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Exhibit 10.42    
    


CONFIDENTIAL 









   



 
 

WAFER SUPPLY AGREEMENT    
    


between: 


Newport Fab, LLC  


a Delaware limited liability company 


d/b/a
Jazz Semiconductor  


and 


RF Micro Devices, Inc.  


a North Carolina corporation. 






Dated as of October 15, 2002 





   

    







Confidential
treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request.
Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission. 





TABLE OF CONTENTS  



	1.	Definitions.	 	1
	 	1.1	"Basic Price"	 	1
	 	1.2	"Capacity"	 	1
	 	1.3	"Engineering Wafers"	 	1
	 	1.4	"Forecast"	 	1
	 	1.5	"Hot Lot" and "Super Hot Lot"	 	1
	 	1.6	"Lead-time"	 	1
	 	1.7	"Lot"	 	1
	 	1.8	"Newport Beach Fab"	 	1
	 	1.9	"NRE Services"	 	1
	 	1.10	"Party"	 	1
	 	1.11	"Photomasks"	 	1
	 	1.12	"Production Wafers"	 	1
	 	1.13	"Purchase Order"	 	2
	 	1.14	[...***...]	 	2
	 	1.15	"Wafers"	 	2
	 	1.16	"Wafer Acceptance Criteria"	 	2
	 	1.17	"Wafer Warranty Period"	 	2
	

2.	

Purchase and Supply Obligations.	
 	

2
	 	2.1	Establishment of Capacity and Volume Commitments	 	2
	

3.	

Wafer Purchases.	
 	

3
	 	3.1	Scope.	 	3
	 	3.2	Purchase Orders; Delivery Schedule.	 	3
	 	3.3	Acceptance and Acknowledgement.	 	3
	 	3.4	Materials.	 	3
	 	3.5	[...***...]	 	3
	 	3.6	NRE Services	 	3
	 	3.7	No Waiver or Release	 	3
	

4.	

Wafer Delivery and Logistics.	
 	

3
	

5.	

Pricing; Credits; and Payments.	
 	

4
	 	5.1	Invoicing and Payment.	 	4
	 	5.2	Wafer Credits.	 	4
	 	5.3	Costs.	 	4
	 	5.4	Taxes.	 	4
	

6.	

Tracking; Reporting; and Audits.	
 	

4
	 	6.1	Wafer Tracking.	 	4
	 	6.2	Reporting Requirements.	 	4
	

7.	

Warranty and Disclaimer.	
 	

4
	 	7.1	Wafer Warranty.	 	4
	 	7.2	Disclaimers.	 	5
	

8.	

Indemnification.	
 	

5
	 	8.1	RFMD Indemnification Obligations.	 	5
	 	8.2	JAZZ Indemnification Obligations.	 	5
	 	8.3	Conditions.	 	5
	 	8.4	Sole and Exclusive Remedy.	 	6
	

9.	

Confidentiality.	
 	

6







Confidential
treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request.
Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission. 





 


	10.	Limitations of Liability.	 	6
	 	10.1	DISCLAIMER.	 	6
	 	10.2	BASIS OF BARGAIN.	 	6
	

11.	

Term; Termination.	
 	

6
	 	11.1	Term	 	6
	 	11.2	Termination.	 	6
	 	11.3	Survival.	 	7
	

12.	

General.	
 	

7
	 	12.1	Agency.	 	7
	 	12.2	Governing Law; Venue and Jurisdiction.	 	7
	 	12.3	Dispute Resolution.	 	7
	 	12.4	Third-Party Beneficiaries.	 	8
	 	12.5	Compliance with Law.	 	9
	 	12.6	Force Majeure.	 	9
	 	12.7	Amendment; Later Agreement.	 	9
	 	12.8	Notices.	 	9
	 	12.9	Assignment.	 	10
	 	12.10	Waiver	 	10
	 	12.11	Severability.	 	10
	 	12.12	Counterparts and Facsimile	 	10
	 	12.13	Rules of Construction.	 	10
	 	12.14	Entire Agreement.	 	11




ii





 
LIST OF EXHIBITS  



	EXHIBIT A	PRICING & LEADTIME
	

EXHIBIT B	

WAFER FORECAST
	

EXHIBIT C	

REPORTS
	

EXHIBIT D	

MAP SAMPLE SIZE




iii






WAFER SUPPLY AGREEMENT  


THIS WAFER SUPPLY AGREEMENT (this "Supply Agreement") is entered into as of October 15, 2002 (the  "Effective
Date") by and between NEWPORT FAB, LLC, a Delaware limited liability company d/b/a Jazz
Semiconductor ("JAZZ") and RF MICRO DEVICES, INC., a North Carolina corporation
("RFMD"). 


RECITALS  


        RFMD desires, on the terms and conditions of this Supply Agreement, to purchase from JAZZ semiconductor wafers and related foundry manufacturing services. 


        JAZZ
is willing to supply such wafers and services to RFMD on the terms and conditions set forth in this Supply Agreement. 



        NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Supply Agreement, the Parties agree as follows: 


AGREEMENT  


1.    DEFINITIONS.    Capitalized terms not expressly defined elsewhere in this
Supply Agreement have the following meanings: 



        1.1    "Basic Price" is defined in  Exhibit A (Pricing). 


        1.2    "Capacity" means, as of any date for any period, the average number of
wafer starts per day capable of being completed at the Newport Beach Fab during such period, based on available equipment, tools, and personnel, without additional capital spending, equipment
purchases, or hiring of personnel. 


        1.3    "Engineering Wafers" means Wafers, manufactured by JAZZ solely for
qualification or testing, and which are either (1) initial lot run for a new mask set or mask set revision, (2) any lot run by RFMD with less than 25 wafers, or (3) any lot that
is split or placed on hold by RFMD. 


        1.4    "Forecast" is defined in  Section 2.1(a). 



        1.5    "Hot Lot" and "Super Hot
Lot" mean Lots that are processed so as to meet certain accelerated Lead-times specified in writing to RFMD from time to time. 


        1.6    "Lead-time" means the estimated amount of time required from
submission of a Purchase Order to delivery, as specified in Exhibit A to this Supply Agreement. 



        1.7    "Lot" means a single lot of Wafers that are processed together. Each Lot
of Production Wafers or Risk Materials shall consist of [...***...] Wafers. Each Lot of Engineering Wafers shall consist of no less than
[...***...] but less than [...***...] Wafers. 


        1.8    "Newport Beach Fab" means the facility and associated assets used by JAZZ
to provide specialty process foundry services and to manufacture semiconductor wafers, located in Newport Beach, California. 



        1.9    "NRE Services" means non-recurring engineering services. 


        1.10    "Party" means either RFMD or JAZZ, as the context requires, and  "Parties" means RFMD
and JAZZ collectively. 


        1.11    "Photomasks" means precision photographic quartz or glass plates
containing microscopic images of integrated circuits, for use as master images to transfer circuit patterns onto semiconductor wafers during the fabrication of integrated circuits and other
semiconductor products. 


        1.12    "Production Wafers" means all Wafers other than Engineering Wafers,
manufactured by JAZZ. 





Confidential
treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request.
Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission. 





 

        1.13    "Purchase Order" means a written blanket order for the purchase of a
specified quantity of Wafers by process and product submitted by RFMD to Jazz. 


        1.14    [...***...] 



        1.15    "Wafers" means semiconductor wafers to be processed and prepared for
shipping by JAZZ at the Newport Beach Fab, including Engineering Wafers, Production Wafers, and Risk Materials. 


        1.16    "Wafer Acceptance Criteria" means the parametric wafer measurements set
forth in JAZZ's procedures as specified in JAZZ's document #19091A01 entitled "Wafer Acceptance Criteria," set forth in Exhibit D. 



        1.17    "Wafer Warranty Period" is defined in  Section 7.1. 


2.    PURCHASE AND SUPPLY OBLIGATIONS.    


        2.1    Establishment of Capacity and Volume Commitments    



        (a)    Forecast.    Within [...***...] prior
to the [...***...] during the term of this Supply Agreement, RFMD shall submit in writing or electronically to JAZZ a rolling [...***...] forecast
setting forth the number of Wafers for which the Company shall commence a specified fabrication process [...***...] during each month of the forecast (a
"Forecast"). 


        (b)    RFMD Volume Commitments.    RFMD shall purchase, at the
Contract Price, 100% of the Wafers for which JAZZ is required to commence the [...***...] fabrication process as specified by RFMD for the [...***...]
month of the Forecast and for the [...***...] of the initial Forecast (a "Guaranteed Month"). The number of Wafers set forth in
a Forecast with respect to a Guaranteed Month that RFMD is obligated to purchase pursuant to this section shall be referred to herein as the "Wafer Volume
Commitment." [...***...] 



[...***...] 


        JAZZ
and RFMD acknowledge that the number of Wafers in a Forecast shall be the number for a certain fabrication process [...***...], and nothing herein shall
restrict changes to the mix of Wafers within a certain fabrication process by RFMD in subsequent Forecasts, provided the total number of Wafers for a certain fabrication process shall be subject to
the limitations set forth above. 



        (c)    JAZZ Capacity Commitments.    JAZZ, shall accept each Purchase
Order, which is consistent with the Forecast, and fulfill [...***...] (the "Baseline Commitment"). If the amount forecasted in
any calendar year exceeds the Baseline Commitment (the amount of such excess being referred to herein as the "Excess Demand"), provided such Excess
Demand does not exceed [...***...] the Baseline Commitment then JAZZ [...***...]. Regardless of Baseline or subsequent forecast, Jazz shall at all times
agree, upon [...***...] advance notice by RFMD, to start [...***...] during the term of this Agreement. 


        (d)    Preferred Vendor Status.    RFMD shall give JAZZ the first
right of refusal to supply all RFMD silicon demand, provided JAZZ is competitive in pricing, technology, quality and delivery, and further provided no material breach as reasonably determined in good
faith by RFMD, by Jazz or other Jazz board members, of the Confidentiality Agreement or confidentiality provisions of the Company Second Amended and Restated Stockholder Agreement signed
contemporaneously herewith occur. 


