<PAGE>

                                                                   Exhibit 10.17

                       DEVELOPMENT AND LICENSE AGREEMENT
                       ---------------------------------

          THIS AGREEMENT is made effective as of May 25, 2001 ("Agreement") by
and between ASIP, Inc., a Delaware corporation ("ASIP"), with its principal
place of business at 155 Pierce Street, Somerset, New Jersey 08873, and
Multilink Technology Corporation, a California corporation ("MLTC"), with its
principal place of business at 300 Atrium Drive, 2/nd/ Floor, Somerset, New
Jersey 08873.

                               R E C I T A L S :
                               ----------------
          WHEREAS, MLTC desires to engage ASIP to develop certain Devices (as
defined in Section 1.8 hereof) based on MLTC's requirements;

          WHEREAS, ASIP and MLTC wish to set forth the parties' respective
proprietary rights in the Devices; and

          WHEREAS, ASIP desires to sell to MLTC and MLTC desires to purchase
from ASIP its requirements for the Devices after its development, subject to the
terms and conditions of this Agreement.

                               A G R E E M E N T
                               -----------------
          In consideration of the mutual promises and covenants set forth below,
the parties agree as follows:

          1.   Definitions.  As used in this Agreement, these terms shall have
               -----------
the following definitions:

               1.1       "ASIP Technology" means any and all Proprietary Rights
                         -----------------
of ASIP being provided by ASIP in connection with the development of the
Devices, including but not limited to those listed on Schedule 1.1 attached
                                                      ------------
hereto.

               1.2       "Change in Control" means a change in ownership or
                          -----------------
control of ASIP effected through any of the following transactions: (a) merger,
consolidation or reorganization approved by ASIP's stockholders, unless
securities representing more than fifty percent (50%) of the total combined
voting power of the voting securities of the successor corporation are
immediately thereafter beneficially owned, directly or indirectly and in
substantially the same proportion, by the persons who beneficially owned,
directly or indirectly and in substantially the same proportion, by the persons
who beneficially owned ASIP's outstanding voting securities immediately prior to
such transaction; (b) any stockholder-approved transfer or other disposition of
all or substantially all of ASIP's assets; or (c) the acquisition, directly or
indirectly by any person or related group of persons (other than ASIP or a
person that directly or indirectly controls, is controlled by, or is under
common control with, ASIP), of beneficial ownership (within the meaning of Rule
13d-3 of the 1934 Act) of securities possessing more than fifty

                                      -1-
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percent (50%) of the total combined voting power of ASIP's outstanding
securities pursuant to a tender or exchange offer made directly to ASIP's
stockholders.

          1.3       "Confidential Information" means any and all information and
                    --------------------------
data of either party ("Disclosing Party") which is disclosed to the other party
("Receiving Party") pursuant to this Agreement, whether written, oral or both,
whether tangible or intangible, irrespective of the medium in which such
information or data is embedded.  Confidential Information will include, but not
be limited to, the terms of this Agreement (including all schedules and exhibits
attached hereto), any non-public Proprietary Rights, Joint Technology, and any
other trade secrets, know-how, inventions, techniques, processes, algorithms,
software programs, schematics, designs, contracts, customer lists, and financial
information.

          1.4       "Deliverable" means the materials or designs to be provided
                    -------------
by ASIP to MLTC as specified on Exhibit A, the delivery dates of which shall be
                                ---------
specified on the Development Schedule.

          1.5       "Design" means the functional design of the Devices
                    --------
developed after the Effective Date.

          1.6       "Development Expenses" mean the cost of labor and material
                    ----------------------
associated with the development of the Devices incurred by ASIP, as further
specified in Section 4.1.

          1.7       "Development Schedule" means the schedule setting forth a
                    ----------------------
description for the performance of the parties' respective obligations under
this Agreement with respect to the development of the Devices, to be agreed to
by the parties in accordance with Section 2.2.

          1.8       Devices" means the 40Gb/s devices to be developed pursuant
                    --------
to this Agreement, as described on Exhibit A.
                                   ---------
          1.9       "Effective Date" means the date of this Agreement as
                    ----------------
indicated above.

          1.10      "Final Approval Date" means the actual date of the last
                    ---------------------
approval of the Devices under Section 2.6.

          1.11      "MLTC Technology" means any and all Proprietary Rights of
                    -----------------
MLTC being provided by MLTC in connection with the development of the Devices,
including but not limited to those listed on Schedule 1.11 attached hereto.
                                             -------------
          1.12      "Invention" means any idea, design, concept, technique,
                    -----------
invention, discovery or improvement, whether or not patentable, made solely or
jointly by one or more employees or consultants of ASIP or MLTC, provided that
either the conception or reduction to practice occurs in the performance of work
related to the development of the Devices under this Agreement.

          1.13      "Joint Technology" means those Inventions or other materials
                    ------------------
consisting of the specific results of the parties' partial or completed design
and development work under this Agreement, as embodied in all tangible, written,
graphic and other documentary forms, as well as

                                      -2-
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intangible forms, but shall specifically exclude the ASIP Technology and the
MLTC Technology.

