Assembly and Testing Services Agreement



 Exhibit 10.1 
 Redacted Version 
  
 Confidential
treatment has been requested as to certain portions of this agreement. Such omitted confidential information has been designated by asterisks and has been filed separately with the Securities and Exchange Commission. 
  


			
	 	 	 
	 	 	 









 

 
  
 ASSEMBLY AND TEST SERVICES AGREEMENT

  

					
	Parties:	  	SPANSION	  	Supplier
	Full Legal Name:	  	SPANSION LLC	  	ChipMOS TECHNOLOGIES INC.
	 	 	 
	Business Entity Type:	  	Corporation	  	Corporation
	Organized In:	  	State of Delaware, USA	  	Republic Of China
	 	 	 
	Principal Business Address:	  	 915 DeGuigne Drive
 P.O. Box 3453
	  	 No. 1 R&D Rd.1,
 Hsinchu Science Park

	 	  	Sunnyvale, CA 94088-3453, USA	  	Hsinchu, Taiwan, R.O.C.
	 	 	 
	Address for Notices:	  	 915 DeGuigne Drive
 P.O. Box 3453
	  	 No. 1 R&D Rd.1,
 Hsinchu Science Park

	 	  	Sunnyvale, CA 94088-3453, USA	  	Hsinchu, Taiwan, R.O.C.
	 	  	Attn: GSM Vice President, MS 583	  	Attn: S.J. Cheng
	 	  	Facsimile: (512) 602-9999	  	Facsimile: 886-3-5668980
	 	 
	Effective Date:	  	September 15, 2005
	 	 
	Expiration Date:	  	Defined in each separate applicable Statement of Work

  
 SPANSION and Supplier agree as
follows: 
  

	1.	Definitions 

  
 (a) “Affiliate” means, with respect to a party hereto, a business entity that directly controls, is controlled by or is under common control
with that party through ownership of more than fifty percent (50%) of the stock normally entitled to vote for the election of directors. 
  
 (b) “Capacity” means the amount of trained personnel and plant and equipment capacity that is available for the assembly and/or test services,
shipment packaging and delivery of Products as specified and as determined in the appropriate SOW. 
  
 (c) “Consigned Components/Hardware” means any component, material and/or hardware that SPANSION supplies to Supplier (but not purchased by
Supplier) to be used in the assembly or testing services of Products. 
  
 (d) “Deviation” means a written document that approves (i) a temporary modification to a Product, or (ii) a temporary modification of a process utilized by Supplier in the performance of Services. 
  
 (e) “Excess Inventory” means Turnkey Component inventory quantities
on hand in Supplier’s inventory that (i) have been in Supplier’s inventory for more than six (6) months, and/or (ii) Supplier has purchased or ordered from the applicable Turnkey Component vendor in accordance with section
7(a) that cannot be utilized to manufacture Products during the subsequent six (6) month period based on the most recent Orders and SPANSION forecasted requirements, provided that such on hand quantities resulted from (i) SPANSION’s
cancellation, change, or reschedule of any or all of the Services and/or Product deliveries set forth in the applicable Statement of Work or Order, (ii) SPANSION’s reduction in its forecasted requirements, (iii) SPANSION’s
termination of all or any part of this Agreement, or (iv) SPANSION’s change of a Product or Turnkey Component specification. 
  

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 (f) “First SOW” means the
first SOW as set forth in Appendix 2. 
  
 (g) “Intellectual
Property Right” or “IPR” means any and all intellectual property and proprietary rights of the Products and Services in any jurisdiction, whether registered or unregistered, including such rights in and to: (i) patents,
(ii) copyrights, (iii) inventions, inventors’ certificates and invention disclosures, (iv) designs and circuit layouts, (v) know-how and trade secrets, (vi) computer systems and programs, including all computer and
peripheral hardware, firmware and software (in both object and source code formats in any programming language), databases, algorithms, operational procedures and all documentation therefor; (vii) registrations of, and applications to register,
any of the foregoing with any governmental entity and any renewals, modifications, derivatives, replacements, enhancements, updates and extensions thereof. 
  
 (h) “Mitigation Efforts” means Supplier’s exercise of commercially reasonable efforts to minimize to the greatest extent possible
SPANSION’s liability for Excess Inventory, including but not limited to the cancellation of outstanding orders for such Turnkey Components, the return or sale of such Turnkey Components back to the original vendor or to a third party, and the
use of such Turnkey Components in the manufacture of other Products. 
  
 (i) “Order” means a purchase order by SPANSION for Products or Services to be furnished by Supplier to SPANSION during a specified time period, specifying the quantity, price, part number, revision details and other relevant
information with respect to such Products or Services. 
  
 (j)
“Product” means any semiconductor product assembled, tested, and/or packaged (as applicable) by Supplier per the requirements set forth in the applicable Statement of Work. 
  
 (k) “Services” means the services specified in this Agreement or applicable Statement of Work and may include
without limitation assembly, packaging, testing (wafer sorting and/or final test), quality monitoring, quality screening, and/or failure analysis of the Product. 
  
 (l) “Specifications” means the specifications for each with respect to the relevant Service or Products specified
in a Statement of Work or Order and all drawings, documentation, data, information, software and/or hardware and know-how related thereto provided by SPANSION to Supplier. 
  
 (m) “Statement of Work” or “SOW” means the documentation set forth in Appendix 2 and other documentation
mutually agreed upon by the parties in accordance with Section 2(a), setting forth the Effective Date and Term, Scope of Services, Prices and all other terms of conditions applicable thereto in such Statement of Work. 
  
 (n) “Turnkey Components” means any component or material that
Supplier procures from third parties to be used in the assembly of Products on a turnkey basis. 
  
 (o) Words such as “include”, “includes”, “including” and other similar expressions are not expressions of limitation and
shall be constructed as if followed by the words “without limitation” in each case. 
  

	2.	Scope Of Services 

  
 (a) Statements of Work. Pursuant to one or more mutually agreed Statements of Work, SPANSION shall purchase from Supplier and Supplier shall
provide SPANSION with Services in accordance with the terms of this Agreement. Each Statement of Work executed by the parties shall be the integral part of this Agreement and, in the event of any discrepancy between the terms and conditions of the
applicable Statement of Work and this Agreement, those of the Statement of Work shall prevail. Services not specifically mutually agreed upon and included in a Statement of Work shall 
  

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 not be subject to the terms and conditions of this
Agreement, even if such Services have been actually provided by Supplier. Without limiting the foregoing, this Agreement, together with the terms and conditions of the applicable Statement of Work, takes precedence over any additional or different
terms and conditions in any other documents exchanged by the parties. 
  
 (b) Orders. SPANSION shall submit one or more Orders to Supplier pursuant to the applicable Statement of Work. Supplier shall confirm in writing acceptance or rejection within three (3) business days of its receipt of an Order.
Supplier’s failure to timely reject an Order shall be deemed acceptance of that Order. Supplier shall issue a quotation for any Services requested by SPANSION pursuant to this Agreement within the time period specified in the applicable
Statement of Work, and to accept any Order submitted by SPANSION that is consistent with such quotation, provided that the quantities are within the agreed capacity limits and forecasted requirements specified in the applicable Statement of Work.
Orders may be issued by mail or facsimile, or by electronic means if the parties have agreed in writing to conduct such business electronically. 
  
 (c) Capacity Requirements; Forecasts. Supplier shall at all times maintain sufficient Capacity to support SPANSION’s forecasted requirements
(in accordance with the forecasting requirements established in the applicable Statement of Work), including buffer capacity mutually agreed by the parties. Supplier’s failure to maintain such Capacity shall be a material breach of this
Agreement. Forecasts provided by SPANSION are intended to be good faith estimates only. Such forecasts are intended to be used by Supplier solely as a business planning tool, and do not constitute an Order by SPANSION or a commitment by SPANSION to
purchase any quantity of Products or Services from Supplier. Decisions regarding whether to purchase Products or Services from Supplier shall be at SPANSION’s sole discretion. Except for any SPANSION obligation with regard to Excess Inventory
described herein, any reliance by Supplier on such forecasts shall be at Supplier’s sole risk. 
  
 (d) Tools & Equipment. Unless otherwise agreed to in writing by the parties, Supplier shall provide the equipment, tools, technology, and
labor necessary to provide the Services in accordance with the applicable Statement of Work. SPANSION shall provide Supplier with Specifications and/or technology, equipment and/or tools if agreed by the parties in the applicable Statement of Work.

  
 (e) Changes. Subject to subsection (f) below,
SPANSION may cancel, change, or reschedule any or all of the Services and/or Product deliveries as set forth in the applicable Statement of Work or Order. Supplier shall confirm its acceptance of such changes as soon as is reasonably possible.
Subject to subsection (f) below, SPANSION may cancel any Order or postpone any performance without Supplier’s consent. Supplier shall use commercially reasonable efforts to accommodate SPANSION’s requests for other Order changes,
including but not limited to increases in quantities or acceleration of delivery dates set forth in the applicable Statement of Work or an Order. Failure to confirm acceptance or rejection within three (3) business days of receipt of such
changes these shall be deemed acceptance of such changes. 
  
 (f)
Cancellation or Rescheduling. In the event of a cancellation or rescheduling of any Services, in whole or in part, Supplier, as soon as reasonably practicable, shall stop all related work and use commercially reasonable efforts to cause its
suppliers and subcontractors to stop all related work. SPANSION’s liability with respect to any cancellation or rescheduling is limited to: 
  
 (i) all Product and all work-in-process that exists at the time Supplier is notified of such cancellation or rescheduling; 
  
 (ii) Excess Inventory resulting from such cancellation or
rescheduling in accordance with this Agreement; 
  
 (iii) actual, non-recoverable costs incurred by Supplier prior to cancellation or rescheduling pursuant to an Order or a Statement of Work, provided that Supplier substantiates the amount of such costs through documentation that is
reasonably satisfactory to SPANSION; and 
  
 (iv)
any other amounts payable under the applicable SOW. 
  

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 Supplier shall use all commercially
reasonable efforts to limit SPANSION’s liability in this regard in accordance with Section 7. Unless otherwise provided in this Agreement or the Applicable Statement of Work, SPANSION shall have no other liability or responsibility arising
out of any cancellation or rescheduling of Services except as stated above. 
  
 (g) Shipping Terms; Title & Risk of Loss. Except as otherwise agreed by the parties in writing, terms of shipment for the Products, when the Services have been completed, shall be: Ex Works (EXW)
– Supplier’s plant of manufacture and/or Services, as defined in Incoterms 2000. Title for Products shall remain with SPANSION throughout the period when the Products are in Supplier’s possession or storage. Risk of loss shall pass to
SPANSION upon delivery to SPANSION’s designated carrier, subject to Section 6(c). 
  
 (h) Affiliates. This Agreement shall govern Statements of Work executed by SPANSION’s and Supplier’s Affiliates and/or Orders issued and accepted by SPANSION’s and Supplier’s Affiliates,
whereby SPANSION’s and Supplier’s Affiliates expressly agree in writing to be bound to the terms and conditions of this Agreement for the purpose of the applicable transaction(s); provided that SPANSION shall be jointly and severally
liable to Supplier for the obligations of SPANSION’s Affiliates. Any such Statement of Work or Order shall incorporate the terms and conditions of this Agreement by reference. 
  

	3.	Pricing & Payments 

  
 (a) Pricing. Prices for Services and Products shall be as set forth in the applicable Statement of Work. Turnkey Component prices shall be subject
to review by the parties on a quarterly basis or as otherwise mutually agreed at a price review meeting to be arranged by the authorized representatives of the parties. 
  