        (e)    Lead-Times.    Jazz shall not revise any
Lead-time without providing RFMD with [...***...] advanced written notice, and in no event shall any Lead-time exceed
[...***...] of the then current industry average for like processes. 






Confidential
treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request.
Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission. 


2





 

3.    WAFER PURCHASES.    


        3.1    Scope.    Upon receipt of a Purchase Order from RFMD (as described in Section 3.2(a) (Purchase Orders)),
JAZZ shall produce the Wafers covered by such Purchase Order release as described therein Section 3.3.. 


        3.2    Purchase Orders; Delivery Schedule.    



        (a)    Purchase Order.    Simultaneously with providing each Forecast
to JAZZ required by Section 2.1 (a), FRMD shall submit to JAZZ a [...***...] Purchase Order for the number of Wafers for which the fabrication process is to be commenced
during the [...***...] month of such Forecast, except that the initial Forecast shall be accompanied by a [...***...] Purchase Order for the number of
Wafers for which the fabrication process is to be commenced during the [...***...] months of such Forecast. 


        (b)    Delivery Schedule.    JAZZ will acknowledge each Purchase Order
with an acknowledgement (a "Purchase Order Acknowledgment"), which shall include a schedule by Wafer
part number and quantity, within [...***...] of the date of such Purchase Order. 




        3.3    Acceptance and Acknowledgement.    Each Purchase Order submitted shall be accepted by JAZZ up to the Wafer
Volume Commitment defined in Section 2.1 and shall be acknowledged by JAZZ within [...***...] days of receipt. Subject to
the terms of this Supply Agreement, once JAZZ accepts a Purchase Order, it will be obligated to produce and deliver the Wafers in the volumes specified in the Purchase Order and RFMD will be obligated
to purchase such Wafers in the volumes specified in the Purchase Order. Unless otherwise agreed to in writing by the Parties, Production Wafers shall be ordered by RFMD and delivered by JAZZ in Lots
of [...***...] Wafers and Engineering Wafers shall be ordered by FRMD and delivered by JAZZ in Lots of [...***...] to no more than
[...***...] Wafers. [...***...] 


[...***...]



[...***...]



        3.4    Materials.    [...***...] 


        3.5    [...***...]    



        3.6    NRE Services    At RFMD's request, the Parties shall negotiate regarding provision by JAZZ of NRE Services to
RFMD related to development of new Wafers. All NRE Services provided pursuant to this Supply Agreement shall be in accordance with the Research and Development Agreement entered into between the
parties concurrently herewith. The Parties shall negotiate in good faith the terms and conditions and any applicable pricing for such NRE Services. 


        3.7    No Waiver or Release    No failure by JAZZ to accept any modification in the volume, delivery date, or other
term with respect to any Forecast, Wafer Volume Commitment or Purchase Order proposed by RFMD, provided that JAZZ has the discretion under the terms hereof to accept or reject such proposed
modification, shall act as a waiver or release of, or otherwise relieve RFMD from, RFMD's obligations hereunder to satisfy the Waiver Volume Commitment for each month during the term hereof. 


4.    WAFER DELIVERY AND LOGISTICS.    


        All
Wafers delivered to RFMD shall be delivered F.O.B. the Newport Beach Fab. Title and risk of loss shall pass from JAZZ to RFMD upon delivery, which shall be deemed made upon transfer
by JAZZ of possession to the shipping carrier or to storage if not shipped immediately. RFMD shall be responsible
for all freight, handling and insurance charges subsequent to such delivery. Except in accordance with the applicable delivery terms set forth in this Supply Agreement, JAZZ shall not have any
liability in connection with shipment, nor shall the shipping carrier be deemed to be an agent of JAZZ. 





Confidential
treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request.
Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission. 


3





 

5.    PRICING; CREDITS; AND PAYMENTS.    


        5.1    Invoicing and Payment.    



        (a)    Shipped Wafers.    JAZZ will invoice RFMD for Wafers delivered
hereunder upon shipment of each Lot, at the applicable [...***...] RFMD shall pay any amounts due on such invoices within [...***...] of receipt
thereof. Notwithstanding any other provision hereof, neither Party may offset any amounts owed by such Party to the other Party against any amounts from such other Party, without such other Party's
express written agreement to such offset in each case. 


        (b)        [...***...] 




        5.2    Wafer Credits.    (a) JAZZ will provide to RFMD credits for the purchase of Wafers from JAZZ, in the
amount [...***...]. Such Wafer Credits shall apply only to the [...***...] of Wafers purchased by RFMD. The amount of the Wafer Credit shall be applied
to each and every Wafer purchased by RFMD by the reduction in the [...***...] per wafer invoiced by: [...***...] The summary provided will reference
invoice number, credit earned and date of invoice. 


        (b)   [...***...]



        (c)   [...***...]



        5.3    Costs.    Except as otherwise provided herein or agreed to in writing by the Parties, each Party will be solely
responsible for the costs and expenses it incurs in performing its obligations under this Supply Agreement. 


