exv10w24



 






[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




Exhibit 10.24




Manufacturing and Supply Agreement




     This Manufacturing and Supply Agreement (the “Agreement”) is entered into as of
the 18th day of September, 2002 (the “Effective Date”), by and between BUYER
Corporation, a Delaware corporation with its principal offices at 990 Almanor Avenue,
Sunnyvale, CA 94085, (“BUYER””) and HANA Microelectronics, a corporation with is principal
offices at 10/4 MOO 3, Vipavadee Road, Bangkok, Thailand(“Manufacturer”).



Recitals




     Whereas, BUYER desires to engage Manufacturer to manufacture, assemble, test, label,
package, and ship certain Products (as defined below); and



     Whereas, Manufacturer wishes to provide such services.



     Now Therefore, in consideration of the mutual covenants and conditions contained in
this Agreement, the parties agree as follows.



Agreement





	1.  	Definitions






	 	1.1  	“Approved Process” is defined in Section 6.2.
	 
	 	1.2  	“Confidential Information” of a party means any and all technical or
non-technical information related to the past, current or proposed operations,
products, technology, services and business of such party (“Discloser”) that is
disclosed (whether orally, visually or through any tangible medium) to the other party
(“Recipient”), or to which the Recipient may gain access in the performance of this
Agreement, and that the Discloser designates as being confidential or which, under the
circumstances of disclosure, would reasonably be considered to be confidential. The
parties agree that the Specifications and any other information relating to the BUYER
Technology shall be BUYER’s Confidential Information whether or not so designated at
the time of disclosure. Confidential Information will not include any information that
the Recipient can document: (a) is or subsequently becomes (through no improper action
or inaction by the Recipient) generally available to the public; (b) was already in the
Recipient’s possession or known by the Recipient prior to receipt from the Discloser;
(c) was rightfully disclosed to the Recipient by a third party free of any obligation
of confidence; or (d) is independently developed by the
Recipient without reference to the Confidential Information of the Discloser.




 









 












	 	1.3  	“BUYER-Supplied Components” is defined in Section 5.2(b).
	 
	 	1.4  	“BUYER Technology” means BUYER’s proprietary technology relating to the
Products and their design and manufacture, including without limitation the
Specifications, and all Intellectual Property embodied in any of the foregoing.
	 
	 	1.5  	“Engineering Change” is defined in Section 6.1.
	 
	 	1.6  	“Indemnified Party” is defined in Section 13.4.
	 
	 	1.7  	“Indemnifying Party” is defined in Section 13.4.
	 
	 	1.8  	“Intellectual Property” means copyrights, patents, trade secrets and mask
works, whether or not registered, filed, applied for or the like, and all related
rights and all tangible and intangible works, manifestations and aspects of same
existing as of the Effective Date and created or coming into existence during the term
of this Agreement. As used herein, “patents” includes all inventions, invention
disclosures, provisional applications, applications, letters patent and all foreign
counterparts and foreign equivalents of same, and any and all divisions, continuations,
continuations-in-part, revisions, renewals, reissues, extensions and like of the
foregoing.
	 
	 	1.9  	“Manufacturing Capability” is defined in Section 3.2.
	 
	 	1.10  	“Manufacturing Facility” is defined in Section 2.3.
	 
	 	1.11  	“Manufacturing Metrics” is defined in Section 7.8.
	 
	 	1.12  	“MMIC” means monolithic microwave integrated circuit.
	 
	 	1.13  	[ * ] is defined in Section 5.2(a).
	 
	 	1.14  	“Product Quality Criteria” is defined in Section 7.1.
	 
	 	1.15  	“Product” means any BUYER product or product family set forth in a Project
Appendix.
	 
	 	1.16  	“Product Warranty” is defined in Section 12.1.
	 
	 	1.17  	“Project Appendix” is defined in Section 2.1.
	 
	 	1.18  	“Purchase Order” is defined in Section 8.2(a).





_________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




 









 









	 	1.19  	“Specifications” means the specifications and software for the design,
performance and manufacturability characteristics of a Product, including any
modifications, improvements or enhancements thereto that are made by the parties under
this Agreement.
	 
	 	1.20  	“Testing Capability” is defined in Section 4.1.
	 
	 	1.21  	“Third-Party Proprietary Right” is defined in Section 13.1.






	2.  	Engagement of Manufacturer






	 	2.1  	Project Appendices. From time to time the parties may mutually agree upon one
or more Products that will be subject to the terms and conditions of this Agreement.
The specifics about any individual Product shall be set forth in an appendix to this
Agreement (each, a “Project Appendix”). Upon execution by both parties of any Project
Appendix, such Project Appendix shall become a part of this Agreement. In the event of
a conflict between any term of the main body of this Agreement and a Project Appendix,
the term of the Project Appendix will prevail only with respect to that Project
Appendix.
	 
	 	2.2  	Manufacture of Products for BUYER. BUYER hereby engages Manufacturer, on a
non-exclusive basis, to manufacture, assemble, inspect, test, label, package, and ship
the Products, in accordance with the terms of this Agreement, solely for sale to BUYER.
Manufacturer acknowledges and agrees that BUYER shall have the right, either on its own
or through use of a third party, to obtain the same services as provided by
Manufacturer hereunder.
	 
	 	2.3  	Manufacturing Facility. Manufacturer will fulfill its obligations under this
Agreement solely at a facility designated and approved in writing by BUYER (the
“Manufacturing Facility”).
	 
	 	2.4  	Exclusivity of Production. Manufacturer hereby undertakes to supply Products
to BUYER and to allocate sufficient of its facilities, resources, capital equipment,
materials, tools and labor to enable it to deliver the Products in the quantities
required by BUYER. Manufacturer will manufacture the Products exclusively for BUYER
and will not sell or otherwise provide Products to any other person, firm or company
without BUYER’s prior written approval. Except as provided in Section 13.2, nothing in
this Agreement is intended to grant to Manufacturer a license to the Products or to any
of the BUYER Technology or Intellectual Property.
	 
	 	2.5  	Non-Delegable Responsibility. Manufacturer acknowledges that BUYER has elected
to partner with Manufacturer for the manufacture of Products due to BUYER’s
understanding of Manufacturer’s unique skill in manufacturing similar products.
Therefore, Manufacturer’s rights and obligations under this Agreement may not be
subcontracted or assigned to





____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




 









 









	 	   	any third party or successor entity without the express written consent of BUYER.
In the event BUYER provides such consent, Manufacturer shall remain wholly
responsible to BUYER for the acts or omissions of any approved third party or
successor entity.
	 
