsidiaries of which at least 80% of the Voting Stock is owned directly or indirectly by the Borrower and (ii) is not an Unrestricted Subsidiary, providedthat, for purposes of clause (i), any Voting Stock owned by a Subsidiary of the Borrower that is not a Restricted Subsidiary based on the foregoing clauseshall be excluded.“Restricted Subsidiary Debt”: the meaning set forth in Section 6.1(b).20“Revolving Commitments”: with respect to each Lender, the commitment of such Lender to make Revolving Loans and to acquire participations inDocumentary Credits hereunder, expressed as an amount representing the maximum aggregate amount of such Lender’s Revolving Credit Exposurehereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.7 and (b) reduced or increased from time to time pursuant toassignments by or to such Lender pursuant to Section 9.4. The initial amount of each Lender’s Revolving Commitment is set forth on Schedule 1.1, or in theAssignment and Assumption or other documentation or record (as such "term is defined in Section 9-102(a)(70) of the New York Uniform Commercial Code)as provided in Section 9.04(b)(ii)(C), pursuant to which such Lender shall have assumed its Revolving Commitment, as applicable. The initial aggregateamount of the Lenders’ Revolving Commitments is $2,000,000,000.“Revolving Credit Exposure”: with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s RevolvingLoans and its DC Exposure at such time.“Revolving Extensions of Credit”: as to any Lender at any time, an amount equal to the sum of (a) the aggregate principal amount of all RevolvingLoans made by such Lender then outstanding, and (b) such Lender’s Revolving Loan Percentage of the DC Obligations then outstanding.“Revolving Facility”: the Revolving Commitments and the extensions of credit made thereunder.“Revolving Loan”: a Loan made pursuant to Section 2.3.“Revolving Loan Percentage”: as to any Lender at any time, the percentage of which such Lender’s Revolving Commitment represents of theaggregate Revolving Commitments or, if the Revolving Commitments have been terminated, the percentage held by such Lender of the aggregate principalamount of all Revolving Loans and DC Obligations (via risk participation) then outstanding.“Revolving Maturity Date”: the earlier to occur of (a) the Stated Maturity and (b) the acceleration of the Revolving Loans and termination of theRevolving Commitments. In the event that one or more Extensions are effected in accordance with Section 2.27, then the Revolving Maturity Date of theRevolving Loans shall be determined based on the respective Stated Maturity applicable thereto (except in cases where clause (b) of the preceding sentenceis applicable).“S&P”: Standard & Poor’s Ratings Services, and any successor to its rating agency business.“Sanctioned Country” means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the time of thisAgreement, Crimea, Cuba, Iran, Libya, North Korea and Syria).“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of ForeignAssets Control of the U.S. Department of the Treasury, the U.S. Department of State, by the United Nations Security Council, the European Union, anyEuropean Union member state, Her Majesty’s Treasury of the United Kingdom or other relevant sanctions authority, (b) any Person operating, organized orresident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b).“Sanctions” means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S.government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or(b) the United Nations Security Council, the European Union, any European Union member state or Her Majesty’s Treasury of the United Kingdom.“SEC”: the Securities and Exchange Commission, any successor thereto and any analogous Governmental Authority.“Secured Covenants Period”: the meaning assigned to such term in Section 9.14.“Secured Covenant Reinstatement Event”: any day following a Guarantee and Collateral Suspension Date on which (i) the Borrower’s CorporateRating shall be equal to or less than either (x) Ba3 from Moody’s or (y) BB- from S&P (or, if the Borrower also maintains a Fitch Corporate Rating, then theBorrower’s Corporate Rating for two of the three rating agencies is equal to or less than (x) Ba3 from Moody’s, (y) BB- from S&P and (z) BB- from21Fitch) or (ii) the Borrower notifies the Administrative Agent in writing that it has elected to terminate a Guarantee and Collateral Suspension Period.“Secured Obligations”: means any principal, interest, premium (if any), fees, indemnifications, reimbursements, expenses, damages and otherliabilities payable under (i) the Security Documents and (ii) any other security agreement with respect to any other series of First Lien Debt, in each case,including, without limitation, all outstanding Obligations, and such obligations in respect of any other series of First Lien Debt issued or outstanding afterthe date of this Agreement.“Secured Parties”: (a) the Administrative Agent, (b) the Collateral Agent, (c) the Lenders and (d) any other Person to whom a Secured Obligation isowned by a Loan Party pursuant to the terms of the Loan Documents.“Securities Act”: the Securities Act of 1933, as amended, or any successor statute or statutes thereto.“Security Documents”: the Guarantee and Collateral Agreement, the Mortgages, and all security agreements, mortgages, deeds of trust or othergrants for security executed and delivered by the Borrower or any other Guarantor creating (or purporting to create) a Lien upon Collateral in favor of theCollateral Agent, for the benefit of the Secured Parties, in each case, as amended, modified, renewed, restated or replaced, in whole or in part, from time totime, in accordance with its terms.“Significant Subsidiary”: any Subsidiary that is a “significant subsidiary” of the Borrower as defined under clauses (1) or (2) of Rule 1-02(w) ofRegulation S-X under the Exchange Act; provided that references to “10 percent” in clauses (1) and (2) of such definition shall be replaced with “20 percent”.“Single Employer Plan”: any Plan that is covered by Title IV of ERISA, but that is not a Multiemployer Plan.“Solvent”: when used with respect to any Person and its Subsidiaries, means that, as of any date of determination, (a) the amount of the “present fairsaleable value” of the assets of such Person and its Subsidiaries on a consolidated basis will, as of such date, exceed the amount of all “liabilities of suchPerson and its Subsidiaries on a consolidated basis, contingent or otherwise”, as of such date, as such quoted terms are determined in accordance withapplicable federal and state laws governing determinations of the insolvency of debtors, (b) the present fair saleable value of the assets of such Person and itsSubsidiaries will, as of such date, be greater than the amount that will be required to pay the probable liability of such Person and its Subsidiaries on aconsolidated basis on its debts as such debts become absolute and matured, (c) such Person and its Subsidiaries on a consolidated basis will not have, as ofsuch date, an unreasonably small amount of capital with which to conduct their business, and (d) such Person and its Subsidiaries will be able to pay theirdebts as they mature. For purposes of this definition, (i) “debt” means liability on a “claim”, and (ii) “claim” means any (x) right to payment, whether or notsuch a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured orunsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to anequitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured.“Stated Maturity”: the Original Revolving Maturity Date; provided that, with respect to any Extended Revolving Commitments, the StatedMaturity with respect thereto shall instead be the final maturity date as specified in the applicable Extension Offer accepted by the respective Lender.“Subsidiary”: with respect to any specified Person:(1) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stockentitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders’ agreement thateffectively transfers voting power) to vote in the election of directors, managers or trustees of the corporation, association or other business entity isat the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combinationthereof); and(2) any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or(b) the only general partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof).22“Taxes”: all present or future taxes, levies, imposts, duties, deductions, charges, assessments, fees, withholdings or other charges imposed by anyGovernmental Authority, including any interest, additions to tax or penalties applicable thereto.“Term Loan Credit Agreement”: the Credit Agreement, dated as of April 26, 2016 (as amended, restated, amended and restated, supplemented orotherwise modified from time to time), by and among Micron Technology, Inc., as borrower, the lenders party thereto, Morgan Stanley Senior Funding, Inc.,as administrative agent and collateral agent and the other parties thereto.“Term Loan Agent”: Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent under the Term Loan Credit Agreement.“Title Insurance Company”: First American Title Insurance Company, or such other title insurance company as shall be reasonably acceptable to theAdministrative Agent.“Total Leverage Ratio”: as of the of the date of determination thereof, the ratio of Indebtedness of the Borrower and its Consolidated Subsidiaries asof such date to Consolidated EBITDA of the Borrower for such Measurement Period.“Total Revolving Credit Exposure” means, the sum of the outstanding principal amount of all Lenders’ Revolving Loans and their DC Exposure atsuch time.“Trademarks”: (i) all trademarks, service marks, trade names, corporate names, company names, business names, fictitious business names, tradestyles, service marks, logos, domain names, and other source or business identifiers, and all goodwill associated therewith, all registrations and recordingsthereof, and all applications in connection therewith (other than “intent to use” applications included in Excluded Property (as defined in the Guarantee andCollateral Agreement), whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any state thereof orany other country or any political subdivision thereof, or otherwise, and all common-law rights related thereto, and (ii) the right to obtain all renewals thereof.“Trademark License”: any agreement, whether written or oral, providing for the grant by or to Borrower or any Guarantor of any right to use anyTrademark.“tranche”: the meaning set forth in Section 2.27(a).“Transferee”: any Assignee or Participant.“Type”: when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising suchBorrowing, is determined by reference to the Base Rate or the Eurodollar Rate.“UCC”: the Uniform Commercial Code as in effect from time to time in the State of New York.“United States”: the United States of America.“Unrestricted Subsidiary”: (1) any Subsidiary of the Borrower designated by the Borrower as an Unrestricted Subsidiary pursuant to Section 5.9subsequent to the Closing Date, until such Person ceases to be an Unrestricted Subsidiary of the Borrower in accordance with Section 5.9 and (2) anySubsidiary of an Unrestricted Subsidiary.“Unsecured Covenants Period”: meaning assigned to such term in Section 9.14.“Unused Revolving Commitment”: with respect to any Lender at any time, an amount equal to the excess, if any, of (a) such Lender’s RevolvingCommitment then in effect over (b) such Lender’s Revolving Extensions of Credit then outstanding.23“Voting Stock”: all classes of capital stock or other interests (including partnership interests) of a Person then outstanding and normally entitled(without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof.“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEAResolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers aredescribed in the EU Bail-In Legislation Schedule.1.2. Other Definitional Provisions.(a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Loan Documentsor any certificate or other document made or delivered pursuant hereto or thereto.(b) As used herein and in the other Loan Documents, and any certificate or other document made or delivered pursuant hereto or thereto, (i) thewords “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, (ii) the word “incur” shall be construed tomean incur, create, issue, assume, become liable in respect of or suffer to exist (and the words “incurred” and “incurrence” shall have correlative meanings)and (iii) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assetsand properties, including cash, Capital Stock, securities, revenues, accounts, leasehold interests and contract rights.(c) The words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as awhole and not to any particular provision of this Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.(d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. Whenever thecontext may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. References to agreements or other ContractualObligations shall, unless otherwise specified, be deemed to refer to such agreements or Contractual Obligations as amended, supplemented, restated orotherwise modified from time to time to the extent permitted herein.Except as otherwise provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP.1.3. Delivery of Notices. Any reference to a delivery or notice date that is not a Business Day shall be deemed to mean the next succeeding daythat is a Business Day.SECTION 2The Credits2.1. Revolving Commitments. Subject to the terms and conditions hereof, each Lender agrees to make Revolving Loans to the Borrower from timeto time during the Availability Period in an aggregate amount that will not result (after giving effect to any application of proceeds of such Borrowingpursuant to Section 2.8) in (a) such Lender’s Revolving Credit Exposure exceeding such Lender’s Revolving Commitment or (b) the sum of the TotalRevolving Credit Exposure exceeding the total Revolving Commitments. Within the foregoing limits and subject to the terms and conditions set forthherein, the Borrower may borrow, prepay and reborrow Revolving Loans. The Revolving Loans may from time to time be Eurodollar Loans or Base RateLoans, as determined by the Borrower and notified to the Administrative Agent in accordance with Sections 2.2 and 2.15.2.2. Revolving Loans and Borrowing. (a) Each Revolving Loan shall be made as part of a Borrowing consisting of Revolving Loans made by theLenders ratably in accordance with their respective Revolving Loan Percentages. The failure of any Lender to make any Revolving Loan required to be madeby it shall not relieve any other Lender of its obligations hereunder; provided that the Revolving Commitments of the Lenders are several and no Lendershall be responsible for any other Lender’s failure to make Loans as required.(b) Subject to Section 2.11, each Revolving Borrowing shall be comprised entirely of Base Rate Loans or Eurodollar Loans as the Borrower mayrequest in accordance herewith. Each Lender at its option may make any24Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan by designating such branch or Affiliate as itslending office; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms ofthis Agreement.(c) At the commencement of each Interest Period for any Eurodollar Revolving Borrowing, such Borrowing shall be in an aggregate amount that isan integral multiple of $1,000,000 and not less than $5,000,000. At the time that each Base Rate Revolving Borrowing is made, such Borrowing shall be inan aggregate amount that is an integral multiple of $1,000,000 and not less than $3,000,000; provided that a Base Rate Revolving Borrowing may be in anaggregate amount that is equal to the entire unused balance of the total Revolving Commitments or that is required to finance the reimbursement of an DCDisbursement as contemplated by Section 2.6(e). Borrowings of more than one Type and Class may be outstanding at the same time; provided that there shallnot at any time be more than a total of ten Eurodollar Revolving Borrowings outstanding.(d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, anyBorrowing if the Interest Period requested with respect thereto would end after the Maturity Date.2.3. Requests for Revolving Borrowings. To request a Revolving Borrowing, the Borrower shall notify the Administrative Agent of such request bysubmitting a Borrowing Request (a) in the case of a Eurodollar Borrowing, not later than 1:00 p.m. New York City time, three Business Days before the dateof the proposed Borrowing or (b) in the case of a Base Rate Borrowing, not later than 12:00 p.m. New York City time, on the date of the proposed Borrowing(which shall be a Business Day). Each such Borrowing Request shall be irrevocable and shall be signed by a Responsible Officer of the Borrower. Each suchBorrowing Request shall specify the following information in compliance with Section 2.2:(i) the aggregate amount of the requested Borrowing;(ii) the Borrowing Date;(iii) whether such Borrowing is to be a Base Rate Borrowing or a Eurodollar Borrowing;(iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by thedefinition of the term “Interest Period”; and(v) the location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements ofSection 2.5.If no election as to the Type of Revolving Borrowing is specified, then the requested Revolving Borrowing shall be a Base Rate Borrowing. If no InterestPeriod is specified with respect to any requested Eurodollar Revolving Borrowing, then the Borrower shall be deemed to have selected an Interest Period ofone month’s duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lenderof the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.2.4. Documentary Credits. (a) General. Subject to the terms and conditions set forth herein, the Borrower may request the issuance of DocumentaryCredits as the applicant thereof for the support of its or its Subsidiaries’ obligations, in a form reasonably acceptable to the Administrative Agent and theIssuing Bank, at any time and from time to time during the Availability Period. In the event of any inconsistency between the terms and conditions of thisAgreement and the terms and conditions of any Documentary Credit Agreement, the terms and conditions of this Agreement shall control. Notwithstandinganything herein to the contrary, the Issuing Bank shall have no obligation hereunder to issue, and shall not issue, any Documentary Credit the proceeds ofwhich would be made available to any Person (i) to fund any activity or business of or with any Sanctioned Person, or in any Sanctioned Country, (ii) in anymanner that would result in a violation of any Sanctions by any party to this Agreement or (iii) in any manner that would result in a violation of one or morepolicies of such Issuing Bank applicable to letters of credit or bank guarantees generally.(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request the issuance of a Documentary Credit (or the amendment,renewal or extension of an outstanding Documentary Credit), the Borrower shall hand deliver or telecopy (or transmit by electronic communication, ifarrangements for doing so have been25approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment,renewal or extension, but in any event no less than three Business Days) a notice requesting the issuance of a Documentary Credit, or identifying theDocumentary Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a BusinessDay), the date on which such Documentary Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such DocumentaryCredit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend suchDocumentary Credit. In addition, as a condition to any such Documentary Credit issuance, the Borrower shall have entered into a continuing agreement (orother letter of credit agreement) for the issuance of letters of credit and/or shall submit a letter of credit application, in each case, as required by the IssuingBank and using such bank’s standard form (each, a “Documentary Credit Agreement”). A Documentary Credit shall be issued, amended, renewed or extendedonly if (and upon issuance, amendment, renewal or extension of each Documentary Credit the Borrower shall be deemed to represent and warrant that), aftergiving effect to such issuance, amendment, renewal or extension (i) the DC Exposure shall not exceed $200,000,000, (ii) the sum of the total RevolvingCredit Exposures shall not exceed the total Revolving Commitments, (iii) following an Extension Offer and acceptance of such Extension Office, the DCExposure in respect of all Documentary Credits having an expiration date after the fifth Business Day prior to the Revolving Maturity Date shall not exceedthe total Revolving Commitments outstanding after such extension and (iv) the applicable Issuing Bank has consented, in its sole discretion, to issue suchDocumentary Credit.(c) Expiration Date. Each Documentary Credit shall expire (or be subject to termination by notice from the Issuing Bank to the beneficiary thereof)at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Documentary Credit (or, in the case of anyrenewal or extension thereof, one year after such renewal or extension) and (ii) the date that is five Business Days prior to the Revolving Maturity Date.(d) Participations. By the issuance of a Documentary Credit (or an amendment to a Documentary Credit increasing the amount thereof) and withoutany further action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Revolving Lender, and each Revolving Lenderhereby acquires from the Issuing Bank, a participation in such Documentary Credit equal to such Revolving Lender’s Revolving Loan Percentage of theaggregate amount available to be drawn under such Documentary Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutelyand unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Revolving Lender’s Revolving Loan Percentage ofeach DC Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the date due as provided in paragraph (e) of this Section, or of anyreimbursement payment required to be refunded to the Borrower for any reason. Each Revolving Lender acknowledges and agrees that its obligation toacquire participations pursuant to this paragraph in respect of Documentary Credits is absolute and unconditional and shall not be affected by anycircumstance whatsoever, including any amendment, renewal or extension of any Documentary Credit or the occurrence and continuance of a Default orreduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.(e) Reimbursement. If the Issuing Bank shall make any DC Disbursement in respect of a Documentary Credit, the Borrower shall reimburse such DCDisbursement by paying to the Administrative Agent an amount equal to such DC Disbursement not later than 12:00 noon, New York City time, on the datethat is two Business Days after such DC Disbursement is made, if the Borrower shall have received notice of such DC Disbursement prior to 10:00 a.m.,New York City time, on such date, or, if such notice has not been received by the Borrower prior to such time on such date, then not later than 12:00 noon,New York City time, on the Business Day immediately following the day that the Borrower receives such notice, if such notice is not received prior to suchtime on the day of receipt; provided that the Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.3 or2.5 that such payment be financed with a Base Rate Revolving Borrowing in an equivalent amount and, to the extent so financed, the Borrower’s obligationto make such payment shall be discharged and replaced by the resulting Base Rate Revolving Borrowing Loan. If the Borrower fails to make such paymentwhen due, the Administrative Agent shall notify each Revolving Lender of the applicable DC Disbursement, the payment then due from the Borrower inrespect thereof and such Lender’s Revolving Loan Percentage thereof. Promptly following receipt of such notice, each Lender shall pay to the AdministrativeAgent its Revolving Loan Percentage of the payment then due from the Borrower, in the same manner as provided in Section 2.5 with respect to RevolvingLoans made by such Lender (and Section 2.5 shall apply, mutatis mutandis, to the payment obligations of the Revolving Lenders), and the AdministrativeAgent shall promptly pay to the Issuing Bank the amounts so received by it from the Revolving Lenders. Promptly following receipt by the AdministrativeAgent of any payment from the Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the Issuing Bank or,26to the extent that Revolving Lenders have made payments pursuant to this paragraph to reimburse the Issuing Bank, then to such Revolving Lenders and theIssuing Bank as their interests may appear. Any payment made by a Revolving Lender pursuant to this paragraph to reimburse the Issuing Bank for any DCDisbursement (other than the funding of Base Rate Revolving Loans as contemplated above) shall not constitute a Loan and shall not relieve the Borrower ofits obligation to reimburse such DC Disbursement.(f) Obligations Absolute. The Borrower’s obligation to reimburse DC Disbursements as provided in paragraph (e) of this Section shall be absolute,unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoeverand irrespective of (i) any lack of validity or enforceability of any Documentary Credit, any Documentary Credit Agreement or this Agreement, or any term orprovision therein, (ii) any draft or other document presented under a Documentary Credit proving to be forged, fraudulent or invalid in any respect or anystatement therein being untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a Documentary Credit against presentation of a draft orother document that does not comply with the terms of such Documentary Credit, or (iv) any other event or circumstance whatsoever, whether or not similarto any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, theBorrower’s obligations hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their Related Parties, shall have anyliability or responsibility by reason of or in connection with the issuance or transfer of any Documentary Credit or any payment or failure to make anypayment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay intransmission or delivery of any draft, notice or other communication under or relating to any Documentary Credit (including any document required to makea drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; providedthat the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to special,indirect, consequential or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) sufferedby the Borrower that are caused by the Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under aDocumentary Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on thepart of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in each suchdetermination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented whichappear on their face to be in substantial compliance with the terms of a Documentary Credit, the Issuing Bank may, in its sole discretion, either accept andmake payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse toaccept and make payment upon such documents if such documents are not in strict compliance with the terms of such Documentary Credit.(g) Disbursement Procedures. The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent ademand for payment under a Documentary Credit. The Issuing Bank shall promptly notify the Administrative Agent and the Borrower by telephone(confirmed by telecopy or electronic mail) of such demand for payment and whether the Issuing Bank has made or will make an DC Disbursement thereunder;provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenderswith respect to any such DC Disbursement.(h) Interim Interest. If the Issuing Bank shall make any DC Disbursement, then, unless the Borrower shall reimburse such DC Disbursement in full onthe date such DC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such DC Disbursement ismade to but excluding the date that the reimbursement is due and payable at the rate per annum then applicable to Base Rate Revolving Loans and suchinterest shall be due and payable on the date when such reimbursement is payable; provided that, if the Borrower fails to reimburse such DC Disbursementwhen due pursuant to paragraph (e) of this Section, then Section 2.9(c) shall apply. Interest accrued pursuant to this paragraph shall be for the account of theIssuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (e) of this Section to reimburse the IssuingBank shall be for the account of such Lender to the extent of such payment.(i) Replacement of the Issuing Bank. (i) An Issuing Bank may be replaced at any time by written agreement among the Borrower, the AdministrativeAgent, the replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such replacement of an IssuingBank. At the time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bankpursuant to Section 2.22(c). From and after the effective date of any such replacement, (x) the successor Issuing Bank shall have all the rights and obligationsof Issuing Banks under this Agreement with27respect to Documentary Credits to be issued thereafter and (y) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or toany previous Issuing Banks, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bankhereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under thisAgreement with respect to Documentary Credits issued by it prior to such replacement, but shall not be required to issue additional Documentary Credits.(ii) Subject to the appointment and acceptance of a successor Issuing Bank, any Issuing Bank may resign as an Issuing Bank at any time upon thirtydays’ prior written notice to the Administrative Agent, the Borrower and the Lenders, in which case, such Issuing Bank shall be replaced in accordance withSection 2.6(i) above.(j) Cash Collateralization. During a Secured Covenants Period, if any Event of Default shall occur and be continuing, on the Business Day that theBorrower receives notice from the Administrative Agent or the Required Revolving Lenders (or, if the maturity of the Loans has been accelerated, RevolvingLenders with DC Exposure representing greater than 50% of the total DC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, theBorrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Revolving Lenders, anamount in cash equal to the DC Exposure as of such date plus any accrued and unpaid interest thereon; provided that the obligation to deposit such cashcollateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind,upon the occurrence of any Event of Default with respect to the Borrower described in Section 7.1(f) or (g). Such deposit shall be held by the AdministrativeAgent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusivedominion and control, including the exclusive right of withdrawal, over such account. Other than any interest earned on the investment of such deposits,which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall notbear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the AdministrativeAgent to reimburse the Issuing Bank for DC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for thesatisfaction of the reimbursement obligations of the Borrower for the DC Exposure at such time or, if the maturity of the Loans has been accelerated (butsubject to the consent of Revolving Lenders with DC Exposure representing greater than 50% of the total DC Exposure), be applied to satisfy otherObligations. If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (tothe extent not applied as aforesaid) shall be returned to the Borrower within three Business Days after all Events of Default have been cured or waived.(k) Documentary Credits Issued for Account of Restricted Subsidiaries. Notwithstanding that a Documentary Credit issued or outstanding hereundersupports any obligations of, or is for the account of, a Subsidiary of the Borrower, or states that a Subsidiary of the Borrower is the “account party,”“applicant,” “customer,” “instructing party,” or the like of or for such Documentary Credit, and without derogating from any rights of the applicable IssuingBank (whether arising by contract, at law, in equity or otherwise) against such Subsidiary in respect of such Documentary Credit, the Borrower (i) shallreimburse, indemnify and compensate the applicable Issuing Bank hereunder for such Documentary Credit (including to reimburse any and all drawingsthereunder) as if such Documentary Credit had been issued solely for the account of the Borrower and (ii) irrevocably waives any and all defenses that mightotherwise be available to it as a guarantor or surety of any or all of the obligations of such Subsidiary in respect of such Documentary Credit. The Borrowerhereby acknowledges that the issuance of such Documentary Credits for its Subsidiaries inures to the benefit of the Borrower, and that the Borrower’sbusiness derives substantial benefits from the businesses of such Subsidiaries.2.5. Funding of Borrowings.(a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by2:00 p.m., New York City time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders. TheAdministrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an account of theBorrower maintained at a financial institution reasonably acceptable to the Administrative Agent and designated by the Borrower in the applicableBorrowing Request; provided that Base Rate Revolving Loans made to finance the reimbursement of an DC Disbursement as provided in Section 2.4(e) shallbe remitted by the Administrative Agent to the relevant Issuing Bank.(b) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender willnot make available to the Administrative Agent such Lender’s28Revolving Loan Percentage of such Borrowing, the Administrative Agent may assume that such Lender has made such Revolving Loan Percentage of suchBorrowing available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to theBorrower a corresponding amount. In such event, if a Lender has not in fact made its Revolving Loan Percentage of the applicable Borrowing available to theAdministrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand suchcorresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding thedate of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the NYFRB Rate and a rate determined by the AdministrativeAgent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrower, the interest rate applicable to Base RateLoans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Revolving Loan included in suchBorrowing.2.6. RESERVED.2.7. Termination and Reduction of Revolving Commitments.(a) Unless previously terminated, the Revolving Commitments shall terminate on the Revolving Maturity Date.(b) The Borrower may at any time terminate, or from time to time reduce, the Revolving Commitments; provided that (i) each reduction of theRevolving Commitments shall be in an amount that is an integral multiple of $5,000,000 and not less than $10,000,000 and (ii) the Borrower shall notterminate or reduce the Revolving Commitments if, after giving effect to any concurrent prepayment of the Revolving Loans in accordance with Section2.13, the sum of the Revolving Credit Exposures would exceed the total Revolving Commitments.(c) The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Revolving Commitments under paragraph (b) ofthis Section at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof.Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrowerpursuant to this Section shall be irrevocable; provided that a notice of termination of the Commitments delivered by the Borrower may state that such noticeis conditioned upon the effectiveness of other credit facilities or another contingency, in which case such notice may be revoked by the Borrower (by noticeto the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the RevolvingCommitments shall be permanent. Each reduction of the Revolving Commitments shall be made ratably among the Lenders in accordance with theirrespective Revolving Commitments.2.8. Repayment of Loans; Evidence of Debt.(a) The Borrower hereby unconditionally promises to pay the Administrative Agent for the account of each Lender the then unpaid principalamount of each Loan on the applicable Maturity Date.(b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing Indebtedness of the Borrower to suchLender resulting from each Loan of such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from timeto time under this Agreement.(c) The Administrative Agent shall, in respect of this Agreement, record in the Register, with separate sub-accounts for each Lender, (i) the amountand Borrowing Date of each Loan made hereunder, (ii) the amount of any principal or interest due and payable or to become due and payable from theBorrower to each Lender hereunder and (iii) both the amount of any payment received by the Administrative Agent hereunder from the Borrower and eachLender’s share thereof.(d) The entries made in the Register and the accounts of each Lender maintained pursuant to Sections 2.8(b) and (c) shall, to the extent permittedby applicable law, be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded absent manifest error; provided,however, that the failure of any Lender or the Administrative Agent to maintain the Register or any such account, or any error therein, shall not in any manneraffect the obligation of the Borrower to repay (with applicable interest) the Loans made to the Borrower by such Lender in accordance with the terms of thisAgreement.29(e) If so requested after the Closing Date by any Lender by written notice to the Borrower (with a copy to the Administrative Agent), the Borrowerwill execute and deliver to such Lender, promptly after the Borrower’s receipt of such notice, a Note to evidence such Lender’s Loans in form and substancereasonably satisfactory to the Administrative Agent and the Borrower.2.9. Interest Rates and Payment Dates.(a) Each Eurodollar Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the EurodollarRate determined for such Interest Period plus the Applicable Margin.(b) Each Base Rate Loan shall bear interest at a rate per annum equal to the Base Rate from time to time plus the Applicable Margin.(c) Notwithstanding the foregoing, upon the occurrence and during the continuance of an Event of Default under Section 7.1(a) or (b), at any timeafter the date on which any principal amount of any Loan is due and payable (whether on the maturity date therefor, upon acceleration or otherwise), or afterany other monetary Obligation of the Borrower or any other Loan Party shall have become due and payable, and, in each case, for so long as such overdueObligation remains unpaid, the Borrower shall pay, but only to the extent permitted by law, interest (after as well as before judgment) on such unpaid overdueamounts at a rate per annum equal to (i) in the case of overdue principal on any Loan, the rate of interest that otherwise would be applicable to such Loanplus 2% per annum and (ii) in the case of overdue interest, fees, and other monetary Obligations, the rate then applicable to Base Rate Loans plus 2% perannum.(d) Interest shall be payable in arrears on each Interest Payment Date; provided that interest accruing pursuant to paragraph (c) of this Section shallbe payable from time to time on demand.(e) The provisions of this Section 2.9 (and the interest rates applicable to various extensions of credit hereunder) shall be subject to modification asexpressly provided in Section 2.27 hereof.2.10. Computation of Interest and Fees.(a) Interest and fees payable pursuant hereto shall be calculated on the basis of a 360-day year for the actual days elapsed, except that, with respectto Base Rate Loans, when the Base Rate is based on the Prime Rate the interest thereon shall be calculated on the basis of a 365- (or 366-, as the case may be)day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Borrower and the Lenders of each determination of aEurodollar Rate. Any change in the interest rate on a Loan resulting from a change in the Base Rate or the Eurocurrency Reserve Requirements shall becomeeffective as of the opening of business on the day on which such change becomes effective. The Administrative Agent shall as soon as practicable notify theBorrower and the Lenders of the effective date and the amount of each such change in interest rate.(b) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive andbinding on the Borrower and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of the Borrower, deliver to theBorrower a statement showing the quotations used by the Administrative Agent in determining any interest rate hereunder.2.11. Inability to Determine Interest Rate. (a) If prior to the first day of any Interest Period:(i) the Administrative Agent shall have reasonably determined (which determination shall be conclusive and binding upon the Borrower)that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate forsuch Interest Period, or(ii) the Administrative Agent shall have received notice from the Required Lenders that the Eurodollar Rate determined or to bedetermined for such Interest Period in good faith by such Required Lenders will not adequately and fairly reflect the cost to such Lenders (asconclusively certified by such Lenders) of making or maintaining their affected Loans during such Interest Period,30the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower and the relevant Lenders as soon as practicable thereafter. If suchnotice is given (x) any Eurodollar Loans hereunder requested to be made on the first day of such Interest Period shall be made as Base Rate Loans, (y) anyLoans hereunder that were to have been converted on the first day of such Interest Period to Eurodollar Loans shall be continued as Base Rate Loans and(z) any outstanding Eurodollar Loans hereunder shall be converted, on the last day of the then-current Interest Period, to Base Rate Loans;provided that if the circumstances giving rise to such notice shall cease or otherwise become inapplicable to such Required Lenders, then such RequiredLenders shall promptly give notice of such change in circumstances to the Administrative Agent and the Borrower. Until such notice has been withdrawn bythe Administrative Agent, no further Eurodollar Loans hereunder shall be made or continued as such, nor shall the Borrower have the right to convert Loanshereunder to Eurodollar Loans.