Amended and Restated Investment Contract between ANAD and Kunshan New & High Tech Industrial Development Zone


    


    CONFORMED
      COPY 

    


     

    Amended
      and Restated Investment Contract

     

    


    


    Between

    


    ANADIGICS,
      Inc

    


    And

    


    Kunshan
      New and Hi-Tech Industrial Development Zone

    


    


    


    Dated
      as of April 5, 2007


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    Contents

    


    Chapter
      I General

    Chapter
      II Parties to the Contract

    Chapter
      III Newco

    Chapter
      IV Objective of the Contract and Business Scope
      of the Newco

    Chapter
      V Total investment and registered capital of
      the Newco

    Chapter
      VI Conditions Precedent to the
      Investment

    Chapter
      VII Obligations of the
      Parties

    Chapter
      VIII Liabilities for Breach and Dispute
      Resolution

    Chapter
      IX Representations and
      Warranties

    Chapter
      X Governing
      Law

    Chapter
      XI Modification and Termination of the
      Contract

    Chapter
      XII Miscellaneous

    APPENDIX
      ONE DEFINITIONS

    *APPENDIX
      TWO PRINCIPAL TERMS OF OPERATING LEASE

    *APPENDIX
      THREE BUILDING
      REQUIREMENT

    *APPENDIX
      FOUR SITE MAP

    {*
      NOT INCLUDED}

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    Chapter
      I

    General

     

    

      1.1    To
        expand
        foreign economic cooperation and technological exchange, fully utilize both
        Parties’ strength, promote the development of Kunshan’s high and new science and
        technology and expand the manufacturing capacity of ANADIGICS, Inc in China,
        Kunshan
        New and Hi-Tech Industrial Development Zone
        under
        the People’s Government of Kunshan City (“Party
        A”)
        and
        ANADIGICS, Inc. a corporation formed and existing under the laws of the State
        of
        Delaware, U.S.A. (“Party
        B”),
        through equal and friendly negotiations, based on the People’s Republic of
        China’s Wholly Foreign Owned Enterprise Laws, and other applicable laws,
        regulations, policies of regions under national supervision, hereby agree
        to
        Party B’s establishment of a new company in Kunshan New & Hi-tech Industrial
        Development Zone (“KSND”)
        in
        Kunshan City, Jiangsu Province, and hereby enter into this contract
        (“Contract”)
        as
        follows.

      


      1.2    Terms
        used but not defined herein that are defined in Appendix One hereto shall
        have
        the respective meanings set forth in Appendix One.

    

    
 

    Chapter
      II

    Parties
      to the Contract

    


    2.1    Parties
      to the Contact are as follows:

    


    Party
      A:
      Kunshan
      New and Hi-Tech Industrial Development Zone

    Legal
      Address: 

     

    757
      Beimen Road

    Yushan
      Town, Kunshan
      Municipality

    Jiangsu
      Province, China

     

    Legal
      Representative: Wei
      Cheng,
      Deputy
      Director

    Nationality:
      China

    


     

    Party
      B: ANADIGICS,
      Inc

    Legal
      Address:

     

    141
      Mt.
      Bethel Road, Warren, NJ 07059, USA

     

    Authorized
      Representative: Bamdad (Bami) Bastani, President & CEO

    Nationality:
      USA

    


    Chapter
      III

    Newco

    


    3.1    Party
      B
      will through its subsidiary ANADIGICS China Holding Corporation, Inc.,
      a corporation
      formed under the laws of the Cayman Islands (“ACHC”)
      to
      invest in KSND and incorporate a wholly foreign owned subsidiary limited
      liability company (“Newco”).

    


    3.2   The
      name
      and legal address of the Newco will be as follows:

     

    English
      Name: ANAD China Corporation (“ACC”)

    Chinese
      Name: Anadigics (Kunshan) Semiconductor Company, Ltd.