        5.4    Taxes.    RFMD will be responsible for payment of any local, state or federal sales, use and excise or similar
taxes or related government charges ("Taxes") imposed on or arising from RFMD's purchase of Wafers under this Supply Agreement, excluding any Taxes on
the net income or net worth of JAZZ. All Wafer prices are exclusive of federal, state or local sales, use, excise, or similar taxes applicable to Wafers or mask sets or the fabrication, processing,
engineering, or sale thereof. Any such tax(es) shall be separately itemized on JAZZ's invoice(s) and paid by RFMD, or, in lieu thereof, RFMD shall furnish JAZZ a properly executed tax exemption
certificate prior to shipment. 


6.    TRACKING; REPORTING; AND AUDITS.    


        6.1    Wafer Tracking.    All Wafers manufactured and delivered by JAZZ to RFMD shall have backward and forward trace
ability sufficient to enable JAZZ to identify (i) the processes and materials used in the manufacture of such Wafers; (ii) the batches or lots of such materials; and (iii) other
Wafers in the same or sequential lots. Such information shall be provided to RFMD, upon RFMD's reasonable request. 


        6.2    Reporting Requirements.    JAZZ shall provide RFMD with the reports specified in Exhibit C (Reports) or
otherwise as mutually agreed to in writing by the Parties. 


7.    WARRANTY AND DISCLAIMER.    



        7.1    Wafer Warranty.    For a period of [...***...] from the date of delivery (the  "Wafer Warranty
Period"), JAZZ warrants that the Wafers, other than Risk Materials, delivered hereunder
will conform to and be manufactured in accordance with the Wafer Acceptance Criteria, and will be free from defects in material, manufacturing and workmanship. If, during the Wafer Warranty Period, a
breach of this warranty is discovered in any Wafers, then JAZZ shall work with RFMD to determine the cause of such defect and appropriate corrective measures, and, at RFMD's option,
[...***...]. For the avoidance of doubt, a breach of the foregoing warranty will not give rise to any termination provision under Section 11 (Term; Termination) provided
that JAZZ provides the foregoing express and exclusive remedy for any breach of this warranty. 





Confidential
treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request.
Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission. 


4





 

        7.2    Disclaimers.    EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS SUPPLY AGREEMENT, NEITHER PARTY MAKES ANY
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED OR OTHERWISE, IN CONNECTION WITH THIS SUPPLY AGREEMENT OR ANY WAFERS OR SERVICES PROVIDED UNDER THIS SUPPLY AGREEMENT, AND EACH PARTY SPECIFICALLY
DISCLAIMS THE IMPLIED WARRANTIES AND CONDITIONS OF MERCHANTABILITY, FITNESS FOR PARTICULAR PURPOSE AND NONINFRINGEMENT. 


8.    INDEMNIFICATION.    


        8.1    RFMD    Indemnification Obligations. RFMD agrees to indemnify, hold harmless and defend at its own expense any
liability or cost associated with any claim, suit, or action (collectively, "Claims") asserted or brought against JAZZ, its Affiliates and its
subsidiaries, and their respective officers, directors, employees, agents, and representatives by a third party to the extent that such Claim alleges that RFMD's specifications or designs used in the
production of Wafers infringe on any patent, copyright, or any other intellectual property right (a "RFMD Infringement Claim"). RFMD will pay such
damages awarded against JAZZ by a court of competent jurisdiction, or agreed to in a monetary settlement of any such Claim by RFMD, to the extent that such damages are directly attributable to a RFMD
Infringement Claim. RFMD's indemnification obligation will not apply to RFMD Infringement Claims to the extent they result from or are attributable to (a) any modifications, combinations, or
improvements made to the design or specification as furnished to JAZZ by RFMD that are not agreed to by RFMD; or (b) use of the design or specification by JAZZ for any purpose other than
providing Wafers to RFMD. 


        8.2    JAZZ Indemnification Obligations.    JAZZ agrees to indemnify, hold harmless and defend at its own expense any
liability or cost associated with any Claim asserted or brought against RFMD, its Affiliates and it subsidiaries, and their respective officers, directors, employees, agents, and representatives by a
third party to the extent that such Claim alleges that JAZZ's use of technology, equipment, processes, or methods to manufacture the Wafers or provide the Probe Services infringes upon any patent,
copyright, or any other intellectual property right, other than any such Claim that is a RFMD
Infringement Claim (a "JAZZ Infringement Claim"). JAZZ will pay such damages awarded against RFMD by a court of competent jurisdiction, or agreed to in
a monetary settlement of any such Claim by JAZZ, to the extent that such damages are directly attributable to a JAZZ Infringement Claim. JAZZ's indemnification obligation hereunder will not apply to
JAZZ Infringement Claims alleging infringement by any technology, equipment, processes, or methods that were provided by RFMD to JAZZ. For the avoidance of doubt, if JAZZ modifies, improves, or
combines any such technology equipment, processes, or methods, the foregoing indemnification obligation will apply to the extent that JAZZ Infringement Claims are directed at the modifications,
improvements, or combinations, except for modifications, improvements, or combinations performed at the direction of RFMD or its Affiliates. 