(b) If at any time the Administrative Agent determines (which determination shall be conclusive absent manifest error) that (i) the circumstances setforth in clause (a)(i) have arisen and such circumstances are unlikely to be temporary or (ii) the circumstances set forth in clause (a)(i) have not arisen buteither (w) the supervisor for the administrator of the LIBOR has made a public statement that the administrator of the LIBOR is insolvent (and there is nosuccessor administrator that will continue publication of the LIBOR), (x) the administrator of the LIBOR has made a public statement identifying a specificdate after which the LIBOR will permanently or indefinitely cease to be published by it (and there is no successor administrator that will continuepublication of the LIBOR), (y) the supervisor for the administrator of the LIBOR has made a public statement identifying a specific date after which theLIBOR will permanently or indefinitely cease to be published or (z) the supervisor for the administrator of the LIBOR or a Governmental Authority havingjurisdiction over the Administrative Agent has made a public statement identifying a specific date after which the LIBOR may no longer be used fordetermining interest rates for loans, then the Administrative Agent and the Borrower shall endeavor to establish an alternate rate of interest to the EurodollarRate that gives due consideration to the then prevailing market convention for determining a rate of interest for syndicated loans in the United States at suchtime, and shall enter into an amendment to this Agreement to reflect such alternate rate of interest and such other related changes to this Agreement as may beapplicable (but for the avoidance of doubt, such related changes shall not include a reduction of the Applicable Margin); provided that, if such alternate rateof interest as so determined would be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement. Notwithstanding anything to thecontrary in Section 9.1, such amendment shall become effective without any further action or consent of any other party to this Agreement so long as theAdministrative Agent shall not have received, within five Business Days of the date notice of such alternate rate of interest is provided to the Lenders, awritten notice from the Required Lenders of each Class stating that such Required Lenders object to such amendment. Until an alternate rate of interest shallbe determined in accordance with this clause (b) (but, in the case of the circumstances described in clause (ii) of the first sentence of this Section 2.11(b), onlyto the extent the LIBOR for such Interest Period is not available or published at such time on a current basis), (x) any requests to convert of any Borrowing to,or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective and (y) if any Borrowing Request requests a Eurodollar Borrowing, suchBorrowing shall be made as a Base Rate Borrowing.2.12. RESERVED. 2.13. Prepayment of Loans.(a) Subject to the provisos below, the Borrower may at any time and from time to time prepay the Revolving Loans, in whole or in part, withoutpremium or penalty, upon irrevocable notice, which shall be in substantially the firm attached hereto as Exhibit H, delivered to the Administrative Agentprior to 10:00 A.M., New York City time on the same Business Day, which notice shall specify the date and amount of prepayment and whether theprepayment is of Eurodollar Loans or Base Rate Loans; provided that if a Eurodollar Loan is prepaid on any day other than the last day of the Interest Periodapplicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.20. Upon receipt of any such notice of prepayment, theAdministrative Agent shall notify each relevant Lender thereof on the date of receipt of such notice. If any such notice is given, the amount specified in suchnotice shall be due and payable on the date specified therein, together with (except in the case of prepayments of Loans maintained as Base Rate Loans)accrued interest to such date on the amount prepaid. Partial prepayments shall be in an aggregate principal amount of $1,000,000 or a whole multiple of$1,000,000 in excess thereof (or, if less, the then outstanding principal amount of Loans). The application of any prepayment pursuant to this Section 2.13(a)shall be made, first, to Base Rate Loans of the respective Revolving Lenders (and of the respective tranche, if there are multiple tranches) and, second, toEurodollar Loans of the respective Revolving31Lenders (and of the respective tranche, if there are multiple tranches). A notice of prepayment of all outstanding Revolving Loans pursuant to thisSection 2.13(a) may state that such notice is conditioned upon the effectiveness of other credit facilities, securities offerings or other transactions, theproceeds of which will be used to refinance in full this Agreement, in which case such notice may be revoked by the Borrower (by notice to theAdministrative Agent on or prior to the specified effective date) if such condition is not satisfied.2.14. RESERVED.2.15. Conversion and Continuation Options.(a) The Borrower may elect from time to time to convert Eurodollar Loans to Base Rate Loans by giving the Administrative Agent prior irrevocablenotice, in substantially the form attached hereto as Exhibit G, of such election no later than 12:00 Noon, New York City time, on the Business Day precedingthe proposed conversion date, provided that any such conversion of Eurodollar Loans may only be made on the last day of an Interest Period with respectthereto. The Borrower may elect from time to time to convert Base Rate Loans to Eurodollar Loans by giving the Administrative Agent prior irrevocablenotice of such election no later than 12:00 Noon, New York City time, on the third (3rd) Business Day preceding the proposed conversion date (which noticeshall specify the length of the initial Interest Period therefor), provided that no Base Rate Loan may be converted into a Eurodollar Loan when any Event ofDefault has occurred and is continuing and the Administrative Agent or the Required Lenders have determined in its or their sole discretion not to permitsuch conversions. Upon receipt of any such notice, the Administrative Agent shall promptly notify each relevant Lender thereof.(b) Any Eurodollar Loan may be continued as such upon the expiration of the then current Interest Period with respect thereto by the Borrowergiving irrevocable notice no later than 12:00 Noon, New York City time, on the third (3rd) Business Day preceding the proposed continuation date to theAdministrative Agent, in substantially the form attached hereto as Exhibit G, in accordance with the applicable provisions of the term “Interest Period” setforth in Section 1.1, of the length of the next Interest Period to be applicable to such Loans, provided that no Eurodollar Loan may be continued as suchwhen any Event of Default has occurred and is continuing and the Administrative Agent has or the Required Lenders have determined in its or their solediscretion not to permit such continuations, and provided, further, that if the Borrower shall fail to give any required notice as described above in thisparagraph or if such continuation is not permitted pursuant to the preceding proviso such Eurodollar Loans shall be automatically converted to Base RateLoans on the last day of such then expiring Interest Period. Upon receipt of any such notice, the Administrative Agent shall promptly notify each relevantLender thereof.2.16. Limitations on Eurodollar Tranches. Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions andcontinuations of Eurodollar Loans and all selections of Interest Periods shall be in such amounts and be made pursuant to such elections so that no more thanten different Interest Periods for any Class of Loans be outstanding at any one time (unless a greater number of Interest Periods is permitted by theAdministrative Agent).2.17. Pro Rata Treatment, etc.(a) Except as otherwise provided herein (including Section 2.27), each borrowing by the Borrower from the Revolving Lenders hereunder shall bemade pro rata according to their Revolving Loan Percentages.(b) Except as otherwise provided herein (including Section 2.27), each payment (including each prepayment) by the Borrower on account ofprincipal or interest on each Class of Loans shall be made pro rata according to the respective outstanding principal amounts of such Class of Loans then heldby the applicable Lenders.(c) All payments by the Borrower hereunder and under the Notes shall be made in Dollars in immediately available funds without setoff orcounterclaim at the Funding Office of the Administrative Agent by 2:00 P.M., New York City time, on the date on which such payment shall be due, providedthat if any payment hereunder would become due and payable on a day other than a Business Day such payment shall become due and payable on the nextsucceeding Business Day and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension.Interest in respect of any Loan hereunder shall accrue from and including the date of such Loan to but excluding the date on which such Loan is paid in full.32(d) RESERVED.(e) Unless the Administrative Agent shall have been notified in writing by the Borrower prior to the date of any payment due to be made by theBorrower hereunder that the Borrower will not make such payment to the Administrative Agent, the Administrative Agent may assume that the Borrower ismaking such payment, and the Administrative Agent may, but shall not be required to, in reliance upon such assumption, make available to the Lenders theirrespective pro rata shares of a corresponding amount. If such payment is not made to the Administrative Agent by the Borrower within three (3) BusinessDays after such due date, the Administrative Agent shall be entitled to recover, on demand, from each Lender to which any amount which was made availablepursuant to the preceding sentence, such amount with interest thereon at the rate per annum equal to the daily average Federal Funds Effective Rate. Nothingherein shall be deemed to limit the rights of the Administrative Agent or any Lender against the Borrower.(f) Notwithstanding anything to the contrary contained in this Section 2.17 or elsewhere in this Agreement, the Borrower may extend the finalmaturity of Loans in connection with an Extension that is permitted under Section 2.27 without being obligated to effect such extensions on a pro rata basisamong the Lenders. Furthermore, the Borrower may take all actions contemplated by Section 2.27 in connection with any Extension (including modifyingpricing and repayments or prepayments), and in each case such actions shall be permitted, and the differing payments contemplated therein shall be permittedwithout giving rise to any violation of this Section 2.17 or any other provision of this Agreement.2.18. Requirements of Law.(a) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by any Lender orIssuing Bank with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority, in each case,made subsequent to the Closing Date (including, but not limited to, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and, in each case, allrequests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines, requirements and directivespromulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the UnitedStates or foreign Governmental Authorities, in each case pursuant to Basel III):(i) shall subject the Administrative Agent, any Lender or Issuing Bank to any Tax of any kind whatsoever with respect to this Agreementor any Eurodollar Loan made by it (except for Non-Excluded Taxes or Other Taxes covered by Section 2.19 and any Excluded Taxes);(ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by,deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any officeof such Lender or Issuing Bank that is not otherwise included in the determination of the Eurodollar Rate; or(iii) shall impose on any such Lender or Issuing Bank or the London interbank market (by reasons of such Lender or Issuing Bank’sparticipation in the London interbank market) any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made bysuch Lender or any Documentary Credit or participation therein;and the result of any of the foregoing is to increase the cost to such Lender or Issuing Bank, by an amount that such Lender or Issuing Bank deems to bematerial, of making, converting into, continuing or maintaining Eurodollar Loans or any Documentary Credit, or to reduce any amount receivable hereunderin respect thereof, then, in any such case, the Borrower shall promptly pay such Lender or Issuing Bank, upon its demand, any additional amounts necessaryto compensate such Lender or Issuing Bank for such increased cost or reduced amount receivable. If any Lender or Issuing Bank becomes entitled to claimany additional amounts pursuant to this paragraph, it shall promptly notify the Borrower (with a copy to the Administrative Agent) of the event by reason ofwhich it has become so entitled.(b) If any Lender or Issuing Bank shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacyor liquidity requirements or in the interpretation or application thereof or compliance by such Lender or Issuing Bank or any corporation controlling suchLender or Issuing Bank with any request or directive regarding capital adequacy or liquidity requirements (whether or not having the force33of law) from any Governmental Authority made subsequent to the Closing Date shall have the effect of reducing the rate of return on such Lender’s, suchIssuing Bank’s or such corporation’s capital as a consequence of its obligations hereunder to a level below that which such Lender, such Issuing Bank’s orsuch corporation could have achieved but for such adoption, change or compliance (taking into consideration such Lender’s, such Issuing Bank’s or suchcorporation’s policies with respect to capital adequacy or liquidity requirements) by an amount deemed by such Lender to be material, then from time totime, after submission by such Lender or Issuing Bank to the Borrower (with a copy to the Administrative Agent) of a written request therefor, the Borrowershall pay to such Lender or Issuing Bank such additional amount or amounts as will compensate such Lender, such Issuing Bank or such corporation for suchreduction.(c) A certificate as to any additional amounts payable pursuant to this Section submitted by any Lender or Issuing Bank to the Borrower (with acopy to the Administrative Agent) shall be conclusive in the absence of manifest error. Notwithstanding anything to the contrary in this Section 2.18, theBorrower shall not be required to compensate any Lender or Issuing Bank pursuant to this Section 2.18 for any amounts incurred more than 180 days prior tothe date that such Lender or Issuing Bank notifies the Borrower of such Lender’s or Issuing Bank’s intention to claim compensation therefor; provided that, ifthe circumstances giving rise to such claim have a retroactive effect, then such 180 days period shall be extended to include the period of such retroactiveeffect. The obligations of the Borrower pursuant to this Section 2.18 shall survive the termination of this Agreement and the payment of the Loans and allother amounts payable hereunder.2.19. Taxes.(a) Unless required by applicable law (as determined in good faith by the applicable withholding agent), all payments by or on account of anyobligation of any Loan Party hereunder or under any other Loan Document shall be made free and clear of, and without deduction or withholding for or onaccount of, any Taxes, excluding (i) Taxes imposed on or measured by net income (however denominated), gross receipts Taxes (imposed in lieu of netincome Taxes) and franchise Taxes (imposed in lieu of net income Taxes) imposed on the Administrative Agent or any Lender as a result of such recipient(A) being organized or having its principal office in the applicable taxing jurisdiction, or in the case of any Lender, having its applicable lending office insuch jurisdiction, or (B) having any other present or former connection with the applicable taxing jurisdiction (other than any such connection arising solelyfrom the Administrative Agent or such Lender having executed, delivered, become a party to, or performed its obligations or received a payment under, orenforced, and/or engaged in any activities contemplated with respect to this Agreement or any other Loan Document); (ii) any Taxes in the nature of thebranch profits tax within the meaning of Section 884 of the Code imposed by any jurisdiction described in clause (i) above; (iii) other than in the case of anassignee pursuant to a request by the Borrower under Section 2.26 hereof, any U.S. federal withholding tax except (A) to the extent such withholding taxresults from a change in a Requirement of Law after the recipient became a party hereto or changed its lending office or (B) to the extent that such recipient’sassignor (if any) was entitled immediately prior to such assignment or such recipient was entitled immediately prior to changing its lending office to receiveadditional amounts from any Loan Party with respect to such withholding tax pursuant to this Section 2.19(a); (iv) any withholding Tax that is attributable tothe recipient’s failure to comply with Section 2.19(e) hereof; and (v) any withholding Taxes imposed pursuant to FATCA. If any such non-excluded Taxes(“Non-Excluded Taxes”) or Other Taxes are required by law to be withheld by the applicable withholding agent from any amounts payable to theAdministrative Agent or any Lender hereunder, or under any other Loan Document: (x) the amounts so payable by the applicable Loan Party to theAdministrative Agent or such Lender shall be increased to the extent necessary so that after all required deductions for Non-Excluded Taxes and Other Taxes(including deductions for Non-Excluded Taxes and Other Taxes applicable to additional sums payable under this Section 2.19) have been made, the Lender(or, in the case of any payment made to the Administrative Agent for its own account, the Administrative Agent) receives an amount equal to the sum itwould have received had no such deduction or withholding for Non-Excluded Taxes and Other Taxes been made, (y) the applicable withholding agent shallmake such deductions, and (z) the applicable withholding agent shall timely pay the full amount deducted to the relevant Governmental Authority inaccordance with applicable law.Notwithstanding anything to the contrary contained in this Section 2.19(a) or Section 2.19(b), unless the Administrative Agent or a Lender givesnotice to the applicable Loan Party that such Loan Party is obligated to pay an amount under Section 2.19(a) or Section 2.19(b) within 180 days of the laterof (x) the date the applicable party incurs the Taxes or (y) the date the applicable party has knowledge of its incurrence of the Taxes, then such party shall notbe entitled to be compensated for any penalties, interest or expenses relating to such Taxes, except to the extent such penalties, interest or expenses arise oraccrue on or after the date that occurs 180 days prior to the date such party gives notice to the applicable Loan Party, but if the circumstances giving rise tosuch claim have a34retroactive effect (e.g., in connection with the audit of a prior tax year), then such 180 day period shall be extended to include such period of retroactiveeffect.(b) In addition, the relevant Loan Party shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicablelaw.(c) Whenever any Taxes are payable by a Loan Party pursuant to this Section 2.19, as promptly as possible thereafter such Loan Party shall send tothe Administrative Agent for its own account or for the account of the relevant Lender, as the case may be, a certified copy of an original official receiptreceived, if any, by the Borrower or other documentary evidence showing payment thereof.(d) The Borrower shall indemnify the Administrative Agent and each Lender (within 10 days after demand therefor) for the full amount of any Non-Excluded Taxes or Other Taxes (including Non-Excluded Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under thisSection 2.19), and for any reasonable expenses arising therefrom or with respect thereto, that may become payable by the Administrative Agent or anyLender, whether or not such Non-Excluded Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority;provided that the Borrower shall not be obligated to indemnify the Administrative Agent or any Lender for any penalties, interest or expenses relating toNon-Excluded Taxes or Other Taxes to the extent that such penalties, interest or expenses are found by a final and nonappealable decision of a court ofcompetent jurisdiction to have resulted from such party’s gross negligence or willful misconduct. A certificate as to the amount of such payment or liabilitydelivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender,shall be conclusive absent manifest error.(e) Each Lender shall, at such times as are reasonably requested by the Borrower or the Administrative Agent, provide the Borrower and theAdministrative Agent with any documentation prescribed by law, or reasonably requested by the Borrower or the Administrative Agent, certifying as to anyentitlement of such Lender to an exemption from, or reduction in, any withholding Tax with respect to any payments to be made to such Lender under theLoan Documents. In addition, each Lender shall, at such times as reasonably requested by the Borrower or the Administrative Agent, deliver such otherdocumentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or theAdministrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Each such Lendershall, whenever a lapse in time or change in circumstances renders any such documentation (including any documentation specifically referenced below)expired, obsolete or inaccurate in any material respect, or upon the reasonable request of the Borrower or the Administrative Agent, deliver promptly to theBorrower and the Administrative Agent updated or other appropriate documentation (including any new documentation reasonably requested by theapplicable withholding agent) or promptly notify the Borrower and the Administrative Agent of its legal ineligibility to do so. Unless the applicablewithholding agent has received forms or other documents satisfactory to it indicating that payments under any Loan Document to or for a Lender are notsubject to withholding tax or are subject to such Tax at a rate reduced by an applicable tax treaty, the Borrower, Administrative Agent or other applicablewithholding agent shall withhold amounts required to be withheld by applicable law from such payments at the applicable statutory rate. Each Lender herebyauthorizes the Administrative Agent to deliver to the Borrower and to any successor Administrative Agent any documentation provided to the AdministrativeAgent pursuant to this Section 2.19(e).Without limiting the generality of the foregoing:(i) Each Lender that is a “United States person” (as defined in Section 7701(a)(30) of the Code) shall deliver to the Borrower and theAdministrative Agent on or before the date on which it becomes a party to this Agreement two properly completed and duly signed original copiesof Internal Revenue Service Form W-9 (or any successor form) certifying that such Lender is exempt from U.S. federal backup withholding.(ii) Each Lender that is not a “United States person” (as defined in Section 7701(a)(30) of the Code) shall deliver to the Borrower and theAdministrative Agent on or before the date on which it becomes a party to this Agreement whichever of the following is applicable:35(A) two duly completed copies of Internal Revenue Service Form W-8BEN or W-8BEN-E (or any successor forms) claimingeligibility for benefits of an income tax treaty to which the United States of America is a party,(B) two duly completed copies of Internal Revenue Service Form W-8ECI (or any successor forms),(C) in the case of a Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) acertificate, in substantially the form of Exhibit F (any such certificate a “United States Tax Compliance Certificate”), or any other formapproved by the Administrative Agent, to the effect that such Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of theCode, (B) a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or (C) a “controlled foreigncorporation” described in Section 881(c)(3)(C) of the Code, and that no payments in connection with the Loan Documents are effectivelyconnected with such Lender’s conduct of a U.S. trade or business and (y) two duly completed copies of Internal Revenue Service Form W-8BEN or W-8BEN-E (or any successor forms),(D) to the extent a Lender is not the beneficial owner (for example, where the Lender is a partnership, or is a Lender that hasgranted a participation), Internal Revenue Service Form W-8IMY (or any successor forms) of the Lender, accompanied by a Form W-8ECI,W-8BEN or W-8BEN-E, United States Tax Compliance Certificate, Form W-9, Form W-8IMY (or other successor forms) or any otherrequired information from each beneficial owner, as applicable (provided that, if the Lender is a partnership (and not a participating Lender)and one or more direct or indirect partners are claiming the portfolio interest exemption, the United States Tax Compliance Certificate shallbe provided by such Lender on behalf of such direct or indirect partner(s)), or(E) any other form prescribed by applicable requirements of U.S. federal income tax law as a basis for claiming exemption from ora reduction in U.S. federal withholding tax duly completed together with such supplementary documentation as may be prescribed byapplicable requirements of law to permit the Borrower and the Administrative Agent to determine the withholding or deduction required tobe made.(iii) If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA ifsuch Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b)of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and atsuch time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (includingas prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or theAdministrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their FATCA obligations, to determinewhether such Lender has or has not complied with such Lender’s FATCA obligations and to determine the amount, if any, to deduct and withholdfrom such payment. Solely for purposes of this clause (iii), “FATCA” shall include any amendments made to FATCA after the date of thisAgreement.Notwithstanding any other provision of this clause (e), a Lender shall not be required to deliver any forms, documentation or other information thatsuch Lender is not legally eligible to deliver.(f) If the Administrative Agent or any Lender determines, in its sole discretion, that it has received a refund of any Non-Excluded Taxes or OtherTaxes as to which it has been indemnified by a Loan Party or with respect to which a Loan Party has paid additional amounts pursuant to this Section 2.19, itshall pay over such refund to the applicable Loan Party (but only to the extent of indemnity payments made, or additional amounts paid, by the such LoanParty under this Section 2.19 with respect to the Non-Excluded Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses (includingTaxes) of the Administrative Agent or such Lender, as the case may be, and without interest (other than any interest paid by the relevant GovernmentalAuthority with respect to such refund, net of any Taxes payable by the Administrative Agent or such Lender); provided that the applicable Loan Party, uponthe request of the Administrative Agent or such Lender, agrees to repay the amount paid over to36such Loan Party (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lenderin the event the Administrative Agent or such Lender, as the case may be, is required to repay such refund to such Governmental Authority. This paragraphshall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its Taxeswhich it deems confidential) to the Borrower or any other Person.(g) The agreements in this Section 2.19 shall survive the termination of this Agreement, any assignment by or replacement of a Lender, resignationof the Administrative Agent and the payment of the Loans and all other amounts payable hereunder or any other Loan Document.(h) For the avoidance of doubt, any payments made by the Administrative Agent to any Lender shall be treated as payments made by theapplicable Loan Party.2.20. Indemnity. The Borrower agrees to indemnify each Lender for, and to hold each Lender harmless from, any loss or expense that such Lendermay sustain or incur as a consequence of (a) default by the Borrower in making a borrowing of, conversion into or continuation of Eurodollar Loans after theBorrower has given a notice requesting the same in accordance with the provisions of this Agreement, (b) default by the Borrower in making any prepaymentof or conversion from Eurodollar Loans after the Borrower has given a notice thereof in accordance with the provisions of this Agreement, or (c) the makingof a prepayment or conversion of Eurodollar Loans on a day that is not the last day of an Interest Period with respect thereto. Such indemnification mayinclude an amount equal to the excess, if any, of (i) the amount of interest that would have accrued on the amount so prepaid, or not so borrowed, convertedor continued, for the period from the date of such prepayment or of such failure to borrow, convert or continue to the last day of such Interest Period (or, in thecase of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rateof interest for such Loans provided for herein (excluding, however, the Applicable Margin included therein, if any) over (ii) the amount of interest (asreasonably determined by such Lender) that would have accrued to such Lender on such amount by placing such amount on deposit for a comparable periodwith leading banks in the interbank eurodollar market. A certificate as to any amounts payable pursuant to this Section submitted to the Borrower by anyLender shall be conclusive in the absence of manifest error. Notwithstanding anything to the contrary in this Section 2.20, the Borrower shall not be requiredto compensate a Lender pursuant to this Section 2.20 for any amounts incurred more than 180 days prior to the date that such Lender notifies the Borrower ofsuch Lender’s intention to claim compensation therefor; provided that, if the circumstances giving rise to such claim have a retroactive effect, then such 180days period shall be extended to include the period of such retroactive effect. This covenant shall survive the termination of this Agreement and the paymentof the Loans and all other amounts payable hereunder.2.21. Change of Lending Office. Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Section 2.18 or 2.19(a)with respect to such Lender, it will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designateanother lending office for any Loans affected by such event with the object of avoiding the consequences of such event; provided that such designation ismade on terms that, in the good faith judgment of such Lender, cause such Lender and its lending office(s) to suffer no economic, legal or regulatorydisadvantage, and provided, further, that nothing in this Section shall affect or postpone any of the obligations of the Borrower or the rights of any Lenderpursuant to Section 2.18 or 2.19(a).2.22. Fees. (a) The Borrower agrees to pay to the Administrative Agent the fees in the amounts and on the dates as set forth in the Engagement Letter and toperform any other obligations contained therein.(b) The Borrower agrees to pay to the Administrative Agent for the ratable account of each Revolving Lender according to its Revolving LoanPercentage a commitment fee at a rate per annum equal to the Commitment Fee Percentage (computed on the basis of a year of 360 days and the actualnumber of days elapsed) on the average daily aggregate Unused Revolving Commitments (the “Commitment Fee”); provided, however, that no CommitmentFee shall accrue to the Unused Revolving Credit Commitment of a Defaulting Lender, or be payable for the benefit of such Lender, so long as such Lendershall be a Defaulting Lender. Such Commitment Fee amount accrued through and including the last day of March, June, September and December of eachyear shall be payable quarterly in arrears on the third Business Day following the Borrower’s receipt of an invoice from Administrative Agent for37such period, commencing on the first such date to occur after the date hereof; provided that such Commitment Fee shall also be payable on the date on whichthe Revolving Commitments terminate.(c) The Borrower agrees to pay (i) to the Administrative Agent for the account of each Revolving Lender (other than a Defaulting Lender) aparticipation fee with respect to its participations in Documentary Credits, which shall accrue at the same Applicable Margin used to determine the interestrate applicable to Eurodollar Revolving Loans on the average daily amount of such Lender’s DC Exposure (excluding any portion thereof attributable tounreimbursed DC Disbursements) during the period from and including the Closing Date to but excluding the later of the date on which such Lender’sRevolving Commitment terminates and the date on which such Lender ceases to have any DC Exposure, and (ii) to the relevant Issuing Bank a fronting fee,as may be agreed between the Issuing Bank and the Borrower, as well as such Issuing Bank’s standard fees with respect to the issuance, amendment, renewalor extension of any Documentary Credit or processing of drawings thereunder. Participation fees and fronting fees accrued through and including the last dayof March, June, September and December of each year shall be payable on the third Business Day following the Borrower’s receipt of an invoice fromAdministrative Agent for such period, commencing on the first such date to occur after the Closing Date; provided that all such fees shall be payable on thedate on which the Commitments terminate and any such fees accruing after the date on which the Commitments terminate shall be payable on demand. Anyother fees payable to any Issuing Bank pursuant to this paragraph shall be payable within 10 days after demand (accompanied by reasonable back-updocumentation relating thereto). All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for theactual number of days elapsed (including the first day but excluding the last day).2.23. RESERVED.2.24. Nature of Fees. All Fees shall be paid on the dates due, in immediately available funds, to the Administrative Agent (for the respectiveaccounts of the Administrative Agent and the Lenders), as provided herein. Once paid, none of the Fees shall be refundable under any circumstances.2.25. Incremental Facilities.(a) The Borrower may at any time or from time to time after the Closing Date, by notice to the Administrative Agent, request (i) the establishmentof Incremental Term Loan Commitments and/or (ii) during the Availability Period, the establishment of Incremental Revolving Commitments; provided that(i) except as otherwise agreed by the Incremental Lenders providing an Incremental Facility (y) no Default or Event of Default shall haveoccurred and be continuing or would exist after giving effect thereto and (z) the conditions set forth in Section 4.2 are satisfied;(ii) on the date of the incurrence or effectiveness of such Incremental Facility (in the case of the incurrence or effectiveness of IncrementalRevolving Commitments, assuming such increase has been drawn in full), the Borrower shall be in compliance, on a pro forma basis, with thefinancial covenants set forth in Section 6.6 recomputed as of the last day of the most recently ended fiscal quarter for which financial statementshave been or were required to be delivered pursuant to Section 5.1; provided that, to the extent incurred in connection with an acquisition, at theBorrower’s election, the Borrower’s compliance on a pro forma basis with the financial covenants set forth in Section 6.6 may be determined at thetime of the signing of any acquisition agreement with respect thereto or at the time of the closing of such acquisition; provided, further that if theBorrower has made the election to measure such compliance on the date of the signing of an acquisition agreement, in connection with thecalculation of any ratio with respect to the incurrence of Indebtedness or Liens, or following such date and until the earlier of the date on which suchacquisition is consummated or the definitive agreement for such acquisition is terminated or expired (but not for the purposes of calculating anyfinancial covenant), such ratio shall be calculated on a pro forma basis assuming such acquisition (including the incurrence of Indebtedness) havebeen consummated;(iii) each Incremental Term Loan Facility shall have an Incremental Term Loan Maturity Date no earlier than the Revolving MaturityDate;(iv) the interest rate applicable to any Incremental Term Loan Facility or Incremental Term Loans will be determined by the Borrower andthe Incremental Term Loan Lenders providing such38Incremental Term Loan Facility or Incremental Term Loans; provided that, such interest rate will not be more than 0.50% higher than thecorresponding interest rate applicable to any other existing incremental term loans or incremental facility of the same type (e.g., “term loan A” or“term loan B”) (the “Relevant Existing Facility”) unless the interest rate with respect to the Relevant Existing Facility is adjusted to be equal to theinterest rate with respect to the relevant Incremental Term Loans or Incremental Term Loan Facility, minus 0.50%; provided, further, that indetermining the applicable interest rate under this clause (iv): (w) original issue discount (“OID”) or upfront fees paid in connection with theRelevant Existing Facility or such Incremental Term Loan Facility or Incremental Term Loans (based on a four-year average life to maturity), shallbe included, (x) any amendments to or changes in the Applicable Margin with respect to the Relevant Existing Facility that became effectivesubsequent to the Closing Date but prior to the time of (or concurrently with) the addition of such Incremental Term Loan Facility or IncrementalTerm Loans shall be included, (y) arrangement, commitment, structuring and underwriting fees and any amendment fees paid or payable to the JointLead Arrangers (or their affiliates) in their respective capacities as such in connection with the Relevant Existing Facility or to one or more arrangers(or their affiliates) in their capacities as such applicable to such Incremental Term Loan Facility or Incremental Term Loans shall be excluded and (z)if such Incremental Term Loan Facility or Incremental Term Loans include any interest rate floor greater than that applicable to the RelevantExisting Facility, and such floor is applicable to the Relevant Existing Facility on the date of determination, such excess amount shall be equated tointerest margin for determining the increase;(v) all Incremental Facilities shall rank pari passu or junior in right of payment and right of security in respect of the Collateral (if any)with the Revolving Loans or may be unsecured; provided that to the extent any such Incremental Facilities are subordinated in right of payment orright of security they shall be subject to intercreditor arrangements reasonably satisfactory to the Administrative Agent, provided further that to theextent any such Incremental Facilities are pari passu in right of security and subject to separate documentation, the agent for such IncrementalFacilities shall become party to the First Lien Intercreditor Agreement;(vi) no Incremental Facility shall be guaranteed by any Person which is not a Loan Party;(vii) the Borrower shall have delivered to the Administrative Agent a certificate of a Financial Officer certifying to the effect set forth insubclauses (i) and (ii) above, together with reasonably detailed calculations demonstrating compliance with subclause (ii) above (which calculationsshall, if made as of the last day of any fiscal quarter of the Borrower for which the Borrower has not delivered to the Administrative Agent thefinancial statements and Compliance Certificate required to be delivered by Section 5.2, be accompanied by a reasonably detailed calculation ofConsolidated EBITDA and Consolidated Interest Expense of the Borrower for the relevant period);(viii) all fees or other payments owing pursuant to this Agreement or as otherwise agreed in writing to the Administrative Agent and theapplicable Incremental Lenders shall have been paid; and(ix) (A) the other terms and conditions of any Incremental Revolving Facility shall be identical to those of the Revolving Commitmentsand Revolving Loans then outstanding, and shall be treated as a single Class with such Revolving Commitments and Revolving Loans; providedthat the upfront fees applicable to any Incremental Revolving Facility shall be as determined by the Borrower and the Incremental RevolvingLenders providing such Incremental Revolving Facility and (B) the other terms and conditions (excluding those referenced in clauses (i) through(viii) above) of such Incremental Term Loan Facility shall be substantially identical to, or (taken as a whole) not materially more favorable (asreasonably determined by the Borrower) to the lenders providing such Incremental Term Loan Facility than those applicable to the Revolving Loans(except for covenants or other provisions applicable only to periods after the latest final maturity date other than existing Revolving Loans orRevolving Commitments); provided that to the extent the terms of any Incremental Term Loans are not substantially identical to the termsapplicable to the Revolving Loans, such terms shall be reasonably satisfactory to the Administrative Agent taking into consideration typicaldifferences between terms and conditions governing revolving credit facilities and term loan facilities.