    (the
      Chinese name approved by the PRC government shall prevail)

    Legal
      Address: [       ]

    


    3.3    The
      establishment date of the Newco shall be the date on which its business license
      is issued.

    


    Chapter
      IV

    Objective
      of the Contract and Business Scope of the Newco

     

    

      4.1    The
        objective of the Contract is to construct a world class Gallium Arsenide
        (“GaAs”)
        wafer
        fabrication manufacturing facility by Party B through ACC in the Kunshan
        New
& Hi-tech Industrial Development Zone, Kunshan City, Jiangsu Province by
        working with the People’s Government of Kunshan City through Party A, and to
        promote the development of compound semiconductor industry in China and create
        high technology jobs in Kunshan as well as to promote ANADIGICS products
        in
        China.

      


      4.2    The
        business scope of the Newco will include: manufacturing and sales of Gallium
        Arsenide
        semiconductor commercial products; import and export of other semiconductor
        products, technological consultation and training and other related business
        as
        approved by Party A and Kunshan Administrative Bureau for Industry and
        Commerce.

    

    


    Chapter
      V

    Total
      investment and registered capital of the Newco

    


    

      5.1    The total
        investment for the Newco will be Forty-Nine Million Eight Hundred Eighty
        Thousand US Dollars (US$49,880,000.00) (“Total
        Investment”),
        whose
        registered capital (“Registered
        Capital”)
        will
        be Sixteen Million Seven Hundred Thousand US Dollars (US$16,700,000.00).
        Party B
        shall be solely responsible for meeting the difference between the Total
        Investment and the Registered Capital. At least 15% of the Registered Capital
        shall be contributed within 3 months after the issuance of Newco’s business
        license, and the remainder shall be contributed within two years after the
        issuance of Newco’s business license.

      


      5.2    The
        capital contributions by Party B to the Registered Capital shall include
        up
        to 40%
        of the
        Registered Capital (subject to the PRC statutory provisions on the proportional
        ratio of intangible assets in the Registered Capital) intangible
        assets that include processing technique, manufacturing technology and related
        patent. The remaining portion of the Registered Capital other than those
        intangible assets recognized by PRC law shall be injected in US dollar cash
        and
        / or Equipment. 

       

      5.3    The
        value
        of the used Equipment supplied by Party B should be that of fair market value.
        The new Equipment purchased within 12 months before the Effective Date should
        be
        valued at the original purchase price. 

       

      5.4    The
        new
        Equipment purchased by Party B may be shipped to the US for debugging and
        qualification before shipping to the Newco for installation. All new Equipment
        supplied by Party B to Newco should be valued at the original purchase price
        independent of whether it’s shipped to Party B in the US first or shipped
        directly to the Newco in KSND.



    Chapter
      VI

    Conditions
      Precedent to the Investment

    

      6.1    Notwithstanding
        any provision in this Contract, the investment specified in Chapter V
        shall
        not be required to be injected till all the following conditions precedent
        are
        satisfied unless waived by Party B in writing:

    

    


    
      	(a)  	
              The
                applications for the establishment of the Newco have been approved
                by
                appropriate PRC and US governmental authorities without material
                changes
                to the terms and conditions herein provided under the
                Contract;

            


    

    


    
      	(b)  	
              Party
                A has obtained a 50 year lease of the Site and the Newco has been
                issued a
                business license specifying the business scope materially the same
                as
                provided under Chapter IV above and other statutory registration
                and
                approvals and permits for its normal
                operation;

            


    

    


    
      	(c)  	
              The
                Newco will be able to lease the Site in accordance with the Principal
                Terms of Operating Lease; and

            


    

    


    
      	(d)  	
              Party
                A has commenced the designing and construction of the wafer manufacturing
                facility including clean room (“Building
                and Clean Room”)
                in accordance with the specifications previously, delivered that
                Party B
                has opened within five (5) business days after the Effective Date
                an
                escrow account with a mutually agreed bank and made a good faith
                deposit
                into this escrow account of Six Hundred Fifty Thousand US Dollars
                (US$650,000.00), which amount shall be returned to Party B plus interest
                if the account is interest bearing less fees within five (5) business
                days
                of the injection by Party B or ACHC of 15% of the Registered Capital
                into
                the Newco within three (3) months after the issuance of Newco’s business
                license. The deposit in the escrow account will belong to Party A
                if Party
                B or ACHC fails to inject 15% of the Registered Capital within three
                (3)
                months after the issuance of Newco’s business
                license.