 (b) Payment Terms. Payments of all undisputed amounts under this Agreement shall be due by the end of the month, net
forty-five (45) days after SPANSION receives an itemized invoice from Supplier, provided that invoices may not be sent until delivery has been made to SPANSION. Supplier shall invoice Products in accordance with the unit of measure set forth in
the applicable Statement of Work or Order. Payments shall be mailed to Supplier at the address indicated in the applicable Order or wire transferred to the bank account designated by the Supplier. Payment shall be made in U.S. dollars absent a
written agreement to the contrary in the applicable Statement of Work. Payment of invoices does not constitute final acceptance of the Services or Product. 
  
 (c) Cost Reduction & Value Engineering. Supplier and SPANSION agree that a mutual goal of their commercial relationship is to decrease
total costs associated with performing Services and producing Products. Both parties agree to use reasonable efforts to provide alternative technical and commercial solutions that reduce costs through design and process improvements. All such
Product improvements must be approved by SPANSION. Supplier shall notify SPANSION of any reductions in the cost of providing the Services and Products during periodic price reviews. Supplier and SPANSION shall share the cost reduction on a 50/50
basis during the first three months of any resulting price reduction, and thereafter, adjustment shall be made to the price to reflect 100% of such cost reductions. This cost savings sharing model does not apply to market driven component price
reductions or increases that occur as a result of normal industry activity, and all such component price adjustments shall be fully passed through to SPANSION immediately. 
  

	4.	Time Of Performance 

  
 (a) Delays. Time is of the essence under this Agreement. Supplier shall commence Services hereunder at the time specified in the applicable Order
and shall finish such Services by the date specified therein. By executing this Agreement and accepting the Order and/or Statement of 
  

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 Work, Supplier agrees that the time limit specified
in the Order, when accepted by Supplier, and/or Statement of Work for the tasks described therein are reasonable. Supplier shall use all reasonable efforts to minimize any delay that may prevent its timely compliance with one or more requirements of
this Agreement. Whenever the timely achievement of Supplier’s responsibilities pursuant to this Agreement has been or shall be adversely affected by any delay, Supplier shall promptly notify SPANSION stating the anticipated length of the delay,
the cause of the delay, the measures proposed or taken to prevent or minimize the delay, and the timetable for implementation of such measures. 
  
 (b) Force Majeure. Neither party shall be held responsible for any delay or failure in performance of any part of this Agreement to the extent such
delay or failure is caused by an act of God or other similar causes beyond its control and without the fault or negligence of the delayed or non-performing party including without limitation strikes, utility shortages, riots, insurrection, fires,
flood, storm, explosions, epidemics, SARS, war, governmental action, labor conditions, and earthquakes (each a “Force Majeure Event”). Delays by vendors designated by SPANSION in the delivery of materials and/or equipment that cause a
delay in Services agreed to by Supplier shall constitute a Force Majeure Event. A party who is delayed or fails to perform as a result of a Force Majeure Event (“Affected Party”) shall use its commercially reasonable efforts (including
without limitation rescheduling labor and resources) to mitigate and minimize any resulting delay in the performance of the suspended obligation. The Affected Party shall provide written notice to the other party within twenty-four (24) hours
of learning of a Force Majeure Event stating the nature and cause of the event and shall provide written notice within one (1) business day of the anticipated length of the delay, the measures proposed or taken by the Affected Party to minimize
the delay, and the timetable for implementation of such measures. If Supplier is the Affected Party and a Force Majeure Event occurs, SPANSION may, at any time after receiving Supplier’s notice of the anticipated length of the delay, the
measures proposed or taken by Supplier to minimize the delay, and the timetable for implementation of such measures, (i) conduct business elsewhere with respect to the affected Products, and deduct such business from any committed quantities
during the period of occurrence of Force Majeure Event; and/or (ii) extend the term of this Agreement up to the length of time of the delay. 
  

	5.	Periodic Supplier Reviews 

  
 The parties agree to meet quarterly to review Supplier’s performance with regards to mutually agreed upon metrics. 
  

	6.	Consigned Components/Hardware 

  
 (a) Component Warehousing. Supplier shall provide warehousing services at Supplier’s manufacturing plant or other storage facility designated
by Supplier for the Consigned Components/Hardware consisting of receiving, storage, order picking, shipment preparation and execution, pick and pack processing, cycle counting, and performance tracking and inspection of the Consigned
Components/Hardware as set out in this section. Supplier shall further provide SPANSION, its employees and agents, accessibility to the Consigned Components/Hardware on Supplier’s premises during normal business hours and permit the retrieval
and removal of any Consigned Components/Hardware, subject to Supplier’s reasonable confidentiality, safety and security requirements. Upon termination of this Agreement or at any time upon SPANSION’s request, Supplier shall promptly return
in good condition any Consigned Components/Hardware back to SPANSION at SPANSION’s expense. 
  
 (b) Shipping Terms. Terms of shipment for Consigned Components/Hardware to Supplier shall be: Delivered Duty Paid (DDP) – Supplier’s
plant as defined in Incoterms 2000. 
  
 (c) Title &
Risk of Loss. Title and right of possession to all Consigned Components/Hardware shall at all times remain with SPANSION. Liability for loss of or damage to Consigned Components/Hardware, other than for manufacturing yield loss, shall pass to
Supplier once the Consigned Components/Hardware are delivered to Supplier. In the event of such loss or damage to Consigned Components/Hardware while in the control of Supplier attributable to Supplier, Supplier shall compensate SPANSION within
ninety (90) days of the loss or damage for the manufacturing cost 
  

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 of the Consigned Component/Hardware as reasonably
determined by SPANSION. All damaged, scrap or rejected Consigned Components/Hardware or Product must be returned to SPANSION, with appropriate documentation in a timely manner. For purposes of this Agreement, “manufacturing yield loss”
shall mean the loss of or damage to Consigned Components/Hardware resulting from normal and customary errors in the manufacturing process, not to exceed that amount specified in the applicable Statement of Work. 
  
 (d) Security Requirements. To protect the Products and Consigned
Components/Hardware, Supplier shall comply with the SPANSION security requirements, guidelines and procedures set forth in Appendix 1 attached hereto and incorporated by reference herein, and shall take all other measures reasonable prudent to
prevent the theft of or damage to Products and Consigned Components/Hardware while in Supplier’s control. Supplier must maintain reasonable documentation of all Consigned Components/Hardware used and in inventory and provide copies to SPANSION
Security in the event a discrepancy is identified. 
  
 (e)
Inventory Tracking. Supplier shall track and account for all SPANSION Consigned Components/Hardware and Product at all times. Upon request, Supplier shall send to SPANSION an inventory reconciliation report of Consigned Components/Hardware
and Product that includes the following information by SPANSION part number and any other information mutually agreed by the parties: 
  
 (i) the number of Consigned Components/Hardware received during the applicable period, 
  
 (ii) the ending inventory for work-in-process on the
production line including the Consigned Component/Hardware inventory issued to the production line and the Product inventory in rework, 
  
 (iii) the ending inventory in the Supplier’s staging area, 
  
 (iv) the total number of Consigned Components/Hardware delivered to Supplier, 
  
 (v) the ending inventory of rejects being held by Supplier,
and 
  
 (vi) the total number of rejected
Products and/or rejected Consigned Components/Hardware and/or Products shipped to SPANSION. 
  

	7.	Component Sourcing, Pricing and Inventory 

  
 (a) Component Sourcing. If agreed upon by the parties and set forth in the applicable Statement of Work: (i) Turnkey Components shall be
purchased only from SPANSION-approved vendors; (ii) Supplier shall not utilize a Turnkey Component vendor or purchase any Turnkey Component item other than an item specifically approved by SPANSION without obtaining prior written approval from
SPANSION; (iii) absent an agreement to the contrary in the applicable Statement of Work, Supplier shall issue purchase orders to SPANSION-approved vendors for sufficient quantities of Turnkey Components, taking into account manufacturer
lead-times, so as to ensure Turnkey Component availability as necessary to meet SPANSION forecast requirements as set forth in the applicable Statement of Work; (iv) unless otherwise agreed in the applicable Statement of Work, when the
applicable manufacturer has established minimum order quantities for a Turnkey Component, Supplier may order that Turnkey Component in quantities that exceed SPANSION’s forecasted requirements by up to five percent (5%); and (v) any order
of Turnkey Components that exceeds the quantity percentage in the previous sentence requires the prior written approval of SPANSION. Unless otherwise agreed by SPANSION in writing, any Turnkey Components purchased by Supplier not in accordance with
this subsection shall be the responsibility of the Supplier; associated costs shall not be passed on to SPANSION. 
  

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 (b) Component Pricing. If
agreed upon by the parties and set forth in the applicable Statement of Work and if SPANSION is able to secure lower pricing on any Turnkey Component, with a lead-time and other terms and conditions that are equal to or better than a Supplier-priced
bill of materials, Supplier agrees to utilize the SPANSION source if such source agrees to conduct business with Supplier based on such lower pricing and if Supplier after exercising good faith efforts is able to negotiate terms of purchase with the
SPANSION source that are reasonably acceptable to Supplier. 
  
 (c) Obligations for Excess Inventory. If agreed upon by the parties and set forth in the applicable Statement of Work, on or about the fifteenth day of each month, Supplier shall provide a report to SPANSION specifying the quantity
of Excess Inventory currently on hand. No later than the ninetieth (90th) day following the date on which
Supplier provides such report, provided that Supplier has performed Mitigation Efforts for a period of at least two (2) weeks, SPANSION shall issue to Supplier a purchase order for: 
  
 (i) any remaining Excess Inventory at the cost on the current SPANSION-approved bill of materials, and

  
 (ii) under-recoveries resulting from the sale
of Excess Inventory or returns to the material vendor as part of the Mitigation Efforts at prices less than Supplier and relating to re-stocking or return charges. 
  
 Upon purchase by SPANSION under this subsection, Excess Inventory shall either be returned to SPANSION or scrapped, at
SPANSION’s direction and expense. 
  
 (d) Product
Quality. Supplier shall manufacture the Products and/or provide the Services in accordance with the Specifications, the applicable Statement of Work, and standards of quality control and test procedures based on Supplier’s ISO 9000
procedures. 
  

	8.	Engineering Change Requests And Change Orders 

  
 (a) Engineering Change Request. Supplier shall not make any changes to Product and/or Services or any process specifically defined in the
Specifications without SPANSION’s written authorization. That written authorization shall only be accepted in the form of an approved Engineering Change Request (ECR) or Deviation signed by an authorized representative of SPANSION. The ECR or
Deviation may include, but is not limited to, changes in the Product’s design, components, or suppliers listed in the SPANSION Approved Vendor List, or assembly and/or testing processes specifically defined in the Specifications. Either
SPANSION or Supplier may initiate an ECR or a Deviation. 
  
 (b)
Response to ECR. Supplier shall review and respond to all ECRs initiated by SPANSION in writing within two (2) business days with the feasibility, cost, schedule, and availability impact of the proposed change. SPANSION shall respond to
a Supplier ECR in writing and shall not unreasonably withhold or delay its approval. Supplier shall use all reasonable efforts to comply with such agreed upon Supplier or SPANSION ECRs. If Supplier and SPANSION cannot agree to implement the ECR,
SPANSION may, at its sole discretion, cancel outstanding Orders with respect to the affected Products, in whole or in part, in accordance with Section 2 (e) and (f) above. Both SPANSION and Supplier shall handle Deviations and
emergency ECR in a time-critical manner. 
  
 (c) Associated
Costs. All costs of implementing agreed ECRs initiated by SPANSION shall be the responsibility of SPANSION only if such costs are approved by SPANSION in advance of the change. All costs of implementing ECRs initiated by Supplier solely to
improve its manufacturing and/or Services processes shall be the responsibility of Supplier. Any Excess Inventory resulting from an ECR shall be dealt with in accordance with Section 7 above. 
  

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	9.	Quality Assurance 

  
 Supplier shall comply with all quality requirements and maintain all quality systems, policies and procedures set forth in the applicable Statement of
Work. 
  