	 	2.6  	Business Reviews. Manufacturer and BUYER executive management team members
agree to meet frequently during the term of this Agreement to discuss in good faith the
status of this Agreement, new business opportunities and other relevant issues. This is
in addition to the regularly scheduled metric reviews with BUYER’s on site personnel.






	3.  	Phase One — Demonstration of Manufacturing Capability






	 	3.1  	Product Design and Development. BUYER will design and develop Products in its
facility in the United States.
	 
	 	3.2  	Manufacturing Capability. Once any Product designed and developed by BUYER has
reached a mutually agreeable level of manufacturing maturity, Manufacturer will take
all actions necessary to demonstrate that Manufacturer has the capability to
manufacture such Product (“Manufacturing Capability”).
	 
	 	3.3  	BUYER Responsibilities. To enable Manufacturer to demonstrate Manufacturing
Capability, BUYER will:






	 	(a)  	Procure, inspect and deliver to Manufacturer all parts and
components, not defined in 3.4.a, for the Product
	 
	 	(b)  	Deliver to Manufacturer the Specifications for the Product;
	 
	 	(c)  	Test any units of Product delivered by Manufacturer to BUYER to
ensure such units conform to the Specifications; and
	 
	 	(d)  	Provide feedback to Manufacturer.
	 
	 	(e)  	Provide serial numbers of the modules to be used in tracking
the modules in BUYER’s facility.






	 	3.4  	Manufacturer Responsibilities. To demonstrate Manufacturing Capability,
Manufacturer will:






	 	(a)  	Supply the materials such as epoxy, wire, assembly fixtures,
and packaging material.
	 
	 	(b)  	Manufacture, assemble, label, package and supply at least [ * ]
of Product that conform to the Specifications and Product Quality Criteria;





____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




 









 









	 	(c)  	Take such action as required by the feedback provided by BUYER.
	 
	 	(d)  	Manufacturer will package and ship modules to BUYER.






	 	3.5  	Failure to Demonstrate Manufacturing Capability. If Manufacturer fails to
demonstrate Manufacturing Capability within a period of [ * ] after delivery by BUYER
to Manufacturer of the Specifications and raw materials for the Product, BUYER will
have the right to terminate this Agreement immediately upon written notice to
Manufacturer.






	4.  	Phase Two — Demonstration of Ramping assembly and test capability






	 	4.1  	Assembly and Test Capability. Upon successful demonstration by Manufacturer of
Manufacturing Capability, Manufacturer will take all actions necessary to demonstrate
to BUYER that Manufacturer has the capacity to independently test each unit of Product
to ensure such unit conforms to the Specifications and Product Quality Criteria.






	 	4.2  	BUYER Responsibilities. To enable Manufacturer to demonstrate Testing
Capability, BUYER will:






	 	(a)  	Procure, inspect and deliver to Manufacturer all parts and
components for the Product;
	 
	 	(b)  	Provide appropriate training to Manufacturer’s personnel;
provided, however, that: (i) such training shall take place at BUYER’s
facilities, (ii) such training shall not exceed a period of [ * ] and (iii)
Manufacturer shall be responsible for the [ * ], and BUYER will be responsible
for [ * ] by Manufacturer’s test engineers and other personnel in connection
with attending such training;
	 
	 	(c)  	Test any units of Product delivered by Manufacturer to BUYER to
ensure such units conform to the Specifications and Product Quality Criteria;
and
	 
	 	(d)  	Provide feedback to Manufacturer.
	 
	 	(e)  	Provide test equipment to the manufacturer.
	 
	 	(f)  	Set up test equipment and train personnel.






	 	4.3  	Manufacturer Responsibilities. To demonstrate Testing Capability Manufacturer
will:






	 	(a)  	Supply the materials such as epoxy, wire, assembly fixtures,
and packaging material.





____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




 









 









	 	(b)  	Manufacture, assemble, label, package and supply to BUYER, all
in conformance with the Specifications and Product Quality Criteria, the number
of units of Product upon which the parties mutually agree;
	 
	 	(c)  	Test units of Product prior to delivery to BUYER to ensure
such units conform to the Specifications and Product Quality Criteria; and
provide the test data.
	 
	 	(d)  	Take such action as required by the feedback provided by BUYER,
including, reworking any units of Product returned to Manufacturer as
non-conforming.
	 
	 	(e)  	Assist BUYER in establishing an interface between the ATE and
BUYER via the Internet to allow BUYER personnel to review the test results.
	 
	 	(f)  	Manufacturer will package and ship modules to BUYER.






	5.  	Phase Three – Turnkey Manufacturing Solution






	 	5.1  	Generally. Upon successful Completion of Phase Two by Manufacturer of
Manufacturing Capability and Testing Capability for a Product, Manufacturer will
provide full turnkey manufacturing of that Product by manufacturing, assembling,
testing and shipping Product directly to BUYER’s customers and by troubleshooting and
repairing any non-conforming Product that is returned by an BUYER customer.






	 	5.2  	BUYER Responsibilities






	 	(a)  	Supply of [ * ]. Unless any Project Appendix specifies
otherwise, BUYER is responsible for procuring and supplying to Manufacturer [ *
] called for by the Specifications for any unit of Product purchased by BUYER
under this Agreement. BUYER acknowledges that, during Manufacturer’s
manufacture and assembly of Product, a [ * ] (the [ * ]). BUYER therefore also
agrees to procure and supply to Manufacturer those [ * ] that are [ * ]. In
the event that Manufacturer requires [ * ] in excess of those procured and
supplied by BUYER hereunder, Manufacturer will be responsible for [ * ], such [
* ]. The parties will mutually agree in good faith upon the [ * ] for [ * ] as
defined in Schedule 2 of the Logistics Appendix. BUYER will periodically review
Manufacturer’s [ * ] to ensure that Manufacturer, at all times, has sufficient
inventory.
	 
	 	(b)  	Supply of Other Components. If any Project Appendix specifies
that BUYER is responsible for procuring and supplying to Manufacturer any other
Product component(s) (“BUYER-Supplied Components”), BUYER will procure and
supply such BUYER-





____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




 









 









	 	   	Supplied Components to Manufacturer on the terms set forth in Schedule 2 of
the Logistics Appendix. BUYER and Manufacturer will periodically review
Manufacturer’s inventory of BUYER-Supplied Components to ensure that
Manufacturer, at all times, has sufficient inventory.






	 	5.3  	Manufacturer Responsibilities






	 	(a)  	Product Manufacture, Assembly and Testing. Manufacturer will
manufacture, assemble and test each unit of Product ordered by BUYER hereunder
strictly in conformance with the Specifications and Product Quality Criteria.
	 