(b) Each notice from the Borrower pursuant to this Section 2.25 shall specify (i) the date on which the Borrower proposes that the Incremental TermLoan Commitments or the Incremental Revolving Facility shall, as applicable shall be effective, which shall be a date not less than five (5) Business Days (orsuch shorter period as39may be agreed to by the Administrative Agent) after the date on which such notice is delivered to the Administrative Agent and (ii) the requested amount andproposed terms of the relevant Incremental Term Loan Commitments or Incremental Revolving Commitments, as applicable (it being agreed that (x) anyLender approached to provide any Incremental Term Loan Commitment or Incremental Revolving Commitment may elect or decline, in its sole discretion, toprovide such Incremental Term Loan Commitment or Incremental Revolving Commitment and (y) any Person that the Borrower proposes to become anIncremental Revolving Lender, must be consented to (such consent not to be unreasonably withheld, delayed or conditioned) by the Administrative Agentand each Issuing Bank if such consent would be required under Section 9.4 for an assignment of Loans or Commitments, as applicable to such Lender orIncremental Lender.(c) Incremental Commitments in respect of Incremental Loans shall become Commitments under this Agreement pursuant to an amendment (an“Incremental Amendment”) to this Agreement and, as appropriate, the other Loan Documents, executed (in the case of such amendment to this Agreement) bythe Borrower, each Lender agreeing to provide such Commitment, if any, each Incremental Term Loan Lender (if any) or Incremental Revolving CreditLender (if any), as applicable, and the Administrative Agent.(d) Any Incremental Amendment may, without the consent of any other Lenders, effect such amendments to this Agreement and the other LoanDocuments as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the Borrower, to effect the provisions of thisSection, including (x) imposing “call-protection” applicable to any exiting term loans in the case of any fungible add-on thereto and (y) limiting the abilityof future Incremental Term Loan Facility to have a maturity date prior to the maturity date applicable to any Incremental Term Loan Facility then beingestablished. The Borrowers may use the proceeds of the Incremental Loans for any purpose not prohibited by this Agreement.(e) Upon each increase in the Revolving Commitments pursuant to this Section 2.25, (i) each Lender with a Revolving Commitment immediatelyprior to such increase will automatically and without further act be deemed to have assigned to each Incremental Revolving Lender in respect of suchincrease, and each Incremental Revolving Lender will automatically and without further act be deemed to have assumed, a portion of such Lender’sparticipations hereunder in outstanding Documentary Credits such that, immediately after giving effect to each such deemed assignment and assumption ofparticipations, the percentage of the aggregate outstanding participations hereunder in Documentary Credits held by each Lender with a RevolvingCommitment (including each Incremental Revolving Lender) will equal the percentage of the aggregate Revolving Commitments of all Lenders withRevolving Commitments represented by such Lender’s Revolving Commitment and (ii) if, on the date of such increase, there are any Revolving Loansoutstanding, such Revolving Loans shall on or prior to the effectiveness of such increase in the Revolving Commitments be prepaid from the proceeds ofadditional Revolving Loans made hereunder (reflecting such increase in Revolving Commitments), which prepayment shall be accompanied by accruedinterest on the Revolving Loans being prepaid and any costs incurred by any Lender in accordance with Section 2.20. The Administrative Agent and theLenders hereby agree that the minimum Borrowing, pro rata Borrowing and pro rata payment requirements contained elsewhere in this Agreement shall notapply to the transactions effected pursuant to the immediately preceding sentence.(f) During any Secured Covenants Period, any incurrence under an Incremental Facility shall constitute incurrence of First Lien Debt for purposesof Section 6.1(c)(1) and during any Unsecured Covenants Period any incurrence under an Incremental Facility shall constitute incurrence of Indebtednessthat is not secured by a Lien on Principal Property or Collateral.(g) This Section 2.25 shall supersede any provisions in Section 9.1 to the contrary.2.26. Replacement of Lenders. The Borrower shall be permitted to replace any Lender that (a) requests reimbursement for amounts owing pursuantto Section 2.18, 2.19 or 2.20, and is unable to designate a different lending office in accordance with Section 2.21 so as to eliminate the continued need forpayment of amounts owing pursuant to Sections 2.18, 2.19 or 2.20, (b) refuses to extend its Loans pursuant to an Extension Offer pursuant to Section 2.27 or(c) does not consent to any proposed amendment, supplement, modification, consent or waiver of any provision of this Agreement or any other LoanDocument that requires the consent of each of the Lenders or each of the Lenders affected thereby (so long as the consent of the Required Lenders (of allLoans or the affected Classes of Loans) has been obtained), in each case with a replacement financial institution(s); provided that (i) such replacement doesnot conflict with any Requirement of Law, (ii) no Event of Default shall have occurred and be continuing at the time of such replacement, (iii) thereplacement financial institution(s) shall purchase, at par, all Loans outstanding, Revolving Commitments, DC Exposure and other amounts related theretoowing to such40replaced Lender on or prior to the date of replacement, (iv) the Borrower shall be liable to such replaced Lender under Section 2.20 if any Eurodollar Loanowing to such replaced Lender shall be purchased other than on the last day of the Interest Period relating thereto, (v) the replacement financial institution(s)(if other than a then existing Lender or an affiliate thereof) shall be reasonably satisfactory to the Administrative Agent (such consent not to be unreasonablywithheld, delayed or conditioned), (vi) the replaced Lender shall be obligated to make such replacement in accordance with the provisions of Section 9.6(provided that the Borrower shall be obligated to pay the registration and processing fee referred to therein), (vii) until such time as such replacement shall beconsummated, the Borrower shall pay all additional amounts (if any) required pursuant to Section 2.18, 2.19 or 2.20, as the case may be, and (viii) any suchreplacement shall not be deemed to be a waiver of any rights that the Borrower, the Administrative Agent or any other Lender shall have against the replacedLender.2.27. Extensions of Commitments.(a) Notwithstanding anything to the contrary in this Agreement, pursuant to one or more offers (each, an “Extension Offer”) made from time to timeby the Borrower to any or all Lenders holding Commitments in the same Credit Facility with a like Maturity Date, the Borrower may from time to timerequest an extension to the applicable Maturity Date and otherwise modify the terms of such Commitments pursuant to the terms of the relevant ExtensionOffer (including, without limitation, by increasing the interest rate or fees payable in respect of such Loans (and related outstandings)) (an “Extension”, suchCommitments so extended, “Extended Commitments”; and each group of Commitments so extended, as well as the original Commitments of such CreditFacility (not so extended), being a “tranche”; any Extended Commitments shall constitute a separate tranche of Commitments from the tranche ofCommitments from which they were converted and Loans made pursuant to Extended Commitments shall constitute a separate Class of Loan); provided that(i) each applicable Lender shall have the right (but not the obligation) to agree to the extension of the applicable Maturity Date, (ii) no Default or Event ofDefault shall have occurred and be continuing at the time any the offering document (if any) in respect of an Extension Offer is delivered to the Lenders,(iii) except as to interest rates, fees and final maturity, the Extended Commitments of any Lender shall have the same terms as the original Commitments inthe applicable Credit Facility; provided that at no time shall there be more than three different Revolving Maturity Dates, (iv) if the aggregate principalamount of Commitments in respect of which Lenders shall have accepted the relevant Extension Offer shall exceed the maximum aggregate principal amountof Commitments offered to be extended by the Borrower pursuant to such Extension Offer, then the Commitments of such Lenders shall be extended ratablyup to such maximum amount based on the respective principal amounts (but not to exceed actual holdings of record) with respect to which such Lendershave accepted such Extension Offer, (v) all documentation in respect of such Extension shall be consistent with the foregoing, and all writtencommunications by the Borrower generally directed to the Lenders in connection therewith shall be in form and substance consistent with the foregoing andotherwise reasonably satisfactory to the Administrative Agent and (vi) any applicable Minimum Extension Condition shall be satisfied.(b) With respect to an Extension consummated by the Borrower pursuant to this Section 2.27, (i) such Extensions shall not constitute prepaymentsfor purposes of Section 2.13 or prepayments for purposes of an Incremental Term Loan Facility and (ii) no Extension Offer is required to be in any minimumamount or any minimum increment, provided that the Borrower may at its election specify as a condition (a “Minimum Extension Condition”) toconsummating any such Extension that a minimum amount (to be determined and specified in the relevant Extension Offer in the Borrower’s discretion) ofCommitments of any or all applicable tranches be tendered.(c) The Lenders hereby irrevocably authorize the Administrative Agent to enter into amendments to this Agreement and the other Loan Documentswith the Borrower as may be necessary in order establish new tranches or sub-tranches in respect of Commitments so extended and such technicalamendments as may be necessary in connection with the establishment of such new tranches or sub-tranches, in each case on terms consistent with thisSection 2.27. Notwithstanding the foregoing, the Administrative Agent shall have the right (but not the obligation) to seek the advice or concurrence of theRequired Lenders (of one or more Classes of Loans) with respect to any matter contemplated by this Section 2.27(c) and, if the Administrative Agent seekssuch advice or concurrence, the Administrative Agent shall be permitted to enter into such amendments with the Borrower in accordance with anyinstructions actually received by such Required Lenders and shall also be entitled to refrain from entering into such amendments with the Borrower unlessand until it shall have received such advice or concurrence; provided, however, that whether or not there has been a request by the Administrative Agent forany such advice or concurrence, all such amendments entered into with the Borrower by the Administrative Agent hereunder shall be binding and conclusiveon the Lenders. Without limiting the foregoing, in connection with any41Extensions, the respective Loan Parties shall (at their expense) amend (and the Collateral Agent is hereby directed to amend) any Mortgage that has amaturity date prior to the then latest Maturity Date so that such maturity date is extended to the then latest Maturity Date (or such later date as may beadvised by local counsel to the Collateral Agent).(d) In connection with any Extension, the Borrower shall provide the Administrative Agent at least five (5) Business Days’ (or such shorter periodas may be agreed by the Administrative Agent) prior written notice thereof, and shall agree to such procedures, if any, as may be established by, or acceptableto, the Administrative Agent, in each case acting reasonably to accomplish the purposes of this Section 2.27.2.28. Reserved. 2.29. Defaulting Lenders. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then,until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:(a) Waivers and Amendments. The Loans and Commitments of such Defaulting Lender shall not be included in determining whether the RequiredLenders have taken or may take any action hereunder or under any other Loan Document (including any consent to any amendment, waiver or othermodification pursuant to Section 9.1); provided that any amendment, waiver or other modification requiring the consent of all Lenders or all Lenders affectedthereby shall, except as otherwise provided in Section 9.1, require the consent of such Defaulting Lender in accordance with the terms hereof.(b) Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account ofsuch Defaulting Lender hereunder (whether voluntary, at maturity, pursuant to Article VII or otherwise) shall be applied at such time or times as may bedetermined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agenthereunder; second, as the Borrower may request (so long as no Default exists), to the funding of any Loan in respect of which such Defaulting Lender hasfailed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; third, if so determined by the AdministrativeAgent and the Borrower, to be held in a deposit account and released pro rata in order to satisfy such Defaulting Lender’s potential future funding obligationswith respect to Loans under this Agreement; fourth, to the payment of any amounts owing to the Lenders or Issuing Banks as a result of any judgment of acourt of competent jurisdiction obtained by any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations underthis Agreement; fifth, so long as no Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competentjurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement;and sixth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of theprincipal amount of any Loans in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made at a timewhen the conditions set forth in Section 4.1 were satisfied or waived, such payment shall be applied solely to pay the Loans of the same Class of all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of such Class of such Defaulting Lender until such time as allLoans of such Class are held by the Lenders pro rata in accordance with the applicable Commitments. Any payments, prepayments or other amounts paid orpayable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant to this Section shallbe deemed paid to and redirected by such Defaulting Lender, and such Defaulting Lender irrevocably consents hereto.(c) Defaulting Lender Cure. If the Borrower and the Administrative Agent (unless the Administrative Agent is the Defaulting Lender) agree inwriting that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the applicable parties hereto, whereupon as of the effectivedate specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any cash collateral), that Lenderwill, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent(unless the Administrative Agent is the Defaulting Lender) may determine to be necessary to cause the Loans to be held pro rata by the Lenders in accordancewith the relative amounts of their Commitments for each applicable Class of Loans, whereupon such Lender will cease to be a Defaulting Lender; providedthat no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was aDefaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from DefaultingLender to42non-Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.SECTION 3Representations and WarrantiesThe Borrower represents and warrant on the Closing Date to the Administrative Agent, each Lender and each Issuing Bank as follows:3.1. Existence; Compliance with Law. Each Loan Party (a) is duly organized, validly existing and (to the extent such concept is applicable) ingood standing under the laws of the jurisdiction of its organization, (b) has the power and authority, and the legal right, to own and operate its property, tolease the property it operates as lessee and to conduct the business in which it is currently engaged, (c) is duly qualified as a foreign corporation or otherorganization and (to the extent such concept is applicable) in good standing under the laws of each jurisdiction where its ownership, lease or operation ofproperty or the conduct of its business requires such qualification, and (d) is in compliance with all Requirements of Law, except, in the case of each of theforegoing clauses (a) through (d), to the extent that the failure to comply therewith would not, in the aggregate, reasonably be expected to have a MaterialAdverse Effect.3.2. Power; Authorizations; Enforceable Obligations. Each Loan Party has the power and authority, and the legal right, to make, deliver andperform the Loan Documents to which it is a party and, in the case of the Borrower, to obtain extensions of credit hereunder. Each Loan Party has taken allnecessary organizational action to authorize the execution, delivery and performance of the Loan Documents to which it is a party and, in the case of theBorrower, to authorize the extensions of credit on the terms and conditions of this Agreement. No consent or authorization of, filing with, notice to or otheract by or in respect of, any Governmental Authority is required in connection with the extensions of credit hereunder or with the execution, delivery,performance, validity or enforceability of this Agreement or any of the Loan Documents, except (i) that have been obtained or made and are in full force andeffect, (ii) the filings made in respect of the Security Documents and (iii) to the extent that the failure to obtain any such consent, authorization, filing, noticeor other act would not, in the aggregate, reasonably be expected to have a Material Adverse Effect. Each Loan Document has been duly executed anddelivered on behalf of each Loan Party party thereto. This Agreement constitutes, and each other Loan Document upon execution will constitute, a legal,valid and binding obligation of each Loan Party party thereto, enforceable against each such Loan Party in accordance with its terms, except as enforceabilitymay be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally andby general equitable principles (whether enforcement is sought by proceedings in equity or at law).3.3. No Legal Bar. The execution, delivery and performance of this Agreement and the other Loan Documents, the borrowings hereunder and theuse of the proceeds thereof (x) will not violate any Requirement of Law or any material Contractual Obligation of any Loan Party and (y) will not result in, orrequire, the creation or imposition of any Lien on any of their respective properties or revenues pursuant to any Requirement of Law or any such materialContractual Obligation (other than the Liens created by the Security Documents) except, in the case of each of the foregoing clauses (x) and (y), to the extentthat the failure to comply therewith would not, in the aggregate, reasonably be expected to have a Material Adverse Effect.3.4. Accuracy of Information. No statement or information contained in this Agreement, any other Loan Document, or any other document,certificate or statement furnished by or on behalf of any Loan Party to the Administrative Agent or the Lenders, or any of them, for use in connection with thetransactions contemplated by this Agreement or the other Loan Documents, contained as of the Closing Date, taken as a whole and in light of thecircumstances in which made, any untrue statement of a material fact or omitted to state a material fact necessary to make the statements contained herein ortherein not materially misleading; provided that, with respect to projected financial information, each Loan Party represents only that such information wasprepared in good faith based upon assumptions believed by them to be reasonable at the time delivered and, if such projected financial information wasdelivered prior to the Closing Date, as of the Closing Date, it being understood that any such projected financial information may vary from actual results andsuch variations could be material.3.5. No Material Adverse Effect. Since the last day of the most recently ended fiscal year of the Borrower prior to the Closing Date or suchsubsequent date as this representation may be re-made with respect to which financial statements have been delivered to the Administrative Agent pursuantto Section 5.1 there has been no development or event that has had or would reasonably be expected to have a Material Adverse Effect.433.6. Restricted Subsidiaries. Schedule 3.6 annexed hereto sets forth the name and jurisdiction of organization of each direct Restricted Subsidiaryof the Borrower, the Capital Stock of which will be pledged as Collateral, as of the Closing Date and, as to each such Restricted Subsidiary, the percentage ofeach class of Capital Stock owned by the Borrower as of the Closing Date, and (b) as of the Closing Date, there are no outstanding subscriptions, options,warrants, calls, rights or other agreements or commitments (other than stock options or restricted stock granted to employees or directors and directors’qualifying shares) of any nature relating to any Capital Stock that is included in the Collateral, except as created by the Loan Documents or as are notprohibited by Section 6.2.3.7. Title to Assets; Liens. The Borrower and its Restricted Subsidiaries have good and marketable title to, or a valid leasehold or easement interestin, all their other material property (including any Mortgaged Property), taken as a whole, except for minor defects in title that do not interfere with theirability to conduct their business as currently conducted or as proposed to be conducted or to utilize such properties for their intended purposes, in each case,except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and none of such property is subject to anyLien except Permitted Liens or Liens not prohibited by Section 6.2(b).3.8. Intellectual Property. The Borrower and its Restricted Subsidiaries own, or are licensed to use, all Intellectual Property material to the conductof their businesses, and the use thereof by the Borrower and its Restricted Subsidiaries does not, to the knowledge of the Borrower, infringe upon,misappropriate or otherwise violate the Intellectual Property rights of any other Person, in each case except where the failure to own or license IntellectualProperty, or any infringement on Intellectual Property rights would not, in the aggregate, reasonably be expected to have a Material Adverse Effect.3.9. Use of Proceeds. The proceeds of the Loans shall be utilized for general corporate purposes.3.10. Litigation. No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledgeof the Borrower, threatened (including “cease and desist” letters and invitations to take a patent license) by or against the Borrower or its RestrictedSubsidiaries or against any of their respective properties, rights or revenues that, in the aggregate, would reasonably be expected to have a Material AdverseEffect.3.11. Federal Reserve Regulations. No part of the proceeds of any Loan will be used for any purpose that violates the provisions of theRegulations of the Board of Governors. Neither the Borrower nor any of its Subsidiaries is engaged principally, or as one of its important activities, in thebusiness of extending credit for the purpose of purchasing or carrying any “margin stock.”3.12. Solvency. The Borrower and its Subsidiaries, taken as a whole, are, and after giving effect to the incurrence of all Indebtedness andobligations being incurred in connection herewith will be, Solvent.3.13. Taxes. Each of the Borrower and its Restricted Subsidiaries has filed or caused to be filed all federal and state income Tax and other Taxreturns that are required to be filed, except if the failure to make any such filing would not, individually or in the aggregate, reasonably be expected to have aMaterial Adverse Effect, and has paid all Taxes shown to be due and payable on said returns or on any assessments made against it or any of its property andall other Taxes, fees or other charges imposed on it or any of its property by any Governmental Authority (other than any (x) the amount or validity of whichare currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided onthe books of the relevant entity, or (y) those where the failure to pay, individually or in the aggregate, would not reasonably be expected to have a MaterialAdverse Effect). There is no proposed Tax assessment or other claim against, and no Tax audit with respect to, the Borrower or its Restricted Subsidiaries thatwould reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.3.14. ERISA. Except as, in the aggregate, does not or would not reasonably be expected to result in a Material Adverse Effect: neither a ReportableEvent nor a failure to satisfy the minimum funding standard of Section 430 of the Code or Section 303 of ERISA, whether or not waived, with respect to aPlan has occurred during the five-year period prior to the date on which this representation is made or deemed made with respect to any Plan, and each Planhas complied in all respects with the applicable provisions of ERISA and the Code; no termination of a Single Employer Plan has occurred, and no Lien infavor of the PBGC or a Plan has arisen, during such five-year44period; the present value of all accrued benefits under each Single Employer Plan (based on those assumptions used to fund such Plans) did not, as of the lastannual valuation date prior to the date on which this representation is made or deemed made, exceed the value of the assets of such Plan allocable to suchaccrued benefits; neither the Borrower nor any Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer Plan; to theknowledge of the Borrower after due inquiry, neither the Borrower nor any Commonly Controlled Entity would become subject to any liability under ERISAif the Borrower or any such Commonly Controlled Entity were to withdraw completely from any Multiemployer Plans as of the valuation date most closelypreceding the date on which this representation is made or deemed made; and to the knowledge of the Borrower after due inquiry, no Multiemployer Plan isin “critical status” (within the meaning of Section 432 of the Code or Section 305 of ERISA) or Insolvent.3.15. Environmental Matters; Hazardous Material. There has been no matter with respect to Environmental Laws or Materials of EnvironmentalConcern which, in the aggregate, would reasonably be expected to have a Material Adverse Effect.3.16. Investment Company Act; Other Regulations. Neither the Borrower nor any Restricted Subsidiary is required to register as an “investmentcompany”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended. Neither theBorrower nor any Restricted Subsidiary is subject to regulation under any Requirement of Law that limits its ability to incur Indebtedness under thisAgreement and the other Loan Documents.3.17. Labor Matters. Except as, in the aggregate, would not reasonably be expected to have a Material Adverse Effect: (a) there are no strikes orother labor disputes against the Borrower or any Restricted Subsidiary pending or, to the knowledge of the Borrower, threatened; (b) hours worked by andpayment made to employees of each of the Borrower and its Restricted Subsidiaries have not been in violation of the Fair Labor Standards Act or any otherapplicable Requirement of Law dealing with such matters; and (c) all payments due from the Borrower and its Restricted Subsidiaries on account of employeehealth and welfare insurance have been paid or accrued as a liability on the books of the relevant entity.3.18. Security Documents. The Security Documents are effective to create in favor of the Collateral Agent, for the benefit of the Lenders, a legal,valid and enforceable security interest in the Collateral described therein and proceeds thereof. In the case of the pledged stock of a Material Subsidiarydescribed and as defined in the Guarantee and Collateral Agreement, when stock certificates (if any) representing such Pledged Stock of a Material Subsidiaryare delivered to the Collateral Agent (or to the “Controlling Collateral Agent” pursuant to the terms of the First Lien Intercreditor Agreement), and in the caseof the other Collateral described in the Guarantee and Collateral Agreement, when financing statements and other filings specified on Schedule 3.18 inappropriate form are filed in the offices specified on Schedule 3.18, including the United States Patent and Trademark Office and the United States CopyrightOffice, the Guarantee and Collateral Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the LoanParties in such Collateral and the proceeds thereof to the extent security interests can be so perfected (by delivery or filing UCC financing statements andother such filings as applicable) on such Collateral, as security for the Obligations (as defined in the Guarantee and Collateral Agreement) and including theObligations, in each such case prior and superior in right to any other Person (except other Permitted Liens and Liens not prohibited by Section 6.2).3.19. Anti-Corruption Laws and Sanctions. The Borrower has implemented and maintains in effect policies and procedures designed to ensurecompliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicableSanctions, and the Borrower, its Subsidiaries and their respective officers and directors and to the knowledge of the Borrower its employees and agents, are incompliance with Anti-Corruption Laws and applicable Sanctions in all material respects. None of (a) the Borrower, any Subsidiary or any of their respectivedirectors, officers or employees, or (b) to the knowledge of the Borrower, any agent of the Borrower or any Subsidiary that will act in any capacity inconnection with or benefit from the credit facility established hereby, is a Sanctioned Person. No Borrowing, use of proceeds or other transactioncontemplated by this Agreement will violate any Anti-Corruption Law or applicable Sanctions.3.20. EEA Financial Institutions. No Loan Party is an EEA Financial Institution.3.21. Disclosure. As of the Closing Date, to the best knowledge of the Borrower, the information included in the Beneficial OwnershipCertification provided on or prior to the Closing Date to any Lender in connection with this Agreement is true and correct in all respects.453.22. ERISA Event. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Eventsfor which liability is reasonably expected to occur, would reasonably be expected to result in a Material Adverse Effect.SECTION 4Conditions Precedent4.1. Conditions to the Closing Date. The obligations of the Lenders to make Loans and of the Issuing Banks to issue Documentary Creditshereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.1):(a) Loan Documents. The Administrative Agent shall have received (i) counterparts hereof executed and delivered by the Borrower, theAdministrative Agent, the Collateral Agent, and each other Lender and Issuing Bank; (ii) Schedules to this Agreement; (iii) the Guarantee and CollateralAgreement, executed and delivered by each Loan Party party thereto and (iv) Schedules to the Guarantee and Collateral Agreement, executed and deliveredby the parties thereto.(b) Corporate Documents and Proceedings. The Administrative Agent shall have received (i) a certificate of each Loan Party, dated the ClosingDate, in the case of the Borrower, substantially in the form attached hereto as Exhibit A-1, and, in the case of the Guarantors substantially in the form attachedhere to as Exhibit A-2, each with appropriate insertions and attachments, including the certificate of incorporation of each Loan Party that is a corporationcertified by the relevant authority of the jurisdiction of organization of such Loan Party, and (ii) a long form good standing certificate for each Loan Partyfrom its jurisdiction of organization.(c) No Material Adverse Effect. Since August 31, 2017, there has been no development or event that has had or would reasonably be expected tohave a Material Adverse Effect.(d) Officer’s Certificate. The Administrative Agent shall have received a certificate, dated as of the Closing Date by a Responsible Officer of theBorrower, confirming compliance with the conditions set forth in Section 4.1(c) and Section 4.2(a) and (b) (and covering all representations and warranties inSection 3).(e) Lien Searches. The Administrative Agent shall have received the results of a recent lien search in each jurisdiction where a Loan Party isorganized, and such search shall reveal no liens on any of the assets of the Loan Parties except for Permitted Liens and Liens not prohibited by Section 6.2 ordischarged on or prior to the Closing Date pursuant to documentation reasonably satisfactory to the Administrative Agent.(f) Solvency Certificate. The Administrative Agent shall have received a customary certificate from the chief financial officer of the Borrower inform and substance satisfactory to the Administrative Agent certifying as to the solvency of the Borrower and its Subsidiaries on a consolidated basis aftergiving effect to the transactions contemplated to occur on the Closing Date.(g) Payment of Fees; Expenses. The Arrangers and the Administrative Agent shall have received all fees required to be paid, and all reasonablecosts and expenses required to be paid and for which invoices have been presented (including the reasonable fees and expenses of legal counsel), on or beforethe Closing Date.(h) Legal Opinion. The Administrative Agent shall have received the following executed legal opinions:(i) one or more legal opinions from Wilson Sonsini Goodrich & Rosati P.C., counsel to the Borrower and the Guarantors, in form andsubstance satisfactory to the Administrative Agent; and(ii) the legal opinion of such local counsel, in form and substance satisfactory to the Administrative Agent and as may be reasonablyrequired by the Administrative Agent.(i) Filings, Registrations and Recordings. Each document (including any Uniform Commercial Code financing statement and filings with theUnited States Patent and Trademark Office and United States Copyright Office) required by the Security Documents to be filed on the Closing Date or underlaw or reasonably requested by the Administrative Agent to be filed, registered or recorded in order to create in favor of the Collateral Agent, for the46benefit of the Secured Parties, a perfected Lien on the Collateral described therein, prior and superior in right to any other Person (other than with respect toPermitted Liens and Liens not prohibited by Section 6.2), shall be in proper form for filing, registration or recordation except to the extent of items identifiedin Section 5.8.(j) Insurance. The Administrative Agent shall have received insurance certificates satisfying the requirements of Section 5.4, except to the extentcontemplated by Section 5.8.(k) Reserved.(l) Term Loan Credit Agreement. The Administrative Agent shall have received a joinder to the First Lien Intercreditor Agreement, executed by theAdministrative Agent and acknowledged by the Term Loan Agent and the Borrower.(m) Patriot Act and Beneficial Ownership Regulation. (i) The Administrative Agent shall have received, at least three (3) Business Days prior to theClosing Date, all documentation and information as is reasonably requested in writing by any Lender at least eight days prior to the Closing Date about theBorrower and its Subsidiaries that is required by U.S. Governmental Authorities under applicable “know your customer” and anti-money laundering rules andregulations, including without limitation, the Patriot Act and (ii) to the extent the Borrower qualifies as a “legal entity customer” under the BeneficialOwnership Regulation, at least five days prior to the Closing Date, any Lender that has requested, in a written notice to the Borrower at least 10 days prior tothe Closing Date, a Beneficial Ownership Certification in relation to the Borrower shall have received such Beneficial Ownership Certification (providedthat, upon the execution and delivery by such Lender of its signature page to this Agreement, the condition set forth in this clause (ii) shall be deemed to besatisfied).4.2. Each Credit Event. The obligation of each Lender to make a Revolving Loan on the occasion of any Borrowing, and of each Issuing Bank toissue, amend, renew or extend any Documentary Credit, is subject to the satisfaction of the following conditions:(a) All representations and warranties contained in this Agreement shall be true and correct in all material respects on and as of the date of suchBorrowing or the date of issuance, amendment, renewal or extension of such Documentary Credit, as applicable, with the same effect as if made on and as ofsuch date (unless stated to relate to a specific earlier date, in which case, such representations and warranties shall be true and correct in all material respectsas of such earlier date) (it being understood that any representation or warranty that is qualified as to materiality or Material Adverse Effect shall be correct inall respects).(b) At the time of and immediately after giving effect to such Revolving Loan or the issuance, amendment, renewal or extension of suchDocumentary Credit, as applicable, no Default or Event of Default shall have occurred and be continuing.(c) The Administrative Agent shall have received a notice requesting such Borrowing or the issuance, amendment, renewal or extension of suchDocumentary Credit, as applicable to the extent required hereunder.Each Borrowing and each issuance, amendment, renewal or extension of a Documentary Credit shall be deemed to constitute a representation and warrantyby the Borrower on the date thereof as to the matters specified in paragraphs (a) and (b) of this Section.SECTION 5Affirmative CovenantsUntil the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall havebeen paid in full and all Documentary Credits shall have expired or terminated and all DC Disbursements shall have been reimbursed, the Borrowercovenants and agrees that:5.1. Financial Statements, etc. The Borrower will furnish to the Administrative Agent (for distribution to the Lenders), within 15 days after theBorrower has filed the same with the SEC, copies of the quarterly and annual reports and the information, documents and reports (or copies of such portionsof any of the foregoing as the SEC may prescribe) that the Borrower may be required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act(other than confidential filings, documents subject to confidential treatment and correspondence with the SEC); provided that in each case the delivery ofmaterials to the Administrative Agent by electronic means or47filing of documents pursuant to the SEC’s “EDGAR” system (or any successor electronic filing system) shall be deemed to be “furnished” with theAdministrative Agent as of the time such documents are filed via the “EDGAR” system for purposes of this Section 5.1.5.2. Compliance Certificate; Reporting.(a) Promptly (and in any event within 5 Business Days) following delivery of the quarterly and annual financial statements provided for in Section5.1 on Form 10-Q or 10-K, as applicable, a certificate of a Financial Officer of the Borrower substantially in the form of Exhibit C (y) stating no Default orEvent of Default has occurred and is then continuing or, if a Default or Event of Default exists, a detailed description of the Default or Event of Default andall actions the Borrower is taking with respect to such Default or Event of Default and (z) containing calculations demonstrating the Borrower’s compliancewith the covenants set forth in Section 6.6.(b) The Borrower will deliver to the Administrative Agent, forthwith upon any Responsible Officer becoming aware of any Default or Event ofDefault (which shall be no more than five (5) Business Days following the date on which the Responsible Officer becomes aware of such Default or Event ofDefault), an officer’s certificate of a Responsible Officer of the Borrower specifying such Default or Event of Default and what action the Borrower is taking orproposes to take with respect thereto.(c) Promptly following any request therefor, the Borrower will deliver information and documentation reasonably requested by the AdministrativeAgent or any Lender for purposes of compliance with applicable “know your customer” and anti-money laundering rules and regulations, including thePatriot Act and the Beneficial Ownership Regulation. Promptly following any request therefor, the Borrower shall provide written notice of any change in thelist of beneficial owners identified in the most recent Beneficial Ownership Certification delivered to Administrative Agent or a Lender.5.3. Maintenance of Existence. The Borrower and its Restricted Subsidiaries shall preserve, renew and keep in full force and effect itsorganizational existence and (ii) take all reasonable action to maintain all rights, privileges and franchises reasonably necessary in the normal conduct of itsbusiness, except, in each case, (x) as otherwise permitted by Section 6.3 or (y) to the extent that failure to do so would not, in the aggregate, reasonably beexpected to have a Material Adverse Effect.5.4. Maintenance of Insurance. (a) (i) The Loan Parties will maintain insurance policies (or self-insurance) on all its property in at least such amounts and against at least such risksas are usually insured against by companies of a similar size engaged in the same or a similar business (after giving effect to any self-insurance which in thegood faith judgment of management of the Borrower is reasonable and prudent in light of the size and nature of its business) and (ii) other than during aGuarantee and Collateral Suspension Period, each general liability policy of insurance maintained by a Loan Party shall name the Collateral Agent, as anadditional insured thereunder as its interests may appear and each general property insurance policy maintained by a Loan Party shall contain a mortgageeand lender loss payable endorsement that names the Collateral Agent, as mortgagee and lender loss payee thereunder as its interests may appear, providedthat, unless an Event of Default shall have occurred and be continuing, (A) all proceeds from insurance policies shall be paid to the Borrower (or a designatedLoan Party), (B) to the extent the Collateral Agent receives any proceeds, the Collateral Agent shall turn over to the Borrower any amounts received by it asan additional insured or lender loss payee under any property insurance maintained by the Borrower and its Restricted Subsidiaries, and (C) the CollateralAgent agrees that the Borrower and/or its applicable Restricted Subsidiary shall have the sole right to adjust or settle any claims under such insurance.Notwithstanding anything to the contrary herein, with respect to Foreign Subsidiaries and any Collateral located outside of the United States, therequirements of this Section 5.4 shall be deemed satisfied if the Borrower obtains insurance policies that are customary and appropriate for the applicablejurisdiction. Upon the request of the Collateral Agent, the Borrower and the Guarantors will furnish to the Collateral Agent full information as to their generalproperty and liability insurance carriers; and(b) If at any time any Mortgaged Property that remains subject to a Mortgage is at any time located in an area identified by the Federal EmergencyManagement Agency (or any successor agent) as a special flood hazard area, then the Borrower shall, or shall cause the applicable Loan Party to, (i) maintain,or cause to be maintained, with a financially sound and reputable insurer reasonably acceptable to the Administrative Agent, flood insurance in an amountand otherwise sufficient to comply with all applicable rules and regulations promulgated pursuant to the48Flood Insurance Laws and (ii) deliver to the Collateral Agent evidence of such compliance in form and substance reasonably acceptable to the CollateralAgent.5.5. Use of Proceeds and Documentary Credits. The proceeds of the Loans and the Documentary Credits will be used only for general corporatepurposes. No part of the proceeds of any Loan or any Documentary Credit will be used, whether directly or indirectly, for any purpose that entails a violationof any of the regulations of the Federal Reserve Board, including Regulations T, U and X.5.6. After-Acquired Collateral; Further Assurances.