	10.	Rejected Product 

  
 Supplier shall notify SPANSION of problems associated with Consigned Components/Hardware on a regular basis and shall return defective Consigned
Components/Hardware as directed by SPANSION. For problems mutually determined to be due to a problem with a Consigned Component/Hardware or the Specifications, SPANSION shall compensate Supplier on a mutually agreed schedule to reimburse Supplier
for its actual costs for material and labor. For problems mutually determined to be due to a problem with workmanship, SPANSION shall not compensate Supplier for any material, labor, or related expenses. If the parties are unable to mutually agree
as to the cause of the problem, then the parties may engage a mutually agreed independent third party expert to determine the cause of the problem, and the fees and expenses associated with engaging such expert shall be borne by the party whose
assertion of the cause of the problem was incorrect. 
  

	11.	Hazards 

  
 In the event that either Supplier or SPANSION becomes aware of any information which reasonably supports a conclusion that a defect may exist in any
Product which could cause harm to any person or property damage (“Hazard”), the party becoming aware of this information shall immediately notify the other of the Hazard. Supplier and SPANSION shall promptly exchange all relevant data and
information, and, as promptly as possible, meet to review and discuss the data, information, tests and conclusions relating to the alleged Hazard. At this meeting the parties shall discuss the basis for any remedial or corrective action, including
without limitation the origin or cause of the alleged Hazard. 
  

	12.	Standards for Performance 

  
 (a) General Performance Requirements. Except as specifically agreed to the contrary in the applicable Order or Statement of Work in writing by the
parties, Supplier shall furnish all labor, materials, tools, equipment, and supervision necessary to perform the Services in accordance with the terms and conditions of this Agreement and the applicable Statement of Work. Supplier shall provide
proper training and education to all persons performing Services, and shall ensure that such persons have sufficient experience and expertise to perform the Services in an efficient and effective manner. Upon SPANSION’s request, Supplier shall
provide to SPANSION reasonably satisfactory evidence of such training, education, experience, and expertise. SPANSION’s acceptance of Supplier’s workmanship, materials, or Product and/or Services which do not conform to the applicable
specifications shall not relieve Supplier of the warranty obligations herein. 
  
 (b) General Warranties by Supplier. Supplier warrants to SPANSION that: 
  
 (i) Supplier has the power and authority to enter into this Agreement, 
  
 (ii) Supplier shall maintain sufficient Capacity under the terms and conditions in each applicable Statement
of Work to perform the Services as specified in each applicable Statement of Work; and 
  
 (iii) each of Supplier’s employees, subcontractors or agents involved in the Services provided to SPANSION under this Agreement have
signed an agreement with Supplier agreeing to abide by confidentiality requirements with respect to SPANSION’s Confidential Information that are at least as protective of such information as the confidentiality obligations set forth in this
Agreement. 
  

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 (c) Product Warranties. For
twelve (12) months from the Product ship date, Supplier warrants to SPANSION that each Product provided by Supplier to SPANSION or its designee(s): 
  
 (i) shall be free from defects in workmanship and materials (except for Turnkey Components), subject to subsection 12(d) below,

  
 (ii) shall be manufactured in accordance with
any standards specified in a Statement of Work as such standards relate to Supplier’s manufacturing processes and Services provided, and 
  
 (iii) shall conform to all applicable specifications and other criteria set forth in the applicable Statement of Work. 
  
 (d) Turnkey Components Warranty. If agreed upon
by the parties and set forth in the applicable Statement of Work, Supplier agrees to pass through all warranty protection and rights it receives with regard to its purchase of Turnkey Components to the maximum extent possible under its purchase
agreement with each applicable vendor. If the warranty period on any Turnkey Component is less than ninety (90) days, Supplier shall not purchase such Turnkey Component without obtaining SPANSION’s prior written consent. 

 
 (e) Services Warranties. Supplier covenants and warrants that
Supplier shall perform all Services in accordance with the standards and practices of care, skill, and diligence customarily observed by similar firms under similar circumstances at the time the Services are rendered. Supplier warrants that all
Services shall comply with all Specifications and/or other requirements set forth in the applicable Statement of Work, and any deliverables resulting from such Services shall be free of defects in workmanship and materials in accordance with the
quality standards as set forth in the applicable Statement of Work. Supplier shall utilize and comply with the relevant portions of any regulatory standards specifically referred to in the Statement of Work. 
  
 (f) Remedies. SPANSION shall notify Supplier promptly in writing of
any defect or nonconformity in Product resulting from defects in Supplier’s workmanship, if applicable, or Supplier’s failure to conform to the Specifications set forth in the applicable Statement of Work as set forth in Section 12(c)
above. Supplier shall, at Supplier’s expense and at Supplier’s option, promptly repair, replace, or accept the return of and credit SPANSION for, such defective or nonconforming Product. Product returned to Supplier for warranty claims
shall be repaired or replaced to the engineering level that the Product was originally manufactured to unless the parties agree otherwise. The foregoing remedies are in addition to all other remedies at law, in equity, or under this Agreement, and
shall not be deemed to be exclusive. SPANSION shall obtain a return material authorization number from Supplier before returning the defective Product to Supplier’s designated facility (which return shall be at SPANSION’s expense).
Supplier shall pay for delivery of repaired or replaced Products where found by Supplier to be defective under Section 12(c) above. If a Product is replaced, title to the replaced product shall pass to Supplier on delivery to Supplier and title
to the replacement Product shall pass to SPANSION on delivery to SPANSION. 
  
 (g) Exclusions. Supplier’s warranty for Product and Services does not extend to: 
  
 (i) Product that has been subject to abuse, misuse, unauthorized or faulty repairs, alteration or tampering by SPANSION or SPANSION’s
customer, or that has been operated in a manner in violation of operational installation, maintenance or instruction, as mutually determined by the parties in good faith, or 
  
 (ii) any defect caused by an error or omission or other fault in specifications, data, software, materials,
information or know-how provided by SPANSION in writing, or 
  
 (iii) any defect not caused solely by Supplier’s Services. 
  

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 (h) Inspection. At reasonable
times and under reasonable conditions and subject to Supplier’s normal confidentiality and security requirements, SPANSION shall have the right to inspect Supplier’s performance of Services during office hours. At the conclusion of the
performance of any Services, SPANSION shall have the right to make any final inspection or tests that SPANSION shall deem advisable. 
  

	13.	Data Network and Transfer Of Information 

  
 If required in the applicable Statement of Work, Supplier shall maintain a communications network for transferring information between Supplier and
SPANSION. Specific requirements for any such network and for what specific data is to be transferred shall be set forth in the applicable Statement of Work. 
  

	14.	Confidentiality 

  
 (a) Supplier’s Obligations. All communications and information obtained by Supplier from SPANSION relating to this Agreement are confidential
(“SPANSION Confidential Information). Without the prior written consent of an authorized representative of SPANSION, Supplier shall neither divulge to, nor discuss with, any third party other than its Affiliates such SPANSION Confidential
Information. Prior to any disclosure of SPANSION Confidential Information, whether as required by law or otherwise, Supplier shall inform SPANSION in writing of the nature and reasons for such disclosure. Supplier shall not use any communication or
information obtained from SPANSION for any purpose other than the performance of this Agreement, without SPANSION’s prior written consent. Upon termination or expiration of this Agreement, Supplier shall destroy or return to SPANSION all
written materials constituting or incorporating any SPANSION Confidential Information. Upon SPANSION’s specific approval, Supplier may retain copies of such materials, subject to the requirements of this Subsection (a). SPANSION shall use all
reasonable efforts to mark all communications and information as “Confidential.” 
  
 (b) SPANSION’s Obligations. All communications and information obtained by SPANSION from Supplier relating to this Agreement are confidential (“Supplier Confidential Information). Without the prior
written consent of an authorized representative of Supplier, SPANSION shall neither divulge to, nor discuss with, any third party other than its Affiliates such Supplier Confidential Information. Prior to any disclosure of Confidential Information,
whether as required by law or otherwise, SPANSION shall inform Supplier in writing of the nature and reasons for such disclosure. SPANSION shall not use any communication or information obtained from Supplier for any purpose other than the
performance of this Agreement, without Supplier’s prior written consent. Upon termination or expiration of this Agreement, SPANSION shall destroy or return to Supplier all written materials constituting or incorporating any Supplier
Confidential Information. Upon Supplier’s specific approval, SPANSION may retain copies of such materials, subject to the requirements of this Subsection (b). Supplier shall use all reasonable efforts to mark all communications and information
as “Confidential.” 
  
 (c) Exclusions. The
parties’ obligation of confidentiality hereunder shall not apply to any information disclosed hereunder if the disclosing party establishes that (i) the information was publicly known at the time of its receipt by the recipient party or
has become publicly known other than by a breach of this Agreement or other action by the recipient party; (ii) the information was already known to the recipient party or independently developed by the recipient party, without obligation to
keep it confidential, at the time of its receipt from the disclosing party; (iii) the information was received by the recipient party in good faith from a third party lawfully in possession thereof and having no obligation to keep such
information confidential; (iv) the information is compelled to be disclosed by judicial or administrative order, process or regulation (including in connection with obtaining the necessary approvals of this Agreement by governmental authorities
or by other requirements of applicable laws); (v) the information is to be disclosed to each party’s financial advisors, certified public accountants, investment bankers, underwriters, legal counsels or any other professionals and those of
its counterparts for the purpose of fund raising; or (vi) the information is to be disclosed in compliance with the applicable laws (including U.S. securities regulations) or stock exchange regulations if the disclosing party determines in good
faith, upon advice of counsel, that it is necessary to do so after giving prior notice to the other party and using its reasonable efforts (given any time constraints) to contact the other party and to discuss such disclosure with such other party.

  

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 (d) Approved Disclosures.
Supplier may disclose to any subcontractor or SPANSION-approved third party any information otherwise subject to Subsection (a) above that is reasonably required for the performance of the subcontractor’s or third party’s work. Prior
to any such disclosure, Supplier shall obtain the subcontractor’s or third party’s written agreement to the requirements of Subsection (a) above and shall provide a copy of such agreement to SPANSION. 
  
 (e) Advertising. Each party agrees that it shall not publish or cause
to be disseminated through any press release, public statement, or marketing or selling effort any information that relates to the other party or this Agreement without the prior written approval of the other party. 
  
 (f) Joint Press Release. Notwithstanding the above, the parties shall
issue a press release or public statement regarding execution of this Agreement and the content hereof upon execution of this Agreement, provided that such press release or public statement shall be mutually agreed upon by the parties. 

 

	15.	Intellectual Property Rights 

  
 (a) Supplier Intellectual Property Rights. The parties agree that the Intellectual Property Rights of all writings, software, drawings, designs,
copyrightable material, mask works, inventions, improvements, developments, and discoveries owned by Supplier prior to or during the term of this Agreement, and disclosed, used, made, implemented, performed or reduced to practice independently by
Supplier during the course of this Agreement that relate in any manner to the Services to be performed or the Products in accordance with the applicable Statements of Work (“Supplier Intellectual Property Rights”) shall remain the sole and
exclusive property and proprietary information of Supplier. 
  
 (b) SPANSION Intellectual Property Rights. The parties agree that the Intellectual Property Rights of all writings, software, drawings, designs, copyrightable material, mask works, inventions, improvements, developments, and
discoveries owned by SPANSION prior to or during the term of this Agreement, and disclosed, used, made, implemented, performed or reduced to practice independently by SPANSION during the course of this Agreement that relate in any manner to the
Services to be performed or the Products in accordance with the applicable Statements of Work (“SPANSION Intellectual Property Rights”) shall remain the sole and exclusive property and proprietary information of SPANSION. 
  