        8.3    Conditions.    The obligations of the indemnifying Party (the "Indemnifying
Party") under Section 8.1 (RFMD Indemnification Obligations) or  Section 8.2 (JAZZ Indemnification Obligations) with
respect to a RFMD Infringement Claim or JAZZ Infringement Claim (as applicable) (an  "Infringement Claim") are subject to the following conditions: (a) the indemnified Party (the "Indemnified
Party") must promptly notify the Indemnifying Party in writing of such Infringement Claim; (b) the Indemnifying Party must have sole control of the defense and
settlement of the Infringement Claim; and (c) the Indemnified Party must fully cooperate with and provide reasonable assistance to the Indemnifying Party in the defense and settlement of such
Infringement Claim (which includes furnishing to the Indemnifying Party all evidence in the possession of the Indemnified Party that is relevant to such Infringement Claim). The Indemnifying Party
will not accept a settlement or stipulated judgment of any RFMD Infringement Claim or JAZZ Infringement Claim (as applicable) without the prior written consent of the Indemnified Party, which consent
will not be unreasonably 


5





 



withheld.
The Indemnifying Party will have no liability under this Section 8 (Indemnification) for any costs, losses, liabilities, or damages
resulting from the willful acts of the Indemnified Party or any settlement or compromise incurred or made by the Indemnified Party without the Indemnifying Party's prior written consent. The
Indemnified Party will have the right to participate, at its own expense, in the defense or settlement of the Infringement Claim. 


        8.4    Sole and Exclusive Remedy.    This Section 8
(Indemnification) states the Indemnifying Party's entire liability and the Indemnified Party's sole remedy with respect to the infringement, violation, or misappropriation of any intellectual property
rights of any third party arising from or relating to this Supply Agreement, subject to Section 10.1. Each Party's obligations under this  Section 8 (Indemnification) are subject to the
limitations of liability set forth in  Section 10 (Limitations of Liability). 


9.    CONFIDENTIALITY.    



        The
Parties acknowledge that any nonpublic information disclosed or provided by one Party to another Party in connection with this Agreement will be subject to the Confidentiality
Agreement between the Parties dated                        , 2002. The terms and conditions of this Supply Agreement (including
the pricing information contained herein) will be considered to be the
Confidential Information (as defined in the Confidentiality Agreement) of both parties. 


10.    LIMITATIONS OF LIABILITY.    



        10.1    DISCLAIMER.    EXCEPT FOR INTENTIONAL, RECKLESS OR GROSSLY NEGLIGENT BREACHES OF THIS AGREEMENT, IN NO EVENT
WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR LOST PROFITS OR FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR EXEMPLARY DAMAGES ARISING FROM THE SUBJECT MATTER OF THIS SUPPLY AGREEMENT,
REGARDLESS OF THE TYPE OF CLAIM AND EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. FURTHER, IN NO EVENT WILL JAZZ'S AGGREGATE LIABILITY (INCLUDING ATTORNEY'S FEES) TO RFMD
HEREUNDER EXCEED [...***...], EXCEPT THAT THIS LIMITATION SHALL NOT APPLY TO ANY INTENTIONAL, RECKLESS OR GROSSLY NEGLIGENT BREACH BY JAZZ OF SECTION 9 OF THIS AGREEMENT. 



        10.2    BASIS OF BARGAIN.    EACH PARTY ACKNOWLEDGES THAT THE MUTUAL LIMITATIONS OF LIABILITY CONTAINED IN THIS  SECTION 10
(LIMITATIONS OF LIABILITY) REFLECT THE ALLOCATION OF RISK SET FORTH IN THIS SUPPLY AGREEMENT AND THAT EACH PARTY WOULD NOT ENTER INTO THIS
SUPPLY AGREEMENT WITHOUT THESE LIMITATIONS OF LIABILITY. 


11.    TERM; TERMINATION.    



        11.1    Term    This Supply Agreement will take effect on the Effective Date and will remain in effect for a period of
five (5) years from the Effective Date (the "Initial Term"), unless earlier terminated in accordance with this  Section 11 (Term;
Termination). Following the Initial Term, this Supply Agreement may be renewed for additional one-year renewal
terms (each a "Renewal Term"), upon mutual agreement of the Parties. 



        11.2    Termination.    This Supply Agreement may be terminated at any time as follows: 



        (a)   by written agreement of the Parties; 






Confidential
treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request.
Omissions
are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission. 


6





 

        (b)   by either Party, at its discretion upon written notice to the other Party, if the other Party materially breaches any
provision of this Supply Agreement and such breach is not cured within [...***...] after written notice of such breach is furnished by the non-breaching Party; 



        (c)   by either Party, at its discretion, if (i) the other Party becomes insolvent, admits in writing its inability to
pay its debts as they become due, or files or has filed against it any proceeding in bankruptcy or for reorganization under any federal bankruptcy law or similar state law, or has any receiver
appointed for all or a substantial part of such Party's assets or business, or makes any assignment for the benefit of its creditors, or enters into any other proceeding for debt relief, and such
proceeding is not dismissed within [...***...] of filing or (ii) the other Party dissolves, liquidates, or institutes any proceedings for the liquidation or winding up
of its business. 