            


    

    


    Chapter
      VII

    Obligations
      of the Parties

    


    7.1    The
      obligations of Party A are as follows:

    


    
      	(a)  	
              Party
                A
                will obtain a 50-year lease of the Site for the construction of the
                Facility;

            


    

     

    
      	(b)  	
              Party
                A will jointly participate in funding towards the design and construction
                of the Building
                and Clean Room
                (including the costs of design and construction consultants retained
                by
                Party A and Newco). Party A will hire a financial auditor at its
                own cost
                to insure the overall Funding will be within the budget for proper
                accounting, and will directly pay the general contractor(s); such
                design
                and construction to commence within two
                (2)
                months
                following the Effective Date and to be completed no later than
                twelve
                (12) months
                following the Effective Date,
                provided that Party B shall ensure that the fund Party B is responsible
                for the construction of the Building and Clean Room that is within
                the
                Registered Capital required for the purchase by Party B of the Equipment
                will be in place in concurrent pace with the project construction
                plan
                mutually agreed upon and within ten (10) business days after a written
                notice from Party A and the general
                contract:

            


    

     

    
      	(c)  	
              Upon
                completion of the construction and certification for occupancy of
                the
                Building
                and Clean Room and subsequent qualification of the Facility
                by
                Newco,
                Party A will lease the Building
                and Clean Room
                to
                Newco. 

            


    

     

    
      	(d)  	
              Party
                A shall ensure that the Newco and the Facility will be granted certain
                preferential tax and customs treatment previously identified by Party
                A to
                Party B;
                and

            


    

     

    
      	(e)  	
              Party
                A shall provide Party B copies of all the appropriate documents confirming
                the approvals granted by the PRC national and local governmental
                agencies
                for the establishment of the Kunshan New & Hi-Tech Industrial
                Development Zone and the granting of the tax and Customs
                incentives.

            


    

     

    
      7.2    The
        obligations of Party B are as follows:

       

      
        	(a)  	
                

                    Party
                      B shall cause to be transferred to the Newco the Equipment
                      and working
                      capital the estimated value of which will be no less than Ten
                      Million US
                      Dollars (US$10,000,000.00) as contemplated under Chapter V
                      herein above to
                      satisfy the Registered Capital requirement under the PRC
                      law;


                

              


      

        

      
        	(b)  	
                
                  Party
                    B shall be responsible for all funding required to complete the
                    construction of the “Building and Clean Room” over and beyond the Funding
                    committed by Party A,
                    and ensure that the funding is available to ensure that the construction
                    can be completed as contemplated under Clause 7.1
                    (b);

                

              


      

       

      
        	(c)  	
                

                    

                        
                          Subject
                            to any limitations on the transfer of Technology imposed
                            by the government
                            of the USA, Party B will transfer to the Newco Technology,
                            manufacturing
                            and management expertise and dispatch experts and personnel
                            necessary to
                            enable the Newco to develop Gallium Arsenide technology;
                            

                        


                    


                

              


      

       

      
        	(d)  	
                

                    Party
                      B shall make a good faith effort to transfer to the Newco cash,
                      Equipment,
                      and Technology and know-how with an approximately combined
                      value of
                      US$49,880,000.00 over the ten (10) years following the Effective
                      Date of
                      this Contract;


                

              


      

       

      
        	(e)  	
                

                    Party
                      B will form a Project team to work with Party A’s Project team in
                      developing detailed Building and Clean Room Specifications,
                      overseeing the
                      construction of the
                      Facility;


                

              


      

       

      
        	(f)  	
                
                  Party
                    B will
                    train the on-site management, engineering team and employees
                    of the Newco
                    to operate the Facility properly;

                

              


      

       

      
        	(g)  	
                

                    Party
                      B shall be responsible for obtaining all necessary governmental
                      authorization from the USA authorities for the transfer of
                      Technology and
                      Equipment to the Newco and for the operation of the Facility
                      as
                      contemplated in this Contract;



                

              


      

       

      
        	(h)  	
                
                  Party
                    B will sell the Products through its sales and marketing channels;
                    and

                

              


      

       

      
        	(i)  	
                Party
                  B will assist Party A to develop appropriate local or regional
                  supplier
                  chain
                  in China (epitaxy - subject to technology approval if required
                  by US
                  Government, chemicals, assembly, and test). The proposed suppliers
                  should
                  meet semiconductor grade and Party B’s quality standards and offer
                  substantial cost saving over Party B’s current suppliers in order to be
                  used by Newco.