 (c) Assistance by Supplier. Supplier agrees to assist SPANSION, at
SPANSION’s expense, in every proper way to enable SPANSION to obtain, perfect, defend, and enforce its rights in and to all such SPANSION Intellectual Property Rights in any and all countries, including the disclosure to SPANSION of all
pertinent information and data with respect thereto, and the execution of all applications, specifications, oaths, assignments, and all other instruments that SPANSION shall deem necessary in order to apply for and obtain copyright protection, mask
work registration, and/or letters patent, and in order to assign and convey to SPANSION, its successors, assigns, and nominees, sole and exclusive rights, title, and interest in and to such copyrights, mask works, inventions, patent applications, or
patents. 
  
 (d) Assistance by SPANSION. SPANSION agrees to
assist Supplier, at Supplier’s expense, in every proper way to enable Supplier to obtain, perfect, defend, and enforce its rights in and to all such Supplier Intellectual Property Rights in any and all countries, including the disclosure to
Supplier of all pertinent information and data with respect thereto, and the execution of all applications, specifications, oaths, assignments, and all other instruments that Supplier shall deem necessary in order to apply for and obtain copyright
protection, mask work registration, and/or letters patent, and in order to assign and convey to Supplier, its successors, assigns, and nominees, sole and exclusive rights, title, and interest in and to such copyrights, mask works, inventions, patent
applications, or patents. 
  

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 (e) Survival of
Section 15(c). Supplier’s obligation to execute (or cause to be executed), at SPANSION’s expense, instruments or papers such as those described in Subsection 15(c) above, shall continue after the termination or expiration of this
Agreement with respect to any and all copyrights, mask works, and/or inventions to be assigned to SPANSION under the applicable Statements of Work. If testimony or information relative to any of said matters or related to any interference or
litigation is required by SPANSION either during the term of this Agreement or following its termination or expiration which is available to Supplier but not available to SPANSION, Supplier agrees to give all information and testimony and do all
things requested of it that Supplier may lawfully do, provided that, if such matters shall be required of Supplier, Supplier shall receive reasonable compensation for the time so consumed and reimbursements. 
  
 (f) Survival of Section 15(d). SPANSION’s obligation to
execute (or cause to be executed), at Supplier’s expense, instruments or papers such as those described in Subsection 15(d) above, shall continue after the termination or expiration of this Agreement with respect to any and all copyrights, mask
works, and/or inventions to be assigned to Supplier under the applicable Statements of Work. If testimony or information relative to any of said matters or related to any interference or litigation is required by Supplier either during the term of
this Agreement or following its termination or expiration which is available to SPANSION but not available to Supplier, SPANSION agrees to give all information and testimony and do all things requested of it that SPANSION may lawfully do, provided
that, if such matters shall be required of SPANSION, SPANSION shall receive reasonable compensation for the time so consumed and reimbursements. 
  
 (g) Non-disclosure. In the event SPANSION should not seek to obtain copyright protection, mask work registration, or patent protection for any of
said Intellectual Property Rights, but should desire to keep the same secret, Supplier agrees to assist SPANSION in this regard and shall not disclose any information as to the same except with the written consent of SPANSION. In the event Supplier
should not seek to obtain copyright protection, mask work registration, or patent protection for any of said Intellectual Property Rights, but should desire to keep the same secret, SPANSION agrees to assist Supplier in this regard and shall not
disclose any information as to the same except with the written consent of Supplier. 
  
 (h) Use of Third Party Intellectual Property. Supplier agrees to notify and request approval from SPANSION in writing prior to the inclusion of any third party intellectual property, including software and
documentation, into any Services. SPANSION may decline such approval in SPANSION’s reasonable discretion. Supplier warrants that Supplier has the right to include such third party intellectual property in the Services, and that SPANSION shall
have the right to use any Services based upon such third party intellectual property to the same extent as SPANSION may use such Services pursuant to this Agreement. SPANSION agrees to notify Supplier in writing prior to the inclusion of any third
party intellectual property, including software and documentation, into any Services. Supplier may decline to use such third party intellectual property upon receipt of any notice by the third party that such intellectual property infringes upon the
intellectual property of such notifying third party. 
  
 (i)
Joint Intellectual Property Rights. The parties agree that the Intellectual Property Rights of all writings, software, drawings, designs, copyrightable material, mask works, inventions, improvements, developments, and discoveries jointly
developed by the parties during the course of this Agreement that relate in any manner to the Services to be performed or the Products in accordance with the applicable Statements of Work (“Joint Intellectual Property Rights”) shall be
jointly owned by the parties, each of whom shall have an undivided ownership interest therein. The parties further agree that: 
  
 (i) Each party grants the other party a non-exclusive, royalty-free, perpetual license (including the right to sub-license) to the Joint
Intellectual Property Rights. Each party shall have the full and unrestricted rights to design, have designed, develop, have developed, make, have made, manufacture, license, use, lease, sell, offer to sell, import, export or otherwise dispose of
any semiconductor product or device using any portion of the technologies under such Joint Intellectual Property Rights and to license, use, reproduce, modify and make derivative works of any copyrightable materials for use of any portion of the
technologies under such Joint Intellectual Property Rights, without any further obligation and consideration due or payable to the other party, as if such a party is the sole owner of such Joint Intellectual Property Rights; 
  

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 (ii) If the consent
or approval of a co-owner is required by the IPR-related laws or regulations of any country or jurisdiction for exercise of any part of the rights or ownership interests described in Section 15(i)(i), such consent or approval is hereby given by
the other party for the exercise; and 
  
 (iii)
The parties shall cooperate, with each party bearing its own expenses, and each party agrees to assist the other party, at the other party’s expense, in every proper way to enable each party to obtain, perfect, defend, and enforce its rights in
and to the Joint Intellectual Property Rights in any and all countries, including the disclosure by each party to the other party of all pertinent information and data with respect thereto, and the execution of all applications, specifications,
oaths, assignments, and all other instruments by each party that the other party shall deem necessary in order to apply for and obtain copyright protection, mask work registration, and/or letters patent, and in order to assign and convey to each
party, its successors, assigns, and nominees, rights, title, and interest in and to such copyrights, mask works, inventions, patent applications, or patents. 
  

	16.	Indemnification 

  
 (a) General Indemnification Obligations. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT TO THE CONTRARY BUT SUBJECT TO SECTION 19(d)
(LIMITATION OF LIABILITY) INCLUDING THE EXCEPTIONS THERETO, EACH PARTY AGREES TO INDEMNIFY, DEFEND, AND HOLD HARMLESS THE OTHER PARTY, THE OTHER PARTY’S SUBSIDIARIES, AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, SUBCONTRACTORS, CONSULTANTS, AND
AGENTS FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, DAMAGES, LOSSES, AND EXPENSES ARISING OUT OF, IN CONNECTION WITH, OR RESULTING FROM ANY ACT OR OMISSION IN THE PERFORMANCE OF ANY AND ALL OBLIGATIONS HEREUNDER. SUBJECT TO SECTION 19(d)
(LIMITATION OF LIABILITY), SUCH INDEMNIFICATION OBLIGATION SHALL INCLUDE BUT NOT BE LIMITED TO THE PAYMENT OF ALL REASONABLE ATTORNEYS’ FEES, COSTS AND EXPENSES OF CONSULTANTS AND EXPERT WITNESSES, COSTS OF APPEAL, AND OTHER COSTS INCURRED IN
DEFENDING ANY SUCH CLAIMS. 
  
 (b) Supplier Intellectual Property
Indemnification Obligations. 
  
 (i) SUBJECT TO
SECTION 19(d) (LIMITATION OF LIABILITY) INCLUDING THE EXCEPTIONS THERETO, SUPPLIER AGREES TO DEFEND, INDEMNIFY, AND HOLD HARMLESS SPANSION AND ITS SUBSIDIARIES, AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, SUBCONTRACTORS (OF ANY TIER), CONSULTANTS,
AND AGENTS FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, DAMAGES, LOSSES, AND EXPENSES THAT THE TECHNOLOGIES OWNED BY SUPPLIER OR LICENSED TO SUPPLIER NOT RELATED TO THOSE OF SPANSION OR ITS SUPPLIERS OR LICENSOR OR THE LIKE AND USED FOR PERFORMANCE
OF THE SERVICES HEREUNDER INFRINGE A COPYRIGHT, PATENT, OR OTHER INTELLECTUAL PROPERTY RIGHT OF A THIRD PARTY, PROVIDED THAT (i) SPANSION NOTIFIES SUPPLIER IN WRITING WITHIN THIRTY (30) DAYS OF THE CLAIM; (ii) SUPPLIER HAS SOLE
CONTROL OF THE DEFENSE AND ALL RELATED SETTLEMENT NEGOTIATIONS, BUT SPANSION SHALL BE ALLOWED TO APPROVE ANY FINAL SETTLEMENT, PROVIDED THAT SPANSION’S APPROVAL SHALL NOT BE UNREASONABLY WITHHELD; AND (iii) SPANSION PROVIDES SUPPLIER WITH
THE ASSISTANCE, INFORMATION, AND AUTHORITY NECESSARY TO PERFORM SUPPLIER’S OBLIGATIONS UNDER THIS SECTION. SUBJECT TO SECTION 19(d) (LIMITATION OF LIABILITY) INCLUDING THE EXCEPTIONS THERETO, SUPPLIER SHALL REIMBURSE SPANSION’S REASONABLE
OUT-OF-POCKET EXPENSES INCURRED IN PROVIDING SUCH ASSISTANCE AND/OR INFORMATION. SUBJECT TO SECTION 19(d) (LIMITATION OF LIABILITY) INCLUDING THE EXCEPTIONS THERETO, SUCH INDEMNIFICATION OBLIGATION SHALL INCLUDE BUT NOT BE LIMITED TO THE PAYMENT OF
ALL REASONABLE ATTORNEYS’ FEES, COSTS AND EXPENSES OF CONSULTANTS AND EXPERT WITNESSES, COSTS OF APPEAL, AND OTHER COSTS INCURRED IN DEFENDING ANY SUCH CLAIMS. 
  

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 (ii) IF THE FOREGOING
TECHNOLOGIES ARE BELIEVED BY SUPPLIER TO INFRINGE, SUPPLIER SHALL, AT ITS OPTION AND EXPENSE, EITHER (i) MODIFY THE FOREGOING TECHNOLOGIES TO BE NONINFRINGING; OR (ii) OBTAIN A LICENSE TO CONTINUE USING THE FOREGOING TECHNOLOGIES IN THE
MANNER DESCRIBED IN THE PURCHASE ORDER AND/OR STATEMENT OF WORK. IF IT IS NOT POSSIBLE FOR SUPPLIER TO PERFORM EITHER OF THE ABOVE OPTIONS, THEN SUPPLIER MAY TERMINATE THIS AGREEMENT FOR THE INFRINGING FOREGOING TECHNOLOGIES AND REFUND TO SPANSION
ALL OF THE FEES PAID BY SPANSION FOR THOSE PRODUCTS CONTAINING FOREGOING TECHNOLOGIES, SUBJECT TO SECTION 19(d) (LIMITATION OF LIABILITY) INCLUDING THE EXCEPTIONS THERETO. 
  
 (c) SPANSION Intellectual Property Indemnification Obligations. 
  