	 	(b)  	Procurement of Materials. Manufacturer will procure all
materials, except any BUYER-Supplied Components, necessary for Manufacturer to
fulfill its obligations under this Section 5. In connection therewith,
Manufacturer and BUYER will work together in good faith to enable Manufacturer
to assume existing purchase orders submitted by BUYER to third-party suppliers
of such materials. Manufacturer will be responsible for providing traceability
to the materials used by Manufacturer and will provide such information to
BUYER (or its representatives) promptly upon request.. [ * ].
	 
	 	(c)  	Shipping of modules. Manufacturer will provide ESD protective
packaging and preservation methods for products to assure that products will
not be damaged in shipment and storage and when applicable, as required and
instructed by BUYER. Prices for the products shall include the [ * ] during
transportation. The manufacturer will be responsible for any damage that the
products may suffer due to improper packing. Shipments shall be [ * ].





____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




 









 









	6.  	Engineering and Process Changes






	 	6.1  	Engineering Changes. BUYER may, by written request to Manufacturer, request
that Manufacturer incorporate a modification in the Specification or Product Quality
Criteria (an “Engineering Change”). Such a request will include a description of the
proposed change sufficient to permit Manufacturer to evaluate its feasibility and the
proposed effect on quality, reliability, performance, cost, and serviceability. As
soon as possible, but in any event within [ * ] after such request, Manufacturer will
advise BUYER of the terms and conditions under which BUYER may implement the
Engineering Change requested, if any. Manufacturer’s evaluation will be in writing and
will state the cost savings or increase, if any, expected to be created by the
Engineering Change and its effect on the performance, quality, reliability, safety,
appearance, dimensions, tolerance, inventory cost and lead time.evaluation by
Manufacturer will be deemed conditional only, and any increase or decrease in the
purchase price, or revision of delivery schedule, or both, requires a written agreement
between BUYER and Manufacturer, to be negotiated in good faith. If Manufacturer fails
to issue such a written evaluation within the [ * ] period specified above,
Manufacturer will be deemed to have accepted such Engineering Change and any claim by
Manufacturer for a price adjustment resulting from the Engineering Change will be [ *
]. If an Engineering Change is agreed to by the parties, the Specifications and/or
Product Quality Criteria, as applicable, will be amended as required.

[ * ]
	 
	 	6.2  	Process Changes. Manufacturer shall not change, without written approval from
BUYER, in any manner the manufacturing process employed by Manufacturer in connection
with establishing Manufacturing Capacity and Testing Capacity (the “Approved Process”).
If Manufacturer proposes a change to the Approved Process, Manufacturer shall, at its
own expense, build sample units of Product using such changed process and bear the cost
of qualification of the Process and/or Product in accordance BUYER’s qualification
procedure ([ * ]). Manufacturer shall not employ the changed process until BUYER
approves such changed process in writing, at which time the changed process shall
become the Approved Process.
	 
	 	6.3  	Material Changes.
	 
	 	   	If changes are proposed, BUYER agrees to evaluate in a timely manner.





____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




 









 









	7.  	Quality Control.
	 
	   	In connection with fulfilling its obligations under this Agreement, Manufacturer will
comply, at all times, with the quality control provisions set forth in this Section 7.






	 	7.1  	Manufacturer warrants that it shall manufacture the parts strictly in
accordance with the Specifications, Quality requirements, and the Workmanship
standards.
	 
	 	7.2  	Manufacturer will provide a list of all material suppliers prior to the start
of production. Manufacturer shall not change material suppliers without written consent
of BUYER.
	 
	 	7.3  	Manufacturer shall not transfer the manufacture of the parts to another of its
factories without the written consent of BUYER.
	 
	 	7.4  	Manufacturer shall provide units to BUYER to qualify the manufacturing process.
Once the product and the process has been approved by BUYER’s quality assurance group,
that production baseline is considered frozen.
	 
	 	7.5  	Manufacturer agrees that at all times while this Agreement is in effect,
Manufacturer will maintain a quality assurance system equal or superior to ISO 9002.
Any formal change in the ISO status or findings from a survey shall be reported to
BUYER within one month of any change.
	 
	 	7.6  	Manufacturer will permit BUYER, its employees and/or it’s customers, to enter
the Manufacturing Facility at all reasonable times for the purpose of inspecting and
testing the Products and to check the materials and the method of manufacture,
assembly, labeling, testing and packaging of Product in order to ensure that such
conform to the Specifications and Product Quality Criteria. All Products supplied
hereunder will be subject to inspection and test by BUYER to the extent practicable at
all times and places during and after the period of manufacture.
	 
	 	7.7  	Facility Surveys:






	 	(a)  	BUYER reserves the right with reasonable notice, to inspect
manufacturer’s facility, quality control procedures both prior to the first
delivery and periodically thereafter.
	 
	 	(b)  	Manufacturer agrees to deliver to BUYER, within [ * ] from the
effective date of the agreement, a detailed disaster recovery plan.
	 
	 	(c)  	Manufacturer agrees to prompt implementation of the recovery
plan to resume the performance of its obligation.






	 	7.8  	Manufacturing Metrics. To ensure quality and customer service, Manufacturer
will establish and use a standard set of manufacturing metrics (“Manufacturing
Metrics”) through which Manufacturer will



____________________


[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




 









 









	 	   	attempt continually to improve yields and delivery accuracy and to reduce costs and
defect rates. The Manufacturing Metrics shall be made immediately available upon
request, and to include, at a minimum, information concerning: (a) Product inventory
(finished goods, work-in-progress and raw materials); (b) yield (at various
production points) and improvement plans for yield; (c) delivery accuracy; (d)
returns (number of units, repair time); (e) fault statistics (most frequent defects
found, faulty parts, cause and corrective action); (f) failure rates (assembly,
first pass test, final test, final inspection, labeling, packaging, shipping and
improvement plans for each of the foregoing). On a regular basis (but [ * ]),
Manufacturer will: (a) provide BUYER with copies of the Manufacturing Metrics; and
(b) engage in status reviews concerning the Manufacturing Metrics.
	 
	 	7.9  	Access to Information; Corrective Action. In order to confirm that
Manufacturer is fulfilling its obligations under this Agreement, Manufacturer will
maintain at the Manufacturing Facility all information required to be compiled under
this Section 7. Manufacturer will provide BUYER, upon reasonable notice and during
normal working hours, access to such information. Should BUYER determine, based upon a
review of the Manufacturing Facility or any such information, that Manufacturer is
failing to meet its quality control obligations under this Section 7, BUYER will notify
Manufacturer in writing. Manufacturer will be entitled to comment on such findings and
will thereafter, [ * ], take all corrective actions necessary to regain compliance.