        11.3    Survival.    The rights and obligations under Sections
1 (Definitions), 5.2 (Wafer Credits), 7 (Warranty and
Disclaimer), 8 (Indemnification), 9 (Confidentiality),  10 (Limitations of Liability),
11.3 (Survival), and  12 (General) will survive termination or expiration of this Supply Agreement for any reason. 



12.    GENERAL.    


        12.1    Agency.    Under this Supply Agreement (i) each Party will be deemed to be an independent contractor
and not an agent, joint venturer, or representative of the other Party; (ii) neither Party may create any obligations or responsibilities on behalf of or in the name of the other Party; and
(iii) neither Party will hold itself out to be a partner, employee, franchisee, representative, servant, or agent of the other Party. 



        12.2    Governing Law; Venue and Jurisdiction.    This Supply Agreement will be governed by, subject to, and construed
in accordance with the internal laws of the State of Delaware, as such laws apply to contracts between Delaware residents performed entirely within Delaware. The Parties agree that the United Nations
Convention on Contracts for the International Sale of Goods will not apply to this Supply Agreement. 


        12.3    Dispute Resolution.    The Parties will act in good faith and use commercially reasonable efforts to promptly
resolve any claim, dispute, controversy or disagreement arising out of or relating to or in connection with this Supply Agreement or the breach, termination or validity hereof (each a  "Dispute")
between the Parties under or related to this Supply Agreement or any of the transactions contemplated hereby. 



        (a)   Upon the written request (a "Request") of a Party, the other Party shall
commence good faith negotiations with the goal of resolving the Dispute on a mutually satisfactory basis. If the Dispute has not been resolved to the satisfaction of the Parties within
[...***...] after the date on which the Request is delivered, the Dispute shall immediately be referred to senior officers of each Party. The senior officers of each Party
(e.g., chief executive officer) shall meet immediately, and in no case later than [...***...] after the date on which the
Request is delivered, for a minimum of [...***...] with a mutually selected mediator and attempt in good faith to negotiate a resolution of the Dispute. If the Parties are
unable to resolve the Dispute within [...***...] after the date on which the Request is delivered, then any relevant Party may submit the Dispute to arbitration as the
exclusive means of resolving it in accordance with the procedures set forth in this Section 12.3. 



        (b)   Except as otherwise specified in this Section 12.3, any Dispute
not resolved through the procedure set forth above shall be finally settled by arbitration in accordance with the International Rules and Procedures of the American Arbitration Association (the  "Arbitration
Rules"), which are deemed to be incorporated by reference herein except as otherwise modified herein. 






Confidential
treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request.
Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission. 


7





 

        (c)   The arbitration situs shall be Wilmington, Delaware, and the laws of the State of Delaware shall be applied. 



        (d)   In the event of arbitration, there shall be one arbitrator who shall be jointly nominated by such parties. If the Parties
fail to so nominate the arbitrators within [...***...]
from the date when the Dispute is submitted to arbitration pursuant to this Section 13.3, at the request of any Party, the arbitrator(s) shall be
appointed in accordance with the Arbitration Rules. 


        (e)   The arbitration hearing shall commence no later than [...***...] following the appointment of the
sole arbitrator, as the case may be, and the final award shall be rendered no later than [...***...] following the close of the hearing. 



        (f)    Consistent with the expedited nature of arbitration, each Party will, upon the written request of the other Party,
provide the other with copies of documents relevant to the issue raised by any claim or counterclaim. Other discovery may be ordered by the arbitrator to the extent the arbitrator deems additional
discovery relevant and appropriate, and any dispute regarding discovery, relevance or scope thereof, shall be determined by the arbitrator, which determination shall be conclusive. 


        (g)   By agreeing to arbitration, the Parties do not intend to deprive any court of its jurisdiction to issue a
pre-arbitral injunction, pre-arbitral attachment, injunctive or other equitable relief or an order in aid of arbitration proceedings and the enforcement of any award. Without
prejudice to such provisional remedies in aid of arbitration as may be available under the jurisdiction of a national court, the arbitral tribunal shall have full authority to grant provisional
remedies and to award damages for the failure of any party to respect the arbitral tribunal's orders to that effect. 


        (h)   The award shall be final and binding upon the Parties, and shall be the sole and exclusive remedy between the Parties
regarding any claims, counterclaims, issues, or accounting presented to the arbitral tribunal in connection with the Dispute. Judgment upon any award may be entered in any court having competent
jurisdiction thereof. 


        (i)    The costs of the arbitration shall be borne as determined in accordance with the Arbitration Rules;  provided, however, that to the extent a
Party is non-prevailing or unsuccessful on a claim in an arbitration proceeding under this  Section 12.3 as determined by the arbitrator, that Party shall pay the prevailing or successful Party's
costs and expenses incurred in connection
with the arbitration of that Dispute, including attorneys' fees and arbitration expenses, whether or not such Dispute is prosecuted to award or judgment. 