 (i) SUBJECT TO SECTION 19(d) (LIMITATION OF LIABILITY)
INCLUDING THE EXCEPTIONS THERETO, SPANSION AGREES TO DEFEND, INDEMNIFY, AND HOLD HARMLESS SUPPLIER AND ITS SUBSIDIARIES, AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, SUBCONTRACTORS (OF ANY TIER), CONSULTANTS, AND AGENTS FROM AND AGAINST ANY AND ALL
CLAIMS, DEMANDS, DAMAGES, LOSSES, AND EXPENSES THAT THE TECHNOLOGIES OWNED BY SPANSION OR LICENSED TO SPANSION NOT RELATED TO THOSE OF SUPPLIER OR ITS SUPPLIERS OR LICENSOR OR THE LIKE AND USED FOR PERFORMANCE OF THE SERVICES HEREUNDER INFRINGE A
COPYRIGHT, PATENT, OR OTHER INTELLECTUAL PROPERTY RIGHT OF A THIRD PARTY, PROVIDED THAT (i) SUPPLIER NOTIFIES SPANSION IN WRITING WITHIN THIRTY (30) DAYS OF THE CLAIM; (ii) SPANSION HAS SOLE CONTROL OF THE DEFENSE AND ALL RELATED
SETTLEMENT NEGOTIATIONS, BUT SUPPLIER SHALL BE ALLOWED TO APPROVE ANY FINAL SETTLEMENT, PROVIDED THAT SUPPLIER’S APPROVAL SHALL NOT BE UNREASONABLY WITHHELD; AND (iii) SUPPLIER PROVIDES SPANSION WITH THE ASSISTANCE, INFORMATION, AND
AUTHORITY NECESSARY TO PERFORM SPANSION’S OBLIGATIONS UNDER THIS SECTION. SUBJECT TO SECTION 19(d) (LIMITATION OF LIABILITY) INCLUDING THE EXCEPTIONS THERETO, SPANSION SHALL REIMBURSE SUPPLIER’S REASONABLE OUT-OF-POCKET EXPENSES INCURRED
IN PROVIDING SUCH ASSISTANCE AND/OR INFORMATION. SUBJECT TO SECTION 19(d) (LIMITATION OF LIABILITY) INCLUDING THE EXCEPTIONS THERETO, SUCH INDEMNIFICATION OBLIGATION SHALL INCLUDE BUT NOT BE LIMITED TO THE PAYMENT OF ALL REASONABLE ATTORNEYS’
FEES, COSTS AND EXPENSES OF CONSULTANTS AND EXPERT WITNESSES, COSTS OF APPEAL, AND OTHER COSTS INCURRED IN DEFENDING ANY SUCH CLAIMS. 
  

	17.	Insurance 

  
 (a) Supplier represents that it has procured, and at all times during the term of this Agreement shall maintain, in addition to mandatory insurance
requirements imposed by Taiwanese Labor Law, worker’s compensation, employer’s liability, comprehensive general liability (including without limitation premises-operations, completed operations, contractual, broad form property damage,
personal injury), comprehensive automobile liability (for all owned, non-owned, and hired vehicles) insurance covering activities and obligations undertaken by Supplier pursuant to this Agreement, subject to Section 16(a). 
  
 (b) All such insurance shall provide coverage on the basis of occurrences
during the policy period, and not on the basis of claims made during the policy period. Supplier shall procure additional amounts or categories of insurance coverage, if required by law. Such insurance shall be the primary policy covering such
occurrences, and no insurance coverage maintained by SPANSION shall apply to such occurrences unless and until such Supplier’s policies are exhausted. Supplier is responsible for ensuring that such insurance satisfies all requirements of this
section, including any applicable limits and the scope of coverage. Prior to commencing Services, Supplier shall provide executed certificates 
  

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 of insurance to SPANSION. Should such insurance not
meet the requirement of this section, SPANSION shall notify Supplier within ten (10) business days after receipt of the certificates of insurance; otherwise, it shall be deemed that such insurance satisfies all requirements of this section.
Supplier shall notify SPANSION in writing at least sixty (60) days prior to any cancellation, material modification, lapse, or termination of any such insurance policy. 
  
 (c) Supplier shall use its commercially reasonable efforts to have its subcontractors comply with the requirements of this
section. Supplier shall advise SPANSION at the time it requests approval for use of a subcontractor if such subcontractor does not meet these insurance requirements. 
  

	18.	Term And Termination 

  
 (a) The term of this Agreement shall begin on the Effective Date and shall end on the Expiration Date referenced above, unless sooner terminated by
SPANSION or Supplier as provided herein. If no Expiration Date is specified, then this Agreement shall remain in effect until terminated by SPANSION or Supplier as provided herein. This agreement shall remain co-terminus with the latest expiration
date of any Statement of Work under this agreement. 
  
 (b)
Termination for Cause. If either party commits a material breach of any provision of this Agreement, a Statement of Work or any Order, the other party may terminate this Agreement and/or the applicable Purchase Order and/or the applicable
Statement of Work in whole or in part, provided that the breaching party fails to cure the breach within thirty (30) days of receiving written notice of the non-breaching party’s intent to terminate. Further, should either party
(i) be adjudged or become insolvent; (ii) have any proceedings instituted by or against it in bankruptcy, under insolvency laws, or for the party’s reorganization, receivership, dissolution, or liquidation; (iii) make an
assignment for the benefit of creditors or any general arrangement with creditors; or (iv) discontinue business or adopt a resolution calling for same, the other party may terminate this Agreement for cause upon twenty-four (24) hours
written notice. 
  
 If SPANSION terminates this Agreement and/or
Purchase Order for cause, SPANSION may procure substantially similar services from an alternate supplier, and Supplier shall be liable to SPANSION for any and all additional costs or expenses reasonably incurred by SPANSION in procuring such
substitute services, provided that the above remedy shall be the only and exclusive remedy which SPANSION may assert. 
  
 (c) Termination for Convenience. Upon thirty (30) days prior written notice to Supplier, SPANSION reserves the right to terminate this
Agreement in whole or in part for its sole convenience. In the event of such termination, Supplier shall immediately stop all related work and cause its suppliers and subcontractors to stop work. Any liability of SPANSION for its termination of a
Purchase Order shall be limited to actual, non-recoverable costs incurred by Supplier pursuant to such Purchase Order, and Supplier shall provide to SPANSION documentation sufficient to substantiate the amount of such costs. The termination of one
or more Purchase Orders, or any part thereof, shall not terminate or otherwise affect in any way the validity of this Agreement or any other Purchase Order or applicable Statement of Work in effect at such time. Notwithstanding the above in this
Section 18(c), neither party may terminate this Agreement for convenience if the First SOW and other applicable Statements of Work are in effect. 
  
 (d) Supplier’s Obligations upon Termination. Upon termination or expiration of this Agreement and/or any Statement of Work or Purchase Order,
Supplier shall, in addition to any other obligations of Supplier on termination or expiration, (i) cease all performance of the terminated Services and furnish to SPANSION all completed deliverables and work in progress; (ii) return to
SPANSION or destroy all copies of any confidential or proprietary information of SPANSION related to the terminated Services, and cease all use of these materials; and (iii) within thirty (30) days, provide a full accounting itemizing all
Services performed prior to termination for which Supplier has not yet received payment. 
  

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 (e) Partial Termination. The
termination of one or more Scopes of Work and/or Purchase Orders, or any part or portion thereof, shall not terminate or otherwise affect in any way the validity of any other Statement of Work or Purchase Order in effect at such time. 
  
 (f) Credit Control. Without prejudice to Section 18(b),
(i) if SPANSION fails to pay any payment due hereunder under this Agreement (including the applicable Statement of Work), Supplier may give SPANSION a no less than fifteen (15) business days’ notice to pay such payment overdue. If
SPANSION fails to make such payment overdue within the above period of notice and the aggregate sum of the outstanding payments payable by SPANSION to Supplier under this Agreement (including the applicable Statement of Work) has exceeded the
aggregate sum of the payments paid by SPANSION to Supplier under this Agreement (including the applicable Statement of Work) in the preceding ****, Supplier may suspend the Services until all payments overdue have been duly made, provided that, a
suspension effected by Supplier in accordance with this Section 18(f) shall not, in any circumstances, relieve SPANSION of its obligations under this Agreement (including the applicable Statement of Work) or suspend its obligation to pay under
this Agreement (including the applicable Statement of Work); and (ii) if SPANSION fails to pay any payment due, under this Agreement (including the applicable Statement of Work), for a period of sixty (60) days or more after suspension of
the Services in accordance with this Section 18(f), Supplier may, upon giving five (5) business days’ notice, terminate this Agreement and/or the applicable Statement of Work, provided, that, the notice terminating this Agreement
and/or the applicable Statement of Work specifies that the termination shall not be effective if SPANSION makes full payment within such five (5) business day’s notice period. 
  
 (g) SPANSION’s Obligations upon Termination. Upon termination or expiration of this Agreement and/or any
Statement of Work, SPANSION shall, in addition to any other obligations of SPANSION on termination or expiration, (i) pay all outstanding amounts under this Agreement (including the applicable Statement of Work) in respect of periods on or
before the date of termination or expiration; and (ii) pay the sum of the payments for the minimum capacity commitment as set forth in the applicable Statements of Work, including under Section 7 of the First SOW, for each Test Cell
purchased and installed as of the date of termination or expiration for the remainder of the period of thirty-six (36) consecutive months commencing on the date immediately after the date on which such Test Cell is purchased and installed as if
Services equivalent to the sum of such payments for the minimum capacity commitment as set forth in the applicable Statements of Work have been performed by Supplier. 
  
 19. Miscellaneous Provisions 
  
 (a) Compliance with Law. In the performance of this Agreement, Supplier shall at all times comply with all applicable governmental laws, statutes,
ordinances, rules, regulations, orders, and other requirements, including without limitation such governmental requirements applicable to environmental protection, health, safety, wages, hours, equal employment opportunity, nondiscrimination,
working conditions, import or export control, customs, and transportation, to which Supplier is subject. In the performance of this Agreement, SPANSION shall at all times comply with all applicable governmental laws, statutes, ordinances, rules,
regulations, orders, and other requirements, including without limitation such governmental requirements applicable to environmental protection, health, safety, wages, hours, equal employment opportunity, nondiscrimination, working conditions,
import or export control, customs, and transportation, to which SPANSION is subject. In the event that the other party’s assistance is necessary to achieve such compliance, such party shall promptly notify the other party. 
  
 (b) Delegation, Subcontracting, and Assignments. Supplier shall not
assign its rights, delegate its duties, or subcontract any work performed under the terms of this Agreement and the applicable Statements of Work without prior written authorization from SPANSION. Supplier hereby consents to the transfer and
assignment of all rights, licenses and obligations under this Agreement 
  

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 and the applicable Statements of Work to a successor
entity of SPANSION in connection with the reorganization of SPANSION for the purposes of an IPO (“Successor Entity”), provided that such Successor Entity was established for the purposes of the IPO and that the size, scope and nature of
the business of such Successor Entity is substantially similar to that of SPANSION, and provided that such Successor Entity accepts all such rights, licenses and obligations under the terms of this Agreement and the applicable Statements of Work.

  
 (c) Taxes and Benefits. Supplier shall bear and pay all
applicable federal, state, and local taxes based upon or measured by its net income, and all franchise taxes based upon its corporate existence or its general corporate right to transact business. SPANSION shall reimburse Supplier, or pay directly
to the appropriate tax authority, or timely issue a valid tax exemption certificate, for sales or use taxes legally imposed upon the transactions arising out of this Agreement. Each party agrees to cooperate in a reasonable manner provided such
cooperation does not result in penalties assessed against Supplier by any governmental unit with the other party for the purpose of minimizing all taxes that are to be paid directly or indirectly by the other party. Each party agrees to make every
good faith effort to notify the other party’s tax department of any audit, notice, or assessment affecting sales, use, excise, or property taxes, or any other action taken against any deliverable related to such taxes within thirty
(30) days of such action. SPANSION expressly disclaims the payment of, and Supplier shall pay, any and all taxes and contributions for unemployment insurance, old age retirement benefits, workers’ compensation insurance or benefits, life
insurance, pensions, annuities, and similar benefits, and any other employment-related costs, obligations, and duties that may now or hereafter be imposed by law, collective bargaining agreements, or otherwise with respect to persons employed by
Supplier for the performance of Services under this Agreement. 
  