          1.14      "Proprietary Rights" means any and all patents, patent
                    --------------------
applications, copyrights, trade secrets, technical information, know-how, ideas,
designs, concepts, techniques, utility models, inventions, discoveries or
improvements, mask works and all other intellectual property (whether patentable
or not) including common law rights developed prior to the Effective Date (a)
which are owned or licensed by a party hereto, which rights such party has the
right to sublicense, and (b) which are reasonably necessary to develop,
manufacture and sell the Devices.

          1.15      "Specifications" mean the functional specifications for the
                    ----------------
Devices to be agreed to by the parties in accordance with Section 2.1.

     2.   Device Development.  Development of the Devices will take place
          ------------------
as follows:

          2.1       Specifications.  ASIP and MLTC shall agree in writing upon
                    --------------
the preliminary Specifications for the Devices not later than forty-five (45)
days from the date hereof.

          2.2       Development Schedule; Deliverables.  ASIP and MLTC shall
                    ----------------------------------
agree in writing upon the milestones for the development of Devices, to be set
forth in the Development Schedule not later than forty-five (45) days from the
date hereof.  The Deliverables shall be delivered pursuant to the terms of the
Development Schedule and in partial consideration of the Development Expenses.

          2.3       ASIP's Obligations.  ASIP will use good faith and reasonable
                    ------------------
commercial efforts to design, develop and prototype the Devices in conformance
with the Specifications and in the manner set forth in this Agreement and
provide the Deliverables for which it is the responsible party on the
Development Schedule, which Development Schedule may be modified in accordance
with the terms hereof and upon the mutual agreement of both parties.

          2.4       MLTC's Obligations; Equipment.
                    -----------------------------

                    2.4.1          Development.  MLTC will use good faith and
                                   -----------
reasonable commercial efforts to assist in the design, development and
prototyping of the Devices in the manner set forth in this Agreement.  In
connection therewith, on or prior to the Effective Date, MLTC and ASIP each will
assign a technical coordinator who shall act as the primary contact with the
other party.  The initial technical coordinator for MLTC shall be David Cheskis,
and the initial technical coordinator for ASIP shall be Miland Gokhale.

                    2.4.2          Equipment Consignment.  Exhibit B sets forth
                                   ---------------------   ---------
a list of equipment (including its estimated monetary value) (the "Equipment")
which is hereby consigned from MLTC to ASIP. The first priority for the use of
such Equipment by ASIP shall be for ASIP to perform its obligations under this
Agreement and the Supply Agreement (as defined herein) for MLTC. Any excess
capacity for the Equipment available after satisfying such first priority may be
used by ASIP as it deems appropriate in its sole and absolute discretion. Title
to all such Equipment shall remain with MLTC unless and until ASIP exercises its
option to purchase the

                                      -3-
<PAGE>

Equipment under Section 2.4.3(a), or MLTC utilizes the Equipment to purchase
shares of ASIP pursuant to Section 2.4.3(b). Unless otherwise agreed to by MLTC,
ASIP shall insure the Equipment against loss or damage by reason of fire, flood,
accident, theft, riot or civil commotion, in an amount not to exceed three
million five hundred thousand dollars ($3,500,000). Unless and until title to
the Equipment is transferred to ASIP from MLTC, (i) all risk of loss related to
such Equipment shall belong to MLTC, and ASIP shall be responsible for the cost
of routine maintenance of such Equipment, and (ii) the cost of all major repairs
and replacement of any such Equipment due to faulty workmanship shall borne by
MLTC, which shall reimburse or replace such Equipment upon the reasonable
request of ASIP. Other than upon expiration or termination of this Agreement,
MLTC shall give ASIP one hundred eighty (180) days notice prior to retaking
possession of any of such Equipment, provided, that MLTC shall not retake
possession of any such Equipment at any time prior to the expiration or
termination of this Agreement to the extent it is reasonably required for use by
ASIP to fulfill its obligations under this Agreement.

                    2.4.3  Options to Purchase or Lease Equipment; Right of
                           ------------------------------------------------
First Refusal.
-------------

                          (a) ASIP Option.  Upon the later of expiration or
                              -----------
termination, for any reason, of (i) this Agreement or (ii) the Supply Agreement,
ASIP shall have an option for ninety (90) days from the date of such expiration
or termination to purchase any of the Equipment. The purchase price shall equal
the depreciated value of the Equipment through the option exercise date (based
upon a seven (7) year straight-line depreciation method). Upon expiration or
termination, for any reason, of (i) this Agreement or (ii) the Supply Agreement,
ASIP shall also have an option for ninety (90) days from the date of expiration
or termination to lease any of the Equipment for an annual amount equal to its
annual depreciation. Terms and conditions are identical to those specified in
this paragraph for Equipment purchase.

                          (b) Right of First Refusal.  To the extent MLTC
                              ----------------------
exercises its Right of First Refusal to purchase securities of ASIP (a
"Financing") as specified in Section 3 of the Investors' Rights Agreement dated
July 17, 2000 by and among ASIP, MLTC and the other Series A Convertible
Preferred Stock purchasers, MLTC shall be entitled to utilize the Equipment as
payment for its shares in the Financing. The purchase price shall equal the
depreciated value of the Equipment through the closing date of the Financing
(based upon a seven (7) year straight-line depreciation method) and shall be
paid by ASIP through the issuance to MLTC of the number of shares of preferred
stock of ASIP (as valued in the Financing) equal to such purchase price. In the
event the purchase price of the Equipment is (i) less than the purchase price of
MLTC's shares in the Financing, MLTC will pay the difference to ASIP in cash; or
(ii) is more than the purchase price of MLTC's shares in the Financing, ASIP
will pay the difference to MLTC in cash out of the proceeds of the Financing.