              


      

       

      7.3    Environmental
        Protection

       

    

    
      	(a)  	
              
                Party
                  A will ensure that the Building and Clean Room will comply with
                  environmental regulations imposed by PRC local or national governments;
                  and

              

            


    

     

    
      	(b)  	
              
                Party
                  B will ensure that the Newco will take preventive measures to protect
                  the
                  environment from possible pollution to comply with the standards
                  of the
                  exhausting materials specified by PRC local or national
                  governments.

              

            


    

    


    7.4    Confidentiality

     

    Each
      Party has disclosed or may disclose confidential and proprietary information
      to
      the other Party. In addition, the Parties may, during the term of this
Contract,
      obtain confidential and proprietary information of Newco and Party B in
      connection with the incorporation and operation of the Project. Each of the
      Parties receiving such information shall, during the term of this Contract,
      i)
      maintain confidentiality of such information; and ii) not disclose it to any
      person or entity, except its employees and/or professional consultants who
      need
      to know such information to perform their responsibilities and who have
      undertaken in employment or retention agreements to keep such information
      confidential. Each Party shall be liable for damages incurred by any other
      Party
      as a result of a breach of confidentiality. Each Party shall be permitted to
      make any disclosure required by applicable law following written notice to
      the
      other Parties of the nature of such disclosure ten business days (or such
      shorter period as required by applicable law) prior to the date of such
      disclosure.

    


    Chapter
      VIII

    Liabilities
      for Breach and Dispute Resolution

     

    

      8.1    If
        the
        failure to execute or perform this Contract is due solely to one of the Parties
        hereto, then such defaulting Party shall bear the responsibility for breach
        of
        this Contract.  In such situations, the non-defaulting Party shall be
        entitled to seek recovery of any and all losses, damages, injuries and expenses,
        including attorney’s fees and expenses of collection, together with any and all
        other recovery. If a default under this Contract is attributable to fault
        by
        both Parties, then each Party shall bear its respective responsibility in
        accordance with the actual situation.

      


      8.2    In
        the event
        of breach of contract committed by a Party to the Contract resulting in the
        non-performance of, or inability to fully perform, its obligations under
        this
        Contract, such Party’s aggregate liability shall be limited to such extent that:
        i) in the case of Party B, ACHC and the Newco combined under the Contract
        it
        shall not exceed ACHC’s investment in the Registered Capital of the Newco; and
        ii) in the case of Party A it shall not exceed its investment in the Building
        and Clean Room. In the event that a breach of contract is committed by more
        than
        one Party, each Party shall bear its individual share of the liabilities
        arising
        from the breach of contract.

      


      8.3    Any
        dispute,
        controversy or claim arising out of or in connection with or relating to
        this
Contract,
        the interpretation, breach, termination or validity hereof, shall be settled
        by
        the Parties
        through negotiation. Such negotiation shall begin immediately after one Party
        hereto
        has delivered to the other Party hereto a written request for such negotiation.
        

      


      8.4    If
        a
        dispute is not resolved within 30 days of the day the dispute arose through
        negotiation, either Party involved may submit the dispute for arbitration.
        In
        case that the arbitration proceeding is initiated by Party B, both Parties
        agree
        that the dispute shall be submitted to Singapore International Arbitration
        Center for arbitration in accordance with the rules of that Center and such
        arbitration shall be conducted in English and Chinese, and that the arbitrators
        may refer to both the English and Chinese texts of this Contract; in case
        that
        the arbitration proceeding is initiated by Party A, both Parties agree that
        the
        dispute shall be submitted to China International Economic and Trade Arbitration
        Commission Shanghai for arbitration in accordance with the rules of that
        Commission and such arbitration shall be conducted in Chinese and English
        and
        the arbitrators may refer to both the Chinese and English texts of this
        Contract. The arbitration award rendered by either tribunal shall be final
        and
        binding on the Parties and shall be enforceable subject to the limitations
        of
        liability provided in Clause 8.2 herein above.