	8.  	Forecasts; Purchase Orders.






	 	8.1  	Forecasts. Based upon orders for Product that BUYER receives from its
customers, BUYER will, on a [ * ] basis, submit to Manufacturer a non-binding, [ * ],
fax, or electronic forecast of the number of units of Product expected to be ordered by
BUYER. Refer to Logistic Appendix , Section 2.





____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.





 









 









	 	8.2  	Purchase Orders:






	 	(a)  	Submission. From time to time, BUYER will submit written or
electronic purchase orders to Manufacturer for [ * ] build quantities of
Products (each, a “Purchase Order”) that BUYER wishes to purchase from
Manufacturer hereunder. Any such purchase order shall contain those details
upon which the parties mutually agree.
	 
	 	(b)  	Acknowledgment. Manufacturer will respond to any Purchase
Order with: (i) a written or electronic Purchase Order confirmation statement
(including quantity and ship date) and (ii) an actual ship date confirmation
statement (which shall include the packing list) upon shipment of the ordered
Product. The terms and conditions in this Agreement shall supersede and
replace all preprinted form terms and conditions set forth on any Purchase
Order acknowledgment.






	 	(i)  	Manufacturer shall acknowledge purchase order
within 24 hours from the receipt of the order.
	 
	 	(ii)  	If such acknowledgement is not made,
alternative communication method will be employed.
	 
	 	(iii)  	Manufacturer shall use its best endeavors to
supply the parts in accordance with the Logistics Appendix.
	 
	 	(iv)  	Manufacturer shall use reasonable efforts to
meet any quantities exceeding such estimates.






	 	(c)  	Revision. BUYER will have the right, without penalty, to
reschedule the volume as defined in forecasting principle , Section 2 of the
Logistics Appendix.
	 
	 	(d)  	Cancellation. BUYER may, in its sole discretion, cancel all or
any part of any Purchase Order by providing written notice to Manufacturer at
least [ * ] prior to the scheduled shipment date without incurring any
cancellation charges.






	 	(i)  	BUYER may, by written notice not less than [ *
] prior to delivery, reschedule the respective delivery to take place
within a [ * ] of the intended date.
	 
	 	(ii)  	BUYER may, by written notice not less than [ *
] prior to intended delivery, cancel the respective delivery.





____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




 









 









	9.  	MATERIAL LIABILITY
	 
	   	BUYER agrees to be responsible for any raw material purchased as defined in the
Logistics Appendix, Section 3.3.






	10.  	Shipment and Delivery






	 	10.1  	Packaging. Manufacturer will package the Products according to BUYER’s
approved packaging specifications. In the absence of specific instructions from BUYER,
Manufacturer will ship and package the Products in accordance with current industry
standards.
	 
	 	10.2  	Delivery. Manufacture will ship all Product to the destination designated by
BUYER in the applicable Purchase Order. Any shipment of Product shall be made [ * ].
Unless a Purchase Order specifies the name of a carrier, Manufacturer will select the
carrier. Manufacturer will bear the risk of loss until such time as [ * ], at which
time the risk of loss will be borne by BUYER or the party to whom the order is being
shipped. The parties agree that title to the Products will pass at the time that [ *
]. Any claims for damage or loss in transit will be placed by [ * ]. All shipments
will be shipped by [ * ], such freight will be subsequently billed to [ * ] for such
freight. At BUYER’s request, Manufacturer will insure the shipments against damage to
or loss of Products. Any shipping insurance so provided by Manufacturer will [ * ] for
such expense.
	 
	 	10.3  	Anticipated Delays. Manufacturer shall immediately notify BUYER in writing of
any anticipated delay in meeting the agreed shipment date, stating the reasons for the
delay. If Manufacturer fails to meet any agreed shipment date, then Manufacturer shall
be responsible for paying any express delivery rates applicable to shipment of the
Products at issue, in addition to any other remedies available to BUYER permitted by
this Agreement. Products shipped by Manufacturer in advance of a scheduled shipment
date and without BUYER’s prior approval and any partial or incomplete shipments [ * ].
No shipment will be deemed complete until all ordered units have been delivered and
accepted. [ * ] payment or other obligations of BUYER will [ * ].
	 
	 	10.4  	Late Deliveries. If Manufacturer determines that Manufacturer will not be able
to meet the scheduled shipment date, Manufacturer shall immediately notify BUYER orally
and in writing of Manufacturer’s inability to meet the shipment date. Concurrently
with its notification to BUYER, Manufacturer shall supply a recovery release schedule,
which shall include overnight shipping or expatiated shipping, and thereafter take all
appropriate actions to comply with the recovery release schedule. If late delivery
is determined to be Manufacturer’s fault, then compensation shall be negotiated by both
parties.
	 
	 	10.5  	Non-Conforming Product. If, as a result of Manufacturer’s inability to deliver
Product that conform to the Specifications and Product Quality





____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




 









 









	 	   	Criteria, BUYER establishes a procedure for inspecting Product prior to shipment to
customers, Manufacturer shall reimburse to BUYER the costs and expenses incurred by
BUYER in connection with performing such inspections. Furthermore, if Manufacturer
delivers directly to any BUYER customer any Product that does not strictly conform
to the Specifications and Product Quality Criteria specified by BUYER, Manufacturer
shall replace / rework those defective units at Manufacturer’s cost.






	 	(a)  	BUYER may inspect parts upon delivery to ascertain correct
quantities and any damage or deviation from the order.
	 
	 	(b)  	Manufacturer agrees to replace all damaged or incorrect parts
and ship out within [ * ].
	 
	 	(c)  	BUYER or its customer, may use statistical sampling methods in
the incoming inspection. If the parts do not pass this inspection, buyer has
the right;






	 	(i)  	To reject the entire delivery lot.
	 
	 	(ii)  	To demand replacement are shipped within [ * ].
	 
	 	(iii)  	Terminate the respective order.






	 	(d)  	BUYER may sort the shipment to find acceptable parts,
manufacturer to compensate





____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




 









 









	11.  	Payment Terms






	 	11.1  	Payments. Payment to be in [ * ]. Provided Manufacturer is in compliance with
the terms and conditions of this Agreement, BUYER shall pay Manufacturer the purchase
price for the Products as stated in the relevant Project Appendix. Such amount shall
be payable [ * ] from date of Manufacturer’s invoice. If BUYER disputes any portion of
any invoice, then BUYER will pay the undisputed portion according to this Agreement and
shall promptly inform Manufacturer of the nature of the dispute. The parties will use
their best efforts to resolve the dispute promptly






	 	(a)  	All payments conditional on the following;






	 	(i)  	Manufacturer has delivered the full quantities
of the parts ordered. Partial shipments can be acceptable if prior
written consent is received.
	 