                    2.4.4  Change in Control of ASIP.  In the event there is a
                           -------------------------
Change in Control of ASIP, ASIP (or its successor entity) shall purchase the
Equipment simultaneously with the Change in Control.  The purchase price shall
equal the depreciated value of the Equipment through the date of the Change in
Control (based upon a seven (7) year straight-line depreciation method).

                                      -4-
<PAGE>

          2.5       Engineering Change Orders.  If MLTC desires to change the
                    -------------------------
Specifications as necessitated by its commercially reasonable requirements, it
will give ASIP notice of the desired changes.  The parties will negotiate in
good faith the amount of any increased cost or delay in the Development Schedule
due to any such change to the Specifications as set forth herein.  If the
request by MLTC will cause the estimated expense to exceed the limits of Section
4.1 the parties will negotiate in good faith to either increase the limit or
moderate the request.  If the request by MLTC will cause the estimated time to
completion of development of the Devices to exceed the aggregate time period for
the development of the Devices as set forth in the Development Schedule, the
parties will negotiate in good faith to either increase the time limit or
moderate the request.  If such an agreement cannot be reached, either with
respect to the increase in price or extension of time, neither party will be in
default of this Agreement.  Any changes to the Specifications will be evidenced
in writing by the mutual approval of the parties.

          2.6       Device Approval.  MLTC will have thirty (30) days following
                    ---------------
the completion of each milestone set forth in the Development Schedule to
reasonably determine whether the Devices conform to the Specifications ("Device
Approval Period").  MLTC agrees to inform ASIP in writing of any non-conformance
during the applicable Device Approval Period.  If ASIP receives a notice of non-
conformance during any Device Approval Period, ASIP and MLTC will first
cooperate in seeking a commercially reasonable way to correct the defect, which
does not require a redesign of the Devices.  If no such correction is possible
to MLTC's commercially reasonable satisfaction, ASIP and MLTC will then agree on
the design changes which are reasonably necessary to correct the defect.  This
procedure shall be repeated until each Milestone of the Devices does conform to
the Specifications.  The parties will negotiate in good faith the amount of any
increased cost or delay due to any such corrections or design changes.  If such
corrections or design changes will cause the estimated expense to exceed the
limits of Section 4.1, the parties will negotiate in good faith to either
increase the limit or moderate the request.  If such corrections or design
changes will cause the estimated time to completion of development of the
Devices to exceed the aggregate time period for the development of the Devices
as set forth in the Development Schedule, the parties will negotiate in good
faith to either increase the time limit or moderate the request.  If such an
agreement cannot be reached, either with respect to the increase in price or
extension of time, neither party will be in default of this Agreement.

          3.   MLTC License.  The MLTC Proprietary Rights are set forth on
               ------------
Schedule 1.11 attached hereto.  MLTC grants to ASIP an irrevocable,
-------------
nonexclusive, worldwide, royalty-free license to the MLTC Proprietary Rights in
perpetuity solely (a) to develop the Devices subject to the terms of this
Agreement and (b) upon the parties entering into a Supply Agreement (as defined
in Section 6) pursuant to Section 6 hereof, to manufacture and sell the Devices
to MLTC and to grant licenses to third parties to manufacture and sell the
Devices to MLTC pursuant to the Supply Agreement.

          4.   Development Expenses
               --------------------

               4.1       Payment.  MLTC will reimburse, on a monthly basis, all
                         -------
commercially reasonable Development Expenses incurred by ASIP and submitted to
MLTC during its performance under this Agreement up to an aggregate maximum of
two million five hundred thousand

                                      -5-
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dollars ($2,500,000). Such aggregate maximum may be re-negotiated by the parties
during the term of this Agreement, and is subject to increase pursuant to the
provisions of Sections 2.5 and 2.6 hereof.

               4.2       Expense Reports.  In order to receive such
                         ---------------
reimbursement, ASIP must first submit monthly expense reports to MLTC as
follows. ASIP shall prepare an estimate by the fifteenth (15th) day of each
month of its likely expenses in such month. MLTC will reimburse all commercially
reasonable estimates received from ASIP within fifteen (15) days of receipt.
ASIP will subsequently submit a report of the actual expenses incurred in a
month by the fifteenth (15th) day of the following month. The parties will
reconcile any underpayment or overpayment in the next scheduled subsequent
payment from MLTC to ASIP.

          5.   Devices Proprietary Rights; Ownership.
               -------------------------------------

               5.1       Joint Ownership; Assistance in Intellectual Property
                         ----------------------------------------------------
Protection.  ASIP and MLTC shall be the joint owners of all right, title and
----------
interest in the Joint Technology.  Each party agrees to assist the other party
in perfecting and enforcing its rights under this Article.  Such actions shall
include, but not be limited to, execution of assignments, applications and other
documents.

               5.2       ASIP Technology; MLTC Technology.  During the term of
                         --------------------------------
this Agreement and thereafter, ASIP will continue to own or be licensed the ASIP
Technology and is not granting MLTC any right or interest therein, or any
license thereto, and MLTC will continue to own or be licensed the MLTC
Technology and is not granting ASIP any right or interest therein, or any
license thereto, other than the license granted pursuant to Section 3 hereof.