(a) With respect to any property acquired after the date of this Agreement by the Borrower or any Guarantor (other than any property or rightsdescribed in clause (b) and (c) of this Section 5.6) that constitutes Collateral and as to which the Collateral Agent, for the benefit of the Secured Parties, doesnot have a perfected Lien to the extent required by the Guarantee and Collateral Agreement, the Borrower and each applicable Guarantor shall promptly(provided that, in the case of Intellectual Property, at least quarterly) (other than during a Guarantee and Collateral Suspension Period):(i) execute and deliver to the Collateral Agent such amendments to the Guarantee and Collateral Agreement or such other documents asthe Collateral Agent deems necessary or advisable to grant to the Collateral Agent, for the benefit of the Secured Parties, a security interest in suchproperty or rights; and(ii) (A) file Uniform Commercial Code financing statements or amendments thereto with the applicable filing office in the jurisdiction offormation or incorporation of the Borrower or any Guarantor (as applicable) and/or (B) record filings with the United States Patent and TrademarkOffice and United States Copyright Office within the time specified in the Guarantee and Collateral Agreement, as applicable, in each case, to perfecta security interest in favor of the Collateral Agent, for the benefit of the Secured Parties, in such property or rights that is prior to all other Liens onthe Collateral other than Permitted Liens and Liens not prohibited by Section 6.2.(b) With respect to any fee interest in any real property located in the United States having a Fair Market Value (together with improvementsthereof) of at least $100,000,000 acquired after the date of this Agreement by the Borrower or any Guarantor (other than any such real property subject to aPermitted Lien which precludes the granting of a Mortgage thereon), within 90 days after the acquisition thereof, the Borrower and each applicable Guarantorshall (other than during a Guarantee and Collateral Suspension Period):(i) execute and deliver a first priority Mortgage or where appropriate under the circumstances, an amendment to an existing Mortgage, ineach case in favor of the Collateral Agent, for the benefit of the Secured Parties, covering such real property,(ii) if requested by the Collateral Agent, provide the Secured Parties with (A) either (x) title insurance covering such real property in anamount at least equal to the purchase price of such real property (or such other amount as shall be reasonably specified by the Collateral Agent) inform and substance reasonably satisfactory to the Collateral Agent, as well as a current ALTA survey thereof, together with a surveyor’s certificate or(y) where an amendment to an existing Mortgage has been delivered pursuant to clause (i), an endorsement to the existing title policy adding suchproperty as an insured parcel, and (B) any consents or estoppels reasonably deemed necessary or advisable by the Collateral Agent in connectionwith such Mortgage or Mortgage amendment (to the extent obtainable using commercially reasonable efforts), each of the foregoing in form andsubstance reasonably satisfactory to the Collateral Agent;(iii) if requested by the Collateral Agent, deliver to the Collateral Agent legal opinions relating to the matters described in clauses (i) and(ii) above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Collateral Agent and include opinionsregarding the enforceability of such Mortgage and the due authorization, execution and delivery thereof; and(iv) deliver to the Collateral Agent a completed “Life-of-Loan” Federal Emergency Management Agency Standard Flood HazardDetermination (together with a notice about special flood hazard area status and flood disaster assistance duly executed by the respective LoanParty) with respect to such property and, if such property is located in an area identified by the Federal Emergency Management49Agency (or any successor agency) as a special flood hazard area, evidence of flood insurance required by Section 5.4.(c) With respect to any Restricted Subsidiary (excluding any Excluded Subsidiary) that is required to become a Guarantor in order to comply withthe requirements of Section 6.1 or otherwise elects to become a Guarantor, within 60 days of the date such Restricted Subsidiary is required to become aGuarantor (or such date of election if such election is made by such Restricted Subsidiary) the Borrower and each applicable Guarantor shall (other thanduring a Guarantee and Collateral Suspension Period):(i)cause such Restricted Subsidiary (A) to become a party to the Guarantee and Collateral Agreement, (B) file Uniform CommercialCode financing statements or other filings in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as maybe reasonably requested by the Collateral Agent to grant to the Collateral Agent for the benefit of the Secured Parties a perfected first prioritysecurity interest (subject to Permitted Liens and Liens not prohibited by Section 6.2) in the Collateral described in the Guarantee and CollateralAgreement with respect to such Restricted Subsidiary and (C) to deliver to the Collateral Agent a customary closing certificate of such RestrictedSubsidiary, in form and substance reasonably satisfactory to the Collateral Agent, with appropriate insertions and attachments; and(ii)if requested by the Collateral Agent, deliver to the Collateral Agent customary legal opinions relating to the matters describedabove, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Collateral Agent.5.7. Compliance with Laws. The Borrower will maintain in effect and enforce policies and procedures designed to ensure compliance by theBorrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.5.8. Post-Closing Obligations. The Borrower shall deliver to the Administrative Agent on or prior to the date that is 90 days after the Closing Date(or such later date as the Administrative Agent may reasonably agree) (i) counterparts of a Mortgage with respect to each Mortgaged Property duly executedand delivered by the record title holder of such Mortgaged Property, (ii) to the extent applicable in the relevant jurisdiction (A) a policy or policies of titleinsurance (or marked unconditional commitment to issue such policy or policies) in the amount equal to not less than 100% (or such lesser amount asreasonably agreed to by the Administrative Agent) of the Fair Market Value of such Mortgaged Property and fixtures, as reasonably determined by theBorrower and agreed to by the Administrative Agent, issued by the Title Insurance Company insuring the Lien of each such Mortgage as a first priority Lienon the Mortgaged Property described therein, free of any other Liens except for Permitted Liens, together with such endorsements (other than a creditor’srights endorsement) as the Administrative Agent may reasonably request to the extent available in the applicable jurisdiction at commercially reasonablerates, (B) such affidavits, instruments of indemnification (including a so-called “gap” indemnification) as are customarily requested by the Title InsuranceCompany to induce the Title Insurance Company to issue the title policies and endorsements contemplated above, (C) evidence reasonably acceptable to theCollateral Agent of payment by the Borrower of all title policy premiums, search and examination charges, escrow charges and related charges, mortgagerecording taxes, fees, charges, costs and expenses required for the recording of the Mortgages and issuance of the title policies referred to above, (D) a surveyof each Mortgaged Property in such form as shall be required by the Title Insurance Company to issue the so-called comprehensive and other survey-relatedendorsements and to remove the standard survey exceptions from the title policies and endorsements contemplated above (provided, however, that a surveyshall not be required to the extent that the issuer of the applicable title insurance policy provides reasonable and customary survey-related coverages(including, without limitation, survey-related endorsements) in the applicable title insurance policy based on an existing survey and/or such otherdocumentation as may be reasonably satisfactory to the Title Insurance Company), (E) completed “Life-of-Loan” Federal Emergency Management Agency(“FEMA”) Standard Flood Hazard Determination with respect to each Mortgaged Property subject to the applicable FEMA rules and regulations (togetherwith a notice about special flood hazard area status and flood disaster assistance duly executed by the Borrower and each Loan Party relating thereto) and (F)if any Mortgaged Property is located in an area determined by FEMA to have special flood hazards, evidence of such flood insurance as may be requiredunder Section 5.4 and (iii) such legal opinions as the Administrative Agent may reasonably request with respect to any such Mortgage or MortgagedProperty.5.9. Designation of Subsidiaries.50(a) The Borrower may at any time by written notice to the Administrative Agent (i) designate any Restricted Subsidiary as an Excluded Subsidiaryor an Unrestricted Subsidiary or (ii) remove such designation with respect to any Excluded Subsidiary or designate any Unrestricted Subsidiary as aRestricted Subsidiary; provided that no Default or Event of Default shall have occurred and be continuing or would result therefrom.(b) Any Excluded Subsidiary shall be treated like an Unrestricted Subsidiary for all purposes of this Agreement; provided that the ExcludedSubsidiaries designated pursuant to clause (g) of the definition thereof and Unrestricted Subsidiaries that are designated by the Borrower pursuant to Section5.9(a) in the aggregate shall not constitute (after intercompany eliminations) greater than 10% of the total assets of the Borrower and its ConsolidatedSubsidiaries as of the end of the most recently completed fiscal year of the Borrower (such level, the “Excluded Subsidiary Threshold”). In the event theExcluded Subsidiary Threshold is exceeded as of the end of the most recently completed fiscal year of the Borrower, the Borrower shall within three BusinessDays after delivering its annual financial statements to the Administrative Agent pursuant to Section 5.1, by written notice to the Administrative Agent,remove the designation applicable to one or more Excluded Subsidiaries designated an Excluded Subsidiary pursuant to clause (g) of the definition thereofor Unrestricted Subsidiaries in accordance with Section 5.9(a) in order to comply with the Excluded Subsidiary Threshold.SECTION 6Negative CovenantsUntil the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall havebeen paid in full and all Documentary Credits shall have expired or terminated and all DC Disbursements shall have been reimbursed, the Borrower acovenants and agrees that:6.1. Limitation on Indebtedness secured by Liens and Restricted Subsidiary Indebtedness.(a) The Borrower will not, and will not permit any of its Restricted Subsidiaries to create, assume, incur, Guarantee or otherwise become liable forany Indebtedness secured by a Lien on Principal Property or on Collateral, in each case, whether now owned or hereafter acquired, except Permitted Liens.(b) The Borrower will not permit any of its Restricted Subsidiaries to create, assume, incur, Guarantee or otherwise become liable for anyIndebtedness that is not secured by a Lien on Principal Property or on Collateral without causing such Restricted Subsidiary (excluding any ExcludedSubsidiary and any Subsidiary that is not a Material Subsidiary) to become a Guarantor (any such Indebtedness or Guarantee, “Restricted Subsidiary Debt”),except the foregoing restriction shall not apply to, and there shall be excluded from Restricted Subsidiary Debt in any computation under such restriction,Restricted Subsidiary Debt constituting:(1) Restricted Subsidiary Debt in respect of or under the Obligations;(2) Restricted Subsidiary Debt of a Person existing at the time such Person is merged into or consolidated with or otherwise acquired bythe Borrower or any Restricted Subsidiary of the Borrower or otherwise becomes a Restricted Subsidiary of the Borrower (or arising thereafterpursuant to contractual commitments entered into prior to such Person becoming a Restricted Subsidiary) or at the time of a sale, lease or otherdisposition of the properties and assets of such Person (or a division thereof) as an entirety or substantially as an entirety to any RestrictedSubsidiary of the Borrower (or arising thereafter pursuant to contractual commitments entered into prior to such Person becoming a RestrictedSubsidiary) and is assumed by such Subsidiary, other than any increase in the amount of such Restricted Subsidiary Debt (including any increase inthe amount of such Restricted Subsidiary Debt arising pursuant to contractual commitments entered into prior to such acquisition) incurred incontemplation thereof; provided that any such Restricted Subsidiary Debt is not Guaranteed by any other Restricted Subsidiary of the Borrower(other than any Guarantee existing at the time of such merger, consolidation or sale, lease or other disposition of properties and assets and that wasnot issued in contemplation thereof);(3) Restricted Subsidiary Debt owed to the Borrower or any Restricted Subsidiary or under Guarantees of any such Restricted SubsidiaryDebt;(4) Restricted Subsidiary Debt created, incurred, issued, assumed or Guaranteed to pay or finance the payment of all or any part of thepurchase price or the cost of development, operation, construction, alteration, repair or improvement of property, assets or equipment acquired ordeveloped, operated, constructed, altered, repaired or improved by a Restricted Subsidiary, and any related51transactional fees, costs and expenses, provided such Restricted Subsidiary Debt is created, incurred, issued, assumed or Guaranteed within 18months (or in the case of any Restricted Subsidiary Debt supported by an export credit agency, 24 months) after the later of (i) the acquisition or thecompletion of any such development, operation, construction, alteration, repair or improvement of such property, assets or equipment, whichever islater, or (ii) the placing into commercial operation of such property after the acquisition or completion of any such development, operation,construction, alteration, repair or improvement (or, in each case, is incurred pursuant to firm commitment financing arrangements obtained withinsuch period), and, provided further, that the outstanding amount of such Restricted Subsidiary Debt, without duplication, does not exceed 100% ofthe fair value of the property or equipment acquired or developed, operated, constructed, altered, repaired or improved at the time such RestrictedSubsidiary Debt is incurred; or(5) Restricted Subsidiary Debt permitted to be secured by Liens permitted by clauses (5) or (6) of the definition of Permitted Lien (whetheror not such Restricted Subsidiary Debt is in fact secured by such Liens) and any Guarantees thereof.For purposes of this Section 6.1(b), in the event that any Restricted Subsidiary Debt meets the criteria of more than one of the types of RestrictedSubsidiary Debt in such Section, the Borrower, in its sole discretion, will classify, and may reclassify, such Restricted Subsidiary Debt and only berequired to include the amount and type of such Restricted Subsidiary Debt in one of clauses (1) through (5) of Section 6.1(b) or Section 6.1(c) andRestricted Subsidiary Debt may be divided and classified and reclassified into more than one of the types of Restricted Subsidiary Debt describedabove. In addition, for purposes of calculating compliance with this Section 6.1, in no event will the amount of any Restricted Subsidiary Debt berequired to be included more than once despite the fact more than one Person is or becomes liable with respect to any related Indebtedness (forexample, and for avoidance of doubt, in the case where more than one Restricted Subsidiary incurs Restricted Subsidiary Debt or otherwise becomesliable for such Restricted Subsidiary Debt, the amount of such Restricted Subsidiary Debt shall only be included once for purposes of suchcalculations).(c) Notwithstanding the other provisions of Section 6.1(a), Section 6.1(b) and Section 6.4(a),(1) at such time as a Secured Covenants Period is in effect, the Borrower and its Restricted Subsidiaries may create, assume, incur,Guarantee or otherwise become liable for Indebtedness that otherwise would not be permitted pursuant to Section 6.1(a), Section 6.1(b) or Section6.1(d) and enter into sale and leaseback transactions that otherwise would not be permitted pursuant to Section 6.4(a), if after giving effect thereto,(1) in the case of Indebtedness or a Guarantee of Indebtedness that constitutes First Lien Debt, the Aggregate First Lien Debt of the Borrower and itsRestricted Subsidiaries does not exceed the greater of (x) $5,000,000,000 and (y) 33% of Consolidated EBITDA of the Borrower for theMeasurement Period immediately preceding the date of such creation, assumption or incurrence of such Indebtedness or Guaranteeing of orotherwise becoming liable for such Indebtedness or the entering into such sale lease-back transaction, as the case may be, and (2) the AggregatePriority Debt of the Borrower and its Restricted Subsidiaries does not exceed the greater of (x) $7,500,000,000 and (y) 75% of ConsolidatedEBITDA of the Borrower for the Measurement Period immediately preceding the date of such creation, assumption or incurrence of suchIndebtedness or Guaranteeing of or otherwise becoming liable for such Indebtedness or the entering into such sale lease-back transaction, as the casemay be; and(2) at such time as an Unsecured Covenants Period is in effect, the Borrower and its Restricted Subsidiaries may create, assume, incur,Guarantee or otherwise become liable for Indebtedness that otherwise would not be permitted pursuant to Section 6.1(a), Section 6.1(b) or Section6.1(d) and enter into sale and leaseback transactions that otherwise would not be permitted pursuant to Section 6.4(a), if after giving effect thereto,(1) in the case of Indebtedness or a Guarantee of Indebtedness that constitutes Domestic Priority Debt, the Aggregate Domestic Priority Debt of theBorrower and its Domestic Restricted Subsidiaries does not exceed the greater of (x) $1,500,000,000 and (y) 10% of Consolidated EBITDA of theBorrower for the Measurement Period immediately preceding the date of such creation, assumption or incurrence of such Indebtedness orGuaranteeing of or otherwise becoming liable for such Indebtedness or the entering into such sale lease-back transaction, as the case may be, and (2)the Aggregate Priority Debt of the Borrower and its Restricted Subsidiaries does not exceed the greater of (x) $4,000,000,000 and (y) 25% ofConsolidated EBITDA of the Borrower for the Measurement Period immediately preceding the date of such creation, assumption or incurrence ofsuch Indebtedness or Guaranteeing of or otherwise52becoming liable for such Indebtedness or the entering into such sale lease-back transaction, as the case may be.(d) Notwithstanding the other provisions of Section 6.1(a), (b) and (c), the Borrower and its Restricted Subsidiaries may create, assume, incur,Guarantee or otherwise become liable for Indebtedness not otherwise permitted pursuant to Sections 6.1(a), (b) or (c) that is an extension, renewal,substitution, replacement, refinancing or refunding of Indebtedness that was permitted pursuant to Section 6.1(a), (b) or (c) at the time such Indebtedness wascreated or incurred; provided that (1) any Indebtedness incurred to so extend, renew, substitute, replace, refinance or refund shall be incurred within 12months of the maturity, retirement or other repayment or prepayment (including any such repayment pursuant to amortization obligations with respect tosuch Indebtedness), (2) the outstanding amount of the Indebtedness incurred to so extend, renew, substitute, replace, refinance or refund shall not exceed theoutstanding amount of Indebtedness being extended, renewed, substituted, replaced, refinanced or refunded plus any premiums or fees (including tenderpremiums) or other reasonable amounts payable, plus the amount of fees, expenses and other costs incurred, in connection with any such extension, renewal,substitution, replacement, refinancing or refunding, (3) if the Indebtedness being extended, renewed, substituted, replaced, refinanced or refunded wassecured by a Lien on Collateral or Principal Property, the Indebtedness incurred to so extend, renew, substitute, replace, refinance or refund may be securedby Collateral or Principal Property, and (4) if the Indebtedness being extended, renewed, substituted, replaced, refinanced or refunded was not secured by aLien on Collateral or Principal Property, the Indebtedness incurred to so extend, renew, substitute, replace, refinance or refund shall not be secured byCollateral or Principal Property.(e) For purposes of this Section 6.1 and Section 6.2, (1) the creation of a Lien to secure Indebtedness which existed prior to the creation of suchLien will be deemed to involve Indebtedness in an amount equal to the lesser of (x) the fair value (as determined in good faith by the Borrower) of the assetsubjected to such Lien and (y) the principal amount secured by such Lien, and (2) in the event that Indebtedness secured by a Lien meets the criteria of morethan one of the types of Indebtedness secured by a Lien that is permitted pursuant to Section 6.1(a) or 6.1(c) the Borrower, in its sole discretion, will classify,and may reclassify, such Indebtedness and only be required to include the amount and type of such Indebtedness as permitted pursuant to Section 6.1(a) or6.1(c), and Indebtedness secured by a Lien may be divided and classified and reclassified into more than one of such types of Indebtedness. In addition, forpurposes of calculating compliance with this Section 6.1 or Section 6.2, in no event will the amount of any Indebtedness be required to be included morethan once in the same calculation (including in respective calculations of Aggregate First Lien Debt, Domestic Priority Debt, Priority Debt, AggregatePriority Debt and Aggregate Domestic Priority Debt) despite the fact more than one Person is or becomes liable with respect to such Indebtedness and despitethe fact such Indebtedness is secured by the assets of more than one Person and despite the fact that such Indebtedness is both Indebtedness of a RestrictedSubsidiary and Indebtedness secured by a Lien (for example, and for avoidance of doubt, in the case where there are Liens on assets of one or more of theBorrower and its Restricted Subsidiaries securing any Indebtedness, the amount of such Indebtedness secured shall only be included once for purposes ofsuch calculations).6.2. Limitation on Liens. The Borrower will not, and will not permit any of its Restricted Subsidiaries, to create or incur any Lien on any PrincipalProperty or on Collateral, in each case, whether now owned or hereafter acquired, in order to secure any Indebtedness, except for (a) Permitted Liens and (b)other Liens securing Indebtedness that is permitted pursuant to Section 6.1(c) or Section 6.1(d)(3). Notwithstanding the foregoing, the Borrower or anyRestricted Subsidiary of the Borrower also may create or incur Liens that extend, renew, substitute or replace (including successive extensions, renewals,substitutions or replacements), in whole or in part, any Lien securing such Indebtedness).6.3. Merger, Consolidation, or Sale of Assets.(a) The Borrower may not consolidate with or merge with or into, or sell, assign, convey, transfer, lease or otherwise dispose of all or substantiallyall of the properties, rights and assets of the Borrower and its Restricted Subsidiaries, taken as a whole, to any Person, in a single transaction or in a series ofrelated transactions, unless:(1) either (i) the Person formed by or surviving such consolidation or merger is the Borrower or (ii) the Person (if other than the Borrower)formed by such consolidation or into which the Borrower is merged or the Person which acquires by conveyance or transfer, or which leases, all orsubstantially all of the properties, rights and assets of the Borrower (the “Successor Company”), is an entity organized under the laws of the UnitedStates of America, any State thereof or the District of Columbia; provided that such53Successor Company shall provide such information reasonably requested by the Administrative Agent or any Lender for purposes of compliancewith applicable “know your customer” rules and regulations;(2) in any such transaction in which there is a Successor Company, the Successor Company expressly assumes the Obligations pursuant tojoinder agreements or other documents reasonably satisfactory to the Administrative Agent; and(3) immediately after giving effect to the transaction, no Event of Default and no Default shall have occurred and be continuing.This Section 6.3 shall not apply to:(i) a merger of the Borrower with an Affiliate solely for the purpose of reincorporating the Borrower in another jurisdiction in the UnitedStates of America, any State thereof or the District of Columbia; or(ii) any consolidation or merger of (a) the Borrower into a Guarantor, (b) a Guarantor into the Borrower or another Guarantor or (c) aRestricted Subsidiary of the Borrower into the Borrower or another Restricted Subsidiary of the Borrower; or(iii) any sale, assignment, transfer, conveyance, lease or other disposition of property, rights or assets (a) by the Borrower to a Guarantor,(b) by a Guarantor to the Borrower or another Guarantor or (c) by a Restricted Subsidiary of the Borrower to the Borrower or another RestrictedSubsidiary of the Borrower.(b) Upon any consolidation of the Borrower with, or merger of the Borrower into, any other Person or any sale, assignment, conveyance, transfer,lease or other disposition of all or substantially all the properties, rights and assets of the Borrower to a Successor Company in accordance with the conditionsdescribed in Section 6.3(a), the Successor Company shall succeed to and be substituted for, and may exercise every right and power of, the Borrower underthis Agreement, the First Lien Intercreditor Agreement and the Security Documents with the same effect as if such Successor Company had been named as theBorrower and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Agreement, the FirstLien Intercreditor Agreement and the Security Documents.6.4. Limitation on Sale and Leaseback Transactions.(a) The Borrower will not, and will not permit any of its Restricted Subsidiaries, to enter into any sale and lease-back transaction with respect toany Principal Property or Collateral, whether now owned or hereafter acquired, unless:(1) such transaction was entered into prior to the Closing Date;(2) such transaction was for the sale and leasing back to the Borrower or a Restricted Subsidiary by the Borrower or any RestrictedSubsidiary of any Principal Property or Collateral;(3) such transaction involves a lease of Principal Property or Collateral executed by the time of or within 18 months (or in the case of anytransaction supported by the credit of an export credit agency, 24 months) after the later of (i) the acquisition or the completion of any suchdevelopment, operation, construction, alteration, repair or improvement of such property, assets or equipment or (ii) the placing into commercialoperation of such Principal Property or Collateral after the acquisition or completion of any such development, operation, construction, alteration,repair or improvement;(4) such transaction involves a lease for not more than three years (or which may be terminated by the Borrower or the applicableRestricted Subsidiary within a period of not more than three years);(5) the Borrower or the applicable Restricted Subsidiary would be entitled to incur Indebtedness secured by a Lien on the property to beleased in an amount equal to Attributable Debt with respect to such sale and lease-back transaction pursuant to Section 6.1(a); or54(6) the Borrower or the applicable Restricted Subsidiary applies an amount equal to the net proceeds from the sale of the PrincipalProperty to the purchase of other Principal Property or to the retirement, repurchase or other repayment or prepayment of the Loans or other PariPassu Lien Indebtedness within 365 calendar days before or after the effective date of any such sale and lease-back transaction; and(b) Notwithstanding the other provisions of Section 6.4(a), the Borrower and the applicable Restricted Subsidiary may enter into any sale andlease-back transaction with respect to any Principal Property or Collateral if the Borrower or the applicable Restricted Subsidiary would be entitled to incurIndebtedness secured by a Lien on the property to be leased in an amount equal to Attributable Debt with respect to such sale and lease-back transactionpursuant to Section 6.1(c).6.5. Anti-Corruption Laws and Sanctions. The Borrower will not request any Borrowing or Documentary Credit, and the Borrower shall not use,and shall procure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing orDocumentary Credit (a) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, toany Person in violation of any Anti-Corruption Laws, (b) for the purpose of funding, financing or facilitating any activities, business or transaction of or withany Sanctioned Person, or in any Sanctioned Country, to the extent such activities, business or transaction would be prohibited by Sanctions if conducted bya corporation incorporated in the United States or in a European Union member state, or (c) in any manner that would result in the violation of any Sanctionsapplicable to any party hereto.6.6. Financial Covenants.(a) The Borrower will not permit, as of the last day of any fiscal quarter of the Borrower, the Total Leverage Ratio to exceed 2.75 to 1.00; providedthat following the consummation of a Qualified Acquisition for the four fiscal quarters of the Borrower then ended as set forth in the last ComplianceCertificate delivered pursuant to Section 5.2, the Total Leverage Ratio set forth above shall increase for each of the four fiscal quarters of the Borrower endingfollowing the consummation of a Qualified Acquisition to 3.00 to 1.00.(b) The Borrower will not permit, as of the last day of any fiscal quarter of the Borrower, the Interest Coverage Ratio to be less than 3.50 to 1.00.SECTION 7Events of Default7.1. Events of Default. Each of the following is an “Event of Default”:(a) failure by the Borrower to pay principal of a Loan when due;(b) failure by the Borrower to pay (i) any interest or scheduled fees due under this Agreement or the Security Documents for five Business Daysafter such amount” becomes due and (ii) any other obligation due under this Agreement or the Security Documents for ten Business Days after such amountbecomes due; provided that during any Unsecured Covenants Period, failure by the Borrower to make any such payments under the Security Documents shallnot be an Event of Default;(c) failure by the Borrower to comply with Section 6.6;(d) failure by the Borrower or any of its Restricted Subsidiaries to perform, or breach by the Borrower or any of its Restricted Subsidiaries of, anyother covenant, agreement, representation or warranty or condition in this Agreement or any Security Document for 30 calendar days after either theAdministrative Agent or the Required Lenders have given the Borrower written notice of the breach in the manner required by this Agreement;(e) default under any mortgage, indenture or instrument under which there is issued or by which there is secured or evidenced any Indebtedness ofthe Borrower or any Guarantor, whether such Indebtedness or guarantee now exists or is created after the Closing Date, if both: (a) such default either resultsfrom the failure to pay any principal of such Indebtedness at its stated final maturity (after giving effect to any applicable grace periods) or such default iswith respect to another obligation under such Indebtedness and results in the holder or holders of such55Indebtedness causing the payment of such Indebtedness to be accelerated and to become due prior to its stated maturity without such Indebtedness (so longas such Indebtedness is not First Lien Debt) having been discharged or such acceleration having been cured, waived, rescinded or annulled within a period ofthirty (30) calendar days; and (b) the principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness not so paidwhen due, or the maturity of which has been so accelerated, aggregates $100,000,000 or more;(f) the Borrower or any Significant Subsidiary, pursuant to or within the meaning of any Debtor Relief Law:(1) commences proceedings to be adjudicated bankrupt or insolvent;(2) consents to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consentseeking an arrangement of debt, reorganization, dissolution, winding up or relief under applicable Debtor Relief Laws;(3) consents to the appointment of a receiver, interim receiver, receiver and manager, liquidator, assignee, trustee, sequestrator or othersimilar official of it or for all or substantially all of its property; or(4) makes a general assignment for the benefit of its creditors;(g) a court of competent jurisdiction enters an order or decree under any Debtor Relief Law that:(1) is for relief against the Borrower or any Significant Subsidiary in a proceeding in which the Borrower or any Significant Subsidiary isto be adjudicated bankrupt or insolvent;(2) appoints a receiver, interim receiver, receiver and manager, liquidator, assignee, trustee, sequestrator or other similar official of theBorrower or any Significant Subsidiary, or for all or substantially all of the property of the Borrower or any Significant Subsidiary; or(3) orders the liquidation, dissolution or winding up of the Borrower or any Significant Subsidiary;and the order or decree remains unstayed and in effect for 60 consecutive days;provided that, in the cases of the foregoing clauses (f) and (g), (i) such event or circumstance is either (x) a voluntary proceeding or results therefrom or(y) under or pursuant to the laws of such Person’s jurisdiction of incorporation or organization or the jurisdiction in which its head office is located or thelaws of the jurisdictions in which all or substantially all its assets are located, and (ii) in no event shall any such event or circumstance constitute an Event ofDefault if such event or circumstance is a result of a bankruptcy, insolvency, reorganization or other similar proceeding with respect such Person or its assetsor business that was ongoing or in process at the time such Person became a Subsidiary of the Borrower (including any alternate proceedings) or other suchproceedings that are in the nature of either a continuation or extension thereof;(h) other than during a Guarantee and Collateral Suspension Period, any of the Security Documents shall cease, for any reason, to be in full forceand effect (other than in accordance with its terms) with respect to Collateral with a book value greater than $150,000,000, or any Loan Party shall so assert,or any Lien (affecting Collateral with a book value greater than $150,000,000) created by any of the Security Documents shall cease to be enforceable and ofthe same effect and priority purported to be created thereby (other than, in each case, pursuant to a failure of the Administrative Agent, the Collateral Agent,any other agent appointed by the Administrative Agent, the Collateral Agent or the Lenders to take any action within the sole control of such Person) (itbeing understood that the release of Collateral from the Security Documents or the discharge of a Guarantor therefrom shall not be construed (x) as any of theSecurity Documents ceasing to be in full force and effect or (y) as any of the Liens created thereunder ceasing to be enforceable or of the same priority andeffect purported to be created thereby) and such Default continues for 60 calendar days after either the Administrative Agent or the Required Lenders havegiven the Borrower written notice of the Default in the manner required by this Agreement;(i) other than during a Guarantee and Collateral Suspension Period and except as permitted by this Agreement or the Guarantee and CollateralAgreement, any Guaranty Reimbursement Obligation of a Significant56Subsidiary ceases, for any reason, to be in full force and effect (other than in accordance with its terms), or any Significant Subsidiary that is a Guarantordenies or disaffirms in writing its obligations under its Guaranty Reimbursement Obligation;(j) An ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liabilityis reasonably expected to occur, would reasonably be expected to result in a Material Adverse Effect; and(k) any Change of Control shall occur.In the case of an Event of Default, then, and in every such event (other than an event with respect to the Borrower described in clause (f) or (g) of this Section),and at any time thereafter during the continuance of such event, the Administrative Agent may take any and all of the following actions: (A) at the request ofthe Required Revolving Lenders, the Administrative Agent shall, by notice to the Borrower, (i) terminate the Revolving Commitments, and thereupon theRevolving Commitments shall terminate immediately and (ii) require that the Borrower provide cash collateral as required in Section 2.4(j) and (B) at therequest of the Required Lenders, the Administrative Agent shall, by noticed to the Borrower (i) declare the Loans then outstanding to be due and payable inwhole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon theprincipal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accruedhereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived bythe Borrower and (ii) exercise on behalf of itself, the Lenders and the Issuing Banks all rights and remedies available to it, the Lenders and the Issuing Banksunder the Loan Documents and Applicable Law. In case of any event with respect to the Borrower described in clause (f) or (g) of this Section, theCommitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and otherobligations of the Borrower accrued hereunder, shall automatically become due and payable, and the obligation of the Borrower to cash collateralize the DCExposure as provided in clause (ii) above shall automatically become effective, in each case, without presentment, demand, protest or other notice of anykind, all of which are hereby waived by the Borrower.In the event of a declaration of acceleration of the Loans because an Event of Default described in Section 7.1(e) has occurred and is continuing, thedeclaration of acceleration of the Loans shall be automatically annulled if the event of default or payment default triggering such Event of Default pursuantto Section 7.1(e) shall be remedied or cured, or waived by the holders of the Indebtedness or the Indebtedness that gave rise to such Event of Default shallhave been discharged in full, within thirty (30) calendar days after declaration of acceleration with respect thereto, and if (1) the annulment of theacceleration of the Loans would not conflict with any judgment or decree of a court of competent jurisdiction and (2) all existing Events of Default, exceptnonpayment of principal, premium or interest on the Loans that became due solely because of the acceleration of the Loans, have been cured or waived.SECTION 8The Agents8.1. Appointment. Each Lender and each Issuing Bank hereby irrevocably designates and appoints the Administrative Agent as the agent of suchLender under this Agreement and the other Loan Documents, and each such Lender and Issuing Bank irrevocably authorizes the Administrative Agent, insuch capacity, to take such action on its behalf under the provisions of this Agreement and the other Loan Documents and to exercise such powers andperform such duties as are expressly delegated to the Administrative Agent by the terms of this Agreement and the other Loan Documents, together with suchother powers as are reasonably incidental thereto. Each Lender and each Issuing Bank hereby irrevocably designates and appoints the Collateral Agent as theagent of such Lender and Issuing Bank under this Agreement and the other Loan Documents, and each such Lender and Issuing Bank irrevocably authorizesthe Collateral Agent, in such capacity, to take such action on its behalf under the provisions of this Agreement and the other Loan Documents and to exercisesuch powers and perform such duties as are expressly delegated to the Collateral Agent by the terms of this Agreement and the other Loan Documents,together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, none of theAdministrative Agent and the Collateral Agent shall have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationshipwith any Lender or Issuing Bank, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement orany other Loan Document or otherwise exist against the Administrative Agent or the Collateral Agent.578.2. Delegation of Duties. Each of the Administrative Agent and the Collateral Agent may execute any of their duties under this Agreement andthe other Loan Documents by or through agents or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties.None of the Administrative Agent and the Collateral Agent shall be responsible for the negligence or misconduct of any agents or attorneys in fact selectedby it with reasonable care.8.3. Exculpatory Provisions. Neither any Agent nor any of their respective officers, directors, employees, agents, attorneys in fact or affiliates shallbe (i) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or any other Loan Document(except to the extent that any of the foregoing are found by a final and non-appealable decision of a court of competent jurisdiction to have resulted from itsor such Person’s own gross negligence or willful misconduct) or (ii) responsible in any manner to any of the Lenders or Issuing Banks for any recitals,statements, representations or warranties made by any Loan Party or any officer thereof contained in this Agreement or any other Loan Document or in anycertificate, report, statement or other document referred to or provided for in, or received by the Agent under or in connection with, this Agreement or anyother Loan Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document or forany failure of any Loan Party a party thereto to perform its obligations hereunder or thereunder. The Agents shall not be under any obligation to any Lenderor Issuing Bank to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or anyother Loan Document, or to inspect the properties, books or records of any Loan Party.8.4. Reliance by the Administrative Agent. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon anyinstrument, writing, resolution, notice, consent, certificate, affidavit, letter, telecopy, email message, statement, order or other document or conversationbelieved by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legalcounsel (including counsel to the Borrower), independent accountants and other experts reasonably selected by the Administrative Agent. TheAdministrative Agent may deem and treat the payee of any Note as the owner thereof for all purposes unless a written notice of assignment, negotiation ortransfer thereof shall have been filed with the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any actionunder this Agreement or any other Loan Document unless the Administrative Agent shall first receive such advice or concurrence of the Required Lenders (or,if so specified by this Agreement, all Lenders and Issuing Banks) as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders andIssuing Banks against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action. TheAdministrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Loan Documents inaccordance with a request of the Required Lenders (or, if so specified by this Agreement or any other Loan Document, all Lenders and Issuing Banks), andsuch request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and Issuing Banks and all future holders of theLoans.8.5. Notice of Default. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event ofDefault unless it has received written notice from a Lender, Issuing Bank or the Borrower referring to this Agreement, describing such Default or Event ofDefault and stating that such notice is a “notice of default”. In the event that the Administrative Agent receives such a notice, it shall give notice thereof tothe Lenders and Issuing Banks. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonablydirected by the Required Lenders (or, if so specified by this Agreement or any other Loan Document, all Lenders and Issuing Banks); provided that unlessand until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, orrefrain from taking such action, with respect to such Default or Event of Default as the Administrative Agent shall deem advisable in the best interests of theLenders and Issuing Banks.8.6. Non-Reliance on the Agent and Other Lenders. Each Lender and each Issuing Bank expressly acknowledges that neither the Agent nor any oftheir respective officers, directors, employees, agents, attorneys in fact or affiliates have made any representations or warranties to it and that no act by anyAgent hereafter taken, including any review of the affairs of a Loan Party or any affiliate of a Loan Party, shall be deemed to constitute any representation orwarranty by any Agent to any Lender or Issuing Bank. Each Lender and Issuing Bank represents to the Agent that it has, independently and without relianceupon any Agent, any other Lender or any Issuing Bank, and based on such documents and information as it has deemed appropriate, made its own appraisalof and investigation into the business, operations, property, financial and other condition and creditworthiness of the Loan Parties and their affiliates andmade its own decision to make its Loans hereunder and enter into this Agreement.58Each Lender and Issuing Bank also represents that it will, independently and without reliance upon any Agent, any other Lender or any Issuing Bank, andbased on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions intaking or not taking action under this Agreement and the other Loan Documents, and to make such investigation as it deems necessary to inform itself as tothe business, operations, property, financial and other condition and creditworthiness of the Loan Parties and their affiliates. Except for notices, reports andother documents expressly required to be furnished to the Lenders and Issuing Banks by the Administrative Agent hereunder, the Administrative Agent shallnot have any duty or responsibility to provide any Lender or Issuing Bank with any credit or other information concerning the business, operations, property,condition (financial or otherwise), prospects or creditworthiness of any Loan Party or any affiliate of a Loan Party that may come into the possession of theAdministrative Agent or any of its officers, directors, employees, agents, attorneys in fact or affiliates.8.7. Indemnification. To the extent the Borrower fails to pay any amount required to be paid by it to the Administrative Agent, the CollateralAgent or any other agent under Section 9.5, the Lenders and Issuing Banks severally agree to indemnify the Agent in their capacity as such (to the extent notreimbursed by the Borrower and without limiting the obligation of the Borrower to do so), ratably according to their respective Revolving Loan Percentagein effect on the date on which indemnification is sought under this Section 8.7 (or, if indemnification is sought after the date upon which the Commitmentsshall have terminated and the Loans shall have been paid in full, ratably in accordance with such Revolving Loan Percentage immediately prior to suchdate), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kindwhatsoever that may at any time (whether before or after the payment of the Loans) be imposed on, incurred by or asserted against such Agent, in any wayrelating to or arising out of, the Commitments, this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein ortherein or the transactions contemplated hereby or thereby or any action taken or omitted by such Agent under or in connection with any of the foregoing;provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits,costs, expenses or disbursements that are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from such Agent’s,gross negligence or willful misconduct. The agreements in this Section 8.7 shall survive the payment of the Loans and all other amounts payable hereunder.8.8. Agent in Its Individual Capacity. Each Agent and its affiliates may make loans to, accept deposits from and generally engage in any kind ofbusiness with any Loan Party as though such Agent were not an Agent. With respect to its Loans made or renewed by it, each Agent shall have the same rightsand powers under this Agreement and the other Loan Documents as any Lender and may exercise the same as though it were not an Agent, and the terms“Lender” and “Lenders” shall include each Agent in its individual capacity.8.9. Successor Administrative Agent. The Administrative Agent may resign as Administrative Agent upon 30 days’ notice to the Lenders, IssuingBank and the Borrower. If the Administrative Agent shall resign as Administrative Agent under this Agreement and the other Loan Documents, then theRequired Lenders shall appoint from among the Lenders and Issuing Banks a successor agent for the Lenders and Issuing Banks, which successor agent shallbe subject to approval by the Borrower (which approval shall not be unreasonably withheld or delayed), whereupon such successor agent shall succeed to therights, powers and duties of the Administrative Agent, and the term “Administrative Agent” shall mean such successor agent effective upon such appointmentand approval, and the former Administrative Agent’s rights, powers and duties as an Administrative Agent shall be terminated, without any other or furtheract or deed on the part of such former Administrative Agent or any of the parties to this Agreement or any holders of the Loans. If no successor agent hasaccepted appointment as an Administrative Agent by the date that is ten (10) days following the retiring Administrative Agent’s notice of resignation, theretiring Administrative Agent’s resignation shall nevertheless thereupon become effective, and the Lenders and Issuing Banks shall assume and perform all ofthe duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above. After theretiring Administrative Agent’s resignation, the provisions of this Section 8 and Section 9.5 shall inure to its benefit as to any actions taken or omitted to betaken by it while it was Administrative Agent under this Agreement and the other Loan Documents.8.10. RESERVED.8.11. Collateral Security. Other than during a Guarantee and Collateral Suspension Period, the Collateral Agent will hold, administer and manageany Collateral pledged from time to time under the Guarantee and Collateral Agreement either in its own name or as Collateral Agent, but each Lender shallhold a direct, undivided pro rata beneficial interest therein, on the basis of its proportionate interest in the Secured Obligations, by59reason of and as evidenced by this Agreement and the other Loan Documents, subject to the priority of payments referenced in Section 6.4 of the Guaranteeand Collateral Agreement.8.12. Enforcement by the Administrative Agent and Collateral Agent. All rights of action under this Agreement and under the Notes and all rightsto the Collateral hereunder may be enforced by the Administrative Agent and the Collateral Agent and any suit or proceeding instituted by theAdministrative Agent or the Collateral Agent in furtherance of such enforcement shall be brought in its name as Administrative Agent or Collateral Agentwithout the necessity of joining as plaintiffs or defendants any other Lenders or Issuing Banks, and the recovery of any judgment shall be for the benefit ofLenders and Issuing Banks subject to the expenses of the Administrative Agent and the Collateral Agent.8.13. Withholding Tax. Each Lender and Issuing Bank shall severally indemnify the Administrative Agent, within 10 days after demand therefor,for (i) any Non-Excluded Taxes or Other Taxes attributable to such Lender or Issuing Bank (but only to the extent that the Borrower has not alreadyindemnified the Administrative Agent for such Non-Excluded Taxes or Other Taxes and without limiting the obligation of the Borrower to do so), (ii) anyTaxes attributable to such Lender or Issuing Bank’s failure to comply with the provisions of Section 9.6(c) relating to the maintenance of a ParticipantRegister and (iii) any Excluded Taxes attributable to such Lender or Issuing Bank, in each case, that are payable or paid by the Administrative Agent inconnection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly orlegally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender orIssuing Bank by the Administrative Agent shall be conclusive absent manifest error. Each Lender and Issuing Bank hereby authorizes the AdministrativeAgent to set off and apply any and all amounts at any time owing to such Lender and Issuing Bank under this Agreement or any other Loan Documentagainst any amount due to the Administrative Agent under this Section 8.13. The agreements in this Section 8.13 shall survive the resignation and/orreplacement of the Administrative Agent, any assignment of rights by, or the replacement of, a Lender or Issuing Bank, the termination of this Agreement andthe repayment, satisfaction or discharge of all other Obligations.8.14. Certain ERISA Matters. (a) Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y)covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, theAdministrative Agent, and each Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any otherLoan Party, that at least one of the following is and will be true:(i) such Lender is not using “plan assets” (within the meaning of the Plan Asset Regulations) of one or more Benefit Plans in connectionwith the Loans, the Documentary Credits or the Commitments,(ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined byindependent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company generalaccounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a classexemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determinedby in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of theLoans, the Documentary Credits, the Commitments and this Agreement, and the conditions for exemptive relief thereunder are and will continue tobe satisfied in connection therewith,(iii) (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administerand perform the Loans, the Documentary Credits, the Commitments and this Agreement, (C) the entrance into, participation in, administration of andperformance of the Loans, the Documentary Credits, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g)of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied withrespect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Documentary Credits, the Commitmentsand this Agreement, or(iv) such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion,and such Lender.60(b) In addition, unless sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or such Lender has not provided anotherrepresentation, warranty and covenant as provided in sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants,as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date suchPerson ceases being a Lender party hereto, for the benefit of, the Administrative Agent, and each Arranger and their respective Affiliates, and not, for theavoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that:(i) none of the Administrative Agent, or any Arranger or any of their respective Affiliates is a fiduciary with respect to the assets of suchLender (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any LoanDocument or any documents related to hereto or thereto),(ii) the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration ofand performance of the Loans, the Documentary Credits, the Commitments and this Agreement is independent (within the meaning of 29 CFR §2510.3-21, as amended from time to time) and is a bank, an insurance carrier, an investment adviser, a broker-dealer or other person that holds, or hasunder management or control, total assets of at least $50 million, in each case as described in 29 CFR § 2510.3-21(c)(1)(i)(A)-(E),(iii) the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administrationof and performance of the Loans, the Documentary Credits, the Commitments and this Agreement is capable of evaluating investment risksindependently, both in general and with regard to particular transactions and investment strategies (including in respect of the obligations),(iv) the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administrationof and performance of the Loans, the Documentary Credits, the Commitments and this Agreement is a fiduciary under ERISA or the Code, or both,with respect to the Loans, the Documentary Credits, the Commitments and this Agreement and is responsible for exercising independent judgmentin evaluating the transactions hereunder, and(v) no fee or other compensation is being paid directly to the Administrative Agent, or any Arranger or any their respective Affiliates forinvestment advice (as opposed to other services) in connection with the Loans, the Documentary Credits, the Commitments or this Agreement.(c) The Administrative Agent, and each Arranger hereby informs the Lenders that each such Person is not undertaking to provide impartialinvestment advice, or to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and that such Person has a financialinterest in the transactions contemplated hereby in that such Person or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans,the Documentary Credits, the Commitments and this Agreement, (ii) may recognize a gain if it extended the Loans, the Documentary Credits or theCommitments for an amount less than the amount being paid for an interest in the Loans, the Documentary Credits or the Commitments by such Lender or(iii) may receive fees or other payments in connection with the transactions contemplated hereby, the Loan Documents or otherwise, including structuringfees, commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees,utilization fees, minimum usage fees, letter of credit fees, fronting fees, deal-away or alternate transaction fees, amendment fees, processing fees, term outpremiums, banker’s acceptance fees, breakage or other early termination fees or fees similar to the foregoing.SECTION 9Miscellaneous9.1. Amendments and Waivers.(a) None of this Agreement, any Note, any other Loan Document, nor any terms hereof or thereof may be amended, supplemented or modifiedexcept in accordance with the provisions of this Section 9.1. Except to the extent otherwise provided in (or permitted by) the Guarantee and CollateralAgreement, the Required Lenders and each Loan Party party to the relevant Loan Document may, or, with the written consent of the Required Lenders,61the Administrative Agent and each Loan Party party to the relevant Loan Document may, from time to time, (I) enter into written amendments, supplements ormodifications hereto or to the other Loan Documents for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing inany manner the rights of the Lenders or of the Loan Parties hereunder or thereunder or (II) waive, on such terms and conditions as the Required Lenders or theAdministrative Agent, as the case may be, may specify in such instrument, any of the requirements of this Agreement or the other Loan Documents or anyDefault or Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall (A)(i) forgive the principal amount or extend the final scheduled date of maturity of any Loan, (ii) reduce the stated rate of any interest or fee payable hereunder(except in connection with the waiver of applicability of any post-default increase in interest rates (which waiver shall be effective with the consent of theRequired Lenders)) or extend the scheduled date of any payment thereof, (iii) increase the amount or extend the expiration date of any Lender’s Commitment(it being understood that a waiver of any Event of Default or Default shall not be deemed to be an increase in the amount of or extension of the expirationdate of any Lender’s Commitments ), or (iv) release all or substantially all of the Collateral for the Obligations or release all or substantially all of theGuarantors (except, in either case, as expressly permitted by the Loan Documents, including in accordance with Section 9.14), in each case without thewritten consent of each Lender directly affected thereby, (B) RESERVED; (C) without the consent of all the Lenders, (i) amend, modify or waive anyprovision of this Section 9.1(a) or any other provision of any Section hereof expressly requiring the consent of all the Lenders (except, in either case, fortechnical amendments with respect to additional extensions of credit pursuant to this Agreement which afford protections to such additional extensions ofcredit of the type provided to the Commitments on the Closing Date), or (ii) reduce the percentage specified in or otherwise change the definition of RequiredLenders (it being understood that, with the consent of the Required Lenders or as otherwise permitted hereunder, additional extensions of credit pursuant tothis Agreement may be included in the determination of the Required Lenders on substantially the same basis as the extensions of Commitments are includedon the Closing Date), or (iii) change Section 2.17 in a manner that would alter the pro rata sharing of payments required thereby (other than as permittedthereby or by Section 9.1(b)), (D) amend, modify or waive any provision of Section 8 or any other provision of this Agreement or the other Loan Documents,which affects, the rights, duties or obligations of the Administrative Agent without the written consent of the Administrative Agent and (E) require consent ofany Person to an amendment to this Agreement made pursuant to Section 2.27 other than the Borrower and each Lender participating in the respectiveExtension; provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent or Issuing Bankshereunder without the prior written consent of the Administrative Agent and Issuing Banks. Any such waiver and any such amendment, supplement ormodification shall apply equally to each of the Lenders and shall be binding upon the Loan Parties, the Lenders, the Administrative Agent and all futureholders of the Loans. In the case of any waiver, the Loan Parties, the Lenders and the Administrative Agent shall be restored to their former position and rightshereunder and under any other Loan Documents, and any Default or Event of Default waived shall be deemed to have not occurred or to be cured and notcontinuing, as the parties may agree; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequentthereon. In addition, notwithstanding the foregoing provisions of this Section 9.1(a), only the consent of the Required Lenders and the Borrower shall berequired in respect of any amendments or modifications of the following definitions: “Guarantee and Collateral Suspension Period” and “Guarantee andCollateral Period”.(b) Notwithstanding anything to the contrary contained in this Section 9.1, if the Administrative Agent and the Borrower shall have jointlyidentified an obvious error or any error or omission of a technical or immaterial nature, in each case, in any provision of the Loan Documents, then theAdministrative Agent and the Borrower shall be permitted to amend such provision and such amendment shall become effective without any further action orconsent of any other party to any Loan Document if the same is not objected to in writing by the Required Lenders within ten (10) Business Days followingreceipt of notice thereof. Notwithstanding anything to the contrary in this Agreement or the other Loan Documents, the Administrative Agent and theCollateral Agent are each hereby irrevocably authorized by each Lender and Issuing Bank (and each such Lender and Issuing Bank expressly consents),without any further action or the consent of any other party to any Loan Document, to make any technical amendments to the Guarantee and CollateralAgreement to correct any cross-references therein to any provision of this Agreement that may be necessary in order to properly reflect the amendments madeto this Agreement.(c) Notwithstanding anything to the contrary contained in the Loan Documents, the Loans of any Lender that is at the time a Defaulting Lendershall not have any voting or approval rights under the Loan Documents and shall be excluded in determining whether all Lenders, all affected Lenders or theRequired Lenders have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to this Section 9.1); providedthat any waiver, amendment or modification (i) requiring the consent of all Lenders or (ii)62each affected Lender that affects any Defaulting Lender more adversely than other affected Lenders shall require the consent of each Defaulting Lender.(d) Notwithstanding the foregoing, (i) only the consent of the Required Revolving Lenders (and the consent of Required Lenders for any otherClass of Credit Facility to the extent such consent is expressly required in the related Incremental Amendment) shall be required in respect of amendments,modifications or waivers of the financial covenants set forth in Section 6.6 (or any component definition thereof to the extent applicable thereto) and (ii) onlythe consent of the Required Revolving Lenders shall be required with respect to waivers of any conditions to the Borrowing of any Revolving Loans, andany such amendment, modification or waiver may be made without the consent of any other Lender (including, for the avoidance of doubt, the RequiredLenders).9.2. Notices.(a) All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy), and, unlessotherwise expressly provided herein, shall be deemed to have been duly given or made when received, addressed as follows in the case of the Loan Partiesand the Administrative Agent, and as set forth in the administrative questionnaire delivered to the Administrative Agent in the case of the Lenders andIssuing Banks, or to such other address as may be hereafter notified by the respective parties hereto and any future parties:The Borrower:Micron Technology, Inc.8000 S. Federal WayBoise, Idaho 83716-9632Attention: General Counselwith copies (which shall not constitute notice) to:Wilson Sonsini Goodrich & Rosati650 Page Mill RoadPalo Alto, CA 94304Attention: John ForeTelecopier No.: 650-493-6811The Administrative Agent:JPMorgan Chase Bank, N.A.JPM Loan & Agency Services10 S. Dearborn StChicago, IL 60603Attention: Pastell JenkinsTelephone: 312-732-2568Email: Jpm.agency.cri@jpmorgan.comwith copies (which shall not constitute notice) to:Simpson Thacher & Bartlett LLP425 Lexington AveNew York, NY 10017Attention: Justin M. LungstrumTelecopier No.: 212-455-2502(b) Notices and other communications to the Lenders and Issuing Banks hereunder may be delivered or furnished by electronic communications(including e-mail and Internet or intranet websites or other information platform) (the “Platform”) pursuant to procedures approved by the AdministrativeAgent; provided that the foregoing shall not apply to notices pursuant to Sections 2.2, 2.4, 2.7, 2.8(e), 2.11, 2.13, 2.14, 2.15, 2.20 and 2.27(d) unlessotherwise agreed by the Administrative Agent and the applicable Lender or the applicable Issuing Bank. The Administrative Agent or the Borrower may, inits discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it;provided that approval of such procedures may be limited to particular notices or communications. Unless the Administrative Agent otherwise prescribes,(i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intendedrecipient (such as by the “return receipt requested”63function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normalbusiness hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for therecipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intendedrecipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying thewebsite address therefor.(c) RESERVED.(d) Each of the Loan Parties understands that the distribution of material through an electronic medium is not necessarily secure and that there areconfidentiality and other risks associated with such distribution and agrees and assumes the risks associated with such electronic distribution, except to theextent caused by the willful misconduct or gross negligence of the Administrative Agent, as determined by a final, non-appealable judgment of a court ofcompetent jurisdiction.(e) The Platform and any Approved Electronic Communications are provided “as is” and “as available”. None of the Agent or any of theirrespective officers, directors, employees, agents, advisors or representatives warrant the accuracy, adequacy, or completeness of the Approved ElectronicCommunications or the Platform and each expressly disclaims liability for errors or omissions in the Platform and the Approved Electronic Communications.No warranty of any kind, express, implied or statutory, including any warranty of merchantability, fitness for a particular purpose, non-infringement of thirdparty rights or freedom from viruses or other code defects is made by any of the Agent or any of their respective officers, directors, employees, agents, advisorsor representatives in connection with the Platform or the Approved Electronic Communications.(f) Each of the Loan Parties, the Lenders, Issuing Banks and the Agent agree that Administrative Agent may, but shall not be obligated to, store anyApproved Electronic Communications on the Platform in accordance with the Administrative Agent’s customary document retention procedures andpolicies.9.3. No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Administrative Agent, any Lender orany Issuing Bank, any right, remedy, power or privilege hereunder or under the other Loan Documents shall operate as a waiver thereof; nor shall any singleor partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy,power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers andprivileges provided by law.9.4. Survival of Representations and Warranties. All representations and warranties made hereunder, in the other Loan Documents and in anydocument, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and themaking of the Loans and the other extensions of credit hereunder.9.5. Payment of Expenses. The Borrower agrees (a) to pay or reimburse each of the Administrative Agent and the Collateral Agent for all itsreasonable out-of-pocket costs and expenses reasonably incurred in connection with (i) the development, negotiation, preparation, execution and delivery ofthis Agreement, the Notes and any other documents prepared in connection herewith or therewith, including any amendment, supplement or modification toany of the foregoing and (ii) the consummation and administration of the transactions contemplated hereby and thereby, and the reasonable fees anddisbursements of one counsel to the Administrative Agent, the Collateral Agent and the Arrangers, taken as a whole (and, to the extent necessary, one localcounsel in each relevant jurisdiction for all such entities, taken as a whole and, solely in the case of an actual or potential conflict of interest, one additionallocal counsel in each relevant jurisdiction to the affected entities similarly situated, taken as a whole), and security interest filing and recording fees andexpenses, (b) to pay or reimburse the Administrative Agent, the Collateral Agent, each Lender and each Issuing Bank for all its reasonable costs and expensesreasonably incurred in connection with the enforcement or preservation of any rights under this Agreement, the Notes, the other Loan Documents and anysuch other documents following the occurrence and during the continuance of an Event of Default, including without limitation, the reasonable fees anddisbursements of one counsel to the Administrative Agent, the Collateral Agent, the Lenders and Issuing Banks and each of their respective affiliates, takenas a whole (and, to the extent reasonably necessary, one local counsel in each relevant jurisdiction for all such entities, taken as a whole, and, solely in thecase of an actual or potential conflict of interest, one additional local counsel in each relevant jurisdiction to the affected entities similarly situated, taken asa whole), and (c) to pay, and indemnify and hold harmless each Lender, each Arranger, the Collateral Agent, the Administrative Agent, each Issuing Bank and64each of their respective Affiliates, directors, officers, employees, representatives, partners and agents (each, an “Indemnitee”) from and against any and allother liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever withrespect to the execution, delivery, enforcement, performance, preservation of rights and administration of this Agreement, the Notes, the other LoanDocuments or the use of the proceeds of the Loans or any of the foregoing relating to the violation of, noncompliance with or liability under, anyEnvironmental Law applicable to the operations of the Loan Parties or any of their respective properties and the reasonable fees and expenses of one legalcounsel for the Indemnitees taken as a whole in connection with claims, actions or proceedings by any Indemnitee against any Loan Party under any LoanDocument (all the foregoing in this clause (c), collectively, the “indemnified liabilities”), provided that the Borrower shall have no obligation hereunder toany Indemnitee with respect to indemnified liabilities to the extent (x) determined by the final judgment of a court of competent jurisdiction to have resultedfrom the bad faith, gross negligence or willful misconduct of such Indemnitee or any of such Indemnitee’s Related Persons, (y) resulting from a materialbreach by such Indemnitee or any of such Indemnitee’s Related Persons of its material obligations under this Agreement or the other Loan Documents or(z) related to any dispute solely among Indemnitees other than any claims against any Indemnitee in its capacity or in fulfilling its role as an Agent, anIssuing Bank, an Arranger or any similar role under this Agreement and the other Loan Documents and other than any claims involving any act or omissionon the part of the Borrower or its Subsidiaries; provided, further, that the Borrower shall in no event be responsible for consequential, indirect, special orpunitive damages to any Indemnitee pursuant to this Section 9.5 except such consequential, indirect, special or punitive damages required to be paid by suchIndemnitee in respect of any indemnified liabilities. Without limiting the foregoing, and to the extent permitted by applicable law, the Borrower agrees not toassert and to cause its Subsidiaries not to assert, and hereby waives and agrees to cause its Subsidiaries to waive, all rights for contribution or any other rightsof recovery with respect to all claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature, under orrelated to Environmental Laws, that any of them might have by statute or otherwise against any Indemnitee. To the extent permitted by applicable law, noLoan Party nor any of their respective Subsidiaries shall assert, and each Loan Party hereby waives, on behalf of itself and its Subsidiaries, any claim againsteach Lender, each Arranger, each Agent, each Issuing Bank and their respective affiliates, directors, officers, employees, attorneys, representatives, agents orsub-agents, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) (whether or not theclaim therefor is based on contract, tort or duty imposed by any applicable legal requirement) arising out of, in connection with, as a result of, or in any wayrelated to, this Agreement or any Loan Document or any agreement or instrument contemplated hereby or thereby or referred to herein or therein, thetransactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof or any act or omission or event occurring in connection therewith,and each Loan Party hereby waives, releases and agrees, on behalf of themselves and each of their respective Subsidiaries, not to sue upon any such claim orany such damages, whether or not accrued and whether or not known or suspected to exist in its favor. All amounts due under this Section 9.5 shall bepayable not later than 10 days after written demand therefor. The agreements in this Section shall survive the termination of this Agreement and repayment ofthe Loans and all other amounts payable hereunder. This Section 9.5 shall not apply with respect to Taxes other than any Taxes that represent losses, claims,damages, etc. arising from any non-Tax claim.9.6. Successors and Assigns; Participations.(a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assignspermitted, except that (i) unless otherwise permitted by Section 6.3 hereof, the Borrower may not assign or otherwise transfer any of its rights or obligationshereunder without the prior written consent of each Lender and Issuing Bank (and any attempted assignment or transfer by the Borrower without such consentshall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section.(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees (each, an “Assignee”) all or aportion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans at the time owing to it) with the priorwritten consent of:(A) the Borrower (such consent not to be unreasonably withheld, delayed or conditioned), provided that no consent of theBorrower shall be required for an assignment to a Lender, a depositary institution affiliate of a Lender having access to discount windowcredit of the Federal Reserve (as defined below), in the case of any Incremental Term Loan, Approved Fund, or, if an Event of Default underSection 7.1(a) or (b) has occurred and is continuing, any other Person; provided further that, with respect to any Incremental Term Loans,the Borrower’s65consent shall be deemed to have been given if the Borrower has not responded within five Business Days;(B) the Administrative Agent (such consent not to be unreasonably withheld, delayed or conditioned), provided that no consentof the Administrative Agent shall be required for an assignment to a Lender, an affiliate of a Lender or an Approved Fund; and(C) each Issuing Bank (such consent not to be unreasonably withheld, delayed or conditioned), provided that no consent of theIssuing Banks shall be required for an assignment to a Lender, an affiliate of a Lender or an Approved Fund.(ii) Assignments shall be subject to the following additional conditions:(A) except in the case of an assignment to a Lender, an affiliate of a Lender or an Approved Fund or an assignment of the entireremaining amount of the assigning Lender’s Commitments or Loans, the amount of the Commitments or Loans of the assigning Lendersubject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered tothe Administrative Agent) shall not be less than $5,000,000 (or, in the case of Incremental Term Loans, $1,000,000) unless each of theBorrower and the Administrative Agent otherwise consent, provided that (1) no such consent of the Borrower shall be required if an Eventof Default under Section 7.1(a) or (b) has occurred and is continuing and (2) such amounts shall be aggregated in respect of each Lender andits affiliates or Approved Funds, if any;(B) (1) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance,together with a processing and recordation fee of $3,500 (although the Borrower shall not be responsible for the payment of the recordationfee unless the Borrower has chosen to replace a Lender pursuant to Section 2.26) and (2) the assigning Lender shall have paid in full anyamounts owing by it to the Administrative Agent;(C) the Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an administrative questionnaire in whichthe Assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-publicinformation about the Borrower and its Affiliates and their related parties or their respective securities) will be made available and who mayreceive such information in accordance with the assignee’s compliance procedures and applicable laws, including federal and statesecurities laws;(D) any partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights andobligations under this Agreement with respect to any single Class of Loans and related Commitments, except that this clause (D) shall notprohibit any Lender from assigning all or a portion of its rights and obligations among separate Classes on a non- pro rata basis; and(E) none of the Loan Parties, their respective Affiliates or any natural person shall be an Assignee hereunder.For the purposes of this Section 9.6, “Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing,holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender,(b) an affiliate of a Lender or (c) an entity or an affiliate of an entity that administers or manages a Lender.(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) below, from and after the effective date specified in eachAssignment and Acceptance the Assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment andAcceptance, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of theinterest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment andAcceptance covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) butshall continue to be entitled to the benefits of Sections 2.18, 2.19, 2.20 and 9.5 for the period of time in which it was a Lender66hereunder. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.6 shall betreated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) ofthis Section.(iv) The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices a copy of eachAssignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of,and principal amount (and interest amounts) of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). Theentries in the Register shall be conclusive (absent manifest error), and the Borrower, the Administrative Agent and the Lenders shall treat each Personwhose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding noticeto the contrary. The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time uponreasonable prior notice. Any assignment shall be effective only upon appropriate entries with respect thereto being made in the Register.(v) Upon its receipt of an Assignment and Acceptance (executed via an electronic settlement system acceptable to the AdministrativeAgent (or, if previously agreed with the Administrative Agent, manually)), by a transferor Lender and an Assignee, as the case may be (and, in thecase of an Assignee that is not then a Lender, by the Administrative Agent and the Borrower to the extent required under this Section 9.6), togetherwith payment to the Administrative Agent by the transferor Lender or the Assignee of a recordation and processing fee of $3,500 (which fee may bewaived or reduced in the sole discretion of the Administrative Agent), the Administrative Agent shall (i) promptly accept such Assignment andAcceptance, (ii) on the effective date of such transfer determined pursuant thereto record the information contained therein in the Register and(iii) give notice of such acceptance and recordation to the transferor Lender, the Assignee and the Borrower.