	 	(ii)  	Delivered parts strictly conform to the
Specifications and Workmanship standards.






	 	(b)  	BUYER is entitled to [ * ] in respect of delivery of complete
order.
	 
	 	(c)  	[ * ], then the manufacturer is entitled to invoice BUYER for
the delivered quantity.






	 	11.2  	Taxes and Duties. Except as otherwise provided in this Agreement, BUYER agrees
to pay any sales, use, import or export, value added or similar tax or duty relating to
any Product delivered pursuant to the terms of this Agreement, other than those based
on Manufacturer’s net income. If a resale certificate or other certificate or document
of exemption is required in order to exempt Product from any such liability,
Manufacturer will promptly execute and furnish such document or certificate to BUYER.
In the event that there is any change in “free trade zone” status, [ * ].





____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




 









 









	12.  	Product Warranties and Disclaimers






	 	12.1  	Product Warranty. Manufacturer warrants to BUYER that: (a) upon delivery, each
unit of Product will be free and clear of any lien or encumbrance; (b) each unit of
Product will conform in all material respects to the Specifications and Product Quality
Criteria; and (c) each unit of Product will be free from defects in workmanship and
materials under ordinary and proper use for [ * ] from the date Manufacturer ships the
Product to BUYER or BUYER’s customer (the “Product Warranty”). The warranty provided
shall include that each part supplied shall;






	 	(a)  	Be new, unused and in good working order and
	 
	 	(b)  	Be free from all defects in materials and workmanship,
excluding defects in the design
	 
	 	(c)  	Strictly conform to the Specifications and Quality Requirements.
	 
	 	(d)  	If the Manufacturers Failure Analysis Report determines the
product defect is due to handling or installation damages or improper use, the
cost of the repair will be the responsibility of the customer.






	 	12.2  	Warranty Service. If any unit of Product breaches the Product Warranty,
Manufacturer will either repair or replace, at Manufacturer’ option, or by mutual
agreement of the parties credit BUYER for, the breaching unit of Product. The Product
Warranty will apply (and the [ * ] period will recommence) to all Products supplied by
Manufacturer to replace defective Products.
	 
	 	12.3  	[ * ]. Notwithstanding any time limitations set forth in this Section 11,
Manufacturer will [ * ], at [ * ], any unit of Product that [ * ] so that the [ * ] at
the [ * ] customary in the industry.
	 
	 	12.4  	Repair/Replacement System. Manufacturer will be solely responsible for
establishing a system for receiving, troubleshooting and repairing all Products
manufactured by Manufacturer and returned to Manufacturer by BUYER or any BUYER
customer, within the Product Warranty period of [ * ]. [ * ].
	 
	 	12.5  	Reporting. Manufacturer shall provide BUYER with [ * ] reports containing data
relating to any unit of Product returned to Manufacturer for repair or replacement.
Such data shall include: (a) the identification and serial number of each repaired or
replaced unit; (b) a description of the actions taken by Manufacturer to repair or
replace the Product; (c) whether such repair or replacement was made under the Product





____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




 









 









	 	   	Warranty; and (d) the price charged for such repair or replacement if not made under
the Product Warranty. Such data shall also be available to designated BUYER
employee or agent who inspects the Manufacturing Facility under the terms of this
Agreement (upon the consent of Manufacturer).






	13.  	Indemnification






	 	13.1  	Infringement Indemnification by Manufacturer. Subject to the terms and
conditions of this Agreement, Manufacturer will indemnify, defend and hold BUYER
harmless from and against any damages, liabilities, costs and expenses (including
reasonable attorney’s fees) actually paid by BUYER in settlement of, or held against
BUYER arising out of, a claim that: (a) the use or sale of any Product infringes a
patent, copyright, trade secret or other proprietary right of a third party (a
“Third-Party Proprietary Right”), to the extent such claim is based upon modifications
to the Product, Specifications or Product Quality Criteria made by Manufacturer, or (b)
the manufacturing process used by Manufacturer to produce the Product infringes any
Third-Party Proprietary Right.
	 
	 	13.2  	Infringement Indemnification by BUYER. Subject to the terms and conditions of
this Agreement, BUYER will indemnify, defend and hold Manufacturer harmless from and
against any damages, liabilities, costs and expenses (including reasonable attorney’s
fees) actually paid by Manufacturer in settlement of, or held against Manufacturer
arising out of, a claim that the manufacture or use of any Product infringes a
Third-Party Proprietary Right, to the extent such claim is based upon the manufacture
or use of a Product made in accordance with the Specifications and Product Quality
Criteria.
	 
	 	13.3  	Product Liability. Subject to the terms and conditions of this Agreement,
Manufacturer will indemnify, defend and hold BUYER harmless from and against any
damages, liabilities, costs and expenses (including reasonable attorney’s fees)
actually paid by BUYER in settlement of, or held against BUYER arising out of, a claim
by a third party for personal injury or property damage which arises out of (a) a
defect in the manufacture of any Products by Manufacturer or (b) the negligent act or
omission of Manufacturer with regard to the Products. Any settlement will be mutually
agreed by both parties
	 
	 	13.4  	Indemnification Procedure. A party seeking indemnification under this
Agreement (the “Indemnified Party”) will (a) give the other party (the “Indemnifying
Party”) notice of such claim, (b) cooperate with the Indemnifying Party, at the
Indemnifying Party’s expense, in the defense of such claim, and (c) give the
Indemnifying Party the right to control the defense and settlement of any such claim,
except that the Indemnifying Party will not enter into any settlement that affects the
Indemnified Party’s





____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.





 









 









	 	   	rights or interest without the Indemnified Party’s prior written approval. The
Indemnified Party will have no authority to settle any claim on behalf of the
Indemnifying Party.






	14.  	Intellectual Property






	 	14.1  	Design is proprietary to BUYER.
	 
	 	14.2  	Manufacturer does not have any right to manufacture and/or sell this product
to third parties.
	 
	 	14.3  	Ownership of the copyright in all drawings, specifications, data, software and
other material provided shall remain with BUYER.
	 
	 	14.4  	Manufacturer does not have the right to mention or present information about
BUYER to other parties without written consent from BUYER.
	 
	 	14.5  	Manufacturer may need to declare BUYER’s name for custom’s or governmental
purposes.
	 
	 	14.6  	Ownership of BUYER Technology. The BUYER Technology, will be the exclusive
property of BUYER, and shall automatically be included under the license granted to
Manufacturer under Section 14.7. Manufacturer assigns to BUYER all ownership rights in
any improvements and developments, funded by BUYER, in, derivatives of and
modifications to the products or the BUYER Technology, including all related
Intellectual Property, that are created by either party alone or jointly during the
term of this agreement.
	 