               5.3       Use of Joint Technology During Term of Agreement.
                         ------------------------------------------------
During the term of this Agreement, MLTC and ASIP shall have the right to use the
Joint Technology solely for the purpose of developing the Devices in accordance
with the terms hereof.

               5.4       Use of Joint Technology Following Expiration or
                         -----------------------------------------------
Termination of Agreement.  Following the expiration or termination of this
------------------------
Agreement, subject to the provisions of the Supply Agreement, with respect to
the Joint Technology (a) MLTC shall have the right solely to grant licenses to
the Joint Technology to (i) third-party manufacturers to manufacture the Devices
for use by MLTC as part of the manufacture of modules, subsystems or higher-
level assemblies for sale by MLTC and (ii) third-party purchasers of such
modules, subsystems or higher-level assemblies; and (b) ASIP shall have the
right solely to (i) use the Joint Technology to manufacture the Devices, (ii)
grant licenses to the Joint Technology to third-party manufacturers to
manufacture the Devices and (iii) grant licenses to third-party purchasers of
the Devices.

               5.5       No Transfer of Joint Technology.  During the term of
                         -------------------------------
this Agreement, the Supply Agreement and thereafter, except as set forth in
Section 5.4 and 6.3 hereof, or in connection with the sale or other transfer by
a party hereunder of substantially all of such party's business or of that part
of such party's business to which the subject matter of this Agreement relates,
neither party shall transfer, convey, sell or encumber any of its rights in, to
or under the Joint Technology, nor shall it grant any person or entity any
license of any type whatsoever to

                                      -6-
<PAGE>

the Joint Technology, including, but not limited to, any license to use,
execute, reproduce, display, perform, prepare derivative works based upon the
Joint Technology, or authorize others to do any of the foregoing.

          6.   Supply Agreement.  Upon the successful completion and delivery by
               ----------------
ASIP to MLTC of the [*] prototypes as an interim step to providing the   [*]
Device as set forth on Exhibit A attached hereto, MLTC and ASIP shall enter into
a supply agreement for the [*] upon terms and conditions mutually agreed upon by
the parties. Upon the successful completion and delivery by ASIP to MLTC of the
remaining prototypes in accordance with the terms hereof and satisfaction of the
milestones specified on the Development Schedule, MLTC and ASIP shall enter into
an amended and restated supply agreement ("Supply Agreement"), which Supply
Agreement shall contain mutually agreed upon terms (including with respect to
[*] supply), including, without limitation, the following:

               6.1       Efforts; Requirements.  During the term of the Supply
                         ---------------------
Agreement, MLTC shall use good faith and reasonable commercial efforts to buy
its full requirement of Devices from ASIP.  MLTC shall purchase at least   [*]
percent ([*]%) of its requirements of Devices from ASIP for a period of one (1)
year following execution of the Supply Agreement.

               6.2       Price of Devices.  ASIP will sell the Devices to MLTC
                         ----------------
at a price equal to the price necessary for ASIP to generate a [*] percent
([*]%) gross margin with respect to each such Device sold. In the event ASIP
sells the Devices (or any other devices with substantially similar
functionalities) to a third party at more favorable or attractive terms and
conditions than the Devices are offered in the Supply Agreement, ASIP agrees to
make the Devices (or any other devices with substantially similar
functionalities) or terms and conditions available to MLTC on the same or more
favorable terms and conditions.

               6.3       Third Party Foundries.  As a means of fulfilling its
                         ---------------------
obligations under the Supply Agreement, ASIP may, with reasonable MLTC approval
and qualification, utilize one or more third party foundries in connection with
the manufacture of the Devices.  ASIP will enter into appropriate intellectual
property licensing and confidentiality agreements with any third party foundry
to permit the fabrication of the Devices and with respect to the non-disclosure
of any licensed intellectual property by such foundry to third parties.

               6.4       Sales by ASIP to Third Parties.  During the term of the
                         ------------------------------
Supply Agreement and thereafter, ASIP shall be free to sell the Devices to any
third party

               6.5       Sales by MLTC to Third Parties.  During the term of the
                         ------------------------------
Supply Agreement and thereafter, MLTC shall be free to sell the Devices only as
a part of a module, higher-level assembly or subsystem manufactured by MLTC.

          7.   Representations and Warranties of ASIP.
               --------------------------------------

               7.1       Right to License.  ASIP represents and warrants that it
                         ----------------
owns or has the right to license the ASIP Technology.

       Confidential materials omitted and filed separately with the Securities
        and Exchange Commission. Asterisks denote omissions.

                                      -7-
<PAGE>

               7.2       Development of Devices.  ASIP represents and warrants
                         ----------------------
that, to the best of its knowledge, the Devices are an original work of
authorship, prepared without reliance on any third party works.

               7.3       Ownership of Devices.  ASIP represents and warrants
                         --------------------
that except for MLTC's rights, it is the sole and exclusive owner of all right,
title and interest in the Devices and all intellectual property rights
associated with them, the Devices and the intellectual property rights
associated with them are free and clear of all encumbrances, including, without
limitation, security interests, liens, encumbrances, charges or other
restrictions.