(c) Any Lender may, without the consent of the Borrower, the Administrative Agent or any Issuing Bank, sell participations to one or more banksor other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Loansowing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible tothe other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent and the other Lenders shall continue to dealsolely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement pursuant to which aLender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and the other Loan Documents and toapprove any amendment, modification or waiver of any provision of this Agreement and any other Loan Document or to otherwise exercise its votingrighting rights under this Agreement and any other Loan Document; provided that such agreement may provide that such Lender will not, without theconsent of the Participant, agree to any amendment, modification or waiver that (1) requires the consent of each Lender directly affected thereby pursuant tothe proviso to the second sentence of Section 9.1(a) and (2) directly affects such Participant. Subject to paragraph (c)(i) of this Section, the Borrower agreesthat each Participant shall be entitled to the benefits of Sections 2.18, 2.19 and 2.20 (subject to the requirements and limitations of such sections andSections 2.21 and 2.26 and it being understood that the documentation required under Section 2.19(e) shall be delivered solely to the participating Lender)to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by law,each Participant also shall be entitled to the benefits of Section 9.7(b) as though it were a Lender, provided such Participant shall be subject to Section 9.7(a)as though it were a Lender.(i) A Participant shall not be entitled to receive any greater payment under Section 2.18, 2.19 or 2.20 than the applicable Lender wouldhave been entitled to receive with respect to the participation sold to such Participant, except to the extent that any entitlement to a greater paymentresults from a change in any Requirement of Law arising after such Participant became a Participant.(ii) Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a registeron which it enters the name and address of each participant and the principal amounts (and related interest amounts) of each participant’s interest inthe Loans or other obligations under this Agreement (the “Participant Register”). The entries in a Participant Register shall be conclusive, absentmanifest error, and such Lender shall treat each person whose name is recorded in the Participant Register as the owner of such participation for allpurposes of this Agreement notwithstanding any notice to the contrary. No Lender shall have any obligation to disclose all or any67portion of a Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in anyLoans) except to the extent that such disclosure is necessary to establish that such Loan is in registered form under Section 5f.103(c) of the UnitedStates Treasury Regulations or, if different, under Sections 871(h) or 881(c) of the Code.(d) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations ofsuch Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge orassignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunderor substitute any such pledgee or Assignee for such Lender as a party hereto.(e) Subject to Section 9.15, the Borrower authorizes each Lender to disclose to any Transferee and any prospective Transferee (in each case whichagrees to comply with the provisions of Section 9.15 or confidentiality requirements no less restrictive on such prospective transferee than those set forth inSection 9.15) any and all financial information in such Lender’s possession concerning the Borrower and its Affiliates which has been delivered to suchLender by or on behalf of the Borrower pursuant to this Agreement or any other Loan Document or which has been delivered to such Lender by or on behalfof the Borrower in connection with such Lender’s credit evaluation of the Borrower and its Affiliates prior to becoming a party to this Agreement.9.7. Adjustments; Setoff.(a) Except to the extent that this Agreement, any other Loan Document or a court order expressly provides or permits for payments to be allocatedto a particular Lender or Issuing Bank or to the Lenders and Issuing Banks, if any Lender or Issuing Bank (a “Benefited Lender”) shall receive any payment ofall or part of the Obligations owing to it (other than in connection with an assignment or participation made pursuant to Section 9.6), or receive any collateralin respect thereof (whether voluntarily or involuntarily, by setoff or otherwise), in a greater proportion than any such payment to or collateral received by anyother Lender or Issuing Bank, if any, in respect of the Obligations owing to such other Lender or Issuing Bank, such Benefited Lender shall purchase for cashfrom the other Lenders and Issuing Banks a participating interest in such portion of the Obligations owing to each such other Lender and Issuing Bank, orshall provide such other Lenders and Issuing Banks with the benefits of any such collateral, as shall be necessary to cause such Benefited Lender to share theexcess payment or benefits of such collateral ratably with each of the Lenders and Issuing Banks; provided that if all or any portion of such excess paymentor benefits is thereafter recovered from such Benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent ofsuch recovery, but without interest. Notwithstanding anything to the contrary contained in this Section 9.7(a), no extension of Loans that is permitted underSection 2.27 shall constitute a payment of any of such Loans for purposes of this Section 9.7.(b) In addition to any rights and remedies of the Lenders and Issuing Banks provided by law and subject to the terms of the Guarantee andCollateral Agreement, each Lender and Issuing Bank shall have the right, unless otherwise agreed in writing by such Lender or Issuing Bank with theBorrower, without notice to the Borrower, any such notice being expressly waived by the Borrower to the extent permitted by applicable law, upon anyObligations becoming due and payable by the Borrower (whether at the stated maturity, by acceleration or otherwise), to apply to the payment of suchObligations, by setoff or otherwise, any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits,indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing bysuch Lender, such Issuing Bank, any affiliate thereof or any of their respective branches or agencies to or for the credit or the account of the Borrower. EachLender and Issuing Bank agrees promptly to notify the Borrower and the Administrative Agent after any such application made by such Lender or IssuingBank, provided that the failure to give such notice shall not affect the validity of such application.9.8. Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, andall of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Agreementby facsimile or email transmission shall be effective as delivery of a manually executed counterpart hereof.9.9. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, beineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition orunenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.689.10. Integration. This Agreement and the other Loan Documents represent the entire agreement of the Borrower, the Administrative Agent and theLenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the AdministrativeAgent or any Lender relative to the subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents.9.11. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALLBE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.9.12. Submission To Jurisdiction; Waivers.(a) Subject to clause (b)(iii) of this Section 9.12, each party hereto hereby irrevocably and unconditionally submits for itself and its property in anylegal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of anyjudgment in respect thereof, to the exclusive general jurisdiction of the courts of the State of New York, the courts of the United States for the SouthernDistrict of New York, and appellate courts from any thereof, in each case that are located in the Borough of Manhattan, the City of New York;(b) The Borrower hereby irrevocably and unconditionally:(i) agrees that any such action or proceeding shall be brought in such courts and waives any objection that it may now or hereafter have tothe venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees notto plead or claim the same;(ii) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certifiedmail (or any substantially similar form of mail), postage prepaid, to the Borrower at its address set forth in Section 9.2 or at such other address ofwhich the Administrative Agent shall have been notified pursuant thereto;(iii) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit theright of any Agent, any Arranger or any Lender to sue in any other jurisdiction; and(iv) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceedingreferred to in this Section any special, exemplary, punitive or consequential damages.9.13. Acknowledgements. The Borrower hereby acknowledges that:(a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents;(b) notwithstanding the provisions of this Agreement or any of the other Loan Documents, the Arrangers shall have no powers, duties,responsibilities or liabilities with respect to this Agreement and the other Loan Documents;(c) the Agent, the Arrangers, the Lenders, the Issuing Banks and their Affiliates may have economic interests that conflict with those of theBorrower; and(d) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby amongthe Lenders, among the Issuing Banks or among the Borrower and the Lenders.9.14. Releases of Guarantees and Liens.(a) Notwithstanding anything to the contrary contained herein or in any other Loan Document, each of the Administrative Agent and the CollateralAgent is hereby irrevocably authorized by each Lender and Issuing69Bank (and each such Lender and Issuing Bank hereby expressly consents) (without requirement of notice to or consent of any Lender or Issuing Bank exceptas expressly required by Section 9.1(a)), and each of the Administrative Agent and the Collateral Agent hereby agrees with the Borrower, to take any actionreasonably requested by the Borrower to effect the release of any Collateral or Guarantor from its guarantee obligations (i) during a Guarantee and CollateralSuspension Period, (ii) to the extent necessary to permit consummation of any transaction not prohibited by any Loan Document or that has been consentedto in accordance with Section 9.1(a) including, in each case and without limitation, any sale, transfer or other disposition of any Collateral or Guarantor(other than to the Borrower or another Guarantor), including as a result of any investments of Collateral in non-Guarantor Subsidiaries to the extent notprohibited by the Loan Documents, (iii) to the extent any such release is permitted at such time pursuant to the Guarantee and Collateral Agreement(including in connection with the grant of a Permitted Prior Lien (as defined in the Guarantee and Collateral Agreement) or (iv) under the circumstancesdescribed in paragraphs (b) or (c) below (and, upon the consummation of any such transaction in preceding clause (ii), (iii) or (iv), such Collateral shall betransferred free and clear of all Liens under the Security Documents and/or such Guarantor shall be released from its obligations under the Guarantee andCollateral Agreement).(b) At such time as the Commitments shall have been terminated and the Loans and the other obligations under the Loan Documents shall havebeen paid in full, the Collateral shall be released from the Liens created by the Security Documents with respect to the Loans, and the Security Documentsand all obligations with respect to the Loans (other than those expressly stated to survive such termination) of the Administrative Agent, the Collateral Agentand each Loan Party under the Security Documents shall terminate, all without delivery of any instrument or performance of any act by any Person.(c) Notwithstanding anything to the contrary contained herein or in any other Loan Document, the Lenders and Issuing Banks hereby agree, andeach of the Administrative Agent and the Collateral Agent is hereby irrevocably authorized by each Lender and Issuing Bank (without requirement of noticeto or consent of any Lender or Issuing Bank) to take any action required by the Borrower having the effect of releasing a Guarantor from its guaranteeobligations hereunder and as a Grantor under the Security Documents if (i) all or substantially all of the assets of such Guarantor have been sold or otherwisedisposed of (including by way of merger or consolidation) to a Person that is not a Borrower or a Guarantor or (ii) such Guarantor has been liquidated ordissolved.(d) In connection with any release of Collateral of the type described above in clause (a) or (c) or any other transaction involving Collateral whichtransaction is not prohibited by the Loan Documents, notwithstanding anything to the contrary contained herein or in any other Loan Document, each of theAdministrative Agent and the Collateral Agent is hereby irrevocably authorized by each Lender and Issuing Bank (and each such Lender and Issuing Bankhereby expressly consents) (without requirement of notice to or consent of any Lender or Issuing except as expressly required by Section 9.1(a)) to take anyaction with respect to the Collateral requested by the Borrower to the extent necessary to evidence such release or other transaction, including withoutlimitation, directing the Collateral Agent to execute agreements (including, without limitation, with third parties) with respect to any Collateral, upon thedelivery to the Administrative Agent and Collateral Agent of a certificate signed by an officer of the Borrower stating that such action and the release of theCollateral or other transaction, as applicable, is permitted by each Security Document.(e) The Guarantee of the Obligations by any Guarantor will terminate upon:(1) a sale or other disposition (including by way of consolidation or merger) of the Capital Stock of such Guarantor such that suchGuarantor is no longer a Restricted Subsidiary of the Borrower;(2) designation of such Guarantor as an Excluded Subsidiary pursuant to Section 5.9;(3) if such Guarantor was not required to Guarantee the Obligations pursuant to Section 5.6 but did so at its option, the request by suchGuarantor of release at any time; provided that after giving effect to such release the Borrower would be in compliance with the covenants set forthin Sections 5.6 and 6.1; and(4) upon the occurrence of a Guarantee and Collateral Suspension Period, subject to reinstatement pursuant to Section 9.14(f).The Administrative Agent will execute any documents reasonably required in order to evidence the release of any Guarantor from its obligations under itsGuarantee pursuant to the foregoing.70(f) Notwithstanding anything to the contrary contained in this Agreement or any Loan Document, on or following a Guarantee and CollateralSuspension Date, (a) the Borrower shall be entitled to request by written notice to the Administrative Agent and Collateral Agent the release of any or all ofthe Liens granted on the Collateral and the release of any or all of the Guarantors from their obligations under any Guarantee of the Obligations, (b) theLenders hereby irrevocably agree such Liens shall automatically be released and any Guarantee of the Obligations shall automatically be discharged andreleased without any further action by any Person (and the Administrative Agent and Collateral Agent shall (and are authorized by the Lenders to), at theexpense of the Borrower, take all steps reasonably requested by the Borrower to promptly evidence or confirm any such release) and (c) the UnsecuredCovenant Period shall become effective.(g) Notwithstanding anything to the contrary contained herein or in any other Loan Document, the Lenders and Issuing Banks hereby agree, andeach of the Administrative Agent and the Collateral Agent is hereby irrevocably authorized by each Lender and Issuing Bank (without requirement of noticeto or consent of any Lender or Issuing Bank) to amend any Security Document, enter into any new Security Document and make filings related thereto inconnection with any Secured Covenant Reinstatement Event.(h) If, after any Guarantee and Collateral Suspension Date, a Secured Covenant Reinstatement Event occurs, the Guarantee and CollateralSuspension Period shall terminate and all Collateral and the Security Documents, and all Liens granted or purported to be granted therein, and all guarantiesof the Guarantors of the Obligations, shall be reinstated on the same terms as of the applicable Collateral Reinstatement Date, and the Loan Parties shall, attheir sole cost and expense, take all actions and execute and deliver all documents including the delivery of new guaranty and pledge and securitydocuments, UCC-1 financing statements and stock certificates accompanied by stock powers reasonably requested by the Administrative Agent or CollateralAgent as necessary to create and perfect the Liens of the Collateral Agent in such Collateral, in form and substance reasonably satisfactory to theAdministrative Agent and Collateral Agent, within 90 days of such Secured Covenant Reinstatement Event (or such longer period as the AdministrativeAgent may agree in its sole discretion) (the first date on which a new pledge and or security document is required to be delivered pursuant to the foregoing,the “Collateral Reinstatement Date”). Upon the occurrence of a Secured Covenant Reinstatement Event, a Secured Covenants Period shall be in effect untilsuch time as a subsequent Guarantee and Collateral Suspension Date shall occur. Notwithstanding anything to the contrary contained in this Agreement orany Loan Document, no action taken or omitted to be taken by the Borrower or any of its Restricted Subsidiaries during a Unsecured Covenants Period shallgive rise to a Default or Event of Default on or after a Secured Covenant Reinstatement Event so long as such action or omission was permitted during suchUnsecured Covenants Period.(i) For purposes of this Agreement, (i) the period of time between a Guarantee and Collateral Suspension Date and the subsequent CollateralReinstatement Date is referred to as the “Guarantee and Collateral Suspension Period,” (ii) any period of time prior to the first Guarantee and CollateralSuspension Date, or following the first Guarantee and Collateral Suspension Date and after a Collateral Reinstatement Date but prior to the subsequentGuarantee and Collateral Suspension Date, is referred to as a “Guarantee and Collateral Period”, (iii) the period of time between a Guarantee and CollateralSuspension Date and the date of the subsequent Secured Covenant Reinstatement Event, is referred to as the “Unsecured Covenants Period” and (iv) anyperiod of time prior to the first Guarantee and Collateral Suspension Date, or following the first Guarantee and Collateral Suspension Date and after a SecuredCovenant Reinstatement Event but prior to the subsequent Guarantee and Collateral Suspension Date, is referred to as the “Secured Covenants Period”.(j) During any Guarantee and Collateral Suspension Period, any representation, warranty or covenant contained in any Loan Document relating toany Collateral or Guarantor released pursuant to this Section 9.14 shall no longer be deemed to be repeated with respect to such released Collateral orreleased Guarantor.9.15. Confidentiality. Each Agent, each Arranger, each Lender, each Issuing Bank agrees to keep confidential all non-public information providedto it by any Loan Party, the Administrative Agent or any Lender pursuant to or in connection with this Agreement; provided that nothing herein shall preventany Agent, any Arranger, any Lender or Issuing Bank from disclosing any such information (a) to the Administrative Agent, any other Lender or any affiliatethereof (so long as such affiliate agrees to be bound by the provisions of this Section 9.15), (b) subject to an agreement to comply with provisions no lessrestrictive than this Section 9.15, or to any actual or prospective Transferee (or any professional advisor to such counterparty), (c) to its employees, directors,officers, agents, attorneys, accountants, partners and other professional advisors or those of any of its affiliates, (d) upon the request or demand, or inaccordance with the requirements (including reporting requirements), of any Governmental Authority having jurisdiction over such Lender, provided that tothe extent71permitted by law, such Lender shall promptly notify the applicable Loan Party of such disclosure (except with respect to any audit or examination conductedby bank accountants or any governmental bank authority exercising examination or regulatory authority), I in response to any order of any court or otherGovernmental Authority or as may otherwise be required pursuant to any Requirement of Law or other legal process, provided that to the extent permitted bylaw, such Lender shall promptly notify the applicable Loan Party of such disclosure (except with respect to any audit or examination conducted by bankaccountants or any governmental bank authority exercising examination or regulatory authority), (f) if requested or required to do so in connection with anylitigation or similar proceeding; provided that to the extent permitted by law, such Lender shall promptly notify the applicable Loan Party of such disclosure,(g) to the extent such information has been independently developed by such Lender or that has been publicly disclosed other than in breach of thisAgreement, (h) to the National Association of Insurance Commissioners or any similar organization or any nationally recognized rating agency that requiresaccess to information about a Lender’s investment portfolio in connection with ratings issued with respect to such Lender, or (i) in connection with theexercise of any remedy hereunder or under any other Loan Document.Each Lender acknowledges that all information, including requests for waivers and amendments, furnished by the Borrower or the AdministrativeAgent pursuant to, or in the course of administering this Agreement or the other Loan Documents, will be syndicate-level information, which may (except asprovided in the following paragraph) contain material non-public information concerning the Borrower and its Affiliates and their related parties or theirrespective securities. Accordingly, each Lender confirms to the Borrower and the Administrative Agent that (i) it has developed compliance proceduresregarding the use of material non-public information, (ii) it has identified in its administrative questionnaire a credit contact who may receive informationthat may contain material non-public information in accordance with its compliance procedures and applicable law, including federal and state securitieslaws and (iii) it will handle such material non-public information in accordance with those procedures and applicable law, including federal and statesecurities laws.The Borrower acknowledges that certain of the Lenders may be “public-side” Lenders (Lenders that do not wish to receive material non-publicinformation with respect to the Borrower, its subsidiaries or their securities) (each, a “Public Lender”) and, if documents required to be delivered pursuant toSection 5.1 or 5.2 or otherwise are being distributed through the Platform, the Borrower agrees to designate those documents or other information that aresuitable for delivery to the Public Lenders as such. Any document that the Borrower has indicated contains non-public information shall not be posted onthat portion of the Platform designated for such Public Lenders. If the Borrower has not indicated whether a document delivered pursuant to Section 5.1 or 5.2contains non-public information, the Administrative Agent reserves the right to post such document or notice solely on that portion of the Platformdesignated for Lenders who wish to receive material nonpublic information with respect to the Borrower, its Subsidiaries and their securities. The Borroweracknowledges and agrees that copies of the Loan Documents may be distributed to Public Lenders (unless the Borrower promptly notifies the AdministrativeAgent that any such document contains material non-public information with respect to the Borrower or its securities).9.16. WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE LENDERS ANDTHE ISSUING BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDINGRELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.9.17. Patriot Act. Each Lender that is subject to the requirements of the Patriot Act hereby notifies each Loan Party that pursuant to therequirements of the Patriot Act, it is required to obtain, verify and record information that identifies each Loan Party, which information includes the nameand address of such Loan Party and other information that will allow such Lender to identify such Loan Party in accordance with the Patriot Act. TheBorrower shall, and shall cause each of its Subsidiaries to, provide, to the extent commercially reasonable, such information and take such actions as arereasonably requested by each Lender and the Administrative Agent to maintain compliance with the Patriot Act.9.18. No Fiduciary Duty. Each Agent, each Lender, the Arrangers, the Issuing Banks and their respective Affiliates (collectively, solely forpurposes of this paragraph, the “Lenders”) may have economic interests that conflict with those of the Borrower, its stockholders and/or its affiliates. TheBorrower agrees that nothing in the Loan Documents or otherwise will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or otherimplied duty between any Lender, on the one hand, and the Borrower, its stockholders or its affiliates, on the other. The Borrower acknowledges and agreesthat (i) the transactions contemplated by the Loan Documents (including the exercise of rights and remedies hereunder and thereunder) are arm’s-lengthcommercial transactions between the Lenders, on the one hand, and the Borrower, on the other, and (ii) in connection therewith and with the72process leading thereto, (x) no Lender has assumed an advisory or fiduciary responsibility in favor of the Borrower, its stockholders or its affiliates withrespect to the transactions contemplated hereby (or the exercise of rights or remedies with respect thereto) or the process leading thereto (irrespective ofwhether any Lender has advised, is currently advising or will advise the Borrower, its stockholders or its affiliates on other matters) or any other obligation tothe Borrower except the obligations expressly set forth in the Loan Documents and (y) each Lender is acting solely as principal and not as the agent orfiduciary of the Borrower, its management, stockholders, creditors or any other Person. The Borrower acknowledges and agrees that the Borrower hasconsulted its own legal and financial advisors to the extent it deemed appropriate and that it is responsible for making its own independent judgment withrespect to such transactions and the process leading thereto. The Borrower agrees that it will not claim that any Lender has rendered advisory services of anynature or respect, or owes a fiduciary or similar duty to the Borrower, in connection with such transaction or the process leading thereto. None of theArrangers identified on the cover page or signature pages of this Agreement shall have any rights, powers, obligations, liabilities, responsibilities or dutiesunder this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as a Lender hereunder. Without limiting any other provisionof this Article, none of such Arrangers in their respective capacities as such shall have or be deemed to have any fiduciary relationship with any Lender, theAdministrative Agent or any other Person by reason of this Agreement or any other Loan Document.9.19. Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Documentor in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA FinancialInstitution arising under any Loan Document may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees andconsents to, and acknowledges and agrees to be bound by:(a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder whichmay be payable to it by any party hereto that is an EEA Financial Institution; and(b) the effects of any Bail-In Action on any such liability, including, if applicable:(1) a reduction in full or in part or cancellation of any such liability;(2) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, itsparent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership willbe accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or(3) the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEAResolution Authority.9.20. Lien Sharing and Priority Confirmation. Each Lender party to this Agreement, and the Administrative Agent on behalf of the Lenders, herebyagree that:(a) all First Lien Obligations will be and are secured equally and ratably by all First Liens at any time granted by the Borrower or any other Grantorto secure any Obligations (as defined in the First Lien Intercreditor Agreement) in respect of this Agreement and the Loan Documents, whether or not uponproperty otherwise constituting collateral for such Obligations (as defined in the First Lien Intercreditor Agreement) in respect of this Agreement and theLoan Documents and that all such First Liens will be enforceable by the Collateral Agent for the benefit of all holders of First Lien Obligations equally andratably;(b) the Administrative Agent and each of the Lenders in respect of the Obligations (as defined in the First Lien Intercreditor Agreement) in respectof this Agreement and the Loan Documents represented thereby are bound by the provisions of the First Lien Intercreditor Agreement, including withoutlimitation the provisions relating to the ranking of First Liens and the order of application of proceeds from enforcement of First Liens; and(c) the Administrative Agent and each of the Lenders consent to and direct the Collateral Agent to perform the Collateral Agent’s obligationsunder the First Lien Intercreditor Agreement and the Security Documents.73The foregoing provisions of this Section 9.20 are intended for the enforceable benefit of, and will be enforceable as a third party beneficiary by, allholders of First Lien Debt, each existing and future representative of First Lien Debt and the Collateral Agent.74IN WITNESS HEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and the year first written.BORROWER: MICRON TECHNOLOGY, INC. By: Name: Title:[Signature Page to Micron Technology, Inc. Credit Agreement]75JPMORGAN CHASE BANK, N.A.,as Administrative Agent and a Lender By: Name: Title:[Signature Page to Micron Technology, Inc. Credit Agreement]76[•],as a Lender By: Name: Title:[Signature Page to Micron Technology, Inc. Credit Agreement]77EXHIBIT 10.69GUARANTEE AND COLLATERAL AGREEMENTmade byMICRON TECHNOLOGY, INC.and certain of its Restricted Subsidiariesin favor ofJPMORGAN CHASE BANK, N.A.,as Collateral AgentDated as of July 3, 2018TABLE OF CONTENTS PageSECTION 1. Defined Terms11.1 Definitions11.2 Other Definitional Provisions5SECTION 2. Guarantee52.1 Guarantee52.2 Right of Contribution62.3 No Subrogation62.4 Amendments, etc with respect to the Guaranteed Obligations62.5 Guarantee Absolute and Unconditional62.6 Reinstatement72.7 Payments7SECTION 3. Grant of Security Interest7SECTION 4. Representations and Warranties84.1 Title; No Other Liens84.2 Perfected First Priority Liens84.3 Jurisdiction of Organization; Chief Executive Office84.4 Investment Property84.5 Intellectual Property9SECTION 5. Covenants95.1 Maintenance of Perfected Security Interest; Further Documentation95.2 Changes in Name, etc.105.3 Intellectual Property105.4 Delivery of Pledged Notes115.5 Investment Property11SECTION 6. Remedial Provisions116.1 Certain Matters Relating to Receivables116.2 Communications with Obligors; Grantors Remain Liable116.3 Investment Property and Instruments126.4 Proceeds to be Turned Over to Collateral Agent126.5 Application of Proceeds126.6 Code and Other Remedies136.7 Registration Rights136.8 Subordination146.9 Deficiency146.10 First Lien Intercreditor Agreement14SECTION 7. The Collateral Agent147.1 Collateral Agent’s Appointment as Attorney-in-Fact, etc147.2 Duty of Collateral Agent157.3 Financing Statements157.4 Authority of Collateral Agent167.5 First Lien Intercreditor Agreement16SECTION 8. Miscellaneous168.1 Amendments in Writing168.2 Notices16i8.3 No Waiver by Course of Conduct; Cumulative Remedies168.4 Enforcement Expenses; Indemnification168.5 Successors and Assigns178.6 Set-Off; Limitation on Individual Actions178.7 Counterparts178.8 Severability178.9 Section Headings178.10 Integration178.11 GOVERNING LAW178.12 Submission To Jurisdiction; Waivers178.13 Acknowledgements188.14 Additional Grantors; Release of Guarantors; Releases of Collateral188.15 WAIVER OF JURY TRIAL19ANNEXES Annex I—Name of GuarantorsAnnex II—Assumption Agreement EXHIBITS Exhibit A—Copyright Security AgreementExhibit B—Patent Security AgreementExhibit C—Trademark Security Agreement SCHEDULES Schedule 1—Notice AddressSchedule 2—Investment PropertySchedule 3—Perfection MattersSchedule 4—Jurisdiction of Organizational and Chief Executive OfficesSchedule 5—Intellectual PropertyiiGUARANTEE AND COLLATERAL AGREEMENTGUARANTEE AND COLLATERAL AGREEMENT, dated as of July 3, 2018, made by MICRON TECHNOLOGY, INC. (the “Borrower”) and each ofthe signatories from time to time hereto (the “Guarantors”), in favor of JPMORGAN CHASE BANK, N.A., as Collateral Agent (in such capacity, the“Collateral Agent”) for the banks and other financial institutions or entities (the “Lenders”) from time to time party to the Credit Agreement, dated as of July3, 2018 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrower, the Lenders, and JPMorganChase Bank, N.A., as the administrative agent (in such capacity, the “Administrative Agent”) and Collateral Agent.W I T N E S S E T H :WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to make extensions of credit to the Borrower upon theterms and subject to the conditions set forth therein;WHEREAS, the Borrower and the other Grantors are engaged in related businesses, and each Grantor will derive substantial direct andindirect benefit from the making of the extensions of credit under the Credit Agreement;WHEREAS, each of the Guarantors has agreed to guaranty the Obligations and to secure its respective Obligations by granting to theCollateral Agent, for the benefit of the Secured Parties, a first-priority security interest in the Collateral described herein; andWHEREAS, it is a condition precedent to the obligation of the Lenders to make their respective extensions of credit to the Borrower underthe Credit Agreement that the Grantors shall have executed and delivered this Agreement to the Collateral Agent for the ratable benefit of the Secured Parties.NOW, THEREFORE, in consideration of the premises and to induce the Collateral Agent and the Lenders to enter into and make theirrespective extensions of credit to the Borrower under the Credit Agreement, each Grantor hereby agrees with the Collateral Agent, for the ratable benefit ofthe Secured Parties, as follows:SECTION 1. Defined Terms1.1 Definitions. (a) Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement, andthe following terms are used herein as defined in the New York UCC: Accounts (as defined in Article 9 of the New York UCC), Certificated Security,Chattel Paper, Commercial Tort Claims, Documents, Equipment, Fixture, General Intangibles, Goods, Instruments, Inventory, Letter-of-Credit Rights andSupporting Obligations.(b) The following terms shall have the following meanings:“After-Acquired Material Intellectual Property”: as defined in Section 5.3(c).“Agreement”: this Guarantee and Collateral Agreement, as the same may be amended, supplemented or otherwise modified from time to time.“Borrower Obligations”: the collective reference to the unpaid principal of and interest on the Loans, an amount equal to unreimbursed drawingsunder all Documentary Credits, an amount equal to the maximum amount that may be drawn under all then outstanding Documentary Credits, and all otherobligations and liabilities of the Borrower (including, without limitation, interest accruing at the then applicable rate provided in the Credit Agreement afterthe maturity of the Loans and after the Borrower’s obligations with respect to the outstanding Documentary Credits have become due and payable andinterest accruing at the then applicable rate provided in the Credit Agreement after the filing of any petition in bankruptcy, or the commencement of anyinsolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in suchproceeding) to the Administrative Agent, the Collateral Agent, any Issuing Bank or any Lender, whether direct or indirect, absolute or contingent, due or tobecome due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, the Credit Agreement, this Agreement, the other LoanDocuments, or any other document made, delivered or given in connection with any of the foregoing, in each case whether on account of principal, interest,premiums (if any), reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements ofcounsel to the Collateral Agent or to the Lenders that are required to be paid by the Borrower pursuant to the terms of any of the foregoing agreements).1“Capital Lease Obligations”: the obligations of any Person to pay rent or other amounts under any lease of (or other arrangement conveying theright to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on abalance sheet of such person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.“CFC”: a controlled foreign corporation within the meaning of Section 957 of the Code.“Closing Date”: July [3], 2018.“Collateral”: as defined in Section 3.“Collateral Account”: any collateral account established by the Collateral Agent as provided in Section 6.1 or Section 6.4.“Copyrights”: (i) all copyrights, database rights, design rights, mask works and works of authorship arising under the laws of the United States, anyother country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished (including, without limitation,those listed in Schedule 5), all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, allregistrations, recordings and applications in the United States Copyright Office, and (ii) the right to obtain all renewals thereof.“Copyright Licenses”: any written agreement naming any Grantor as a party, granting any right under any Copyright, including, without limitation,the grant of rights to reproduce, prepare derivative works based upon, perform, display, manufacture, distribute, exploit and sell materials derived from anyCopyright.“Copyright Security Agreement”: as defined in Section 5.3(b).“Commodity Exchange Act”: the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.“Credit Agreement”: as defined in the preamble hereto.“Default”: any “Default” under and as defined in this Agreement or the Credit Agreement.“Deposit Account”: as defined in the Uniform Commercial Code of any applicable jurisdiction and, in any event, including, without limitation, anydemand, time, savings, passbook or like account maintained with a depositary institution.“Event of Default”: any “Event of Default” under, and as defined in, the Credit Agreement.“Excluded Property”: with respect to any Grantor, (i) Foreign Subsidiary Voting Stock constituting more than 65% of the total voting power of alloutstanding Capital Stock of such subsidiary (including for this purpose any voting debt security or other voting instrument that is treated as equity for U.S.federal income tax purposes); (ii) any Equity Interests of an Excluded Property Subsidiary, or joint ventures and non-wholly owned Subsidiaries whichcannot be pledged without the consent of third parties, (iii) any fee-owned real property (other than the Mortgaged Property), Fixtures (other than Fixtures onor to Mortgaged Property) or leasehold interest in real property, (iv) all vehicles and other assets covered by a certificate of title, (v) property subject to apurchase money arrangement or Capital Lease Obligation only to the extent and for so long as the contract or other agreement in which such Lien is grantedprohibits the creation of any other Lien securing Indebtedness on such property, (vi) any governmental licenses or state or local franchises, charters andauthorizations, to the extent security interests in such licenses, franchises, charters or authorizations are prohibited or restricted thereby only for so long as theapplicable license, franchise, charter or authorization prohibits or restricts the creation by such Grantor of a security interest in such license, franchise, charteror authorization, (vii) any lease, license, contract or agreement to which any Grantor is a party or any of its rights or interests thereunder if and for so long asthe grant of such security interest shall constitute or result in (A) the abandonment, invalidation, voiding or unenforceability of any right, title or interest ofany Grantor therein or (B) a breach or termination pursuant to the terms of, or a default under, any such lease, license, contract or agreement (other than to theextent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code (or anysuccessor provision or provisions) of any relevant jurisdiction or any other applicable Requirement of Law or principles of equity), provided, however, thatsuch security interest shall attach immediately and automatically at such time as the condition causing such abandonment, invalidation, voiding orunenforceability shall be remedied and, to the extent severable, shall attach immediately to any portion of such lease, license, contract or agreement that doesnot result in any of the consequences specified in (A) or (B) including any Proceeds of such lease, license, contract or agreement, (viii) any property of aGrantor to the extent and for so long as the grant of a security interest pursuant to this Agreement in such Grantor’s right, title2or interest therein is prohibited by applicable Requirement of Law (including any requirement to obtain the consent of any Governmental Authority or thirdparty); provided, that the foregoing exclusions in this clause (vii) shall in no way be construed to apply to the extent that the prohibition is unenforceableunder Sections 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code (or any successor provision or provisions) of any relevant jurisdiction or anyother applicable Requirement of Law or principles of equity; provided, further, that such security interest shall attach immediately and automatically withoutfurther action when such prohibition is repealed, rescinded or otherwise ceases to be effective, (ix) all Commercial Tort Claims and any Letter-of-CreditRights (whether or not the letter of credit is evidenced by a writing), (x) Deposit Accounts (other than the Collateral Accounts), (xi) any intent-to-useapplication for registration of a Trademark prior to the filing of a Statement of Use or an Amendment to Allege Use, solely to the extent, and for so long as,the grant or creation by any Grantor of a security interest therein would impair the registrability thereof, or the validity or enforceability of any registrationissuing therefrom, (xii) any assets to the extent a security interest in such assets could result in material adverse tax consequences to Borrower or any of itsSubsidiaries as reasonably determined by the Borrower in consultation with the Collateral Agent, and (xiii) any other asset or property with respect to whichthe Borrower and the Collateral Agent determine that the costs of obtaining a security interest therein are excessive in relation to the value of the securityafforded thereby.