      


      8.5    When
        any
        dispute occurs and when any dispute is under arbitration, except for the
        matters
        in dispute, the Parties shall continue to fulfill their respective obligations
        and shall be entitled to exercise their rights under this
        Contract.

    

    
       

    

    


    Chapter
      IX

    Representations
      and Warranties

    


    9.1    Each
      of the
      Parties hereto hereby represents and warrants to the other Parties as
      follows:

    


    
      	(a)  	
              it
                is a duly organized and validly existing entity in good standing
                under the
                laws of the place of its establishment or
                incorporation;

            


    

    


    
      	(b)  	
              it
                has all the requisite power and authority and approval required to
                enter
                into this Contract and upon the Effective Date will have all the
                requisite
                power, authority and approvals to perform fully its obligations
                hereunder;

            


    

    


    
      	(c)  	
              it
                has taken all action necessary to authorize the execution of this
                Contract
                and such Party’s representative whose signature is affixed to this
                Contract is fully authorized in writing to execute this Contract
                which
                will legally bind such Party
                thereby;

            


    

    


    
      	(d)  	
              upon
                the Effective Date, this Contract shall constitute a legal, valid
                and
                binding and enforceable obligation of such Party;
                and

            


    

    


    
      	(e)  	
              Neither
                the execution of this Contract nor the performance of such Party’s
                obligations hereunder will conflict with, or result in a breach of,
                or
                constitute a default under, any provision of its business license,
                articles of incorporation or association, or any law, rule, regulation,
                authorization or approval of any government agency or body, or of
                any
                contract or agreement to which it is a party or is
                subject.

            


    

    


    9.2    Party
      A
      hereby represents and warrants to Party B, and Party B hereby
      represents and
      warrants to Party A, that each such representing Party has the construction
      and
engineering
      resources to fulfill its obligations under this Contract.

    


    Chapter
      X

    Governing
      Law

     

    10.1    The
      establishment of this Contract, its enforcement, interpretation, execution,
      and resolution
      of disputes hereunder shall all be governed by the laws of PRC which are
published
      and publicly available. In
      the
      event that there is no published and publicly available
      PRC law governing a particular matter relating to this Contract, the Parties
      will follow
      general international commercial practices.

     

    
      Chapter
        XI

      Modification
        and Termination of the Contract

    

    

      11.1    Any
        amendment
        to this Contract must be in writing and signed by both Parties. 

      


      11.2    The
        Contract
        shall be invalid with mutual consent if any Force Majeure Event occurs, and
        neither of the Parties shall be responsible for the damages. “Force Majeure
        Event” shall mean any event which is beyond the control of the affected Party,
        and which is unforeseen, unavoidable or insurmountable, and which arises
        after
        the signing of this Contract and which prevents total or partial performance
        by
        such Party. Such events shall include earthquakes, typhoons, flood, fire,
        war,
        failures of international or domestic transportation, acts of government
        or
        public agencies, epidemics, civil disturbances, strikes or any other events
        which cannot be foreseen, prevented or controlled, including events which
        are
        accepted as Force Majeure in general international commercial practice. The
        Party claiming Force Majeure shall promptly inform the other Party in writing
        and shall furnish the other Party within fifteen (15) days thereafter sufficient
        proof of the occurrence and duration of Force Majeure. The Party claiming
        Force
        Majeure shall also use all reasonable endeavors to eliminate or mitigate
        the
        effects of such Force Majeure.