               7.4       Non-Infringement.  ASIP represents and warrants that,
                         ----------------
to the best of its knowledge, the Devices and their production, modification and
distribution do not and will not violate the patent, copyright, trade secret and
similar rights of any third parties.

               7.5       Organization and Authority.  ASIP represents and
                         --------------------------
warrants that it is a corporation duly organized and validly existing under the
laws of the State of Delaware and that the execution, delivery and performance
of this Agreement has been duly and validly authorized by it, and all necessary
corporate action has been taken to make this Agreement legal, valid and binding
agreements of ASIP in accordance with their respective terms.

               7.6       LIMITATION. ASIP MAKES NO WARRANTY OF MERCHANTABILITY
                         ----------
OR FITNESS FOR A PARTICULAR PURPOSE, OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED,
WITH RESPECT TO THE DEVICES, THEIR DEVELOPMENT, PRODUCTION, MODIFICATION, OR
DISTRIBUTION.

          8.   Representations and Warranties of MLTC.
               --------------------------------------

               8.1  Right and License.  MLTC represents and warrants that it
                    -----------------
owns or has the right to license the MLTC Technology.

               8.2  Non-Infringement.  MLTC represents and warrants that, to the
                    ----------------
best of its knowledge, the MLTC Technology does not and will not violate the
patent, copyright, trade secret and similar rights of any third parties.

               8.3  Organization and Authority.  MLTC represents and warrants
                    --------------------------
that it is a corporation duly organized and validly existing under the laws of
the State of California and that the execution, delivery and performance of this
Agreement has been duly and validly authorized by it, and all necessary
corporate action has been taken to make this Agreement legal, valid and binding
agreements of MLTC in accordance with their respective terms.

          9.   Indemnification; Limitations of Liability and Time to Sue.
               ---------------------------------------------------------

                    9.1.1  Indemnification.  MLTC will indemnify and hold ASIP,
                           ---------------
its employees, officers, directors, agents, representatives, sublicensees and
customers harmless against any claim, action or proceeding, threatened or
pending, alleging that the use of the MLTC Proprietary Rights in the
development, manufacture, sale or use of the Devices infringes or is alleged to
infringe the rights of any third party in any jurisdiction.  ASIP agrees to
notify

                                      -8-
<PAGE>

MLTC in writing promptly of any such claim, suit or proceeding. ASIP will
reasonably assist MLTC in such defense, and MLTC may at its sole cost and
expense upon written notice to ASIP within a reasonable time following receipt
of notice of such claim, suit or proceeding assume the defense thereof, at which
time it shall no longer be responsible for the fees and expenses of ASIP in
defending such action. Similarly, ASIP will indemnify and hold MLTC, its
employees, officers, directors, agents, representatives and sublicensees, and
customers harmless against any claim, action or proceeding, threatened or
pending, alleging that the use of the ASIP Proprietary Rights in the
development, manufacture, sale or use of the Devices infringes or is alleged to
infringe the rights of any third party in any jurisdiction. MLTC agrees to
notify ASIP promptly of any such claim, suit or proceeding. MLTC will reasonably
assist ASIP in such defense and ASIP may at its sole cost and expense upon
written notice to MLTC within a reasonable time following receipt of notice of
such claim, suit or proceeding assume the defense thereof, at which time it
shall no longer be responsible for the fees and expenses of MLTC in defending
such action. No indemnifying party shall settle any such claim, suit or
proceeding hereunder without the consent of the indemnified party, which consent
shall not be unreasonably withheld.

               9.2  Limitations of Damages.  NEITHER PARTY WILL BE LIABLE IN ANY
                    ----------------------
MANNER FOR ANY CONSEQUENTIAL, SPECIAL, INDIRECT, EXEMPLARY OR INCIDENTAL DAMAGES
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, EVEN IF INFORMED OF THE
POSSIBILITY THEREOF IN ADVANCE INCLUDING, BUT NOT LIMITED TO, LOST PROFITS,
WHETHER ARISING OUT OF CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE, RESULTING
FROM OR RELATED TO THIS AGREEMENT.

               9.3  Statute of Limitations.  NO ACTION MAY BE BROUGHT OR
                    ----------------------
ARBITRATION DEMANDED BY EITHER PARTY ARISING UNDER THIS AGREEMENT AT ANY TIME
MORE THAN TWENTY FOUR (24) MONTHS AFTER THE PARTY BRINGING SUCH ACTION BECOMES
AWARE OF, OR REASONABLY SHOULD HAVE BECOME AWARE OF, THE FACTS THAT OCCURRED
GIVING RISE TO THE CAUSE OF ACTION.