“Excluded Property Subsidiary”: (a) each Subsidiary of the Borrower that is not a Restricted Subsidiary, (b) each Immaterial Subsidiary, (c) any not-for-profit Subsidiaries, captive insurance companies or other special purpose subsidiaries designated by Borrower from time to time and (d) MicronTechnology Texas LLC.“First Lien Documents”: the Credit Agreement and each other agreement or instrument governing, or relating to, any First Lien Debt that is a “FirstLien Document” pursuant to a First Lien Intercreditor Agreement.“Foreign Subsidiary”: any Subsidiary organized under the laws of any jurisdiction outside the United States of America.“Foreign Subsidiary Voting Stock”: the voting Capital Stock of any Foreign Subsidiary or any FSHCO.“Guaranteed Obligations”: in (i) the case of the Borrower, all Other Loan Party Obligations of each Non-Borrower Guarantor and (ii) the case of anyNon-Borrower Guarantor, all Borrower Obligations and all Other Loan Party Obligations of each other Guarantor.“Guarantors”: as defined in the preamble hereto.“Grantors”: the collective reference to the Borrower and each Guarantor identified as a Grantor on Annex I to the signature page hereto, togetherwith any other entity that may become a party hereto (and is identified as a Grantor) as provided herein.“Immaterial Subsidiary”: a Subsidiary that is not a Material Subsidiary.“Intellectual Property”: the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under UnitedStates, multinational or foreign laws or otherwise, including, without limitation, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, theTrademarks and the Trademark Licenses, trade secrets, and any transferable rights to sue at law or in equity for any infringement or other impairment thereof,including the right to receive all proceeds and damages therefrom.“Intellectual Property Security Agreements”: as defined in Section 5.3(b).“Investment Property”: the collective reference to all “investment property” as such term is defined in Section 9-102(a)(49) of the New York UCC(other than any Foreign Subsidiary Voting Stock excluded from the definition of “Pledged Stock”).“IP Agreements”: all agreements, permits, consents, orders and franchises relating to the license (including, without limitation, the CopyrightLicenses, Patent Licenses and Trademark Licenses), development, use or disclosure of any Material Intellectual Property to which a Grantor, now or hereafter,is a party or a beneficiary.“IP Domestic Security Agreement Supplement”: as defined in Section 5.3(c).“Issuers”: the collective reference to each issuer of any Investment Property or any Pledged Note.3“Lenders”: as defined in the preamble hereto.“Material Intellectual Property”: any of the Intellectual Property owned by a Grantor and the material rights of a Grantor under any IP Agreement,including material rights under a license agreement, that (i) is related to computer memory products manufactured and sold in commercial volumes, orprocesses used to make such products, by Borrower and the Restricted Subsidiaries and (ii) are rights that, if the Borrower and the Restricted Subsidiariesfailed to own or have such rights, would reasonably be expected to have a Material Adverse Effect.“Material Subsidiary”: each wholly-owned direct Subsidiary that, as of the last day of the fiscal quarter of Borrower most recently ended for whichfinancial statements are available, had total assets (based on book value after intercompany eliminations) as of the end of such quarter in excess of$200,000,000 or that is designated by the Borrower as a “Material Subsidiary”.“New York UCC”: the Uniform Commercial Code as from time to time in effect in the State of New York.“Non-Borrower Guarantor”: each Guarantor other than the Borrower.“Obligations”: (i) in the case of the Borrower, the Borrower Obligations, and (ii) in the case of each Non-Borrower Guarantor, its Other Loan PartyObligations.“Officer’s Certificate”: a certificate of a Responsible Officer of the Borrower.“Other Loan Party Obligations”: with respect to any Non-Borrower Guarantor, all obligations and liabilities of such Guarantor which may ariseunder or in connection with this Agreement (including, without limitation, pursuant to Section 2 hereof), the Credit Agreement or any other Loan Document,in each case whether on account of guarantee obligations, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, withoutlimitation, all fees and disbursements of counsel to the applicable Administrative Agent, the Collateral Agent, or to the Lenders that are required to be paidby such Guarantor pursuant to the terms of this Agreement, the Credit Agreement or any other Loan Document).“Patents”: (i) all letters patent and patent rights of the United States, any other country or any political subdivision thereof, all reissues,reexaminations, and extensions thereof, including, without limitation, any of the foregoing referred to in Schedule 5, (ii) all applications for letters patent ofthe United States or any other country and all divisionals, continuations and continuations-in-part thereof, including, without limitation, any of theforegoing referred to in Schedule 5, and (iii) all rights to obtain any reissues or extensions of the foregoing.“Patent License”: all agreements, whether written or oral, providing for the grant by or to any Grantor of any right to make, have made, manufacture,use, sell, offer to sell, have sold, import or export any invention covered in whole or in part by a Patent.“Patent Security Agreement”: as defined in Section 5.3(b).“Payment in Full”: as defined in Section 2.1(d).“Pledged Notes”: the promissory notes listed on Schedule 2, and all other promissory notes held by and payable to any Grantor (other thanpromissory notes issued in connection with extensions of trade credit by any Grantor in the ordinary course of business) for Indebtedness in excess of$200,000,000 in aggregate principal amount.“Pledged Stock”: the shares of Capital Stock listed on Schedule 2, together with any other shares, stock certificates, options, interests or rights of anynature whatsoever in respect of the Capital Stock of any Person (other than an Excluded Property Subsidiary) that may be issued or granted to, or held by, aGrantor while this Agreement is in effect; provided that in no event shall more than 65% of the total voting power of all outstanding Foreign SubsidiaryVoting Stock (including for this purpose any voting debt security or other voting instrument that is treated as U.S. equity for federal income tax purposes) berequired to be pledged hereunder.“Permitted Prior Lien”: a Permitted Lien of the type described in any of clauses (3), (4), (5), (6) or (14) of the definition thereof, or of the typedescribed in clause (18) with respect to Liens of the type described in any of clauses (1), (3), (4), (5), (6) or (14) of the definition thereof.4“Proceeds”: all “proceeds” as such term is defined in Section 9-102(a)(64) of the New York UCC and, in any event, shall include, without limitation,all dividends or other income from the Investment Property, collections thereon or distributions or payments with respect thereto.“Receivable”: any right to payment for goods sold or leased or for services rendered, whether or not such right is evidenced by an Instrument orChattel Paper and whether or not it has been earned by performance (including, without limitation, any Account).“Responsible Officer”: any of the Borrower’s Chief Executive Officer, President, Chief Operating Officer, any Vice President, Chief Financial Officer,Controller, Treasurer, any Assistant Treasurer or Secretary.“Securities Act”: the Securities Act of 1933, as amended.“Trademarks”: (i) all trademarks, service marks, trade names, corporate names, company names, business names, fictitious business names, tradestyles, service marks, logos, domain names, and other source or business identifiers, and all goodwill associated therewith, all registrations and recordingsthereof, and all applications in connection therewith (other than “intent to use” applications included in Excluded Property), whether in the United StatesPatent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivisionthereof, or otherwise, and all common-law rights related thereto, including, without limitation, any of the foregoing referred to in Schedule 5, and (ii) the rightto obtain all renewals thereof.“Trademark License”: any agreement, whether written or oral, providing for the grant by or to any Grantor of any right to use any Trademark.“Trademark Security Agreement”: as defined in Section 5.3(b).1.2 Other Definitional Provisions. (a) The words “hereof,” “herein”, “hereto” and “hereunder” and words of similar import when used inthis Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and Schedule references are tothis Agreement unless otherwise specified.(b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.(c) Where the context requires, terms relating to the Collateral or any part thereof, when used in relation to a Grantor, shall refer tosuch Grantor’s Collateral or the relevant part thereof.SECTION 2. Guarantee2.1 Guarantee. (a) Each of the Guarantors hereby, jointly and severally, absolutely, unconditionally and irrevocably, guarantees to theCollateral Agent, for the ratable benefit of the Secured Parties and their respective successors, indorsees, transferees and assigns, as a primary obligor andnot merely as surety, the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of allGuaranteed Obligations.(b) Without limiting the generality of anything herein, or in any other First Lien Document to the contrary notwithstanding, themaximum liability of each Non-Borrower Guarantor hereunder shall be limited to such amount as will, after giving effect to such maximum liability and allother liabilities (contingent or otherwise) of such Guarantor that are relevant under applicable Federal or state bankruptcy or insolvency laws, fraudulentconveyance or transfer laws, or similar such laws, result in the obligations of such Guarantor hereunder not constituting a fraudulent transfer or conveyanceunder applicable Federal or state laws (after giving effect to all rights of subrogation, contribution or reimbursement, subject to Section 2.3 ).(c) Each Non-Borrower Guarantor agrees that the Guaranteed Obligations may at any time and from time to time exceed the amount ofthe liability of such Guarantor hereunder without impairing the guarantee contained in this Section 2 or affecting the rights and remedies of the CollateralAgent or any Secured Party hereunder.(d) The guarantee contained in this Section 2 shall remain in full force and effect until all of the Guaranteed Obligations shall havebeen paid in full and the Commitments shall have terminated and all Documentary Credits shall have expired or been cancelled (other than contingentindemnification obligations for which no claim has been asserted)5(“Payment in Full”). Each Guarantor hereby irrevocably waives any right to revoke this Guarantee as to future transactions giving rise to any GuaranteedObligations.(e) No payment made by the Borrower, any of the Non-Borrower Guarantors, any other guarantor or any other Person or received orcollected by the Collateral Agent or any Secured Party from the Borrower, any of the Non-Borrower Guarantors, any other guarantor or any other Person byvirtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of theGuaranteed Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstandingany such payment (other than any payment made by such Guarantor in respect of the Guaranteed Obligations or any payment received or collected from suchGuarantor in respect of the Guaranteed Obligations), remain liable for the Guaranteed Obligations up to the maximum liability of such Guarantor hereunderuntil Payment in Full.2.2 Right of Contribution. Each Non-Borrower Guarantor hereby agrees that to the extent that a Non-Borrower Guarantor shall have paidmore than its proportionate share of any payment made hereunder, such Non-Borrower Guarantor shall be entitled to seek and receive contribution fromand against any other Non-Borrower Guarantor hereunder which has not paid its proportionate share of such payment. Each Non-Borrower Guarantor’sright of contribution shall be subject to the terms and conditions of Section 2.3. The provisions of this Section 2.2 shall in no respect limit theobligations and liabilities of any Guarantor to the Collateral Agent and the Secured Parties, and each Guarantor shall remain liable to the CollateralAgent and the Secured Parties for the full amount guaranteed by such Guarantor hereunder.2.3 No Subrogation. Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of anyGuarantor by the Collateral Agent or any Secured Party, no Guarantor shall be entitled to seek or enforce its right to be subrogated to any of the rights ofthe Collateral Agent or any Secured Party against the Borrower or any other Guarantor or any collateral security or guarantee or right of offset held by theCollateral Agent or any Secured Party for the payment of the Guaranteed Obligations, nor shall any Guarantor seek or be entitled to seek anycontribution or reimbursement from the Borrower or any other Guarantor in respect of payments made by such Guarantor hereunder, until Payment inFull . If any amount shall be paid to any Guarantor on account of such subrogation rights at any time when all of the Borrower Obligations shall nothave been paid in full or such payment is otherwise prohibited pursuant to the immediately preceding sentence, such amount shall be held by suchGuarantor in trust for the Collateral Agent and the Secured Parties, segregated from other funds of such Guarantor, and shall, forthwith upon receipt bysuch Guarantor, be turned over to the Collateral Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to the CollateralAgent, if required), to be applied against the Borrower Obligations, whether matured or unmatured, in such order as the Collateral Agent may determine.2.4 Amendments, etc with respect to the Guaranteed Obligations. Each Guarantor shall remain obligated hereunder notwithstanding that,without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of theGuaranteed Obligations made by the Collateral Agent or any other Secured Party may be rescinded by the Collateral Agent or such Secured Party andany of the Guaranteed Obligations may be continued, and the Guaranteed Obligations, or the liability of any other Person upon or for any part thereof, orany collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended,amended, modified, accelerated, compromised, waived, surrendered or released by the Collateral Agent or any Secured Party, and the First LienDocuments and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in wholeor in part, as the Collateral Agent (or the relevant Secured Parties, as the case may be) may deem advisable from time to time, and any collateral security,guarantee or right of offset at any time held by the Collateral Agent or any Secured Party for the payment of the Guaranteed Obligations may be sold,exchanged, waived, surrendered or released. Neither the Collateral Agent nor any Lender nor any Secured Party shall have any obligation to protect,secure, perfect or insure any Lien at any time held by it as security for the Guaranteed Obligations or for the guarantee contained in this Section 2 or anyproperty subject thereto.2.5 Guarantee Absolute and Unconditional. Each Guarantor waives any and all notice of the creation, renewal, extension or accrual ofany of the Guaranteed Obligations and notice of or proof of reliance by the Collateral Agent or any other Secured Party upon the guarantee contained inthis Section 2 or acceptance of the guarantee contained in this Section 2; the Guaranteed Obligations, and any of them, shall conclusively be deemed tohave been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 2; and alldealings between the Borrower and any of the Guarantors, on the one hand, and the Collateral Agent and the Secured Parties, on the other hand, likewiseshall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 2. Each Guarantor waivesdiligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Borrower or any of the Non-BorrowerGuarantors with respect6to the Guaranteed Obligations. Each Guarantor understands and agrees that the guarantee contained in this Section 2 shall be construed as a continuing,absolute and unconditional guarantee of payment without regard to (a) the validity or enforceability of any First Lien Documents, any of the GuaranteedObligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by theCollateral Agent or any other Secured Party, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at anytime be available to or be asserted by the Borrower or any other Person against the Collateral Agent or any other Secured Party, or (c) any othercircumstance whatsoever (with or without notice to or knowledge of the Borrower, such Guarantor or any other Guarantor) which constitutes, or might beconstrued to constitute, an equitable or legal discharge of the Borrower or any other obligor for the Guaranteed Obligations, or of such Guarantor underthe guarantee contained in this Section 2, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rightsand remedies hereunder against any Guarantor, the Collateral Agent or any other Secured Party may, but shall be under no obligation to, make a similardemand on or otherwise pursue such rights and remedies as it may have against the Borrower, any other Guarantor or any other Person or against anycollateral security or guarantee for the Guaranteed Obligations or any right of offset with respect thereto, and any failure by the Collateral Agent or anyother Secured Party to make any such demand, to pursue such other rights or remedies or to collect any payments from the Borrower, any other Guarantoror any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the Borrower, anyother Guarantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation orliability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Collateral Agentor any other Secured Party against any Guarantor. For the purposes hereof “demand” shall include the commencement and continuance of any legalproceedings.2.6 Reinstatement. The guarantee contained in this Section 2 shall continue to be effective, or be reinstated, as the case may be, if at anytime payment, or any part thereof, of any of the Guaranteed Obligations is rescinded or must otherwise be restored or returned by the Collateral Agent orany other Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any Non-Borrower Guarantor, orupon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower or any Non-BorrowerGuarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.2.7 Payments. Each Guarantor hereby jointly and severally guarantees that payments hereunder will be paid to the applicableAdministrative Agent without set-off or counterclaim in Dollars at the applicable Funding Office.SECTION 3. Grant of Security InterestEach Grantor hereby grants to the Collateral Agent, for the ratable benefit of the Secured Parties, a security interest in all of the following propertynow owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title orinterest (collectively, the “Collateral”), as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity,by acceleration or otherwise) of such Grantor’s Obligations:(a) all Accounts;(b) all Chattel Paper;(c) all Documents;(d) all Collateral Accounts;(e) all Equipment;(f) all Fixtures on or to Mortgaged Property;(g) all General Intangibles;(h) all Instruments;(i) all Intellectual Property;7(j) all Inventory;(k) all Goods;(l) all Investment Property;(m) all books and records pertaining to the Collateral; and(n) to the extent not otherwise included, all Proceeds, Supporting Obligations and products of any and all of the foregoingand all collateral security and guarantees given by any Person with respect to any of the foregoing;provided, however, that notwithstanding any of the other provisions set forth in this Section 3, this Agreement shall not constitute a grant of a securityinterest in any Excluded Property. For the avoidance of doubt, and notwithstanding anything to the contrary in this Agreement or any other Loan Document,no Obligation shall be (i) guaranteed by any Foreign Subsidiary, FSHCO or other Subsidiary that is not a Grantor, or (ii) secured by any assets of any ForeignSubsidiary, FSHCO, or other Subsidiary that is not a Grantor (including any Equity Interests held directly or indirectly thereby, or any rights to or interest inintangible property under a license agreement or other arrangement related to the development, ownership, or exploitation of intangible property).SECTION 4. Representations and WarrantiesTo induce the Collateral Agent and the Lenders to enter into and to make their respective extensions of credit pursuant to the Credit Agreement,each Grantor hereby represents and warrants to the Collateral Agent that:4.1 Title; No Other Liens. Except for Permitted Liens and Liens not prohibited by Section 6.2 of the Credit Agreement, such Grantorowns, or has rights in, each item of the Collateral free and clear of any and all Liens. No effective financing statement or other public notice with respectto all or any part of the Collateral is on file or of record in any public office, except such as have been filed in favor of the Collateral Agent, for theratable benefit of the Secured Parties, pursuant to this Agreement or as are filed with respect to Permitted Liens or Liens not prohibited by Section 6.2 ofthe Credit Agreement. 4.2 Perfected First Priority Liens. The security interests granted pursuant to this Agreement (a) upon completion of the filings and otheractions specified on Schedule 3 (which, in the case of all filings and other documents referred to on said Schedule, have been delivered to the CollateralAgent in completed and duly executed form to the extent required to be delivered prior to the Closing Date) will constitute valid perfected securityinterests in all of the Collateral for which such filings and actions are effective to perfect such security interests in favor of the Collateral Agent, for theratable benefit of the Secured Parties, as collateral security for such Grantor’s Obligations, enforceable in accordance with the terms hereof and (b) areprior to all other Liens on the Collateral other than Permitted Liens and Liens not prohibited by Section 6.2 of the Credit Agreement.4.3 Jurisdiction of Organization; Chief Executive Office. On the date hereof, such Grantor’s jurisdiction of organization, identificationnumber from the jurisdiction of organization (if any), and the location of such Grantor’s chief executive office or sole place of business, as the case maybe, are specified on Schedule 4.4.4 Investment Property. (a) The shares of Pledged Stock pledged by such Grantor hereunder constitute all the issued and outstandingshares of all classes of the Capital Stock of each Issuer owned by such Grantor or, in the case of Foreign Subsidiary Voting Stock, 65% of the total votingpower of all outstanding Foreign Subsidiary Voting Stock (including for this purpose any voting debt security or other voting instrument that is treatedas U.S. equity for federal income tax purposes) of each relevant Issuer.(b) All the shares of Pledged Stock issued by an Issuer which is a Subsidiary of a Grantor have been duly and validly issued and are, ifsuch shares are shares of stock in a domestic corporation, fully paid and nonassessable.(c) Each of the Pledged Notes issued by an Issuer which is a Subsidiary of such Grantor constitutes the legal, valid and bindingobligation of the obligor with respect thereto, enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulentconveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whetherconsidered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.84.5 Intellectual Property. (a) Except as either individually or in the aggregate could not be reasonably expected to have a MaterialAdverse Effect (i) to the knowledge of each Grantor, the operation of such Grantor’s business as currently conducted and the use of the MaterialIntellectual Property in connection therewith do not infringe, misappropriate, dilute, misuse or otherwise violate the intellectual property rights of anythird party; and (ii) such Grantor is the exclusive owner or joint owner of all right, title and interest in and to the Material Intellectual Property, or isentitled to use all such Material Intellectual Property subject only to the terms of the related IP Agreements.(b) The Intellectual Property set forth on Schedule 5 includes all registrations of or applications for Patents, Trademarks andCopyrights that are Material Intellectual Property owned by a Grantor. For the avoidance of doubt, the inclusion of specific Intellectual Property on Schedule5 shall not create any implication that any such Intellectual Property constitutes Material Intellectual Property.(c) The owned Material Intellectual Property owned by each Grantor is subsisting and has not been adjudged invalid orunenforceable in whole or part, and to the knowledge of such Grantor, is valid and enforceable. For clarity, the foregoing representation and warranty shallnot apply to Material Intellectual Property constituting rights under any IP Agreement.(d) The consummation of the transactions contemplated by the Credit Agreement will not result in the termination or impairment ofany of the Material Intellectual Property or any Grantor’s rights therein. For clarity, the foregoing representation and warranty shall not apply to the exerciseby the Collateral Agent, the Administrative Agent, or the Lenders of any remedy under this Agreement, including the direct enforcement of any rights underany IP Agreement.SECTION 5. CovenantsEach Grantor covenants and agrees with the Collateral Agent and the Secured Parties that, from and after the date of this Agreement and untilPayment in Full:5.1 Maintenance of Perfected Security Interest; Further Documentation. (a) Such Grantor shall maintain the security interest created bythis Agreement as a perfected security interest having the priority described in clause (b) of Section 4.2 and shall defend such security interest against theclaims and demands of all Persons whomsoever; provided that such Grantor shall not be required to take any action to perfect a security interest in theCollateral other than those actions described in clause (a) of Section 4.2, Section 5.3, Section 5.4 or Section 5.5.(b) At any time and from time to time, upon the written request of the Collateral Agent, and at the sole expense of such Grantor, suchGrantor will promptly and duly execute and deliver, and have recorded, such further instruments and documents and take such further actions as theCollateral Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers hereingranted, including, without limitation authorize, and have recorded, any financing or continuation statements under the Uniform Commercial Code (or othersimilar laws) with the applicable filing office in the jurisdiction of formation or incorporation of each Grantor with respect to the security interests created,but subject in each case to the limitations set forth in Section 5.1(a).(c) For the avoidance of doubt, notwithstanding anything herein to the contrary, except as set forth in clause (a) of Section 5.1, noGrantor shall be required to (A) take any action with respect to perfection by any other means besides filings of the type specified in Section 4.2, which othermethods include possession or “control” under the Uniform Commercial Code (whether effected by transfer of possession, control agreements or other steps)or any other method with respect to any Documents, Instruments, Investment Property, Chattel Paper, cash, Deposit Accounts, commodities and securitiesaccounts (including securities entitlements and related assets), except, with respect to Pledged Stock and Pledged Notes, for the actions required pursuant toSection 5.3, Section 5.4 and Section 5.5, (B) obtain landlord lien waivers, estoppels or collateral access letters with respect to any leasehold interests in realproperty, (C) authorize or have filed any financing statement as a fixture filing, (D) take any action with respect to perfection that may be required under non-U.S. laws, (E) take any action to obtain any consents or agreements from third parties to permit the grant of a security interest in any Excluded Property or (F)take any action with respect to perfection with respect to any consignment of goods. For the further avoidance of doubt, notwithstanding anything herein tothe contrary, except as set forth in clause (a) of Section 5.1, prior to an enforcement event following the occurrence and continuation of an Event of Defaultno notices shall be sent by the Collateral Agent to, or required by the Collateral Agent to be sent by any Grantor, to account debtors or other third partyobligors notifying such account debtors or obligors of the security interests created hereby or directing such account debtors or third party obligors to makepayment to a different person or account.95.2 Changes in Name, etc. Such Grantor will promptly (and in any event within 20 days or such longer period as is reasonably agreed toby the Collateral Agent) provide prior written notice to the Collateral Agent and delivery to the Collateral Agent of all additional financing statementsand other executed documents reasonably requested by the Collateral Agent to maintain the validity, perfection and priority of the security interestsprovided for herein, if such Grantor (i) changes its jurisdiction of organization from that referred to in Section 4.3 or (ii) changes its name, and suchGrantor shall deliver to the Collateral Agent additional financing statements as reasonably requested by the Collateral Agent to maintain the validity,perfection and priority of the security interests provided for herein.5.3 Intellectual Property. (a) Except as could not reasonably be expected to have a Material Adverse Effect, subject to the provisions ofparagraph (iv) below:(i) With respect to each item of its Material Intellectual Property, each Grantor agrees to take, at its expense, actions, which may include,without limitation, registering in the U.S. Patent and Trademark Office and the U.S. Copyright Office, to (x) maintain the validity and enforceability of suchMaterial Intellectual Property and maintain such Material Intellectual Property in full force and effect, and (y) pursue the registration and maintenance ofeach Patent, Trademark, or Copyright registration or application, now or hereafter included in such Material Intellectual Property of such Grantor, including,without limitation, the payment of required fees and taxes, the filing of responses to office actions issued by the U.S. Patent and Trademark Office or the U.S.Copyright Office, the filing of applications for renewal or extension, the filing of affidavits under Sections 8 and 15 of the U.S. Trademark Act, the filing ofdivisional, continuation, continuation-in-part, reissue and renewal applications or extensions, the payment of maintenance fees and the participation ininterference, reexamination, opposition, cancellation, inter partes review, infringement and misappropriation proceedings.(ii) No Grantor shall do or permit any act or knowingly omit to do any act whereby any of its Material Intellectual Property may lapse, beterminated or become invalid or unenforceable or placed in the public domain (or, in case of a trade secret, lose its competitive value).(iii) Each Grantor shall take actions to preserve and protect each item of its Material Intellectual Property.(iv) Notwithstanding anything herein to the contrary, each Grantor shall only be required to take actions or refrain from taking or omit totake actions pursuant to the foregoing clauses (i) through (iii) as it determines in the exercise of its reasonable business judgment are commerciallyreasonable, and nothing in the foregoing clauses (i) through (iii) shall be construed as prohibiting or restricting a Grantor from effecting any transaction notprohibited by the Credit Agreement (including, without limitation, a transfer, conveyance, sale or other disposition or license not prohibited by the CreditAgreement).(b) With respect to its Material Intellectual Property, within 30 days of the Closing Date or such later date which the Collateral Agentconsents to in writing, each Grantor agrees to execute and deliver to the Collateral Agent, with respect to all Material Intellectual Property that is registered orwith respect to which registration is pending (i) an agreement, in substantially the form set forth in Exhibit A hereto or otherwise in form and substancereasonably satisfactory to the Collateral Agent (a “Copyright Security Agreement”), (ii) an agreement, in substantially the form set forth in Exhibit B heretoor otherwise in form and substance reasonably satisfactory to the Collateral Agent (a “Patent Security Agreement”) and (iii) an agreement, in substantially theform set forth in Exhibit C hereto or otherwise in form and substance reasonably satisfactory to the Collateral Agent (a “Trademark Security Agreement” and,together with each Copyright Security Agreement and each Patent Security Agreement, the “Intellectual Property Security Agreements”), in each case, forrecording the security interest granted hereunder to the Collateral Agent in such Material Intellectual Property with the U.S. Patent and Trademark Office orthe U.S. Copyright Office, as applicable. For the avoidance of doubt, the inclusion of specific Intellectual Property in any Intellectual Property SecurityAgreement shall not create any implication that any such Intellectual Property constitutes Material Intellectual Property.(c) Each Grantor agrees that should it obtain an ownership interest in any Intellectual Property that is not on the date hereof a part ofthe Material Intellectual Property (“After-Acquired Material Intellectual Property”) (i) the provisions of this Agreement shall automatically apply thereto, and(ii) any such After-Acquired Material Intellectual Property and, in the case of Trademarks, the goodwill symbolized thereby, shall automatically become partof the Material Intellectual Property if and to the extent such After-Acquired Material Intellectual Property meets the definition of Material IntellectualProperty, subject to the terms and conditions of this Agreement with respect thereto. Following the acquisition of its interest in any such After-AcquiredMaterial Intellectual Property (on at least a quarterly basis), each Grantor shall provide written notice to the Collateral Agent identifying the registered orapplied-for Patents, Trademarks and/or Copyrights that are not on the date hereof a part of the Material Intellectual Property, including any such After-Acquired Material Intellectual Property, (other than10any such registered or applied-for Patents, Trademarks and Copyrights as to which a prior notice under this Section 5.3(c) has been provided and an IPDomestic Security Agreement Supplement, as hereinafter defined, has been recorded as required by this Section 5.3(c)) and such notice shall include all suchnew After-Acquired Material Intellectual Property, and such Grantor shall execute and deliver to the Collateral Agent with such written notice, or otherwiseauthenticate, an agreement in form and substance reasonably satisfactory to the Collateral Agent (an “IP Domestic Security Agreement Supplement”)covering such Intellectual Property, which IP Domestic Security Agreement Supplement shall be recorded with the U.S. Patent and Trademark Office, the U.S.Copyright Office and/or any other U.S. governmental authorities necessary to perfect the security interest hereunder in any such Intellectual Property.Notwithstanding anything to the contrary herein, nothing in this Agreement or any other Loan Document shall require any Loan Party or any of theirSubsidiaries to make any filings or take any actions to record or perfect the Collateral Agent’s Lien on and security interest in any Intellectual Property otherthan Material Intellectual Property. For the avoidance of doubt, the inclusion of specific Intellectual Property in any notice of After-Acquired MaterialIntellectual Property or in any IP Domestic Security Agreement Supplement shall not create any implication that any such Intellectual Property constitutesMaterial Intellectual Property.(d) Notwithstanding anything to the contrary in this Agreement or any other Loan Document, no Grantor shall be obligated to(a) effect any filings with respect to Material Intellectual Property outside of the United States, or (b) perfect any Lien in any Intellectual Property establishedin any jurisdiction other than the United States.5.4 Delivery of Pledged Notes. Subject to the First Lien Intercreditor Agreement, if any Instrument is or becomes a Pledged Note, suchInstrument shall promptly be delivered to the Collateral Agent, duly indorsed in a manner satisfactory to the Collateral Agent, to be held as Collateralpursuant to this Agreement.5.5 Investment Property. If such Grantor shall become entitled to receive or shall receive any certificate (including, without limitation,any certificate representing a dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issuedin connection with any reorganization), option or rights in respect of the Pledged Stock (constituting Collateral hereunder) of any Material Subsidiary ofsuch Grantor, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Pledged Stock of a Material Subsidiary ofsuch Grantor, or otherwise in respect thereof, such Grantor shall promptly deliver to the Collateral Agent in the exact form received, duly indorsed bysuch Grantor to the Collateral Agent, together with an undated stock power covering such certificate duly executed in blank by such Grantor and with, ifthe Collateral Agent so requests, signature guaranteed, to be held by the Collateral Agent, subject to the terms hereof, as additional collateral security forthe Obligations; provided that in no event shall more than 65% of the total outstanding Foreign Subsidiary Voting Stock be required to be delivered orpledged hereunder.SECTION 6. Remedial Provisions6.1 Certain Matters Relating to Receivables. If required by the Collateral Agent at any time after the occurrence and during thecontinuance of an Event of Default, any payments of Receivables, when collected by any Grantor, (i) shall be forthwith (and, in any event, within threeBusiness Days) deposited by such Grantor in the exact form received, duly indorsed by such Grantor to the Collateral Agent if required, in a CollateralAccount maintained under the sole dominion and control of the Collateral Agent, subject to withdrawal by the Collateral Agent for the account of theSecured Parties only as provided in Section 6.4, and (ii) until so turned over, shall be held by such Grantor in trust for the Collateral Agent and theSecured Parties, segregated from other funds of such Grantor. Each such deposit of Proceeds of Receivables shall be accompanied by a report identifyingin reasonable detail the nature and source of the payments included in the deposit.6.2 Communications with Obligors; Grantors Remain Liable. (a) The Collateral Agent in its own name or in the name of others may atany time after the occurrence and during the continuance of an Event of Default communicate with obligors under the Receivables constitutingCollateral hereunder and parties to the contracts constituting Collateral hereunder to verify with them to the Collateral Agent’s satisfaction the existence,amount and terms of any such Receivables or contracts.(b) Upon the request of the Collateral Agent at any time after the occurrence and during the continuance of an Event of Default, eachGrantor shall notify obligors on the Receivables constituting Collateral hereunder and parties to the contracts constituting Collateral hereunder that suchReceivables and the contracts have been assigned to the Collateral Agent for the ratable benefit of the Secured Parties and that payments in respect thereofshall be made directly to the Collateral Agent.