       

            In
        the event of a default by
        Party A or Party B, the non-defaulting Party shall send a written notice
        to the
        defaulting Party requesting it to cure such default within ninety (90) days
        after receipt of the notice. If the defaulting Party fails to cure such default
        within such ninety 90 days after it has received the non-defaulting Party’s
        written notice, the non-defaulting Party shall have the right to seek damages
        from the defaulting Party as well as to terminate this Contract. If both
        Parties
        continue to perform this Contract, then the defaulting Party shall pay damages
        to the non-defaulting Party. In the event that a breach of contract is committed
        by more than one Party, each such Party shall bear its individual share of
        the
        liabilities arising from the breach of contract subject to limits of liability
        in Clause 8.2 herein above.

      


      11.3    This
        Contract
        can be terminated by mutual written agreement between both Parties at any
        time.
        In the event of termination of the Contract, Newco shall vacate the Building
        and
        Clean Room and Party A shall cooperate with the Newco to assure a prompt
        and
        efficient move of all the Equipment to a destination of Newco’s
        choosing.

       

      11.4    This
        Contract shall automatically come to an end on the one-hundred-fiftieth (150)
        day after the effective signing by both Parties if by then all the conditions
        previously identified between Party A and Party B for the Contract coming
        into
        effect have not been fulfilled, unless otherwise agreed by both Parties in
        writing.

    


     

    Chapter
      XII

    Miscellaneous 

     

    


    12.1    This
      Contract
      is written and executed in both Chinese and English. Both language versions
      shall be equally authentic. This Contract shall be signed in two English and
      two
      Chinese originals with Party A and Party B each retaining one English and one
      Chinese version of the Contract. 

    


    12.2    This
      Contract, along with its supplements and Appendices, shall become effective
      on
      the Effective
      Date and supersede all prior discussions, negotiations and agreements between
      the Parties. 

    


    12.3    Any
      notice or
      written communication provided in relation to this Contract by one Party
to
      the
      other Party, including but not limited to any and all offers, writings or
      notices to be given hereunder, shall be made in English and Chinese by
      facsimile, or by courier service delivered letter, promptly transmitted or
      addressed to the appropriate Party. The date of receipt of a notice or
      communication hereunder shall be deemed to be the fifteenth day after the letter
      is given to the courier service in the case of a courier service delivered
      letter and the first working day after dispatch of a facsimile if evidenced
      by a
      transmission report. All notices and communications shall be sent to the
      appropriate address set forth below, until the same is changed by notice given
      in writing to the other Party:

     

    
      KSND:

       

      Kunshan
        New& Hi-tech Industrial Development Zone

      757
        Beimen Road

      Yushan
        Town, Kunshan Municipality

      Jiangsu
        Province, China

      


      ACC
        and
        ANAD:

       

      ANADIGICS,
        Inc

      141
        Mt.
        Bethel Road

      Warren,
        NJ 07059

      USA

       

      HEREOF,
        each of the Parties hereto has caused this Contract to be executed by their
        duly
        authorized representatives on the date first set forth above.

      


      Party
        A:

      


      KUNSHAN
        NEW & HI-TECH INDUSTRIAL DEVELOPMENT ZONE ADMINISTRATIVE
        COMMITTEE

      By:
        Wei
        Cheng   

      Title:
        Deputy Director

       

      Party
        B:

      


      ANADIGICS,
        INC.

      By:
        Bami
        Bastani

      Title:
        President & CEO

    

               

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      



    APPENDIX
      ONE 

     

    DEFINITIONS

     

    


    Unless
      otherwise defined in the context of the Contract, the following terms shall
      have
      the meanings set forth below:

    


    “ACC”
       means
      ANAD (China) Corporation, an enterprise legal person to be formed under the
      laws
      of the
      PRC,
      as a wholly-owned subsidiary of ACHC.

    


    “ACHC”
      means
      ANADIGICS China Holding Corporation, Inc., a corporation formed under the laws
      of the
      Cayman Islands as a wholly-owned subsidiary of ANAD

    


    “Affiliate”
       means
      any
      company which through ownership of voting securities or otherwise, directly
      or
indirectly,
      is controlled by, under common control with, or is in control of another entity.
      The term “control” means the ownership of fifty percent (50%) or more of the
      voting securities of a company or the power to appoint or elect a majority
      of
      the directors of a company.