	 	14.7  	License to BUYER Technology. Subject to the terms and conditions of this
Agreement, BUYER hereby grants to Manufacturer a revocable, royalty-free,
non-exclusive, fully-paid and nontransferable license under the Intellectual Property
in and to the BUYER Technology solely as necessary to permit Manufacturer to perform
its obligations under this Agreement.





____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.





 









 









	15.  	Limitation of Liability.
	 
	   	To the extent permitted by applicable law, in no event will either party be liable under
this Agreement for any indirect, incidental, special or consequential damages, including
loss of profits, incurred by the other party, whether in an action in contract, tort or
based on a warranty, even if the party has been advised of the possibility of such damages.
The foregoing limitations shall not apply to Manufacturer’s liability under Sections 13
(Indemnification) or to a breach by Manufacturer of its obligations under Section 16
(Confidentiality).
	 
	16.  	Confidentiality






	 	16.1  	Restrictions on Use and Disclosure. Recipient agrees to hold the Discloser’s
Confidential Information in strict confidence, and use such care and take such
precautions to protect such Confidential Information as it employs to protect its own
Confidential Information (but in no case less than reasonable precautions). Except as
expressly set forth herein, Recipient may not disclose Discloser’s Confidential
Information or any information derived therefrom to any third party. Recipient agrees
not to use Discloser’s Confidential Information for any purpose other than as necessary
to fulfill Recipient’s obligations or exercise its rights under this Agreement.
Recipient will permit access to the Confidential Information of the Discloser only to
Recipient’s employees and authorized representatives who are bound by obligations of
confidentiality substantially similar to, and no less restrictive than, those contained
herein. Recipient agrees to take all reasonable steps to ensure that the Discloser’s
Confidential Information is not disclosed or distributed by its employees or agents in
violation of the terms of this Agreement. Recipient agrees to advise the Discloser
promptly if Recipient is aware or suspects that the security of the Discloser’s
Confidential Information has or may be compromised in any way.
	 
	 	16.2  	Required Disclosure. The restrictions of Section 16.1 will not operate to
prevent disclosures of Confidential Information required by any law or regulation, or
in response to a valid order by a court of competent jurisdiction or other governmental
authority; provided, however, that: (a) Recipient provides the Discloser with prompt
written notice of such pending disclosure, if reasonable under the circumstances, in
order to provide the Discloser with an opportunity (at its own expense) to object to
the disclosure, or to seek confidential treatment or other protective measures to
preserve, to the extent possible, the confidentiality of the Confidential Information
and (b) reasonably cooperates with Discloser in connection therewith.





____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




 









 









	 	(a)  	Manufacturer agrees that the use of BUYER’s name as a reference
is strictly forbidden.






	 	16.3  	Injunctive Relief. The Recipient acknowledges that the Discloser’s
Confidential Information constitutes valuable trade secrets of the Discloser.
Recipient acknowledges that any unauthorized use or disclosure of Discloser’s
Confidential Information would cause Discloser irreparable harm for which Discloser’s
remedies at law would be inadequate. Accordingly, Recipient acknowledges and agrees
that if any such unauthorized use or disclosure occurs, the Discloser will be entitled,
in addition to any other remedies available to it at law or in equity, to seek the
issuance of injunctive or other equitable relief.
	 
	 	16.4  	No Rights Granted. Except as otherwise provided in this Agreement, the
Recipient acquires no license or other rights to any Confidential Information of the
Discloser, including, without limitation, any right that has issued or may issue based
upon such Confidential Information. All Confidential Information and materials
furnished to the Recipient by the Discloser, and all copies thereof made by the
Recipient, will remain the property of the Discloser.






	17.  	Termination






	 	17.1  	Term. This Agreement will commence on the Effective Date and unless terminated
in accordance with Section 17.2 or 17.3, will continue for a period of eighteen (18)
months. Thereafter, this Agreement will automatically renew for successive one
(1)-year periods unless either party notifies the other party in writing of its
intention to not renew this Agreement at least ninety (90) days prior to the expiration
of the then-current term.
	 
	 	17.2  	Termination for Convenience. Either party may terminate this Agreement without
cause upon one hundred twenty (120) days written notice to the other party.
	 
	 	17.3  	Termination for Cause. Either party may terminate this Agreement upon written
notice to the other party if such the party breaches any material provision of this
Agreement and, for a breach capable of cure, the other party fails to cure such breach
within thirty (30) days following written notice specifying such breach and demanding
its cure.





____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




 









 









	 	17.4  	Duties of the Parties Upon Termination. Upon termination of this Agreement for
any reason, the parties will use their best efforts to affect an orderly and economic
wind down of their supply relationship, taking into consideration the legitimate
economic interests of each party on effecting the transition, such transition not to
exceed [ * ] in duration. The parties recognize that the best method of effecting such
wind down cannot be known presently, and agree to cooperate at the time to serve the
interests of all parties as best as is practical. In addition, upon any termination of
this Agreement, each party will return to the other party all tangible items in their
possession or under their control evidencing the Confidential Information of such other
party.
	 
	 	17.5  	Surviving Rights. Termination or expiration of this Agreement will not affect
any other rights of the parties which may have accrued up to the date of such
termination or expiration, and, in addition, the following provisions shall survive
termination: Sections 1 (Definitions),10.5 (Non-Conforming Product), 12 (Product
Warranty and Disclaimer),13(Indemnification),14 (Intellectual Property),15 (Limitation
of Liability),16 (Confidentiality),17.4 (Duties of the Parties Upon Termination),17.5
(Surviving Rights) and 18 (General Provisions).






	18.  	General Provisions






	 	18.1  	Governing Law/Venue. This Agreement shall be governed by and construed in
accordance with the laws of the United States and the State of California as applied to
agreements entered into and to be performed entirely within California between
California residents, notwithstanding the actual residence of the parties. Any legal
action, suit or proceeding arising out of or relating to this Agreement shall be
instituted exclusively in a court of competent jurisdiction, state or federal, located
in the State of California, County of Santa Clara, and in no other jurisdiction. The
parties hereby irrevocably consent to personal jurisdiction and venue in, and agree to
service of process authorized by, such courts. In any such action, suit or proceeding,
the prevailing party (by final and non-appealable order or judgment in its favor) shall
be entitled to recover from the non-prevailing party its reasonable legal fees and
expenses incurred in connection with such action, suit or proceeding.
	 
	 	18.2  	Notices. All notices under this Agreement must be delivered in writing by
courier, electronic facsimile, electronic mail, or by certified or registered mail
(postage prepaid and return receipt requested) to the other party at its address set
forth on the first page above or as amended by notice pursuant to this Section 18.2.
If not received sooner, notice by mail shall be deemed received five (5) days after
deposit in the U.S. mails.