(c) Anything herein to the contrary notwithstanding, each Grantor shall remain liable under each of the Receivables and contracts toobserve and perform all the conditions and obligations to be observed and performed by it11thereunder, all in accordance with the terms of any agreement giving rise thereto. Neither the Collateral Agent nor any Secured Party shall have anyobligation or liability under any Receivable (or any agreement giving rise thereto) or contract by reason of or arising out of this Agreement or the receipt bythe Collateral Agent or any Secured Party of any payment relating thereto, nor shall the Collateral Agent or any Secured Party be obligated in any manner toperform any of the obligations of any Grantor under or pursuant to any Receivable (or any agreement giving rise thereto) or contract, to make any payment, tomake any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, topresent or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to it or towhich it may be entitled at any time or times.6.3 Investment Property and Instruments. (a) Unless an Event of Default shall have occurred and be continuing and the Collateral Agentshall have given written notice to the relevant Grantor of the Collateral Agent’s intent to exercise its corresponding rights pursuant to Section 6.3(b),each Grantor shall be permitted to receive all cash dividends paid in respect of the Investment Property (including Pledged Stock) and all payments madein respect of Instruments (including the Pledged Notes), in each case paid in the normal course of business of the relevant Issuer and consistent with pastpractice and to exercise all voting and corporate or other organizational rights with respect to the Investment Property; provided that no vote shall becast or corporate or other organizational right exercised or other action taken which would be inconsistent with or result in any violation of anyprovision of the Credit Agreement or this Agreement.(b) If an Event of Default shall occur and be continuing and the Collateral Agent shall give written notice of its intent to exercise itsrights to the relevant Grantor or Grantors, (i) the Collateral Agent shall have the right to receive any and all cash dividends, payments or other Proceeds paidin respect of the Investment Property constituting Collateral hereunder and make application thereof to the Obligations in such order as the Collateral Agentmay determine, and (ii) the Collateral Agent shall have the right to cause any or all of the Investment Property to be registered in the name of the CollateralAgent or its nominee, and the Collateral Agent or its nominee may thereafter exercise (x) all voting, corporate and other rights pertaining to such InvestmentProperty at any meeting of shareholders of the relevant Issuer or Issuers or otherwise and (y) any and all rights of conversion, exchange and subscription andany other rights, privileges or options pertaining to such Investment Property as if it were the absolute owner thereof (including, without limitation, the rightto exchange at its discretion any and all of the Investment Property constituting Collateral hereunder upon the merger, consolidation, reorganization,recapitalization or other fundamental change in the corporate or other organizational structure of any Issuer, or upon the exercise by any Grantor or theCollateral Agent of any right, privilege or option pertaining to such Investment Property, and in connection therewith, the right to deposit and deliver anyand all of such Investment Property with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions asthe Collateral Agent may determine), all without liability except to account for property actually received by it, but the Collateral Agent shall have no dutyto any Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.(c) Each Grantor hereby authorizes and instructs each Issuer of any Investment Property pledged by such Grantor hereunder to(i) comply with any instruction received by it from the Collateral Agent in writing that (x) states that an Event of Default has occurred and is continuing and(y) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from such Grantor, and each Grantor agrees that eachIssuer shall be fully protected in so complying, and (ii) unless otherwise expressly permitted hereby, pay any dividends or other payments with respect to theInvestment Property directly to the Collateral Agent.6.4 Proceeds to be Turned Over to Collateral Agent. In addition to the rights of the Collateral Agent and the Secured Parties specified inSection 6.1 with respect to payments of Receivables, if an Event of Default shall occur and be continuing, all Proceeds received by any Grantorconsisting of cash, checks and other near-cash items shall be held by such Grantor in trust for the Collateral Agent and the Secured Parties, segregatedfrom other funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to the Collateral Agent in the exact form received bysuch Grantor (duly indorsed by such Grantor to the Collateral Agent, if required). All Proceeds constituting Collateral hereunder received by theCollateral Agent hereunder shall be held by the Collateral Agent in a Collateral Account maintained under its sole dominion and control. All Proceedsconstituting Collateral hereunder while held by the Collateral Agent in a Collateral Account (or by such Grantor in trust for the Collateral Agent and theSecured Parties) shall continue to be held as collateral security for all the Obligations and shall not constitute payment thereof until applied as providedin Section 6.5.6.5 Application of Proceeds. At such intervals as may be agreed upon by the Borrower and the Collateral Agent, or, if an Event of Defaultshall have occurred and be continuing, at any time at the Collateral Agent’s election, the Collateral Agent may apply all or any part of Proceedsconstituting Collateral, and any proceeds of the guarantee set forth in Section 2, in payment of the Obligations in the following order:First, to pay incurred and unpaid fees and expenses of the Collateral Agent under the First Lien Documents;12Second, to the Collateral Agent, for application by it towards payment of amounts then due and owing and remaining unpaid in respect ofthe Obligations, pro rata among the Secured Parties according to the amounts of the Obligations then due and owing and remaining unpaid to theSecured Parties;Third, to the Collateral Agent, for application by it towards prepayment of the Obligations, pro rata among the Secured Parties according tothe amounts of the Obligations then held by the Secured Parties; andFourth, any balance remaining after Payment in Full shall be paid over to the Borrower or to whomsoever may be lawfully entitled toreceive the same;provided that in the event of any inconsistency between the terms of any First Lien Intercreditor Agreement and this Section 6.5, the term of such First LienIntercreditor Agreement shall govern.6.6 Code and Other Remedies. (a) If an Event of Default shall occur and be continuing, the Collateral Agent, on behalf of the SecuredParties, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing,evidencing or relating to the Obligations, all rights and remedies of a secured party under the New York UCC or any other applicable law. Withoutlimiting the generality of the foregoing, the Collateral Agent, without demand of performance or other demand, presentment, protest, advertisement ornotice of any kind (except any notice required by law referred to below) to or upon any Grantor or any other Person (all and each of which demands,defenses, advertisements and notices are hereby waived), may, subject to the requirements of applicable law, in such circumstances forthwith collect,receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, orotherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private saleor sales, at any exchange, broker’s board or office of the Collateral Agent or any Secured Party or elsewhere upon such terms and conditions as it maydeem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. The CollateralAgent or any Secured Party shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale orsales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in any Grantor, which right or equity is herebywaived and released. Each Grantor further agrees, at the Collateral Agent’s request, to assemble the Collateral and make it available to the CollateralAgent at places which the Collateral Agent shall reasonably select, whether at such Grantor’s premises or elsewhere. The Collateral Agent shall apply thenet proceeds of any action taken by it pursuant to this Section 6.6, after deducting all reasonable costs and expenses of every kind incurred in connectiontherewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Collateral Agent andthe Secured Parties hereunder, including, without limitation, reasonable attorneys’ fees and disbursements, to the payment in whole or in part of theObligations, in such order as the Collateral Agent may elect, and only after such application and after the payment by the Collateral Agent of any otheramount required by any provision of law, including, without limitation, Section 9-615(a)(3) of the New York UCC, need the Collateral Agent account forthe surplus, if any, to any Grantor. To the extent permitted by applicable law, each Grantor waives all claims, damages and demands it may acquireagainst the Collateral Agent or any Secured Party arising out of the exercise by them of any rights hereunder. If any notice of a proposed sale or otherdisposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or otherdisposition.(b) For the purpose of enabling the Collateral Agent, during the continuance of an Event of Default, to exercise rights and remedieshereunder at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, and for no other purpose, each Grantor herebygrants to the Collateral Agent, an irrevocable, non-exclusive license to use, reproduce, distribute, perform, display, prepare derivative works based upon,make, have made, sell, offer to sell, have sold, import, export, practice, make improvements, license or sublicense any of the Intellectual Property constitutingCollateral now owned or hereafter acquired by such Grantor, wherever the same may be located. Such license shall include access to all media in which any ofthe Intellectual Property constituting Collateral may be recorded or stored and to all computer programs used for the compilation or printout hereof. Withrespect to Trademarks, such license shall be subject to the requirement that the quality of goods and services offered under the Trademarks be substantiallyconsistent with the quality of the goods and services offered thereunder by such Grantor prior to the Collateral Agent’s exercise of rights and remedies.6.7 Registration Rights. (a) Each Grantor recognizes that the Collateral Agent may be unable to effect a public sale of any or all thePledged Stock, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelledto resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire suchsecurities for their own account for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that anysuch13private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees thatany such private sale shall be deemed to have been made in a commercially reasonable manner. The Collateral Agent shall be under no obligation todelay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under theSecurities Act, or under applicable state securities laws, even if such Issuer would agree to do so.(b) Each Grantor agrees to use its commercially reasonable efforts to do or cause to be done all such other acts as may be necessary tomake such sale or sales of all or any portion of the Pledged Stock pursuant to this Section 6.7 valid and binding and in compliance with any and all otherapplicable Requirements of Law. Each Grantor further agrees that a breach of any of the covenants contained in this Section 6.7 will cause irreparable injuryto the Collateral Agent and the Secured Parties, that the Collateral Agent and the Secured Parties have no adequate remedy at law in respect of such breachand, as a consequence, that each and every covenant contained in this Section 6.7 shall be specifically enforceable against such Grantor, and such Grantorhereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Defaulthas occurred.6.8 Subordination. Each Grantor hereby agrees that, upon the occurrence and during the continuance of an Event of Default, unlessotherwise agreed by the Collateral Agent, all Indebtedness owing by it to any Restricted Subsidiary of the Borrower shall be fully subordinated to theindefeasible payment in full in cash of such Grantor’s Obligations.6.9 Deficiency. Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral areinsufficient to pay its Obligations and the fees and disbursements of any attorneys employed by the Collateral Agent or any Secured Party to collect suchdeficiency.6.10 First Lien Intercreditor Agreement. Notwithstanding anything to the contrary in this Section 6 or Section 7.1, any First LienIntercreditor Agreement then in effect shall govern the exercise of rights and the enforcement of remedies hereunder by the Collateral Agent and theSecured Parties. In the event of any conflict between the terms of this Section 6 and such First Lien Intercreditor Agreement, such First Lien IntercreditorAgreement shall govern.SECTION 7. The Collateral Agent7.1 Collateral Agent’s Appointment as Attorney-in-Fact, etc. (a) Each Grantor hereby irrevocably constitutes and appoints the CollateralAgent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority inthe place and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of this Agreement, totake any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish thepurposes of this Agreement. At any time when an Event of Default has occurred and is continuing and without limiting the generality of the foregoing,each Grantor hereby gives the Collateral Agent the power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any orall of the following:(i) in the name of such Grantor or its own name, or otherwise, take possession of and indorse and collect any checks,drafts, notes, acceptances or other instruments for the payment of moneys due under any Receivable or contract or with respect to any other Collateral and fileany claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Collateral Agent for the purpose ofcollecting any and all such moneys due under any Receivable or contract or with respect to any other Collateral whenever payable;(ii) in the case of any Intellectual Property, execute and deliver, and have recorded, any and all agreements, instruments,documents and papers as the Collateral Agent may reasonably request to evidence the Collateral Agent’s and the Secured Parties’ security interest in suchIntellectual Property and the goodwill and general intangibles of such Grantor relating thereto or represented thereby;(iii) pay or discharge taxes and Liens levied or placed on or threatened against the Collateral, effect any repairs or anyinsurance called for by the terms of this Agreement and pay all or any part of the premiums therefor and the costs thereof;(iv) execute, in connection with any sale provided for in Section 6.6 or 6.7, any indorsements, assignments or otherinstruments of conveyance or transfer with respect to the Collateral; and(v) (1) direct any party liable for any payment under any of the Collateral to make payment of any and all moneys due orto become due thereunder directly to the Collateral Agent or as the Collateral Agent shall14direct; (2) ask or demand for, collect, and receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any timein respect of or arising out of any Collateral; (3) sign and indorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, draftsagainst debtors, assignments, verifications, notices and other documents in connection with any of the Collateral; (4) commence and prosecute any suits,actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any portion thereof and to enforce any other rightin respect of any Collateral; (5) defend any suit, action or proceeding brought against such Grantor with respect to any Collateral; (6) settle, compromise oradjust any such suit, action or proceeding and, in connection therewith, give such discharges or releases as the Collateral Agent may deem appropriate; (7)assign any Copyright, Patent or Trademark (along with the goodwill of the business to which any such Copyright, Patent or Trademark pertains), throughoutthe world for such term or terms, on such conditions, and in such manner, as the Collateral Agent shall in its sole discretion determine; and (8) generally, sell,transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though the Collateral Agentwere the absolute owner thereof for all purposes, and do, at the Collateral Agent’s option and such Grantor’s expense, at any time, or from time to time, allacts and things which the Collateral Agent deems necessary to protect, preserve or realize upon the Collateral and the Collateral Agent’s and the SecuredParties’ security interests therein and to effect the intent of this Agreement, all as fully and effectively as such Grantor might do.Notwithstanding anything to the contrary in this Section 7.1(a), the Collateral Agent agrees that it will not exercise any rights under the power ofattorney provided for in this Section 7.1(a) unless an Event of Default shall have occurred and be continuing.(b) If any Grantor fails to perform or comply with any of its agreements contained herein, the Collateral Agent, at its option, butwithout any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement.(c) The reasonable expenses of the Collateral Agent incurred in connection with actions undertaken as provided in this Section 7.1,together with interest thereon at a rate per annum equal to the highest rate per annum at which interest would then be payable on any category of past dueLoans under the Credit Agreement, from the date of payment by the Collateral Agent to the date reimbursed by the relevant Grantor, shall be payable by suchGrantor to the Collateral Agent on demand.(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers,authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the securityinterests created hereby are released.7.2 Duty of Collateral Agent. To the full extent permitted by applicable law, the Collateral Agent’s sole duty with respect to the custody,safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the New York UCC or otherwise, shall be to deal with itin the same manner as the Collateral Agent deals with similar property for its own account (and, for the avoidance of doubt, the Collateral Agent shall notbe permitted to create a security interest in Collateral in its possession pursuant to Section 9-207(c) of the New York UCC). Neither the Collateral Agent,any Secured Party nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any ofthe Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantoror any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof, except as provided herein. The powersconferred on the Collateral Agent and the Secured Parties hereunder are solely to protect the Collateral Agent’s and the Secured Parties’ interests in theCollateral and shall not impose any duty upon the Collateral Agent or any Secured Party to exercise any such powers. The Collateral Agent and theSecured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any oftheir officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own grossnegligence or willful misconduct.7.3 Financing Statements. Pursuant to any applicable law, each Grantor authorizes the Collateral Agent to file or record financingstatements and other filing or recording documents or instruments with respect to the Collateral without the signature of such Grantor in such form and insuch offices as the Collateral Agent determines appropriate to perfect the security interests of the Collateral Agent under this Agreement. Each Grantorauthorizes the Collateral Agent to use the collateral description “all personal property” in any such financing statements. Each Grantor hereby ratifiesand authorizes the filing by the Collateral Agent of any financing statement with respect to the Collateral made on or prior to the date hereof.157.4 Authority of Collateral Agent. Each Grantor acknowledges that the rights and responsibilities of the Collateral Agent under thisAgreement with respect to any action taken by the Collateral Agent or the exercise or non-exercise by the Collateral Agent of any option, voting right,request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Collateral Agent and theSecured Parties not party to the Credit Agreement, be governed by the applicable First Lien Intercreditor Agreement, and by such other agreements withrespect thereto as may exist from time to time among any of them, but, as between the Collateral Agent and the Grantors, the Collateral Agent shall beconclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain from acting, and no Grantor shall beunder any obligation, or entitlement, to make any inquiry respecting such authority.7.5 First Lien Intercreditor Agreement. Notwithstanding anything herein to the contrary, the lien and security interest granted to theCollateral Agent pursuant to this Agreement and the exercise of any right or remedy by the Collateral Agent hereunder are subject to the provisions ofany First Lien Intercreditor Agreement. Each party hereto (and each Secured Party) acknowledges and agrees that the Collateral Agent may act inaccordance with, and shall be required to take certain actions as required by, the terms of a First Lien Intercreditor Agreement. Each of the parties hereto(and each Secured Party) acknowledges and agrees that any such actions shall be permitted, and further agrees that in the event of a conflict between theprovisions of this Agreement and any First Lien Intercreditor Agreement, the relevant provisions of such First Lien Intercreditor Agreement shall control.The parties hereto (and each Secured Party) also acknowledge and agree that the Collateral Agent shall have the benefit of the provisions contained inany First Lien Intercreditor Agreement.SECTION 8. Miscellaneous8.1 Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwisemodified except in accordance with Section 9.1 of the Credit Agreement and Section 5.02 of any First Lien Intercreditor Agreement; provided that theCompany and the Collateral Agent may amend this Agreement without consent of any Secured Party to add Collateral for the benefit of the SecuredParties and add provisions related thereto with respect to the exercise of remedies by the Collateral Agent on behalf of the Secured Parties.8.2 Notices. All notices, requests and demands to or upon the Collateral Agent or any Grantor hereunder shall be effected in the mannerprovided for in Section 9.2 of the Credit Agreement.8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Collateral Agent nor any Secured Party shall by any act (exceptby a written instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or tohave acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of the Collateral Agent or any SecuredParty any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereundershall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Collateral Agent or any Lenderof any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Collateral Agent or such SecuredParty would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrentlyand are not exclusive of any other rights or remedies provided by law.8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor agrees to pay or reimburse each Secured Party and the Collateral Agentfor all its costs and expenses incurred in collecting against such Guarantor under the guarantee contained in Section 2 or otherwise enforcing orpreserving any rights under this Agreement and any other First Lien Documents to which such Guarantor is a party, including, without limitation, thefees and disbursements of counsel to each Secured Party and of counsel to the Collateral Agent.(b) Each Guarantor agrees to pay, and to save the Collateral Agent and the Secured Parties harmless from, any and all liabilities withrespect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable withrespect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement.(c) Each Guarantor agrees to pay, and to save the Collateral Agent and the Secured Parties harmless from, any and all liabilities,obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to theexecution, delivery, enforcement, performance and administration of this Agreement to the extent the Borrower would be required to do so pursuant toSection 9.5 of the Credit Agreement or relevant provisions of any other Loan Document.16(d) The agreements in this Section 8.4 shall survive repayment of the Obligations and all other amounts payable under any First LienIntercreditor Agreement.8.5 Successors and Assigns. This Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to thebenefit of the Collateral Agent and the Secured Parties and their successors and assigns; provided that no Grantor may assign, transfer or delegate any ofits rights or obligations under this Agreement without the prior written consent of the Collateral Agent.8.6 Set-Off; Limitation on Individual Actions. In addition to any rights and remedies of the Secured Parties provided by law, each SecuredParty shall have the right, unless otherwise agreed in writing by such Secured Party with the Borrower, without notice to any Grantor, any such noticebeing expressly waived by each Grantor to the extent permitted by applicable law, upon any Obligations becoming due and payable by any Grantor(whether at the stated maturity, by acceleration or otherwise), to apply to the payment of such Obligations, by setoff or otherwise, any and all deposits(general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each casewhether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Secured Party, any affiliate thereof or any oftheir respective branches or agencies to or for the credit or the account of such Grantor. Each Secured Party agrees promptly to notify in writing therelevant Grantor and the Collateral Agent after any such application made by such Secured Party, provided that the failure to give such notice shall notaffect the validity of such application.8.7 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separatecounterparts (including by electronic transmission or telecopy), and all of said counterparts taken together shall be deemed to constitute one and thesame instrument.8.8 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition orunenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.8.9 Section Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect theconstruction hereof or be taken into consideration in the interpretation hereof.8.10 Integration. This Agreement, any First Lien Intercreditor Agreement and any other First Lien Documents represent the entireagreement of the Grantors, the Collateral Agent and the Secured Parties with respect to the subject matter hereof and thereof, and there are no promises,undertakings, representations or warranties by the Collateral Agent or any Secured Party relative to subject matter hereof and thereof not expressly setforth or referred to herein, in any First Lien Intercreditor Agreement or in any other First Lien Documents.8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED INACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.8.12 Submission To Jurisdiction; Waivers. Each Grantor hereby irrevocably and unconditionally:(a) submits for itself and its property in any legal action or proceeding relating to this Agreement, any First Lien IntercreditorAgreement and any other First Lien Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the nonexclusive general jurisdiction of the courts of the State of New York, the courts of the United States of America for the Southern District of New York, andappellate courts from any thereof;(b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafterhave to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees notto plead or claim the same;(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certifiedmail (or any substantially similar form of mail), postage prepaid, to such Grantor at its address referred to in Section 8.2 or at such other address of which theCollateral Agent shall have been notified pursuant thereto;(d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit theright to sue in any other jurisdiction;17(e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceedingreferred to in this Section any special, exemplary, punitive or consequential damages;8.13 Acknowledgements. Each Grantor hereby acknowledges that:(a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement, any First Lien IntercreditorAgreement and any other First Lien Documents to which it is a party;(b) neither the Collateral Agent nor any Secured Party has any fiduciary relationship with or duty to any Grantor arising out of or inconnection with this Agreement, any First Lien Intercreditor Agreement or any other First Lien Documents, and the relationship between the Grantors, on theone hand, and the Collateral Agent and the Secured Parties, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and(c) no joint venture is created hereby, by any First Lien Intercreditor Agreement or any other First Lien Documents or otherwise existsby virtue of the transactions contemplated hereby among the Secured Parties or among the Grantors and the Secured Parties.8.14 Additional Grantors; Release of Guarantors; Releases of Collateral. (a) Each Restricted Subsidiary of the Borrower that is required tobecome a party to this Agreement pursuant to the relevant provision of any Loan Document shall become a Grantor (and a Guarantor) for all purposes ofthis Agreement upon execution and delivery by such Restricted Subsidiary of an Assumption Agreement in the form of Annex II hereto.(b) Non-Borrower Guarantors shall be released from this Agreement to the extent provided below, in each case at the request andexpense of the Borrower:(i) A Non-Borrower Guarantor shall be released from its obligations hereunder in the event that (1) the Indebtedness ofor Guarantee by such Non-Borrower Guarantor that resulted in the obligation to Guarantee the Obligations pursuant to Section 6.1(b) of the Credit Agreement(or would have resulted in the creation of a Guarantee had such Guarantee not already been in place) is released or discharged (other than a discharge of (A) aGuarantee as a result of payment under such Guarantee or (B) Indebtedness as a result of the acceleration of such Indebtedness due to a default or event ofdefault under the terms thereof); (2) the Capital Stock of such Non-Borrower Guarantor is sold or otherwise disposed of (including by way of consolidation ormerger) such that such Non-Borrower Guarantor is no longer a Restricted Subsidiary of the Borrower; and (3) if such Restricted Subsidiary was not required toGuarantee the Obligations pursuant to Section 6.1(b) of the Credit Agreement but did so at its option, upon the request by such Non-Borrower Guarantor ofrelease at any time; provided that after giving effect to such release the Borrower would be in compliance with the covenants set forth in this Article 6 of theCredit Agreement.(ii) One or more Non-Borrower Guarantors may be released from their obligations hereunder at any time if (1) consent torelease of such Non-Borrower Guarantors has been given by the Required Lenders as provided for in the Credit Agreement, and (2) the Borrower has deliveredan Officer’s Certificate to the Collateral Agent certifying as to the consents of the Required Lenders that are necessary for such release and that any suchnecessary consents have been obtained.(iii) In connection with any release of any Non-Borrower Guarantor pursuant to this Section 8.14, the Collateral Agentshall execute and deliver to the Borrower, at the Borrower’s expense, all documents that the Borrower shall reasonably request to evidence such release. Anyexecution and delivery of documents pursuant to this Section 8.14 shall be without recourse to or warranty by the Collateral Agent.(c) Releases of Collateral shall be effected in accordance with the relevant provisions of Section 4.04 of any First Lien IntercreditorAgreement then in effect.(d) Upon the grant of a Permitted Prior Lien in any item of the Collateral or any sale, lease, transfer or other disposition of any item ofCollateral of any Grantor not prohibited by the Credit Agreement, the Lien of the Collateral Agent in such Collateral will be automatically released, and suchPermitted Prior Lien, sale, lease, transfer or other disposition of such item of Collateral shall be free and clear of the Lien of the Collateral Agent, withoutrequirement for consent or approval from the Lenders or the Collateral Agent and the Collateral Agent will, at such Grantor’s expense, execute and deliver tosuch Grantor such documents as such Grantor shall reasonably request to evidence the release of such item of Collateral from the assignment and securityinterest granted by this Agreement; provided, however, that, in connection with such request to evidence the release of such item, such Grantor shall havedelivered to the Collateral Agent a written request for release18describing the item of Collateral and, if applicable, the grant of a Permitted Prior Lien or the terms of the sale, lease, transfer or other disposition in reasonabledetail and an Officer’s Certificate to the effect that the transaction is in compliance with the Credit Agreement and as to such other matters as the CollateralAgent may reasonably request; provided, further, that to the extent and at such time as any property that would otherwise constitute Collateral hereunder isno longer subject to a Permitted Prior Lien, such property shall be Collateral and shall be subject to the Lien of the Collateral Agent.(e) Pursuant to Section 9.14 of the Credit Agreement, notwithstanding anything to the contrary contained in this Agreement or anyLoan Document, on or following a Guarantee and Collateral Suspension Date, (a) the Borrower shall be entitled to request by written notice to theAdministrative Agent and Collateral Agent the release of any or all of the Liens granted on the Collateral and the release of any or all of the Guarantors fromtheir obligations under any Guarantee of the Obligations, (b) the Lenders hereby irrevocably agree such Liens shall automatically be released and anyGuarantee of the Obligations shall automatically be discharged and released without any further action by any Person (and the Administrative Agent andCollateral Agent shall (and are authorized by the Lenders to), at the expense of the Borrower, take all steps reasonably requested by the Borrower to promptlyevidence or confirm any such release) and (c) the Unsecured Covenant Period shall become effective.8.15 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURYIN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, ANY FIRST LIEN INTERCREDITOR AGREEMENT OR ANYOTHER FIRST LIEN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.[remainder of page intentionally left blank]19IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and Collateral Agreement to be duly executed and delivered as of thedate first above written.MICRON TECHNOLOGY, INC. By: Name: Title:20Accepted and agreed as of the date first written aboveMICRON SEMICONDUCTORPRODUCTS, INC. By: Name: Title:21JPMORGAN CHASE BANK, N.A., asCollateral Agent By: Name: Title:22ANNEX IName of GuarantorMicron Semiconductor Products, Inc.23ANNEX IIASSUMPTION AGREEMENT, dated as of ________________, 20__, made by ______________________________ (the “Additional Grantor”),in favor of JPMorgan Chase Bank, N.A., as Collateral Agent (in such capacity, the “Collateral Agent”) for the Secured Parties referred to below. Allcapitalized terms not defined herein shall have the meaning ascribed to them in the Guarantee and Collateral Agreement referred to below.W I T N E S S E T H:WHEREAS, Micron Technology, Inc. (the “Borrower”), the Lenders and the Collateral Agent have entered into a Credit Agreement, dated as of July[3], 2018 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”);WHEREAS, in connection with the Credit Agreement, the Borrower and certain of its Restricted Subsidiaries (other than the Additional Grantor)have entered into the Guarantee and Collateral Agreement, dated as of July [3], 2018 (as amended, supplemented or otherwise modified from time to time, the“Guarantee and Collateral Agreement”) in favor of the Collateral Agent for the ratable benefit of the Secured Parties (as defined therein);WHEREAS, the Additional Grantor is required or has elected to become a party to the Guarantee and Collateral Agreement; andWHEREAS, the Additional Grantor has agreed to execute and deliver this Assumption Agreement in order to become a party to the Guarantee andCollateral Agreement;NOW, THEREFORE, IT IS AGREED:1. Guarantee and Collateral Agreement. By executing and delivering this Assumption Agreement, the Additional Grantor, as provided inSection 8.14 of the Guarantee and Collateral Agreement, hereby becomes a party to the Guarantee and Collateral Agreement as a Grantor and as a Guarantorthereunder with the same force and effect as if originally named therein as a Grantor and a Guarantor and, without limiting the generality of the foregoing,hereby expressly assumes all obligations and liabilities of a Grantor and a Guarantor thereunder and transfers and assigns to the Collateral Agent, and herebygrants to the Collateral Agent, for the ratable benefit of the Secured Parties, a security interest in, and a Lien on, its Collateral as collateral security for theprompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of such Grantor’s Obligations. Theinformation set forth in Annex II-A hereto is hereby added to the information set forth in the Schedules to the Guarantee and Collateral Agreement. TheAdditional Grantor hereby represents and warrants that each of the representations and warranties contained in Section 4 of the Guarantee and CollateralAgreement is true and correct on and as the date hereof (after giving effect to this Assumption Agreement) as if made on and as of such date.2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED INACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.[remainder of page intentionally left blank]24IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first abovewritten.[ADDITIONAL GRANTOR] By: Name: Title:25ANNEX II-A toAssumption AgreementSupplement to Schedule 1Supplement to Schedule 2Supplement to Schedule 3Supplement to Schedule 4Supplement to Schedule 526EXHIBIT ACOPYRIGHT SECURITY AGREEMENT27EXHIBIT BPATENT SECURITY AGREEMENT28EXHIBIT CTRADEMARK SECURITY AGREEMENT29EXHIBIT 21.1MICRON TECHNOLOGY, INC.SUBSIDIARIES OF THE REGISTRANT* Name State (or Jurisdiction) in whichOrganizedIM Flash Technologies, LLC DelawareMicron Asia Pacific LLC DelawareMicron International B.V. NetherlandsMicron International LLC DelawareMicron Memory Finance LLC DelawareMicron Memory Japan, G.K. JapanMicron Memory Taiwan Co., Ltd. TaiwanMicron Semiconductor Asia, LLC DelawareMicron Semiconductor Asia Operations Pte. Ltd. SingaporeMicron Semiconductor Asia Pte. Ltd. SingaporeMicron Semiconductor B.V. NetherlandsMicron Semiconductor Products, Inc. IdahoMicron Semiconductor Taiwan Co., Ltd. TaiwanMicron Semiconductor (Xi’an) Co., Ltd. ChinaMicron Technology B.V. NetherlandsMicron Technology Finance LLC DelawareMicron Technology Taiwan, Inc. Taiwan * The above list of subsidiaries of Micron Technology, Inc. omitted subsidiaries which, considered in the aggregate as a single subsidiary, would notconstitute a significant subsidiary as of the end of the year covered by this report.EXHIBIT 23.1CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (File No. 333-220882) and S-8 (File Nos. 333-17073, 333-50353, 333-103341, 333-120620, 333-133667, 333-140091, 333-148357, 333-159711, 333-167536, 333-167536a, 333-171717, 333-179592, 333-190010,333-196293, 333-203467, 333-217314, 333-223874) of Micron Technology, Inc. of our report dated October 15, 2018 relating to the financial statements,financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10-K./s/ PricewaterhouseCoopers LLPSan Jose, CaliforniaOctober 15, 2018EXHIBIT 31.1RULE 13a-14(a) CERTIFICATION OFCHIEF EXECUTIVE OFFICERI, Sanjay Mehrotra, certify that:1.I have reviewed this Annual Report on Form 10-K of Micron Technology, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectivenessof the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscalquarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect,the registrant's internal control over financial reporting; and5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant's ability to record, process, summarize, and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control overfinancial reporting.Date:October 15, 2018/s/ Sanjay Mehrotra Sanjay Mehrotra President and Chief Executive Officer and DirectorEXHIBIT 31.2RULE 13a-14(a) CERTIFICATION OFCHIEF FINANCIAL OFFICERI, David A. Zinsner, certify that:1.I have reviewed this Annual Report on Form 10-K of Micron Technology, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensurethat material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectivenessof the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscalquarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect,the registrant's internal control over financial reporting; and5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant's ability to record, process, summarize, and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control overfinancial reporting.Date:October 15, 2018/s/ David A. Zinsner David A. ZinsnerSenior Vice President and Chief Financial OfficerEXHIBIT 32.1CERTIFICATION OF CHIEF EXECUTIVE OFFICERPURSUANT TO 18 U.S.C. 1350I, Sanjay Mehrotra, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report ofMicron Technology, Inc. on Form 10-K for the period ended August 30, 2018, fully complies with the requirements of Section 13(a) or 15(d) of the SecuritiesExchange Act of 1934 and that information contained in the Annual Report on Form 10-K fairly presents, in all material respects, the financial condition andresults of operations of Micron Technology, Inc.Date:October 15, 2018/s/ Sanjay Mehrotra Sanjay MehrotraPresident and Chief Executive Officer and DirectorEXHIBIT 32.2CERTIFICATION OF CHIEF FINANCIAL OFFICERPURSUANT TO 18 U.S.C. 1350I, David A. Zinsner, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report ofMicron Technology, Inc. on Form 10-K for the period ended August 30, 2018, fully complies with the requirements of Section 13(a) or 15(d) of the SecuritiesExchange Act of 1934 and that information contained in the Annual Report on Form 10-K fairly presents, in all material respects, the financial condition andresults of operations of Micron Technology, Inc.Date:October 15, 2018/s/ David A. Zinsner David A. ZinsnerSenior Vice President and Chief Financial Officer

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