 (d) Limitation of Liability. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY, OR TO ANY OTHER PERSON, FOR ANY SPECIAL, PUNITIVE, CONSEQUENTIAL OR INDIRECT DAMAGES, INCLUDING BUT NOT LIMITED TO LOSS OF PROFITS OR BUSINESS
OPPORTUNITIES, WHETHER OR NOT ADVISED OF THE POSSIBILITY OF SUCH LOSS, EITHER UNDER THEORIES OF CONTRACTS, MISREPRESENTATION, TORTS OR ANY OTHER LEGAL BASES OF CLAIMS, AND WHETHER OR NOT BASED ON THE GOVERNING LAW OR THE LAWS OF ANY OTHER
JURISDICTION, AND ALL SUCH OBLIGATIONS, RESPONSIBILITIES AND LIABILITIES ARE HEREBY SPECIFICALLY DISCLAIMED (“DAMAGES”) AND IN NO EVENT SHALL EITHER PARTY’S LIABILITY IN CONNECTION WITH THIS AGREEMENT EXCEED THE SUM IN THE AMOUNT OF
TEN MILLION US DOLLARS (US$10,000,000), WITH RESPECT TO ALL CAUSES OF ACTION IN THE AGGREGATE, INCLUDING, WITHOUT LIMITATION, BREACH OF CONTRACT, BREACH OF WARRANTY, SUPPLIER’S NEGLIENCE, STRICT LIABILITY, MISREPRESENTATION, LIABILITY OF
INFRINGEMENT OF THIRD PARTY RIGHTS (OTHER THAN INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTY WHICH SHALL BE SUBJECT TO THE EXCEPTION TO THIS SENTENCE) AND OTHER TORTS, PROVIDED THAT THE ABOVE LIMITATION OF LIABILITY SHALL NOT APPLY
TO THE FOLLOWING EXCEPTIONS (“EXCEPTIONS”): 
  
 (i) THE OBLIGATIONS OF SPANSION HEREUNDER FOR PAYMENTS OF THE SERVICES AND THE COMPENSATION TO SUPPLIER FOR FAILURE TO MEET THE MINIMUM SERVICES IN THE APPLICABLE STATEMENT OF WORK, OR 
  
 (ii) SUPPLIER’S OR SPANSION’S PERFORMANCE OR
FAILURE TO PERFORM THEIR RESPECTIVE OBLIGATIONS UNDER SECTION 16(b) OR SECTION 16(c), AS THE CASE MAY BE, FOR THE SERVICES OR PRODUCTS RELATED TO WAFER SORT AND TEST ONLY, PROVIDED FURTHER THAT THE “DAMAGES” OF THIS SECTION 19(d) SHALL NOT
APPLY TO THIS SECTION 19(d)(ii), OR 
  
 (iii)
BREACH OF EITHER PARTY’S OBLIGATIONS UNDER SECTION 14(a) OR (b), AS THE CASE MAY BE, OR 
  
 (iv) EITHER PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. 
  
 (e) Records Available. Supplier shall keep full and detailed accounting records, correspondence,
instructions, memoranda, receipts, specifications, vouchers, and similar data relating to the Services. The accounting records shall be prepared and maintained on the basis of generally 
  

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	 	 	Assembly and Test Services Agreement









 

 
  
 accepted accounting principles, consistently applied.
All such records publicly available shall be available to SPANSION or to SPANSION’s authorized representative upon request of SPANSION, within a reasonable period of time after such a request, at a reasonable location, and during normal
business hours for a period of five (5) years after the completion of the Services. 
  
 (f) Use of SPANSION Resources. If given authorization to utilize SPANSION resources (e.g., computers, telephones, other office equipment), Supplier agrees to use such resources strictly for
performing the Services hereunder. Any other or unauthorized use shall be deemed breach of this Agreement. 
  
 (g) Gratuities. Supplier warrants that it has not directly or indirectly offered or given, and shall not directly or indirectly offer or give, to
any employee, agent, or representative of SPANSION any cash or non-cash gratuity or payment with a view toward securing any business from SPANSION or influencing such person with respect to the conditions of or performance under any contracts with
or order from SPANSION, including without limitation this Agreement. Any breach of this warranty shall be a material breach of each and every contract between SPANSION and Supplier. 
  
 (h) Solicitation of Employment. Each party agrees not to recruit, divert, or solicit the employment of any the other
Party’s employee from the date hereof to the date ninety (90) days following the termination of this Agreement. 
  
 (i) Notices. All notices relating to this Agreement shall be in writing and shall be deemed given (i) in the case of mail, on the date five
(5) days after it is deposited in the mail, postage prepaid, either registered or certified, with return receipt requested (or its equivalent); (ii) in the case of personal delivery to an authorized representative or officer of the party,
or in the case of express courier service or overnight delivery service of national standing, on the date of delivery or attempted delivery (if receipt is refused); or (iii) in the case of facsimile, twenty-four (24) hours after it has
been sent provided that a duplicate copy of such notice is also promptly sent pursuant to (i) or (ii) above. Notices shall be sent to the Address for Notices set forth above, but each party may change its address by written notice in
accordance with this section. 
  
 (j) Independent Contractor.
In the performance of this Agreement, Supplier is acting as an independent contractor, and neither Supplier nor its employees are the servants, agents, or employees of SPANSION. Except as expressly provided in this Agreement, SPANSION shall have
no direction, supervision, or control over Supplier or its employees. Neither party has the right or ability to bind the other to any agreement with a third party or to incur any obligation or liability on behalf of the other party without the other
party’s written consent. 
  
 (k) Governing Law. This
Agreement shall be governed by, subject to, and construed in accordance with the laws of the State of New York, excluding the conflict of law rules thereof. The parties specifically exclude from application to this Agreement the United Nations
Convention on Contracts for the International Sale of Goods. 
  
 (l) Dispute Resolution. 
  
 (i)
Amicable Negotiation. Any claims, differences or disputes arising out of or in connection with this Agreement (“Dispute”), including any question regarding its existence, validity, termination or its performance, or in connection
with arrangements regarding the performance of this Agreement shall first be attempted to be settled by an amicable effort on the part of the parties, which shall include a meeting between the Presidents of both parties or their designees. An
attempt to arrive at a settlement shall be deemed to have failed as soon as one of the parties so notifies the other party in writing. 
  
 (ii) ICC Arbitration. If an attempt at settlement has failed, the Dispute shall be finally settled by final and binding arbitration
under the Rules of Arbitration (“Rules”) of the International Chamber of Commerce (“ICC”). The Rules are deemed to be incorporated by reference into this clause. The party desiring to commence arbitration shall provide a written
request (an “Arbitration Request”) to the other party and to the ICC in accordance with the 
  

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	 	 	Assembly and Test Services Agreement









 

 
  
 Rules. The number of arbitrators
shall be three (such arbitrators, collectively, the “Arbitral Tribunal”). Each of Supplier and SPANSION shall nominate one arbitrator and send written notice of that nomination to the other party within thirty (30) days after the date
of the Arbitration Request. In the event that either party fails to nominate its arbitrator or send written notice of that nomination to the other party within such time period, the ICC shall instead nominate that arbitrator within thirty
(30) days after receipt of a written notice from either party indicating the other party’s failure to comply with the foregoing provision. Within thirty (30) days after their confirmation, the first two arbitrators shall nominate the
third arbitrator, who shall serve as the Chairperson of the Arbitral Tribunal. If the first two arbitrators fail to nominate the third arbitrator within such time period, the third arbitrator shall be nominated by the ICC and shall serve as the
Chairperson of the Arbitral Tribunal. 
  
 (iii)
Seat. The seat of arbitration shall be New York. 
  
 (iv) Language. The language to be used in the arbitration proceedings shall be English. 
  
 (v) Award. The arbitral award shall be substantiated in writing and shall be final, conclusive and binding upon the parties with
respect to the subject matter thereof. The arbitration tribunal shall decide on the matter of costs of the arbitration and on the allocation of expenditure among the respective parties to the arbitration proceedings. 
  
 (m) Prevailing Party. Subject to Section 19(d), in any
arbitration or judicial proceeding involving SPANSION and Supplier arising out of or relating to this Agreement or to Services performed under this Agreement, the prevailing party shall be entitled to recover all reasonable expenses associated with
such proceeding, including reasonable attorneys’ fees and expenses. 
  
 (n) Severability. Each term of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. However, in the event that any of the terms of this Agreement becomes or is
declared illegal by any court or tribunal of competent jurisdiction, or becomes otherwise unenforceable, such term shall be deemed deleted from this Agreement and all the remaining terms of this Agreement shall remain in full force and effect.

  
 (o) Survivability. The obligation of the parties
contained in Sections 14 (Confidentiality), 15 (Intellectual Property Rights), 18(d) (Supplier’s Obligations upon Termination), 18(g) (SPANSION’s Obligations upon Termination), 19(d) (Limitation of Liability), 19(i) (Notices), 19(k)
(Governing Law), and 19(l) (Dispute Resolution) shall survive any termination of this Agreement and any applicable Statement of Work, unless otherwise agreed by the parties in such Statement of Work. 
  
 (p) Nonwaiver of Rights. The failure of either party to this Agreement
to object to or to take affirmative action with respect to any conduct of the other party that is in violation of the terms of this Agreement shall not be construed as a waiver thereof, or as waiver of any future breach or subsequent wrongful
conduct. 
  
 (q) Modification. This Agreement may not be
modified or amended except in writing signed by a duly authorized representative of each party; no other act, document, usage, or custom shall be deemed to amend or modify this Agreement. 
  
 (r) Entire Agreement. This Agreement, all exhibits, attachments, appendices, and documents incorporated or referenced
herein, including exhibits, attachments, appendices, and the terms and conditions in each Statement of Work and the commercial terms in the Order (such as issuance and shipment dates, quantities, Services types) but excluding any other standard or
printed terms in the Order or any and all terms on the attached pages or reverse sides of the Order not signed by the chairman and CFO of Supplier, constitute the complete agreement between the parties and supersede all prior or contemporaneous
agreements or representations, written or oral, concerning the subject matter of this Agreement. Where there is any conflict or inconsistency with the express terms in this Agreement, the terms of this Agreement shall supersede such conflicting or
inconsistent terms and conditions in the Order, while those in the Statement of Work shall supersede such conflicting or inconsistent terms and conditions in the Agreement and in any Order. 
  

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	 	 	Assembly and Test Services Agreement









 

 
  

			
	SPANSION LLC	 	ChipMOS TECHNOLOGIES INC.
		
	 /s/ Doug Duval

	 	 /s/ S. J. Cheng


	Authorized Signature	 	Authorized Signature
		
	 Doug Duval

	 	 S. J. Cheng


	Print Name	 	Print Name
		
	 VP, Global Supply Management

	 	 Chairman & CEO


	Title	 	Title
		
	 11/17/2005

	 	 11/27/2005


	Date	 	Date

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  

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	SPANSION - ChipMOS CONFIDENTIAL	 	SPANSION - ChipMOS
	 	 	Assembly and Test Services Agreement









 

 
  
 Appendix 1 
 To 
 Assembly and Test Services Agreement

  
 SECURITY POLICY 
  

	1.	General 

  
 A. Supplier shall make available for inspection by SPANSION-designated Distribution and Security Managers written security procedures and evidence of
implementation of such procedures based on these Security Policies, within one (1) month after execution of the Agreement. 
  
 B. Supplier agrees to assign a senior security representative to monitor, standardize and implement its security procedures at each Supplier facility
utilized to perform the Services. 
  
 C. Supplier shall insure
that all Supplier employees and subcontractors who have access to SPANSION Product have satisfactorily passed a background investigation prior to employment. Documentation of the investigation procedure shall be promptly provided to SPANSION upon
request. 
  