          10.  Confidentiality.
               ---------------

               10.1 Confidentiality Obligations.  Each party acknowledges that
                    ---------------------------
in the course of the performance of this Agreement, it may obtain the
Confidential Information of the other party.  The Receiving Party (as defined in
Section 1.3) shall, at all times, both during the term of this Agreement and
thereafter for a period of five (5) years, keep in confidence and trust all of
the Disclosing Party's (as defined in Section 1.3) Confidential Information
received by it.  The Receiving Party shall not use the Confidential Information
of the Disclosing Party other than as expressly permitted under the terms of
this Agreement, unless otherwise expressly agreed to writing by the Disclosing
Party.  The Receiving Party shall take all reasonable steps to prevent
unauthorized disclosure or use of the Disclosing Party's Confidential
Information and to prevent it from falling into the public domain or into the
possession of unauthorized persons.  The Receiving Party shall not disclose
Confidential Information of the Disclosing Party to any person or entity other
than its officers, employees and consultants who need access to such
Confidential Information in order to effect the intent of this Agreement and who
have entered into written confidentiality agreements with the Receiving Party
which protects the Confidential Information

                                      -9-
<PAGE>

of the Disclosing Party. The Receiving Party shall immediately give notice to
the Disclosing Party of any unauthorized use or disclosure of Disclosing Party's
Confidential Information. The Receiving Party agrees to assist the Disclosing
Party to remedy such unauthorized use or disclosure of its Confidential
Information. These obligations shall not apply to the extent that Confidential
Information includes information which:

                    10.1.1  is already known to the Receiving Party at the time
of disclosure, which knowledge the Receiving Party shall have the burden of
proving;

                    10.1.2  is, or, through no act or failure to act of the
Receiving Party, becomes publicly known;

                    10.1.3  is received by the Receiving Party from a third
party without restriction on disclosure;

                    10.1.4  is independently developed by the Receiving Party
without reference to the Confidential Information of the Disclosing Party, which
independent development the Receiving Party will have the burden of proving;

                    10.1.5  is approved for release by written authorization of
the Disclosing Party; or

                    10.1.6  is required to be disclosed by a government agency
to further the objectives of this Agreement or by a proper order of a court of
competent jurisdiction; provided, however that the Receiving Party will use its
best efforts to minimize such disclosure and will consult with and assist the
Disclosing Party, at the Disclosing Party's request and cost, in obtaining a
protective order prior to such disclosure.

          11.  Joining Employees.  During the term of this Agreement and for a
               -----------------
period of one (1) year thereafter, each party agrees that it shall not, directly
or indirectly, (a) hire any employee of the other party or solicit, induce or
entice any employee of the other party to leave such employment or cause anyone
else to do so, or (b) except with respect to serving on the board of directors
of the other party, or holding or making an investment in the other party, enter
into business or work with any current employee of the other party in any
business, partnership, limited liability company, firm, corporation or other
entity then in competition with such party as long as such employee is still
employed by such other party.

          12.  Injunctive Relief.  Each party agrees that any violation of the
               -----------------
terms and conditions of Section 10 or Section 11 by either party would cause the
other party irreparable injury for which it would have no adequate remedy at
law.  Consequently, the parties agree that the non-breaching party shall be
entitled to temporary and permanent restraining orders, preliminary injunctions
and permanent injunctions to enforce such Sections without the necessity of
proving actual damages in connection therewith.  This provision with respect to
injunctive relief shall not, however, diminish either party's right to claim and
recover damages or enforce any of its other legal and/or equitable rights or
defenses.

                                      -10-
<PAGE>

         13.  Termination.
              -----------

              13.1  Term.  This Agreement will be in effect for twenty-four (24)
                    ----
months commencing from the Effective Date, unless terminated earlier by either
party pursuant to the provisions in this Section; provided, however, that all
rights and obligations set forth in Sections 2.4.3(a), 2.4.3(b), 2.4.4, 5, 7, 8,
9, 10, 11, 12 and 13 and Sections 14.8 and 14.14 shall survive termination of
this Agreement.

              13.2  Events of Default by ASIP.  MLTC will have the right to
                    -------------------------
terminate this Agreement and its further obligations hereunder upon the
occurrence of any of the following events of default (subject to ASIP's ability
to cure or remedy such event as described in Section 13.4):

                    13.2.1  ASIP is involved in any voluntary or involuntary
bankruptcy proceeding or any other proceeding concerning insolvency,
dissolution, cessation of operations, reorganization of indebtedness or the like
and the proceeding is not terminated within sixty (60) days;

                    13.2.2  ASIP becomes insolvent or unable to pay its debts as
they mature in the ordinary course of business or makes an assignment for the
benefit of its creditors; or

                    13.2.3  ASIP is in material default of any provision of this
Agreement.

              13.3  Events of Default by MLTC.  ASIP will have the right to
                    -------------------------
terminate this Agreement and its further obligations hereunder upon the
occurrence of any of the following events of default (subject to MLTC's ability
to cure or remedy such event as described in Section 13.4):

                    13.3.1  MLTC becomes involved in any voluntary or
involuntary bankruptcy proceeding or any other proceeding concerning insolvency,
dissolution, cessation of operations, reorganization of indebtedness or the like
and the proceeding is not terminated within sixty (60) days;

                    13.3.2  MLTC becomes insolvent or unable to pay its debts as
they mature in the ordinary course of business or makes an assignment for the
benefit of its creditors; or

                    13.3.3  MLTC is in material default of any provision of this
Agreement.

              13.4  Right to Cure Event of Default.  Upon the occurrence of any
                    ------------------------------
event of default entitling a party to terminate this Agreement, the non-
defaulting party may send notice of default, specifying the nature of the
default, to the other party.  The non-defaulting party will permit thirty (30)
days following the date of such notice to enable the other party to cure the
problem to the non-defaulting party's reasonable satisfaction.  Failure to cure
the problem will result in termination without further notice by the non-
defaulting party, unless such non-defaulting party extends the cure period by
written notice or withdraws the default notice.