____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




 









 









	 	18.3  	Relationship of Parties. The parties hereto are independent contractors.
Nothing in this Agreement shall be deemed to create an agency, employment, partnership,
fiduciary or joint venture relationship between the parties. Neither party (nor any
agent or employee of that party) is the representative of the other party for any
purpose and neither party has the power or authority as agent, employee or in any other
capacity to represent, act for, bind or otherwise create or assume any obligation on
behalf of the other party for any purpose whatsoever.
	 
	 	18.4  	No Third Party Beneficiaries. No party shall be deemed as a third-party
beneficiary to this Agreement.
	 
	 	18.5  	Assignment. Manufacturer may not assign this Agreement, nor assign its rights
or delegate its obligations under this Agreement, by operation of law or otherwise,
without BUYER’s prior written consent. Any attempted assignment in violation of this
Section 18.5 shall be null and void and without effect. Subject to the foregoing, this
Agreement shall be binding upon and shall inure to the benefit of the parties and their
respective successors and permitted assigns.
	 
	 	18.6  	Force Majeure. Except with respect to payment obligations, any delay in or
failure of performance by either party under this Agreement shall not be considered a
breach of this Agreement, and shall be excused, to the extent such delay or failure is
caused by any events in the nature of earthquakes, famines, epidemics, other natural
disasters, acts of God, war, riots, civil unrest or other similar causes beyond the
reasonable control of such party, provided that such party gives prompt notice to the
other party and uses its best efforts to mitigate the effects of such causes.
	 
	 	18.7  	Waiver and Amendments. All waivers must be in writing. Any waiver of either
party to enforce a provision of this Agreement on one occasion shall not be deemed a
waiver by that party of any other provision or such provision on any other occasion.
This Agreement may only be amended by a written document signed by both parties.
	 
	 	18.8  	Construction. The following rule shall govern construction of this Agreement:
(a) section headings are for convenience only and are not to be used in interpreting
this Agreement; (b) as used in this Agreement, the word “including” means “including
but not limited to”; (c) in constructing the terms of this Agreement, no presumption
shall operate in favor of or against any party as a result of its counsel’s role in
drafting the terms and provisions hereof; (d) all references to Sections refer to the
Sections of this Agreement unless otherwise indicated; (e) all capitalized terms
defined herein apply equally to both the singular and plural forms of such terms; and
(f) all monetary amounts refer to U.S. dollars unless otherwise indicated.





____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




 









 









	 	18.9  	Entire Agreement. This Agreement constitutes the entire agreement between the
parties regarding the subject matter hereof and supersedes all prior or
contemporaneous, agreements, understandings and communications, whether, written and
oral, regarding the subject matter hereof.






	 	18.10  	Counterparts. This Agreement may be signed in several counterparts, each of
which shall constitute an original.





       In Witness Whereof, the parties hereto have caused this Agreement to be executed by
their duly authorized representatives as of the Effective Date.



	 	 	 	 	 	 	 
	BUYER	 	Manufacturer
	 
	 	 	 	 	 	 
	By:

	 	/s/ D. J. Dodson
	 	By:
	 	/s/ W. K. Chow
	

	 	 
	 	 	 	 
	Title:

	 	Chief Operating Officer
	 	Title:
	 	V.P. Marketing






____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




 









 








PROJECT APPENDICES





	1.  	Hydra Logistics Appendix





____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




 









 








HYDRA LOGISTICS APPENDIX





	   	This LOGISTICS APPENDIX is made and entered into this 18th day of September 2002 by and
between ENDWAVE CORPORATION, a company incorporated in Delaware, USA with its principal offices at
990 Almanor Avenue, Sunnyvale, CA 94085, USA (hereinafter referred to as the BUYER), and HANA
MICROELECTRONICS PUBLIC, LTD., a company incorporated in Lamphun, Thailand with its principal
office at Northern Region Industrial Estate, 101/2 Moo 4, Lamphun 51000, Thailand (hereinafter
referred to as the “MANUFACTURER”). The BUYER and the MANUFACTURER may hereinafter be jointly
referred to as the “Parties.”






	   1.  	SCOPE AND OBJECTIVE
	 
	   	This Logistics Appendix is incorporated by reference into the Manufacturing and Supply
Agreement entered into between the MANUFACTURER and BUYER on September 18, 2002 (hereinafter
referred to as “Supply Agreement.”)
	 
	   	The object of this Logistics Appendix is to identify the procedures for forecasting,
ordering, shipping and invoicing the Parts listed in Schedule 1 and to identify the
procedures for supply of BUYER Supplied Components to the MANUFACTURER.
	 
	   	In case of any discrepancies between the Supply Agreement and this Logistics Appendix, the
text of the Supply Agreement shall always prevail.
	 
	   	This Logistics Appendix shall not create any obligation for BUYER to purchase any particular
quantity of Parts from MANUFACTURER until a specific order has been placed for the Parts by
the BUYER.
	 
	   	The Parties acknowledge that this Logistics Appendix does not govern the forecasting,
ordering, shipping or invoicing logistics invoicing for any parts other than those listed in
Schedule 1.
	 
	   2.  	FORECASTING AND ORDERING






	 	2.1  	FORECAST
	 
	 	   	BUYER agrees to provide in good faith a forecast of its anticipated purchasing needs
to the MANUFACTURER in order to permit the MANUFACTURER to plan for an adequate
manufacturing capacity.
	 
	 	   	The forecasting principles for each PART governed by this Logistics Appendix are
shown in Table 2.1-1. Forecasts will typically be provided every [ * ] and will
define delivery requirements for a [ * ] period covering [ * ] from the date of the
forecast.





____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




 









 








Table 2.1-1 Forecasting Principles




[ * ]




____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




 









 









	 	   	The forecast provided by the BUYER to the MANUFACTURER shall not be regarded as
binding upon the BUYER except for the [ * ] of the forecast. Flexibility within the
forecast is as shown below.





	 	 	 	 	 	 	 	 	 	 	 	 
	 	Period of Forecast

	 	 	[ * ]
	 	 	[ * ]
	 	 	[ * ]	 
	 	Flexibility

	 	 	[ * ]
	 	 	[ * ]
	 	 	[ * ]	 
	 






	 	   	BUYER may reschedule orders by [ * ] with [ * ] and [ * ] with [ * ] notice.
Increases of [ * ] can continue for only [ * ].
	 
	 	2.2  	ORDERING
	 
	 	   	A purchase order will be placed at the time a forecast is issued covering the [ * ]
of the forecast. A purchase order will be placed during the [ * ] after the forecast
has been issued covering the [ * ] of the forecast.