	2.	Handling Guidelines 

  
 A. The Supplier is required to provide a secure storage area for SPANSION Product. The secure area shall be designed to deter and prevent unauthorized
access. Entry to the secured area is to be limited to personnel directly involved in service provision, shipping and receiving of SPANSION Product. For the purpose of this Agreement, examples of secure storage may include sealed or locked
containers, locked cages, locked hard wall areas, and cargo stored in racks at sufficient height to prevent access by unauthorized persons. Any loose cargo stored over six (6) hours must be stored in a locked cage or locked hard wall area.

  
 B. Loading of SPANSION Product shipments must be done in the
presence of the authorized driver; no pre-loading of Product shipments on vehicles for later collection is permitted. 
  
 C. Any incoming freight owned by SPANSION showing evidence of being opened, or otherwise tampered with must be reported to SPANSION immediately and a
written report produced within twenty-four (24) hours following the discovery. 
  

	3.	Supplier Premise Security 

  
 A. The Supplier shall provide and maintain, at all times, adequate security systems to allow continuous security monitoring and protection of SPANSION
Product against fire and intrusion. This shall include a building fire detection system, an intruder detection system, and a closed circuit television system with video recording capability. Any exceptions to this requirement must be approved by
SPANSION. 
  
 B. The Supplier shall ensure that access to its
buildings is controlled to prevent unauthorized casual and intentional intrusion. Details of measures shall be included in Supplier’s security procedures. 
  

	4.	Audits 

  
 A. Supplier shall meet with SPANSION Corporate Security or its appointed representatives at least once a year to discuss Supplier’s compliance with
these Security Policies. Absent mutual agreement to the contrary, routine business meetings shall not satisfy this requirement. 
  
 B. Subject to reasonable prior written notice and compliance with Supplier’s normal security and confidentiality requirements, SPANSION
reserves the right to audit any of Supplier’s premises used to perform the Services and shall report audit results and proposed corrections within fifteen (15) days of the completed audit. Copies of audit procedures shall be included in
the Supplier’s security procedures. 
  

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	5.	General Security Responsibilities 

  
 A. Supplier senior security representative shall perform loss/theft investigations with respect to SPANSION Products. Results of such investigations shall
be reported to SPANSION within twenty-four (24) hours of completion of the investigation into any such incident. Law enforcement must be notified immediately once Supplier is aware of any discrepancies or losses if the investigation determines
that loss/theft is due to criminal activity and the value of the loss or stolen SPANSION Products is more than $500. The Supplier shall assist and shall cooperate with SPANSION in locating any lost Product. 
  
 B. Supplier shall perform a self-audit twice each year of all facilities in
which SPANSION Product is moved or stored by Supplier and report results to SPANSION in writing. 
  
 C. Supplier shall establish standard security operating procedures, (“Standard Operating Procedures”) for SPANSION shipments if Supplier is
responsible for transportation of SPANSION Products within thirty (30) days of execution of the Agreement and update it twice a year thereafter. Supplier shall provide a copy of its Standard Operating Procedures to SPANSION after each update.
Supplier shall perform additional updates as needed. 
  
 D.
Subject to reasonable prior written notice and compliance with Supplier’s normal security and confidentiality requirements, SPANSION Corporate Security shall have reasonable access to Supplier security audits and loss/theft investigations
related to SPANSION Products. SPANSION Corporate Security shall, in its discretion, participate with Supplier security on security investigations and resolution of issues on loss/theft investigations related to SPANSION Products. 
  
 E. Subject to any confidentiality obligations that Supplier may have to other
parties, Supplier shall, from time to time and at the reasonable request of SPANSION, provide SPANSION a full report on all losses and theft at specified facilities for stipulated periods of time (e.g. 6, 12, 24 months). Supplier’s report shall
include losses for both SPANSION and non-SPANSION product. 
  
 F.
Any exceptions to these Security Policies shall require SPANSION’s prior written agreement. 
  
 G. Quarterly security reviews shall be conducted at each facility utilized to perform the Services. Results are to be reported at quarterly meetings and
any irregularities and corrective action plans explained. 
  
 H.
Copies of all security reports shall be provided to SPANSION Austin Investigations Manager and to the appropriate SPANSION distribution manager. 
  
 ANY AMENDMENTS OR WAIVERS TO THESE SECURITY POLICIES MUST BE APPROVED IN WRITING BY SPANSION CORPORATE SECURITY. 
  
  

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 Appendix 2 
 To 
 Assembly and Test Services Agreement

  
 FIRST STATEMENT OF WORK 
  

					
	Parties:	  	SPANSION	  	Supplier
	 	 	 
	Full Legal Name:	  	SPANSION LLC	  	ChipMOS TECHNOLOGIES INC.
	 	 	 
	Business Entity Type:	  	Corporation	  	Corporation
	Organized In:	  	State of Delaware	  	Republic of China
	 	 	 
	Principal Business Address:	  	 915 DeGuigne Drive
 P.O. Box 3453
	  	 No. 1 R&D Rd. 1,
 Hsinchu Science Park

	 	 	 
	 	  	Sunnyvale, CA 94088-3453	  	Hsinchu, Taiwan, R.O.C.
	 	 	 
	Address for Notices:	  	 915 DeGuigne Drive
 P.O. Box 3453
	  	 No. 1 R&D Rd.1,
 Hsinchu Science Park

	 	  	Sunnyvale, CA 94088-3453	  	Hsinchu, Taiwan, R.O.C.
	 	  	Attn: GSM Vice President, MS 583	  	Attn: S.J. Cheng
	 	  	Facsimile: (512) 602-4000	  	Facsimile: 886-3-5668980
	 	 	 
	 	  	With copy of legal notices only to same address:	  	 
	 	  	Attn: Legal Procurement Grp., MS562	  	 
	 	  	Facsimile: (512) 602-4999	  	 


			
	 	 
	Project Name:	  	ChipMOS Wafer Sorting Agreement
	 	 
	Project Start Date (“Effective Date”):	  	September 15, 2005
	 	 
	Project Completion Date (“Expiration Date”):	  	On the third anniversary of the date of installation by Supplier for each individual test cell. This First SOW shall remain in effect if
SPANSION and Supplier mutually agree for each individual Test Cell on a quarterly basis beyond the third anniversary of the date of installation and qualification of such Test Cell.
	 	 
	Applicable Agreement Title (“Agreement”):	  	          Assembly and Test Services Agreement
	Agreement Date:	  	          September 15, 2005
	SPANSION Contract Number:	  	 

  
 SPANSION and Supplier agree as
follows: 
  

	1.	Definitions: 

  
 (a) “Product” means any fabricated semiconductor wafer provided by SPANSION and/or SPANSION’s foundry and sorted by Supplier per the
requirements set forth in the First Statement of Work. 
  
 (b)
“Services” for this First SOW means the wafer sort services to be provided by Supplier under this First SOW. 
  

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 (c) “Test Cell Installation
Plan” means a twelve (12) month rolling forecast provided by SPANSION that sets forth SPANSION’s wafer sort tester and probers quantity requirements and agreed upon by Supplier in writing (“Test Cell”). 
  

	2.	Relationship to Agreement 

  
 In the event of a conflict between the terms and conditions in this First Statement of Work (“First SOW”) and the terms and conditions of the Agreement
identified above, which is incorporated herein by reference, the terms and conditions of this Statement of Work shall prevail. The Agreement is intended to describe the general rights, obligations, and liabilities of the parties and establishes
general standards applicable to the Services. All terms and conditions in the Agreement shall apply to this SOW absent the express agreement of the parties to the contrary in the Agreement or this First SOW. 
  

	3.	Effective Date and Term 

  
 The term of this SOW shall begin on the Effective Date and shall end on the Expiration Date referenced above, unless sooner terminated in accordance with the provisions
of the Agreement. If no Expiration Date is specified, then the First SOW shall remain in effect until the performance of Services pursuant to this SOW is completed, unless sooner terminated by SPANSION or Supplier in accordance with the provisions
of the Agreement. 
  

	4.	Scope of Services 

  
 Services to be performed by Supplier shall include all work, tasks and deliverables described in Section 4 (Supplier’s Obligations) below. Any additional services shall be agreed to in writing by the parties
in the form of an amendment to this SOW. Supplier shall provide and maintain all tools, equipment, materials, Test Cells, and staff support that may be necessary to perform the Services and to create the deliverables, including providing and
maintaining all necessary peripherals, such as ovens, inkers, and UV machine, including spares at Supplier’s facility and SPANSION’s foundry. In addition, Supplier shall bear responsibility for maintaining probe cards consigned by
SPANSION. 
  

	5.	Supplier’s Obligations 

  
 Supplier shall accomplish the following tasks and provide the following Services: 
  
 (a) Task: Supplier shall maintain a data network connection accessible via
the Internet with the Test Cells that are accessible by SPANSION twenty (24) hours per day, seven days per week. 
  
 (b) Task: Subject to the terms and conditions in the First Statement of Work, Supplier shall purchase and install the Test Cells for Capacity for
SPANSION’s use in accordance with the Test Cell Installation Plan as well as the necessary spares therefore meeting the specifications of SPANSION for provision of the Services; provided that SPANSION shall provide Supplier with specifications
for the Test Cell and the qualified vendors list within thirty (30) days after the date hereof. If the total number of Test Cells required by a subsequently revised Test Cell Installation Plan is more than the quantity specified the previous
Test Cell Installation Plan, Supplier shall use commercially reasonable efforts to purchase and install such additional Test Cells. Any change of the Test Cell model and/or vendor requested by SPANSION from the previous Test Cell Installation Plan,
shall be subject to the mutual agreement of both parties. Notwithstanding the above, Supplier shall request SPANSION within a specific timeframe that consists of one (1) month ordering lead time plus the Test Cell Service lead time prior to the
month during which Supplier shall install certain Test Cells in accordance with the Test Cell Installation Plan to confirm that Supplier shall continue to purchase the Test Cells in said month in accordance with the Test Cell Installation Plan.
SPANSION shall reply in writing within ten (10) business days after Supplier sends said request and any delay of the above reply shall be deemed confirmation of purchase. If SPANSION replies during the above ten (10) business-day period
that SPANSION no longer needs the above Test Cells in said month, Supplier shall cease to purchase such Test Cells in said month and SPANSION may request Supplier in the future to purchase such Test Cells in said month set forth in the Test Cell
Installation Plan if Supplier so agrees, while, for 
  

 25 

			
	 	 	











 

 
  
 avoidance of any doubt, the obligations of Supplier
to purchase the Test Cells in the subsequent months as set forth in the Test Cell Installation Plan shall remain unchanged unless SPANSION provides a new Test Cell Installation Plan. Notwithstanding the above, if the total number of Test Cells which
SPANSION has confirmed with Supplier to purchase as set forth in this Section 4(b) of the First SOW within one (1) year from the completion of the qualification for the first Test Cell is less than ****, Supplier may request to negotiate
with SPANSION to upward adjust the pricings in the Schedule To The First Statement of Work and, in the event that no consensus of the pricing upward adjustment has been reached within two (2) months after Supplier’s request, Supplier may
terminate the First SOW. 
  
 (c) Task: All Services shall be
performed in accordance with SPANSION’s wafer sort testing program as may be updated by SPANSION periodically. Failure to successfully provide Services in accordance with the wafer sort testing specification shall require program verification
and/or retesting at Supplier’s expense. 
  
 (d) Task: Prices
for Services shall be established based on the ChipMOS Wafer Sort Hourly Rate in the Schedule To The First Statement of Work ****. For the purpose of the First SOW, Utilization Rate shall be defined as the amount of test time used per calendar month
for each individual Test Cell, which includes setup time, testing time and indexing time of SPANSION wafers, divided by the total available Test Cell hours for that specific Test Cell for that said month. The setup time shall include, if necessary,
the time to perform an additional setup due to a correlation error caused by the Test Cell. The Available Test Cell Time per month should be defined as the total time that the individual Test Cell was available for testing of SPANSION wafers, not
including time for maintenance, repair, retest at Supplier’s expense and other downtime caused by Supplier, and the test hours allocated by Supplier to third party customers in accordance with Section 7(b) (ii) of the First SOW.
Prices for Services shall be determined on a monthly basis for each individual Test Cell by calculating the utilization rate per Test Cell and the Supplier shall submit an invoice for test services in accordance with the wafer sort hourly rate
defined in Section 1 of the Schedule to the First Statement of Work. Supplier shall be responsible for any wafer retesting at Supplier’s expense occasioned by test failure not attributable to wafer integrity and/or probe card fabrication
issues as acknowledged by the probe card vendor or, in the event of an objection by the probe card vendor, an independent third party selected by SPANSION shall review the probe card issue, and such conclusion by the independent third party shall
prevail. 
  