                                      -11-
<PAGE>

     14.  General Provisions.
          ------------------

          14.1      Notice.  Any notice provided for or permitted under this
                    ------
Agreement will be treated as having been given when (a) delivered personally,
(b) sent by confirmed telex or telecopy, (c) sent by commercial overnight
courier with written verification of receipt, or (d) mailed postage prepaid by
certified or registered mail, return receipt requested, to the party to be
notified, at the address set forth below, or at such other place of which the
other party has been notified in accordance with the provisions of this Section,
provided however, e-mail shall be the preferred method of communication between
the parties for normal day-to-day operations in the ordinary course of business,
provided further, however, that e-mail shall not constitute the giving or
receiving of valid notice under this Agreement.

          If to ASIP: milind.gokhale@asipinc.com
                      155 Pierce Street
                      Somerset, New Jersey 08873
                      Attn.:  Milind Gokhale

          If to MLTC: rich@mltc.com
                      300 Atrium Drive, 2nd Floor
                      Somerset, New Jersey 08873
                      Attn.:  Richard N. Nottenburg
          Such notice will be treated as having been received upon the earlier
of actual receipt or five (5) days after posting.

          14.2      Waiver.  No term or provision hereof will be considered
                    ------
waived by either party, and no breach excused by either party, unless such
waiver or consent is in writing signed on behalf of the party against whom the
waiver is asserted.  No consent by either party to, or waiver of, a breach by
either party, whether express or implied, will constitute a consent to, waiver
of, or excuse of any other, different, or subsequent breach by either party.

          14.3      Entire Agreement.  This Agreement, including all exhibits
                    ----------------
and schedules to this Agreement, constitutes the entire agreement between the
parties relating to this subject matter and supersedes all prior or simultaneous
representations, discussions, negotiations, and agreements, whether written or
oral.

          14.4      Severability.  If any part of this Agreement is found
                    ------------
invalid or unenforceable, the remainder of this Agreement will remain in full
force.
          14.5      Amendment.  This Agreement may be amended or supplemented
                    ---------
only by a writing that is signed by duly authorized representatives of both
parties.

          14.6      Counterparts.  This Agreement may be executed simultaneously
                    ------------
in two or more counterparts, each of which will be considered an original, but
all of which together will constitute one and the same instrument.

          14.7      Section Headings.  The Section headings contained herein are
                    ----------------
for convenience of reference only and will not be considered as substantive
parts of this Agreement.


                                      -12-
<PAGE>

The use of the singular or plural form will include the other form and the use
of the masculine, feminine or neuter gender will include the other genders.

          14.8      Choice of Law.  This Agreement will be governed by and
                    -------------
construed in accordance with the laws of the United States and the State of
Delaware as applied to agreements entered into and to be performed entirely
within Delaware.  The parties agree that the United Nations Convention on
Contracts for the International Sale of Goods (1980) is specifically excluded
from application to this Agreement.

          14.9      Choice of Forum.  Any proceeding to enforce or to resolve
                    ---------------
disputes relating to this Agreement shall be brought before a court of competent
jurisdiction in the United States.  In any proceedings, no party shall assert
that such a court lacks jurisdiction over it or the subject matter of the
proceeding.

          14.10     Force Majeure.  Except for the payment of money, neither
                    -------------
party will be liable for any failure or delay in performance under this
Agreement which might be due, in whole or in part, directly or indirectly, to
any contingency, delay, failure, or cause of, any nature beyond the reasonable
control of such party.  Such causes include, without in any way limiting the
generality of the foregoing, fire, explosion, earthquake, storm, flood or other
weather, unavailability of necessary utilities or raw materials, strike,
lockout, activities of a combination of workmen or other labor difficulties,
war, insurrection, riot, act of God or the public enemy, law, act, order, export
control regulation, proclamation, decree, regulation, ordinance, or instructions
of Government or other public authorities, or judgment or decree of a court of
competent jurisdiction (not arising out of breach by such party of this
Agreement).  In the event of the happening of such a cause, the party whose
performance is so affected will give prompt, written notice to the other party,
stating the period of time the same is expected to continue.  Such delay will
not be excused under this Section for more than one hundred eighty (180) days.

          14.11     Assignment.  Neither party may assign any rights or delegate
                    ----------
any duties under this Agreement (other than the right to receive payments)
without the other party's prior written consent, and any attempt to do so
without that consent will be void, unless the assignment is part of a sale or
other transfer of substantially all of the assignor's business, or of that part
of the assignor's business to which the subject matter of this Agreement
relates.  This Agreement will bind and inure to the benefit of the parties and
their respective successors and permitted assigns.

          14.12     Relationship of the Parties.  The parties to this Agreement
                    ---------------------------
are independent contractors.  There is no relationship of agency, partnership,
joint venture, employment, or franchise between the parties.  Neither party has
the authority to bind the other or to incur any obligation on its behalf.

          14.13     Export Control Regulations.  Neither party shall export,
                    --------------------------
directly or indirectly, any products or technical data acquired or to be
provided under this Agreement, or the direct product of any such technical data,
to any country for which the United States export statutes and regulations, at
the time of export, require an export license or other government approval,
without first obtaining such license or approval.