        (j)    Subject to the receipt of any applicable governmental approval, any monetary award shall be made and promptly payable in
U.S. dollars, if due in U.S. dollars, free of any deduction or offset, and the arbitral tribunal shall be authorized in its discretion to grant pre-award and post-award
interest at commercial rates. The arbitral tribunal shall have the authority to award any remedy or relief proposed by the claimants or respondents pursuant to this Supply Agreement, including without
limitation, a declaratory judgment, specific performance of any obligation created under this Supply Agreement or the issuance of an injunction. 




        12.4    Third-Party Beneficiaries.    There are no third-party beneficiaries of this Supply Agreement. Except for the
pricing established under this Supply Agreement, and any rights of RFMD's Affiliates set forth herein to purchase Wafers from JAZZ subject to such pricing, no provision of this Supply Agreement,
express or implied, is intended or will be construed to confer upon or give to any customer or other person other than the Parties any rights, remedies, or other benefits under or by reason of this
Supply Agreement. 





Confidential
treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request.
Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission. 


8





 

        12.5    Compliance with Law.    The Parties will at all times comply with all applicable foreign, U.S., state, and
local laws, rules and regulations relating to the execution, delivery and performance of this Supply Agreement. Each Party agrees that it will not export or reexport, resell, ship, or divert or cause
to be exported or reexported, resold, shipped, or diverted directly or indirectly any software, documentation, or technical data incorporating any software to any country for which the government (or
any agency thereof) of the United States, or any foreign sovereign government with competent jurisdiction requires an export license or other governmental approval without first obtaining such license
or approval. 


        12.6    Force Majeure.    Neither Party shall be liable for failure or delay in performance of its obligations under
this Supply Agreement to the extent such failure or delay is caused by an act of God, act of a public enemy, war or national emergency, rebellion, insurrection, riot, epidemic, quarantine restriction,
fire, flood, explosion, storm, earthquake, interruption in the supply of electricity, power, or energy, or other catastrophe, terrorist attack, labor dispute or disruption of such Party's suppliers,
or other event beyond the reasonable control of such Party. If a Party's performance under this Supply Agreement is affected by a force majeure event, such Party shall give prompt written notice of
such event to the other Party and shall at all times use its reasonable commercial efforts to mitigate the impact of the force majeure event on its performance under this Supply Agreement. In the
event of a force majeure event as described in this Section that affects either or both Parties' ability to perform under this Supply Agreement, the Parties agree to cooperate in good faith in order
to resume the transactions contemplated by this Supply Agreement as soon as commercially possible to the extent commercially reasonable. 


        12.7    Amendment; Later Agreement.    This Supply Agreement may not be amended, modified, or supplemented by the
Parties in any manner, except by an instrument in writing signed by RFMD and JAZZ and specifically reciting that it amends this Supply Agreement. No purchase order or acknowledgement will amend this
Supply Agreement, and all purchase orders or acknowledgements shall be subject to the terms and conditions of this Agreement regardless of statements to the contrary contained within the purchase
order or acknowledgment. All matters designated herein as subject to agreement of the Parties must be agreed upon in a writing signed by authorized representatives of both Parties for such agreement
to be effective. 


        12.8    Notices.    Any notice, consent, approval, or other communication intended to have legal effect to be given
under this Supply Agreement (other than a purchase order or invoice) must be in writing and will be delivered (as elected by the Party giving such notice): (i) personally; (ii) by
postage prepaid registered or certified airmail, return receipt requested; (iii) by express courier service; or (iv) by facsimile with a confirmation copy deposited prepaid with an
express courier service. Unless otherwise provided herein, all notices will be deemed to have been duly given on: (y) the date of receipt (or if delivery is refused, the date of such refusal)
if delivered personally, by mail, or by express courier; or (z) one (1) business day after receipt by telecopy if the telecopy was accompanied by the mailing of the notice via courier
service. Each Party may change its address for purposes hereof on not 


9





 



less
than three (3) days' prior notice to the other Party. Notice hereunder will be sent to the following addresses (with a copy to the legal department): 



	If to RFMD, to:	 	If to JAZZ, to:
	

RF Micro Devices, Inc.

7628 Thorndike Road,

Greensboro, NC 27409-9421.

Attn: Chief Financial Officer

Telecopy: (336) 931-7655	
 	

Newport Fab, LLC.

4321 Jamboree Road

Newport Beach, CA 92660

Attn: Legal Counsel

Telecopy: (949) 435-8455
	

With copy to:	
 	

With copy to:
	

Womble Carlyle Sandridge & Rice, PLLC

200 West Second Street

Winston-Salem, NC 27101

Attn: Jeffrey C. Howland, Esq.