	6.	SPANSION’s Support of Services 

  
 In support of Supplier’s performance of the Services, SPANSION shall perform only those tasks and/or provide those resources, items, and/or data specifically
identified below: 
  
 (a) Task: SPANSION shall provide
specifications for applicable devices tested by Supplier. 
  
 (b)
Task: SPANSION shall provide probe cards and wafer sort testing specification for Products tested by Supplier. 
  
 Supplier may utilize such resources, items, and/or data solely for the performance of Services pursuant to the First SOW. No other rights of possession or use are granted by SPANSION. Supplier shall promptly return to
SPANSION or destroy all items and data provided by SPANSION upon completion of the applicable task or deliverable, or sooner if instructed by SPANSION. 
  

	7.	SPANSION Payments Obligation 

  
 (a) Payment Obligations and Formula. In consideration of the performance of obligations by Supplier including purchase of the Test Cells in
accordance with the Agreement and the First SOW, SPANSION shall pay to Supplier sums for the Services of each Test Cell purchased and installed by Supplier and qualified by SPANSION in each calendar month in accordance with the following formula:



	*	Omitted material has been filed separately with the Commission pursuant to an application for confidential treatment. 

  

 26 

			
	 	 	











 

 

	 	(i)	Payments for each Test Cell **** 

  
 Px = Rx(****)*Hx***** 
  
 Where, 
  
 Px = Payments for each Test Cell purchased and installed by Supplier in accordance with the Test Cell Installation Plan and qualified by SPANSION **** in
each calendar month. 
  
 Rx(****) = the ChipMOS wafer sorting
hourly rate set forth in ChipMOS Wafer Sorting Hourly Rate in the Schedule to The First Statement of Work **** and as determined for the corresponding Test Cell cost and the corresponding year of said Test Cell purchased and installed by Supplier in
accordance with the Test Cell Installation Plan and qualified by SPANSION, provided that, if the Test Cell cost borne by Supplier for said Test Cell is between two specified hourly rates set forth in ChipMOS Wafer Sorting Hourly Rate in the Schedule
to The First Statement of Work, the applicable hourly rate shall be determined on the basis of linear extrapolation. 
  
 Hx = Total Available Test Cell Time for Service to SPANSION by said Test Cell in each calendar month, measured in hours. 
  

	 	(ii)	Payments for each Test Cell **** 

  
 Py = [Ry*Hy]

  
 where 
  
 Py = Payments for each Test Cell purchased and installed by Supplier in
accordance with the Test Cell Installation Plan and qualified by SPANSION **** in each calendar month. 
  
 Ry = The ChipMOS wafer sorting hourly rate set forth in ChipMOS Wafer Sorting Hourly Rate in the Schedule to The First Statement of Work at the
corresponding Utilization Rate and as determined for the corresponding Test Cell cost and the corresponding year of said Test Cell purchased and installed by Supplier in accordance with the Test Cell Installation Plan and qualified by SPANSION,
provided that, if price based upon Utilization Rate or the Test Cell cost borne by Supplier for said Test Cell is between two specified prices or hourly rates set forth in ChipMOS Wafer Sorting Hourly Rate in the Schedule to The First Statement of
Work, the applicable price based upon Utilization Rate or hourly rate shall be determined on the basis of linear extrapolation. 
  
 Hy = the actual hours utilized for Services to SPANSION by said Test Cell. 
  
 SPANSION’s payment obligations under this Section 7(a) of this First SOW shall remain unchanged notwithstanding
Section 2(e), Section 2(f) or Section 8(b) of the Agreement. 
  
 (b) Pricing. All prices, rates, and/or fees applicable to the Services shall be as set forth in the Schedule to the First SOW and subject to the following conditions: 
  
 (i) SPANSION’s payment obligation for each Test Cell
under Section 7(a) of this First SOW shall commence once such Test Cell has been installed by Supplier and qualified by SPANSION. In the event that the qualification of a Test Cell is not completed within fifteen (15) business days due to
causes not solely attributable to Supplier, SPANSION’s payment obligation for such Test Cell listed in Section 7(a) of this First SOW shall commence immediately upon the expiry of the 15th business day after installation of such Test Cell
by Supplier. In the event that the qualification of a Test Cell is not completed due to causes solely attributable to Supplier, SPANSION’s payment obligations for such Test Cell will not commence until such Test Cell has been qualified by
SPANSION, with such qualification not to be unreasonably withheld or delayed. 


	*	Omitted material has been filed separately with the Commission pursuant to an application for confidential treatment. 

  

 27 

			
	 	 	











 

 
  
 (ii) The payment
obligation of SPANSION stated in Section 7(b)(i) above shall no longer apply to each Test Cell after the third anniversary of the installation and qualification of that specific Test Cell by Supplier; provided that, if SPANSION and Supplier
agree to extend the term of a specific Test Cell beyond the third anniversary of the date of installation and qualification of such Test Cell, such Test Cell shall be included in the determination of SPANSION’s payment obligation set forth in
Section 7(b)(i), which shall be made on a quarterly basis after the third anniversary of the date of installation and qualification of such Test Cell; and 
  

(iii) For the purpose of determining the Utilization Rate, the hours allocated by Supplier to third party customers (other than
SPANSION’s Affiliates) shall be deducted from the amount of Total Available Test Cell Time for the individual Test Cell, provided that SPANSION shall compensate Supplier for any shortfall in revenue of Supplier to be generated from SPANSION at
the price with the higher corresponding hour rate due to applying lower Utilization Rate as contemplated in the First SOW minus the total revenue of Supplier (a) actually generated from SPANSION at the price with the lower corresponding hour
rate due to applying higher Utilization Rate after deducting the hours allocated by Supplier to third party customers (other than SPANSION’s Affiliates) and (b) actually generated from such third party customers within a given month.

  
 (c) Travel Expenses. If the applicable Order provides
for SPANSION’s reimbursement of Supplier’s travel expenses, then SPANSION shall compensate Supplier for all actual, reasonable, and documented travel expenses according to the SPANSION travel policy in effect at the time such expenses are
incurred, up to any maximum amount(s) specified in the Order. A copy of SPANSION’s travel policy shall be provided upon request. SPANSION shall not be obligated to pay hourly or daily service fees for Supplier travel days when no actual work
has been performed. 
  
 (d) No Other Amounts. Except as set
forth in the First Statement of Work and the Agreement or as provided in the applicable Order, Supplier shall not be entitled to any other form of compensation or reimbursement related to the performance of the Services or for the creation of the
deliverables. Unless otherwise specified in the applicable Order, all costs or expenses associated with the tools, equipment, materials, or support staff necessary to perform the Services or create the deliverables shall be borne by Supplier. No
increase in fees or rates may become effective without the prior written consent of an authorized representative of SPANSION and the issuance of a revised Order. 
  

	8.	Exclusions. 

  
 The parties expressly agree that Sections 1(d), 1(f), 1(g), 1(m), 2(b) (fourth sentence only), 2(c), 3(a) (second sentence only), 3(c), 7, 12(c) (i), 12(d), 18(c) of the Agreement shall not apply to the Services set
forth in this First SOW. 
  

 28 

			
	 	 	











 

 
  

			
	SPANSION LLC	 	ChipMOS TECHNOLOGIES INC.
		
	 /s/ Doug Duval

	 	 /s/ S. J. Cheng


	Authorized Signature	 	Authorized Signature
		
	 Doug Duval

	 	 S. J. Cheng


	Print Name	 	Print Name
		
	 VP, Global Supply Management

	 	 Chairman & CEO


	Title	 	Title
		
	 11/17/2005

	 	 11/27/2005


	Date	 	Date

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  

 29 








 

 
  
 SCHEDULE 
  
 TO THE FIRST 
  
 STATEMENT OF WORK 
  
 Supplier Name: ChipMOS TECHNOLOGIES INC. 
  
 Project Name: ChipMOS Wafer Sorting Agreement 
 Project Start Date:
September 15, 2005 
  
 This Pricing Schedule forms a part of the Statement of
Work between SPANSION and Supplier governing the Project specified above. SPANSION and Supplier agree that the pricing for the Services described in the SOW shall be as follows: 
  
 1) ChipMOS Wafer Sort Hourly Rate 
  

																												
	 Utilization Rate

	  	Year 1-2 @ different Test Cell cost in US$


	  	$1.0M

	  	$1.1M

	  	$1.2M

	  	$1.3M

	  	$1.4M

	  	$1.5M

	  	$1.6M

	  	$1.7M

	  	$1.8M


	 *%
	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*
	 *%
	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*
	 *%
	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*
	 *%
	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*
	 *%
	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*
	 *%
	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*

  

																												
	 Utilization Rate

	  	Year 3 @ different Test Cell cost in US$


	  	$1.0M

	  	$1.1M

	  	$1.2M

	  	$1.3M

	  	$1.4M

	  	$1.5M

	  	$1.6M

	  	$1.7M

	  	$1.8M


	 *%
	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*
	 *%
	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*
	 *%
	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*
	 *%
	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*
	 *%
	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*
	 *%
	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*

  

																												
	 Utilization Rate

	  	Year 4 @ different Test Cell cost in US$


	  	$1.0M

	  	$1.1M

	  	$1.2M

	  	$1.3M

	  	$1.4M

	  	$1.5M

	  	$1.6M

	  	$1.7M

	  	$1.8M


	 *%
	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*
	 *%
	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*
	 *%
	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*
	 *%
	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*
	 *%
	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*
	 *%
	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*

  

																												
	 Utilization Rate

	  	Year 5 @ different Test Cell cost in US$


	  	$1.0M

	  	$1.1M

	  	$1.2M

	  	$1.3M

	  	$1.4M

	  	$1.5M

	  	$1.6M

	  	$1.7M

	  	$1.8M


	 *%
	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*
	 *%
	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*
	 *%
	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*
	 *%
	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*
	 *%
	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*
	 *%
	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*	  	$	*



	*	Omitted material has been filed separately with the Commission pursuant to an application for confidential treatment. 

  

 30 








 

 
  

	 	•	 	“Year” shall be based on each set of Test Cell commencing from the completion of the installation and qualification for such Test Cell 

  

	 	•	 	The pricing matrix above shall be a linear for combinations of Utilization Rate and Test Cell cost not specifically listed in the table. 

  

	 	•	 	For ****, Supplier shall charge SPANSION **** listed in the ChipMOS Wafer Sort Hourly Rate table for **** of the Available Test Cell Time for that individual Test Cell.


  

	 	•	 	For ****, the Supplier shall charge SPANSION **** listed in the ChipMOS Wafer Sort Hourly Rate table for the actual amount of test time used for that individual Test Cell.


  

			
	SPANSION LLC	 	ChipMOS TECHNOLOGIES INC.
		
	 /s/ Doug Duval

	 	 /s/ S. J. Cheng


	Authorized Signature	 	Authorized Signature
		
	 Doug Duval

	 	 S. J. Cheng


	Print Name	 	Print Name
		
	 VP, Global Supply Management

	 	 Chairman & CEO


	Title	 	Title
		
	 11/17/2005

	 	 11/27/2005


	Date	 	Date

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  


	*	Omitted material has been filed separately with the Commission pursuant to an application for confidential treatment. 

  

 31