                                      -13-
<PAGE>

          14.14     Attorneys' Fees.  In the event of any action between the
                    ---------------
parties hereto for enforcement of any of the terms or conditions of this
Agreement, the prevailing party in such action shall be entitled to recover its
reasonable costs and expenses, including, without limitation, attorneys' fees.

                  [Remainder of page left intentionally blank]

                                      -14-
<PAGE>

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date indicated below:

<TABLE>
<CAPTION>
ASIP, INC.                              MULTILINK TECHNOLOGY CORPORATION

<S>                                     <C>
By: /s/ Milind Gokhale                  By: /s/ Richard N. Nottenburg

Typed Name:  Milind Gokhale             Typed Name:  Richard N. Nottenburg

Title:  President                       Title:  President and CEO

Date:  May 25, 2001                     Date:  May 25, 2001
</TABLE>

                                      -15-
<PAGE>

                             SCHEDULES AND EXHIBITS
                             ----------------------

Schedule 1.1   ASIP Technology

Schedule 1.11  MLTC Technology

Exhibit A      Devices and Deliverables

Exhibit B      Consigned Equipment

                            SCHEDULES AND EXHIBITS

                                      -1-
<PAGE>

                                  SCHEDULE 1.1
                                  ------------
                                ASIP Technology
                                ---------------

Patent applications filed and awarded:

     1. "Photonic Integration Using a Twin Waveguide Structure," U.S. Patent No.
         5,859,866

     2. "Twin Waveguide Based Design for Phtonic Integrated Circuits,"
         Provisonal U.S. Patent filed June 24, 1998, Serial No. 337,785, U.S.
         Regular Patent filed June 22, 1999, PCT Serial No. WO 99/67665

     3. "Photonic integrated detector having plurality of asymmetric
         waveguides," Provisional U.S. Patent filed May 12, 2000 Serial No.
         203,846, U.S. Regular Patent filed November 21, 2000, Serial No.
         09/717,851

     4. "Asymmetric Waveguide electroabsorption-modulated laser," PUAS-0013,
         U.S. Provisional Patent filed January 19, 2001. Final patent in
         preparation.

     Others:

         1. Princeton University Docket 96-1251-1: "Method and Apparatus For
            Active Alignment fo Semiconductor Optical Waveguides".

         2. Design and calculated performance characteristics of     [*]
            based     [*] integrated with     [*].

         3. Design and calculate performance characteristics of     [*]
            based     [*]     and [*] integrated with [*].

         4. Design methodology and processing know-how for making     [*]
            based     [*]    . This includes existing wafer designs, taper
            designs, and know-how of various fabrication processes to make such
            [*].

         5. Various inventions and device configurations and results that pre-
            date this Agreement and are documented in laboratory notebooks of
            ASIP employees.

       Confidential materials omitted and filed separately with the Securities
        and Exchange Commission. Asterisks denote omissions.

                            SCHEDULES AND EXHIBITS

                                      -1-
<PAGE>

                                 SCHEDULE 1.11
                                 -------------
                                MLTC Technology
                                ---------------


      1. Radio frequency (RF) circuit design and circuit design of  high speed
      telecommunications circuits.

      2. 40 GHz optoelectronic test fixture, MLTC document # 050-0005-001.

      3. Semiconductor manufacturing processes and process control for
      integrated circuit technologies including GaAs, InP and SiGe material
      systems.

      4. Manufacturing processes and assembly techniques for high speed
      electronic modules.

      5. Design, modeling, characterization and manufacturing of high speed
      electronic packages.

      6. High speed amplifier design techniques and circuits that are the
      property of MLTC, whether developed and produced internally or provided
      by another entity.

      7. RF test and measurement techniques and apparatus for characterizing
      optoelectronic devices, components and modules up to 50 GHz.

      8. Time domain test methodologies and approaches for characterizing
      optoelectronic devices, components and modules up to 50 Gb/s.

      9. Fiber optic probe development for wafer level measurements.

     10. High speed, on-wafer test methodologies and techniques for electronic
      and optoelectronic integrated circuits.

                            SCHEDULES AND EXHIBITS

                                      -1-
<PAGE>

                                   EXHIBIT A
                                   ---------
                            Devices and Deliverables
                            ------------------------
Devices:
--------


     . Device A)     [*]     40Gb/s     [*]     plus     [*]     on submount

     . Device B)     [*]     40Gb/s     [*]     on submount


Deliverables:
-------------

ASIP will provide to MLTC:

     . [*] engineering sample units of [*] and [*] qualified production units of
       [*]

     . [*] engineering sample units of [*] and [*] qualified production units of
       [*]

     . [*] engineering sample units of [*] as an interim step to providing
       [*]

       Confidential materials omitted and filed separately with the Securities
        and Exchange Commission. Asterisks denote omissions.

                            SCHEDULES AND EXHIBITS

                                      -1-
<PAGE>

                                   EXHIBIT B
                                   ---------
                              Consigned Equipment
                              -------------------

The  [*]  plus accompanying equipment necessary to manufacture devices including
but not limited to fiber alignment equipment, not to exceed $3,500,000

       Confidential materials omitted and filed separately with the Securities
        and Exchange Commission. Asterisks denote omissions.

                                   EXHIBIT B

                                      -1-