Facsimile: (336) 733-8371	
 	

The Carlyle Group

101 S. Tryon Street, 25th Floor

Charlotte, NC 28280

Attn: Claudius E. Watts, IV

Telecopy: (704) 632-0299






        12.9    Assignment.    Except as otherwise expressly provided in this Supply Agreement, neither Party shall be
permitted to assign any of its rights or delegate any of its obligations under this Supply Agreement without the prior written consent of the other Party; except that (i) JAZZ may, without such
consent, assign all such rights to any Affiliate controlling JAZZ or to any Person providing cash financing to the JAZZ as collateral security for such financing provided that no such assignment shall
relieve JAZZ from any of its obligations hereunder, (ii) RFMD may, without such consent, assign all such rights to any Affiliate controlling RFMD, provided that no such assignment shall relieve
RFMD from any of its obligations hereunder, and (iii) either Party may, without the other Party's consent, assign all rights to any entity which acquires, directly or indirectly, all or any
substantial portion of the assets or securities of such Party subject to the rights of RFMD under the Second Amended and Restated Stockholder Agreement, dated as of October 15, 2002, by and
among the Company, RFMD and the other parties thereto. Any unauthorized assignment or transfer shall be null and void. This Supply Agreement shall be binding upon and inure solely to the benefit of
each Party and its successors and permitted assigns. 


        12.10    Waiver.    If a Party fails to insist on performance of any of the terms and conditions, or fails to exercise
any of its rights or privileges of this Supply Agreement, such failure will not constitute a waiver of such terms, conditions, rights, or privileges. 


        12.11    Severability.    If the application of any provision or provisions of this Supply Agreement to any particular
facts or circumstances is held to be invalid or unenforceable by any court of competent jurisdiction, then: (i) the validity and enforceability of such provision or provisions as applied to any
other particular facts or circumstances and the validity of other provisions of this Supply Agreement will not in any way be affected or impaired thereby; and (ii) such provision or provisions
will be reformed without further action by the Parties and only to the extent necessary to make such provision or provisions valid and enforceable when applied to such particular facts and
circumstances. 


        12.12    Counterparts and Facsimile    This Supply Agreement may be executed in any number of counterparts, each of
which when so executed and delivered will be deemed an original, and such counterparts together will constitute one and the same instrument. The Parties intend that each Party will receive a duplicate
original of the counterpart copy or copies executed by it. For purposes hereof, a facsimile copy of this Supply Agreement, including the signature pages hereto, will be deemed to be an original. 



        12.13    Rules of Construction.    As used in this Supply Agreement, all terms used in the singular will be deemed to
include the plural, and vice versa, as the context may require. The words "hereof," 


10





 



"herein,"
and "hereunder" refer to this Supply Agreement as a whole, including the attached exhibits, as the same may from time to time be amended or supplemented, and not to any subdivision in this
Supply Agreement. When used in this Supply Agreement, unless otherwise expressly stated, "including" means "including, without limitation" and "discretion" means sole discretion. Unless otherwise
expressly stated, when a Party's approval or consent is required under this Supply Agreement, such Party may grant or withhold its approval or consent in its discretion. References to "Section" or
"Exhibit" will be to the applicable section or exhibit of this Supply Agreement. Descriptive headings are inserted for convenience only and will not be utilized in interpreting the Supply Agreement.
This Supply Agreement has been negotiated by the Parties and reviewed by their respective counsel and will be fairly interpreted in accordance with its terms and without any strict construction in
favor of or against either Party. 


        12.14    Entire Agreement.    As to the subject matter hereof: (i) this Supply Agreement, including its
exhibits, sets forth the entire agreement between RFMD and JAZZ; (ii) no promise, inducement, understanding, or agreement not expressly contained herein has been made; and (iii) this
Supply Agreement merges and supersedes any and all previous agreements, understandings, and negotiations between the Parties concerning the subject matter hereof. 


[The remainder of this page is intentionally left blank.] 


11








        IN WITNESS WHEREOF, the parties have executed this Supply Agreement as of the Effective Date by the undersigned duly authorized
representatives of each party. 



	RF MICRO DEVICES, INC.	 	NEWPORT FAB, LLC D/B/A JAZZ SEMICONDUCTOR
	

a North Carolina corporation	
 	

a Delaware limited liability company
	

 	

 	
 	

 	

 
	By:	/s/  JERRY D. NEAL      
	 	By:	/s/  SCOTT SILCOCK      

	Name:	Jerry D. Neal
	 	Name:	Scott Silcock

	Title:	Executive Vice President of Marketing and Strategic Development
	 	Title:	Vice President Operations









EXHIBIT A—PRICING  


[...***...]






Confidential
treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request.
Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission. 






Dated:                                     




	
RF MICRO DEVICES, INC.	
 	
NEWPORT FAB, LLC d/b/a JAZZ SEMICONDUCTOR
	

A North Carolina corporation	
 	

A Delaware limited liability company
	

 	

 	
 	

 	

 
	By:	    
	 	By:	    

	Name:	    
	 	Name:	    

	Title:	    
	 	Title:	    





[SIGNATURES REQUIRED FOR AMENDMENTS TO EXHIBIT A ONLY.]






EXHIBIT B  


WAFER FORECAST  


[...***...] 





Confidential
treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request.
Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission. 






EXHIBIT C  


—REPORTS  


[...***...] 





Confidential
treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request.
Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission. 






EXHIBIT D  


MAP SAMPLE SIZE  


[...***...] 





Confidential
treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request.
Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission. 









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Exhibit 10.42


WAFER SUPPLY AGREEMENT