    


    “ANAD” means
      ANADIGICS, Inc., a corporation formed under the laws of the State of Delaware,
      USA.

    


    “Articles
      of Association” means
      the
      articles of association of ACC

    


    “Building
      and Clean Room” means
      wafer manufacturing Facility, including clean room (“Clean
      Room”)
      to be
      constructed on the Site in accordance with the Building and Clean Room
      Specifications.

    


    “Building
      and Clean Room Specifications” means
      the
      detailed specifications for the construction of the Facility, to be provided
      by
      ANAD.

    


    “Business
      License” means
      the
      business license of ACC issued by the SAIC and any amendment to or renewal,
      replacement or extension thereof.

    


    “Contract” means
      the
      investment contract between ANAD & KSND Dated December 21, 2006 and the 1st
      Amendment dated April 5, 2007.

    


    “China”
and
      “PRC” means
      the
      People’s Republic of China.

    


    “Effective
      Date” means
      the
      date on which the Contract becomes effective and binding upon the Parties
thereto,
      which date shall be April 5, 2007 in Kunshan China.

    


    “Environmental
      Impact Study Report” means
      the
      environmental impact study report prepared for the establishment of the Newco
      by
      a local environmental surveyor licensed by the PRC to be submitted to the
      Examination and Approval Authority.

    


    “Equipment” means
      the
      equipment provided by Party B to Newco and utilized in the Facility for the
      manufacture of Products.

    


    “Examination
      and Approval Authority” means
      the
      authority authorized and empowered by the PRC to approve this Contract.


    


    “Facility” means
      the
      Building and Clean Room inclusive of Newco’s other investments in the
      Site.

    


    “Feasibility
      Study Report” means
      the
      feasibility study report for the establishment of the Newco to
      be submitted
      for approval by the Examination and Approval Authority.

    


    “Funding”
means
      Fifty Five Million RMB (RMB 55,000,000) commitment by KSND to the design
and
      construction of the Building and Clean Room. 

    


    “KSND” means
      Kunshan New and Hi-Tech Industrial Development Zone located in Jiangsu Province,
      PRC.

    


    “Kunshan” means
      the
      City of Kunshan, China.

    


    “Lease” means
      the
      Operating Lease.

    


    “Newco” means
      ACC.

    


    “Newco
      Property”
      means
all
      the
      signs,
      Equipment, trade
      fixtures and furniture which were acquired or established
      at the Facility by
      Newco
      at its
      cost
      and expenses.

    


    “Operating
      Lease” means
      the
      operating lease agreement to be entered into between ACC and KSND.

    


    “Party
      A” means
      KSND.

    


    “Party
      B” means
      ANAD.

    


    “Party”
      or
“Parties” means
      KSND and/or ANAD and the latter shall mean ACC upon its formation after approval
      by the Examination and Approval Authority. 

    


    “Leased
      Premises” means
      the
      Facility and the Site.

    


    “Products”
means
      the products manufactured at the Facility.

    


    “Project”
      means
      the establishment and full operation of ACC as contemplated under the
      Contract.

    


    “Registered
      Capital”
means
      the registered capital of the Newco.

    


    “SAFE”
means
      the State Administration of Foreign Exchange of the PRC and/or a local branch
      thereof.

    


    “SAIC”
means
      the State Administration for Industry and Commerce of the PRC and/or a local
      branch thereof,
      as appropriate to the context.

    


    “Site” means
      the
      land in the Kunshan Hi-Tech Industrial Zone made available to KSND for the
      construction of the Facility.

    


    “Technology” means
      the
      technology, know-how and licenses necessary for Newco to manufacture the
      Products at the Building and Clean Room as contemplated by the
      Contract.

    


    “Term” means
      the
      period from the Effective Date through the term of the Operating Lease
and
      through the life term of the Facility in the event of the exercise by Newco
      of
      its option to purchase the Building and Clean Room.

    


    “Total
      Investment”
means
      the total investment for the Newco.

    


    “US”
      or
“USA”
means
      the United States of America.