	3.  	MATERIAL






	 	3.1  	MANUFACTURER SUPPLIED MATERIAL
	 
	 	   	Manufacturer shall be responsible for planning, ordering, receiving, storing, and
handling all material necessary to manufacture Parts, except that material defined
in Section 3.2.
	 
	 	3.2  	BUYER SUPPLIED MATERIAL
	 
	 	   	BUYER will supply material, including [ * ], listed in Schedule 2. BUYER Supplied
Material to support the [ * ] of the forecast will be supplied no later than the end
of the [ * ] after the forecast is issued. Materiel to support [ * ] for the whole
[ * ] of a forecast will also be provided no later than the [ * ] after the forecast
is issued.
	 
	 	   	The MANUFACTURER must purchase material from the BUYER to support [ * ] above the
level shown in Schedule 2 at [ * ] shown in Schedule 2 on a quarterly basis. During
4Q02 the MANUFACTURER must purchase from the Buyer at the [ * ], material to cover [
* ] exceeding [ * ], excluding incoming [ * ], averaged across all [ * ]. BUYER
SUPPLIED MATERIAL cannot be used in products other than PARTS listed in Schedule 1
without the BUYER’S written approval.
	 
	 	   	The MANUFACTURER and BUYER agree to periodically review and renegotiate, if
necessary, both [ * ] and material cost. Initial re-negotiation is targeted in [ * ].





____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




 









 









	 	3.3  	MATERIAL LIABILITY
	 
	 	   	The BUYER assumes liability for material purchased by the MANUFACTURER in support of
the [ * ] of a forecast only. Material purchased by the MANUFACTURER to support the
[ * ] of the forecast will be either applied to subsequent BUYER requirements or
will be purchased at cost from the MANUFACTURER. The BUYER assumes additional
liability for specific long lead material as identified in Schedule 7.
	 
	 	   	In cases where material must be purchased in minimum quantities that exceed material
liability limits, the BUYER will provide authorization in writing to purchase these
minimum quantities.






	4.  	SHIPPING






	 	4.1  	TRANSPORTATION
	 
	 	   	PARTS will be shipped to BUYER or to BUYER’S customer as designated by the BUYER in
the Purchase Order. BUYER’s and Customer’s forwarding agents/transportation
companies are listed in Schedule 3.
	 
	 	4.2  	PACKING LIST REQUIREMENTS
	 
	 	   	All packaging must be barcoded as defined in NESS 0099C60 barcode specifications.
The packing list must include information shown in Schedule 4.
	 
	 	   	Only Parts sharing the same Part number/code may be packed together in a single
package; however, the delivery package (Master carton) may contain several
separately packed single-Part number/code packages, provided that the delivery
package also conforms to the requirements set forth in this Logistics Appendix.
	 
	 	4.3  	DELIVERY NOTIFICATION METHOD
	 
	 	   	The MANUFACTURER will notify the buyer and buyer’s customer, as required, of each
delivery. The information will be faxed or emailed and will include a copy of the
packing list (including product identification, quantity, manufacturer type, serial
numbers), BUYER’S purchase order, date shipped, and AWB tracking numbers. This
information will be provided on date of shipment.






	5.  	RETURNED AND REJECTED MATERIAL
	 
	   	Defective Parts can be found upon or after the receipt of the Parts, or during or after the
use of Parts in production. Manufacturer will provide an RMA number to authorize return of
defective material.





____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.





 









 









	 	5.1  	RETURN NOTE
	 
	 	   	The BUYER or the BUYER’S CUSTOMER shall issue a RETURN NOTE and send a copy to the
MANUFACTURER. The RETURN NOTE shall include the information shown in Schedule 5.
	 
	 	5.2  	COMPENSATION FOR DEFECTIVE PARTS
	 
	 	   	Compensation for defective parts rejected by BUYER or BUYER’S CUSTOMER shall be as
defined in the Manufacturing and Supply Agreement 10.5 Credits.
	 
	 	5.3  	RETURN OF DEFECTIVE PARTS
	 
	 	   	BUYER or BUYER’S CUSTOMER shall return the defective Parts to MANUFACTURER via its
preferred carrier and the expense shall be billed directly to [ * ].






	6.  	INVOICING
	 
	   	The invoice shall include Information shown in Schedule 6.
	 
	7.  	TERMS OF DELIVERY
	 
	   	Terms of delivery between BUYER, BUYER’S Customer, and MANUFACTURER are [ * ].
	 
	8.  	REPORTING OBLIGATIONS OF MANUFACTURER
	 
	   	In addition to metrics and reports required by paragraph 7.8 of the Manufacturing and Supply
Agreement, MANUFACTURER shall submit the following reports to the BUYER:





	 	 	 	 	 	 
	 	TYPE OF REPORT

	 	 	REPORTING FREQUENCY	 
	 	Delivery Accuracy

	 	 	Weekly	 
	 	[ * ] and Material Usage

	 	 	Every 2 Weeks	 
	 	Inventory Levels

	 	 	Weekly	 
	 






	9.  	FINAL PROVISIONS






	 	9.1  	AMENDMENTS
	 
	 	   	Any modifications or amendments to the text of this Logistics Appendix must be made
in writing and signed by authorized representatives of both Parties. However, the
Parties acknowledge that the Schedules are intended to be revised periodically and
to the extent that such revisions do not conflict with the terms of the Supply
Agreement or the Logistics Appendix, updated versions of Schedules may be issued
upon the





____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




 









 









	 	   	signatures of authorized representatives of both Parties and without requiring a
formal amendment either to this Logistics Appendix or to the Purchase Agreement.
	 
	 	   	BUYER authorized representatives are:




Chief Executive Officer

Chief Operating Officer

Vice President/Director of Manufacturing and Operations




	 	   	Manufacturer authorized representative is:




Chief Operating Officer

Vice President of Operations

Vice President of Marketing and Sales




	 	9.2  	TIME ZONE
	 
	 	   	All times specified in this Logistics Appendix are based on BUYER’s time zone.
	 
	 	9.3  	VERSION
	 
	 	   	This version upon signature of both Parties, below, cancels and supercedes all prior
versions of this Logistics Appendix or any forecast or commitment schedules issued
with regard to the Parts covered by this Logistics Appendix.





	 	 	 	 	 	 	 
	BUYER:	 	MANUFACTURER:
	 
	 	 	 	 	 	 
	ENDWAVE CORPORATION	 	HANA MICROELECTRONICS
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Name:

	 	 	 	Name:	 	 
	 
	 	 	 	 	 	 
	Title:	 	Title:
	 
	 	 	 	 	 	 
	Date:	 	Date:






____________________




[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.